[Federal Register Volume 77, Number 114 (Wednesday, June 13, 2012)]
[Proposed Rules]
[Pages 35310-35317]
[FR Doc No: 2012-14444]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 742 and 774

[Docket No. 120202094-2065-01]
RIN 0694-AF54

Revisions to the Export Administration Regulations (EAR): Control
of Military Training Equipment and Related Items the President
Determines No Longer Warrant Control Under the United States Munitions
List (USML)

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Proposed rule.

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SUMMARY: This proposed rule describes how articles the President
determines no longer warrant control under Category IX (Military
Training Equipment and Training) of the United States Munitions List
(USML) would be controlled under the Commerce Control List (CCL) in new
Export Control Classification Numbers (ECCNs) 0A614, 0B614, 0D614, and
0E614.
    This rule is one in a planned series of proposed rules describing
how various types of articles the President determines, as part of the
Administration's Export Control Reform Initiative, no longer warrant
USML control, would be controlled on the CCL and by the EAR. This
proposed rule is being published in conjunction with a proposed rule
from the Department of State, Directorate of Defense Trade Controls,
which would amend the list of articles enumerated in USML Category IX.
The revisions in this rule are part of Commerce's retrospective plan
under EO 13563 completed in August 2011. Commerce's full plan can be
accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

DATES: Comments must be received by July 30, 2012.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
The identification number for this rulemaking is BIS-2012-0023.
     By email directly to<EMAIL_ADDRESS>Include
RIN 0694-AF54 in the subject line.
     By mail or delivery to Regulatory Policy Division, Bureau
of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th
Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN
0694-AF54.

FOR FURTHER INFORMATION CONTACT: Daniel Squire, Office of National
Security and Technology Transfer Controls, Sensors and Aviation
Division, tel.<PHONE_NUMBER>, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    On July 15, 2011, as part of the Administration's ongoing Export
Control Reform Initiative, BIS published a proposed rule (76 FR 41958)
(herein ``the July 15 proposed rule'') that set forth a framework for
how articles the President determines, in accordance with section 38(f)
of the Arms Export Control Act (AECA) (22 U.S.C. 2778(f)), would no
longer warrant control on the United States Munitions List (USML) and
would be controlled on the Commerce Control List (CCL) in Supplement
No. 1 to Part 774 of the Export Administration Regulations (EAR). On
November 7, 2011, BIS published a rule (76 FR 68675) proposing several
changes to the framework initially proposed in the July 15 rule.
    Following the structure of the July 15 and November 7 proposed
rules, this proposed rule describes BIS's proposal for controlling
under the EAR and its CCL military training equipment and related
articles now controlled by the ITAR's USML under Category IX but that
would no longer be so controlled if the State Department's proposed
revision to the Category were to become final. The changes described in
this proposed rule and the State Department's proposed companion rule
to Category IX of the USML are based on a review of Category IX by the
Defense Department, which worked with the Departments of State and
Commerce in preparing the proposed amendments. The review was focused
on identifying the types of articles that are now enumerated in USML
Category IX that are either (i) inherently military and otherwise
warrant control on the USML or (ii) common to non-military training
equipment applications, possess parameters or characteristics that
provide a critical military or intelligence advantage to the United
States, and almost exclusively available from the United States. If an
article satisfied one or both of those criteria, the article remained
on the USML. If an article did not satisfy either standard but was
nonetheless a type of article that is, as a result of differences in
form and fit, ``specially designed'' for military applications, it was
identified in the new ECCNs proposed in this notice. The licensing
requirements and other EAR-specific controls for such items described
in this notice would enhance national security by permitting the U.S.
Government to focus its resources on controlling, monitoring,
investigating, analyzing, and, if need be, prohibiting exports and
reexports of more significant items to destinations, end uses, and end
users of greater concern than our NATO allies and other multi-regime
partners.
    Pursuant to section 38(f) of the AECA, the President shall review
the USML ``to determine what items, if any, no longer warrant export
controls under'' the AECA. The President must report the results of the
review to Congress and wait 30 days before removing any such items from
the USML. The report must ``describe the nature of any controls to be
imposed on that item under any other provision of law.'' 22 U.S.C.
2778(f)(1).

    In the July 15 proposed rule, BIS proposed creating a series of new
ECCNs to control items that would be removed from the USML, or that are
items from the Munitions List of the Wassenaar Arrangement on Export
Controls for Conventional Arms and Dual Use Goods and Technologies List
(Wassenaar Arrangement Munitions List or WAML) that are already
controlled elsewhere on the CCL. The proposed rule referred to this
series as the ``600 series'' because the third character in each of the
new ECCNs would be a ``6.'' The first two characters of the 600 series
ECCNs serve the same function as any other ECCN as described in Sec.
738.2 of the EAR. The first character is a digit in the range 0 through
9 that identifies the Category on the CCL in which the ECCN is located.
The second character is a letter in the range A through E that
identifies the product group within a CCL Category. In the 600 series,
the third character is the number 6. With few exceptions, the final two
characters identify the WAML category that covers items that are the
same or similar to items in a particular 600 series ECCN.
    This proposed rule would create four such ECCNs: 0A614, 0B614,
0D614, and 0E614. ECCN 0A614 would control military training equipment
and specific ``parts,'' ``components,'' and ``accessories and
attachments'' therefor. ECCN 0B614 would control test, inspection, and
production ``equipment,'' including related ``parts,'' ``components,''
and ``accessories and attachments,'' for the ``production'' or
``development'' of commodities controlled by ECCN 0A614 or articles
controlled by USML Category IX. ECCN 0D614 would control ``software''
for the ``development,'' ``production,'' operation or maintenance of
items controlled by ECCNs 0A614 or 0B614. ECCN 0E614 would control
``technology'' for the ``development,'' ``production,'' operation,
installation, maintenance, repair or overhaul of commodities controlled
by ECCNs 0A614 or 0B614 or ``software'' controlled by ECCN 0D614.
    The revisions in this rule are part of Commerce's retrospective
plan under EO 13563 completed in August 2011. Commerce's full plan can
be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.
    BIS will publish additional Federal Register notices containing
proposed amendments to the CCL that will describe proposed controls for
additional categories of articles the President determines no longer
warrant control under the USML. The State Department will publish
concurrently proposed amendments to the USML that correspond to the BIS
notices. BIS will also publish proposed rules to further align the CCL
with the WAML and the Missile Technology Control Regime Equipment,
Software and Technology Annex.

Detailed Description of Changes Proposed by This Rule

New ECCN 0A614: Military Training ``Equipment''

    Proposed ECCN 0A614 would impose national security (NS Column 1),
regional stability (RS Column 1), and anti-terrorism controls on
military training ``equipment'' not controlled by the USML and on most
``parts,'' ``components,'' and ``accessories and attachments''
``specially designed'' for such military training ``equipment.'' ECCN
0A614 also would apply the same controls to ``parts,'' ``components,''
and ``accessories and attachments'' for military training ``equipment''
controlled by Category IX of the USML unless such ``parts,''
``components,'' or ``accessories and attachments'' are specifically
controlled by the USML or another ECCN on the Commerce Control List.
Notes to proposed ECCN 0A614 would identify how specific commodities
would be classified under ECCN 0A614, including simulators for non-
combat military aircraft, certain radar training units, and training
``equipment'' for ground military operations. ECCN 0A614.y would impose
only anti-terrorism controls on specific ``parts,'' ``components,'' and
``accessories and attachments'' that are ``specially designed'' for a
commodity controlled by ECCN 0A614 and not specified elsewhere in the
CCL.

New ECCN 0B614: Test, Inspection, and Production ``Equipment'' for
Military Training ``Equipment'' and ``Specially Designed'' ``Parts,''
``Components,'' and ``Accessories and Attachments'' Therefor

    Proposed ECCN 0B614 would impose national security (NS Column 1),
regional stability (RS Column 1), and anti-terrorism controls on test,
inspection and production equipment, and on ``parts,'' ``components,''
and ``accessories and attachments'' therefor, that are ``specially
designed'' for the ``production'' of commodities controlled by ECCN
0A614 or USML Category IX. ECCN 0B614.y would impose only anti-
terrorism controls on specific ``parts,'' ``components,'' and
``accessories and attachments'' that are ``specially designed'' for a
commodity controlled by ECCN 0B614 and not specified elsewhere in the
CCL.

New ECCN 0D614: ``Software'' Related to Military Training ``Equipment''

    Proposed ECCN 0D614 would impose national security, (NS Column 1),
regional stability (RS Column 1), and anti-terrorism (AT Column 1)
controls on ``software'' ``specially designed'' for the
``development,'' ``production,'' operation or maintenance of
commodities controlled by ECCNs 0A614 or 0B614 (except the .y
paragraphs of these ECCNs). ECCN 0D614.y would impose only anti-
terrorism controls on specific ``software'' that is ``specially
designed'' for the ``production,'' ``development,'' operation or
maintenance of commodities controlled by ECCNs 0A614.y or 0B614.y.

New ECCN 0E614: ``Technology'' (Related to ECCNs 0A014, 0B014, and
0D014)

    Proposed ECCN 0E614 would impose national security (NS Column 1),
regional stability (RS Column 1), and anti-terrorism (AT Column 1)
controls on ``technology'' ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair, or
overhaul of commodities controlled by 0A614 or 0B614, or software
controlled by 0D614 (except the .y paragraphs of these ECCNs). ECCN
0E614.y would impose only anti-terrorism controls on specific
``technology'' that is ``required'' for the ``production,''
``development,'' operation, installation, maintenance, repair or
overhaul of commodities controlled by ECCNs 0A614.y or 0B614.y or
software controlled by ECCN 0D614.y.

Inclusion of ``.y.99'' Paragraphs in 600 Series ECCNs

    Proposed new ECCNs 0A614, 0B614, 0D614 and 0E614 also would contain
a paragraph ``.y.99'' that would control any item that meets all of the
following criteria: (i) The item is not listed on the CCL; (ii) the
item was previously determined to be subject to the EAR in an
applicable commodity jurisdiction determination issued by the U.S.
Department of State; and (iii) the item would otherwise be controlled
under one of these 0x614 ECCNs because, for example, the item was
``specially designed'' for a military use.

Revisions to Sec.  742.6 of the EAR

    To implement the regional stability controls that apply to the four
new ``600 series'' ECCNs noted above, this proposed rule would revise
Sec.  742.6(a)(1) of the EAR to apply the RS Column 1 licensing policy
to items classified

under ECCNs 0A614, 0B614, 0D614 and 0E614 (except the .y paragraphs).

Proposed New ECCNs and License Exception STA

    The July 15 proposed rule, as modified by the November 7 proposed
rule, would preclude use of License Exception STA for end-items in 600
series ECCNs unless eligibility for such use was applied for and
approved by BIS. This proposed rule would exempt end items classified
under ECCN 0A614 (military training ``equipment'') and classified under
ECCN 0B614 (test, inspection and production ``equipment'' for military
training ``equipment'') from that requirement. BIS notes this proposed
policy by including in the STA paragraphs of these two ECCNs a
statement that reads: ``Paragraph (c)(1) of License Exception STA
(Sec.  740.20(c)(1)) may be used for items in 0A614 without the need
for a determination described in Sec.  740.20(g).'' This provision
would prevail over the elements of the July 15 proposed rule, as
modified by the November 7 proposed rule, that indicated that ``600
series'' ``end items'' may not be exported, reexported or transferred
pursuant to License Exception STA unless those end items have been
identified by BIS in writing or published as an eligible item for
License Exception STA in response to a License Exception STA
eligibility request in accordance with Sec.  740.20(g) of the EAR.

Request for Comments

    All comments must be in writing and submitted via one or more of
the methods listed under the ADDRESSES caption to this notice. All
comments (including any personal identifiable information) will be
available for public inspection and copying. Those wishing to comment
anonymously may do so by submitting their comment via regulations.gov
and leaving the fields for identifying information blank.

Relationship to the July 15 Proposed Rule and the November 7 Proposed
Rule

    As referenced above, the purpose of the July 15 proposed rule was
to set up the framework to support the transfer of items from the USML
to the CCL. To facilitate that goal, the July 15 proposed rule
contained definitions and concepts that were meant to be applied across
categories. However, as BIS undertakes rulemakings to move specific
categories of items from the USML to the CCL, there may be unforeseen
issues or complications that may require BIS to reexamine those
definitions and concepts. The comment period for the July 15 proposed
rule closed on September 13, 2011. In the November 7 proposed rule, BIS
proposed several changes to those definitions and concepts. The comment
period for the November 7 proposed rule closed on December 22, 2011.
    To the extent that this rule's proposals affect any provision in
either of those proposed rules or any provision in either of those
proposed rules affect this proposed rule, BIS will consider comments on
those provisions so long as they are within the context of the changes
proposed in this rule.
    BIS believes that the following aspects of the July 15 proposed
rule and the November 7 proposed rule are among those that could affect
this proposed rule:
     De minimis provisions in Sec.  734.4;
     Restrictions on use of license exceptions in Sec. Sec.
740.2, 740.10, 740.11, and 740.20;
     Change to national security licensing policy in Sec.
742.4;
     Licensing policy in Sec.  742.4(b)(1)(ii);
     Addition of 600 series items to Supplement No. 2 to Part
744--List of Items Subject to the Military End-Use Requirement of Sec.
744.21;
     Addition of U.S. arms embargo policy regarding 600 series
items set forth in Sec.  742.4(b)(1)(ii) (national security) of the
July 15 proposed rule to Sec.  742.6(b)(1) (regional stability) of the
November 7 proposed rule; and
     Definitions of terms in Sec.  772.1.

Effects of This Proposed Rule

De minimis

    The July 15 proposed rule would impose certain unique de minimis
requirements on items controlled under the new 600 series ECCNs.
Section 734.3 of the EAR provides, inter alia, that under certain
conditions, items made outside the United States that incorporate items
subject to the EAR are not subject to the EAR if they do not exceed a
de minimis percentage of controlled U.S.-origin content. Depending on
the destination, the de minimis percentage can be either 10 percent or
25 percent. The military training ``equipment'' and the test,
inspection and production ``equipment'' for military training
``equipment'' that would be subject to the EAR as a result of this
proposed rule would become eligible for de minimis treatment.

Use of License Exceptions

    Military training ``equipment'' and test, inspection, and
production ``equipment'' therefor currently on the USML that would be
classified under ECCNs 0A614 and 0B614 would become eligible for
several license exceptions, including STA, which would be available for
exports to certain government agencies of NATO and other multi-regime
close allies. The exchange of information and statements required under
STA is substantially less burdensome than are the license application
requirements currently required under the ITAR, as discussed in more
detail in the ``Regulatory Requirements'' section of this proposed
rule. None of the military training ``equipment'' or test, inspection
and production ``equipment'' therefor that would be controlled by ECCNs
0A614 or 0B614 would be subject to the provision in the July 15
proposed rule that proposes to preclude the use of License Exception
STA for ``600 series'' end items unless approval for such use is sought
from and granted by BIS. The items covered by this rule also would be
eligible for the following license exceptions: LVS (limited value
shipments), up to $1500; TMP (temporary exports); and RPL (servicing
and parts replacement).

Alignment With the Wassenaar Arrangement Munitions List

    The Administration has stated since the beginning of the Export
Control Reform Initiative that the reforms will be consistent with U.S.
obligations to the multilateral export control regimes. Accordingly,
the Administration will, in this and subsequent proposed rules,
exercise its national discretion to implement, clarify, and, to the
extent feasible, align its controls with those of the regimes. This
proposed rule would align controls on the items that it adds to the CCL
by placing them in new 600 series ECCNs ending in ``14'' to parallel
Category ML14 on the Wassenaar Arrangement Munitions List (``
`Specialised equipment for military training' or for simulating
military scenarios, simulators specially designed for training in the
use of any firearm or weapon specified by ML.1 or ML.2, and specially
designed components and accessories therefor''). Items in proposed ECCN
0A614 are covered by WAML Category ML 14.
    Although the Export Administration Act expired on August 20, 2001,
the President, through Executive Order 13222 of August 17, 2001, 3 CFR,
2001 Comp., p. 783 (2002), as extended by the Notice of August 12,
2011, 76 FR 50661 (August 16, 2011), has continued the Export
Administration Regulations in effect under the International Emergency
Economic Powers Act. BIS continues to carry out the provisions of the
Export Administration Act, as appropriate and to the extent permitted

by law, pursuant to Executive Order 13222.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distribute impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated a ``significant regulatory
action,'' although not economically significant, under section 3(f) of
Executive Order 12866. Accordingly, the rule has been reviewed by the
Office of Management and Budget (OMB).
    2. Notwithstanding any other provision of law, no person is
required to respond to, nor is subject to a penalty for failure to
comply with, a collection of information, subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid OMB
control number. This proposed rule would affect two approved
collections: Simplified Network Application Processing System (control
number 0694-0088), which includes, among other things, license
applications, and License Exceptions and Exclusions (0694-0137).
    As stated in the proposed rule published at 76 FR 41958 (July 15,
2011), BIS believes that the combined effect of all rules to be
published adding items to the EAR that would be removed from the ITAR
as part of the administration's Export Control Reform Initiative would
increase the number of license applications to be submitted by
approximately 16,000 annually, resulting in an increase in burden hours
of 5,067 (16,000 transactions at 17 minutes each) under control number
0694-0088.
    Military training ``equipment,'' related test, inspection, and
production ``equipment,'' ``parts,'' ``components,'' ``accessories and
attachments,'' ``software'' and ``technology'' formerly on the USML
would become eligible for License Exception STA under this rule. As
stated in the July 15 proposed rule, BIS believes that the increased
use of License Exception STA resulting from combined effect of all
rules to be published adding items to the EAR that would be removed
from the ITAR as part of the administration's Export Control Reform
Initiative would increase the burden associated with control number
0694-0137 by about 23,858 hours (20,450 transactions @ 1 hour and 10
minutes each).
    BIS expects that this increase in burden would be more than offset
by a reduction in burden hours associated with approved collections
related to the ITAR. The largest impact of the proposed rule would
likely apply to exporters of replacement parts for military training
``equipment'' that has been approved under the ITAR for export to
allies and regime partners. Because, with few exceptions, the ITAR
allows exemptions from license requirements only for exports to Canada,
most exports of such parts, even when destined to NATO and other close
allies, require specific State Department authorization. Under the EAR,
as proposed in this notice, such parts as well as non-combat military
trainers, certain radar trainers and training ``equipment'' for ground
military operations along with related test, inspection, and production
``equipment'' would become eligible for export to NATO and other multi-
regime allies under License Exception STA. Use of License Exception STA
imposes a paperwork and compliance burden because, for example,
exporters must furnish information about the item being exported to the
consignee and obtain from the consignee an acknowledgement and
commitment to comply with the EAR. However, the Administration
understands that complying with the burdens of STA is likely less
burdensome than applying for licenses. For example, under License
Exception STA, a single consignee statement can apply to an unlimited
number of products, need not have an expiration date, and need not be
submitted to the government in advance for approval. Suppliers with
regular customers can tailor a single statement and assurance to match
their business relationship rather than applying repeatedly for
licenses with every purchase order to supply reliable customers in
countries that are close allies or members of export control regimes or
both.
    Even in situations in which a license would be required under the
EAR, the burden is likely to be reduced compared to the license
requirement of the ITAR. In particular, license applications for
exports of technology controlled by ECCN 0E614 are likely to be less
complex and burdensome than the authorizations required to export ITAR-
controlled technology, i.e., Manufacturing License Agreements and
Technical Assistance Agreements.
    3. This rule does not contain policies with Federalism implications
as that term is defined under E.O. 13132.
    4. The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et seq., generally requires an agency to prepare an initial
regulatory flexibility analysis (IRFA) of any rule subject to the
notice and comment rulemaking requirements under the Administrative
Procedure Act (5 U.S.C. 553) or any other statute. However, under
section 605(b) of the RFA, however, if the head of an agency certifies
that a rule will not have a significant impact on a substantial number
of small entities, the RFA does not require the agency to prepare a
regulatory flexibility analysis. Pursuant to section 605(b), the Chief
Counsel for Regulation, Department of Commerce, submitted a memorandum
to the Chief Counsel for Advocacy, Small Business Administration,
certifying that this proposed rule, if promulgated, will not have a
significant impact on a substantial number of small entities.

Number of Small Entities

    The Bureau of Industry and Security (BIS) does not collect data on
the size of entities that apply for and are issued export licenses.
Although BIS is unable to estimate the exact number of small entities
that would be affected by this rule, it acknowledges that this rule
would affect some unknown number.

Economic Impact

    This proposed rule is part of the Administration's Export Control
Reform Initiative. Under that initiative, the United States Munitions
List (22 CFR part 121) (USML) would be revised to be a ``positive''
list, i.e., a list that does not use generic, catch-all controls on any
part, component, accessory, attachment, or end item that was in any way
specifically modified for a defense article, regardless of the
article's military or intelligence significance or non-military
applications. At the same time, articles that are determined to no
longer warrant control on the USML would become controlled on the
Commerce Control List (CCL). Such items, along with certain military
items that currently are on the CCL, will be identified in specific
Export Control Classification Numbers (ECCNs) known as the ``600
series'' ECCNs. In addition, some items currently on the Commerce
Control List would move from existing ECCNs to the new 600 series
ECCNs. In practice, the greatest impact of this rule on small entities
would likely be reduced administrative costs and

reduced delay for exports of items that are now on the USML but would
become subject to the EAR. This rule addresses Category IX articles,
which are: military training ``equipment,'' ``parts,'' ``components,''
and ``accessories and attachments'' therefor; test, inspection, and
production ``equipment'' for military training ``equipment'' and
``parts,'' ``components'' and ``accessories and attachments'' therefor;
and related ``software'' and ``technology.'' Training ``equipment''
related to certain inherently military functions would remain on the
USML. However, parts, components, and ``accessories and attachments''
for that ``equipment'' would be included on the CCL unless expressly
controlled on the USML. Such parts and components are more likely to be
produced by small businesses than are complete items of training
equipment, and would in many cases become subject to the EAR. Moreover,
officials of the Department of State have informed BIS that license
applications for such parts and components are a high percentage of the
license applications for USML articles reviewed by that department.
    Changing the jurisdictional status of Category IX items would
reduce the burden on small entities (and other entities as well)
through:

--Elimination of some license requirements,
--Greater availability of license exceptions,
--Simpler license application procedures, and
--Reduced (or eliminated) registration fees.

    In addition, parts and components controlled under the ITAR remain
under ITAR control when incorporated into foreign-made items,
regardless of the significance or insignificance of the item,
discouraging foreign buyers from incorporating such U.S. content. The
availability of de minimis treatment under the EAR may reduce the
incentive for foreign manufacturers to avoid purchasing U.S.-origin
parts and components.
    Many exports and reexports of the Category IX articles that would
be placed on the CCL, as proposed in this rule, particularly parts and
components, would become eligible for license exceptions that apply to
shipments to U.S. Government agencies, shipments valued at less than
$1,500, parts and components being exported for use as replacement
parts, temporary exports, and License Exception Strategic Trade
Authorization (STA), reducing the number of licenses that exporters of
these items would need. License exceptions under the EAR would allow
suppliers to send routine replacement parts and low level parts to NATO
and other close allies and export control regime partners for use by
those governments and for use by contractors building equipment for
those governments or for the U.S. Government without having to obtain
export licenses. Under License Exception STA, the exporter would need
to furnish information about the item being exported to the consignee
and obtain a statement from the consignee that, among other things,
would commit the consignee to comply with the EAR and other applicable
U.S. laws. Because such statements and obligations can apply to an
unlimited number of transactions and have no expiration date, they
would impose a net reduction in burden on transactions that the
government routinely approves through the license application process
that the License Exception STA statements would replace.
    Even for exports and reexports in which a license would be
required, the process would be simpler and less costly under the EAR.
When a USML Category IX article is moved to the CCL, the number of
destinations for which a license is required would remain unchanged.
However, the burden on the license applicant would decrease because the
licensing procedure for CCL items is simpler and more flexible than the
license procedure for USML articles.
    Under the USML licensing procedure, an applicant must include a
purchase order or contract with its application. There is no such
requirement under the CCL licensing procedure. This difference gives
the CCL applicant at least two advantages. First, the applicant has a
way of determining whether the U.S. government will authorize the
transaction before it enters into potentially lengthy, complex and
expensive sales presentations or contract negotiations. Under the USML
procedure, the applicant will need to caveat all sales presentations
with a reference to the need for government approval and is more likely
to have to engage in substantial effort and expense only to find that
the government will reject the application. Second, a CCL license
applicant need not limit its application to the quantity or value of
one purchase order or contract. It may apply for a license to cover all
of its expected exports or reexports to a particular consignee over the
life of a license (normally two years, but may be longer if
circumstances warrant a longer period), reducing the total number of
licenses for which the applicant must apply.
    In addition, many applicants exporting or reexporting items that
this rule would transfer from the USML to the CCL would realize cost
savings through the elimination of some or all registration fees
currently assessed under the ITAR's licensing procedure. Currently,
ITAR applicants must pay to use the ITAR licensing procedure even if
they never actually are authorized to export. Registration fees for
manufacturers and exporters of articles on the USML start at $2,500 per
year, increase to $2,750 for organizations applying for one to ten
licenses per year and further increases to $2,750 plus $250 per license
application (subject to a maximum of three percent of total application
value) for those who need to apply for more than ten licenses per year.
There are no registration or application processing fees for
applications to export items listed on the CCL. Once the Category IX
items that are the subject to this rulemaking are removed from the USML
and added to the CCL, entities currently applying for licenses from the
Department of State would find their registration fees reduced if the
number of ITAR licenses those entities need declines. If an entity's
entire product line is moved to the CCL, then its ITAR registration and
registration fee requirement would be eliminated.
    De minimis treatment under the EAR would become available for all
items that this rule proposes to transfer from the USML to the CCL.
Items subject to the ITAR remain subject to the ITAR when they are
incorporated abroad into a foreign-made product regardless of the
percentage of U.S. content in that foreign made product. Foreign-made
products that incorporate items that this rule would move to the CCL
would be subject to the EAR only if their total controlled U.S.-origin
content exceeded 10 percent. Because including small amounts of U.S.-
origin content would not subject foreign-made products to the EAR,
foreign manufacturers would have less incentive to avoid such U.S.-
origin parts and components, a development that potentially would mean
greater sales for U.S. suppliers, including small entities.
    BIS is still considering comments made in response to the July 15
rule pertaining to these proposed new de minimis levels and, as noted
above, will consider de minimis-related comments to this proposed rule
provided they are in the context of this proposed rule. However, BIS
believes that increased burden imposed by those actions will be offset
substantially by the reduction in

burden attributable to the moving of items from the USML to CCL and the
compliance benefits associated with the consolidation of all WAML items
subject to the EAR in one series of ECCNs.

Conclusion

    BIS is unable to determine the precise number of small entities
that would be affected by this rule. Based on the facts and conclusions
set forth above, BIS believes that any burdens imposed by this rule
would be offset by a reduction in the number of items that would
require a license, increased opportunities for use of license
exceptions for exports to certain countries, simpler export license
applications, reduced or eliminated registration fees and application
of a de minimis threshold for foreign-made items incorporating U.S.-
origin parts and components, which would reduce the incentive for
foreign buyers to design out or avoid U.S.-origin content. For these
reasons, the Chief Counsel for Regulation of the Department of Commerce
certified to the Chief Counsel for Advocacy of the Small Business
Administration that this rule, if adopted in final form, would not have
a significant economic impact on a substantial number of small
entities. Accordingly, no IRFA is required, and none has been prepared.

List of Subjects

15 CFR Part 742

    Exports, Terrorism.

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, parts 742 and 774 of the
Export Administration Regulations (15 CFR parts 730-774) are proposed
to be amended as follows:

PART 742--[AMENDED]

    1. The authority citation for 15 CFR part 742 continues to read as
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22
U.S.C. 7210; Sec. 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 12058,
43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3
CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp.,
p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O.
13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential
Determination 2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003;
Notice of August 12, 2011, 76 FR 50661 (August 16, 2011); Notice of
November 9, 2011, 76 FR 70319 (November 10, 2011).

    2. Section 742.6 is amended by revising paragraph (a)(1) to read as
follows:

Sec.  742.6  Regional stability.

    (a) License requirements. The following controls are maintained in
support of U.S. foreign policy to maintain regional stability:
    (1) RS Column 1 License Requirements in General. As indicated in
the CCL and in RS column 1 of the Commerce Country Chart (see
Supplement No. 1 to part 738 of the EAR), a license is required to all
destinations, except Canada, for items described on the CCL under ECCNs
0A606 (except 0A606.b and .y); 0A614 (except 0A614.y); 0A617 (except
0A617.y); 0B606 (except 0B606.y); 0B614 (except 0B614.y); 0B617 (except
0B617.y); 0C606 (except 0C606.y); 0C617; 0D606 (except 0D606.y); 0D614
(except 0D614.y); 0D617 (except 0D617.y); 0E606 (except 0E606.y); 0E614
(except 0E614.y); 0E617 (except 0E617.y); 1A607 (except 1A607.y);
1B607; (except 1B607.y); 1B608 (except 1B608.y); 1C607; 1C608; 1D607
(except 1D607.y); 1D608(except 1D608.y); 1E607 (except 1E607.y); 1E608
(except 1E608.y); 3A982; 3D982; 3E982; 6A002.a.1, a.2, a.3, .c, or .e;
6A003.b.3, and b.4.a; 6A008.j.1; 6A998.b; 6D001 (only ``software'' for
the ``development'' or ``production'' of items in 6A002.a.1, a.2, a.3,
.c; 6A003.b.3 and .b.4; or 6A008.j.1); 6D002 (only ``software'' for the
``use'' of items in 6A002.a.1, a.2, a.3, .c; 6A003.b.3 and .b.4; or
6A008.j.1); 6D003.c, 6D991 (only ``software'' for the ``development,''
``production,'' or ``use'' of equipment controlled by 6A002.e or
6A998.b); 6E001 (only technology'' for ``development'' of items in
6A002.a.1, a.2, a.3 (except 6A002.a.3.d.2.a and 6A002.a.3.e for lead
selenide focal plane arrays), and .c or .e, 6A003.b.3 and b.4, or
6A008.j.1); 6E002 (only ``technology'' for ``production'' of items in
6A002.a.1, a.2, a.3, .c, or .e, 6A003.b.3 or b.4, or 6A008.j.1); 6E991
(only ``technology'' for the ``development,'' ``production,'' or
``use'' of equipment controlled by 6A998.b); 6D994; 7A994 (only QRS11-
00100-100/101 and QRS11-0050-443/569 Micromachined Angular Rate
Sensors); 7D001 (only ``software'' for ``development'' or
``production'' of items in 7A001, 7A002, or 7A003); 7E001 (only
``technology'' for the ``development'' of inertial navigation systems,
inertial equipment, and specially designed components therefor for
civil aircraft); 7E002 (only ``technology'' for the ``production'' of
inertial navigation systems, inertial equipment, and specially designed
components therefor for civil aircraft); 7E101 (only ``technology'' for
the ``use'' of inertial navigation systems, inertial equipment, and
specially designed components for civil aircraft); 8A609 (except
8A609.y); 8A620 (except 8A620.y); 8B609 (except 8B609.y); 8B620 (except
8B620.y); 8C609 (except 8C609.y); 8D609 (except software for the
``development,'' ``production,'' operation, or maintenance of
commodities controlled by 8A609.y, 8B609.y, or 8C609.y); 8D620 (except
software for the ``development,'' ``production,'' operation, or
maintenance of commodities controlled by 8A620.y or 8B620.y); 8E609
(except ``technology'' for the ``development,'' ``production,''
operation, installation, maintenance, repair, or overhaul of
commodities controlled by 8A609.y, 8B609.y, or 8C609.y); 8E620 (except
``technology'' for the ``development,'' ``production,'' operation,
installation, maintenance, repair, overhaul, or refurbishment of
commodities controlled by 8A620.y or 8B620.y); 9A610 (except 9A610.y);
9A619 (except 9A619.y); 9B610 (except 9B610.y); 9B619 (except 9B619.y);
9C610 (except 9C610.y); 9C619 (except 9C619.y); 9D610 (except software
for the ``development,'' ``production,'' operation, installation,
maintenance, repair, or overhaul of commodities controlled by 9A610.y,
9B610.y, or 9C610.y); 9D619 (except software for the ``development,''
``production,'' operation, or maintenance of commodities controlled by
9A619.y, 9B619.y, or 9C619.y); 9E610 (except ``technology'' for the
``development,'' ``production,'' operation, installation, maintenance,
repair, or overhaul of commodities controlled by ECCN 9A610.y, 9B610.y,
or 9C610.y); and 9E619 (except ``technology'' for the ``development,''
``production'' operation, installation, maintenance, repair, or
overhaul of commodities controlled by ECCN 9A619.y, 9B619.y, or
9C619.y).
* * * * *

PART 774--[AMENDED]

    3. The authority citation for 15 CFR part 774 continues to read as
follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et
seq., 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; Notice of August 12, 2011, 76 FR 50661 (August 16, 2011).

    4. In Supplement No. 1 to Part 774, the Commerce Control List, add,
between the entries for Export Control Classification Numbers 0A018 and
0A918, a new entry for Export Control Classification Number 0A614 to
read as follows:

Supplement No. 1 to Part 774--The Commerce Control List

* * * * *
0A614 Military Training ``Equipment,'' as follows (see List of items
controlled):

License Requirements

Reason for Control: NS, RS, AT

------------------------------------------------------------------------
                Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry except 0A614.y.  NS Column 1
------------------------------------------------------------------------
RS applies to entire entry except 0A614.y.  RS Column 1
------------------------------------------------------------------------
AT applies to entire entry................  AT Column 1
------------------------------------------------------------------------

License Exceptions

LVS: $1500
GBS: N/A
CIV: N/A
STA: Paragraph (c)(1) of License Exception STA (Sec.  740.20(c)(1))
may be used for items in 0A614 without the need for a determination
described in Sec.  740.20(g). Paragraph (c)(2) of License Exception
STA (Sec.  740.20(c)(2)) of the EAR may not be used for any item in
0A614.

List of Items Controlled

Unit: ``End items'' in number; ``parts,'' ``components,'' and
``accessories and attachments'' in $ value
Related Controls: (1) Defense articles that are enumerated in USML
Category IX and ``technical data'' (including ``software'') directly
related thereto are subject to the ITAR. (2) See ECCN 0A919 for
foreign-made ``military commodities'' that incorporate more than 10%
U.S.-origin ``600 series'' items. (3) ``Parts,'' ``components,'' and
``accessories and attachments'' that are common to a simulator
controlled by ECCN 0A614.a and to a simulated system or an end item
that is controlled on the USML or elsewhere on the CCL are
controlled under the same USML Category or ECCN as the ``parts,''
``components,'' and ``accessories and attachments'' of the simulated
system or end item.
Related Definitions: N/A
Items:

    a. ``Equipment'' ``specially designed'' for military training
that is not enumerated in USML Category IX.

    Note:  This entry includes operational flight trainers, radar
target trainers, flight simulators for aircraft classified under
ECCN 9A610.a, human-rated centrifuges, radar trainers for radars
classified under ECCN 3A611, instrument flight trainers for military
aircraft, navigation trainers for military items, target equipment,
armament trainers, military pilotless aircraft trainers, mobile
training units and training ``equipment'' for ground military
operations.

    Note:  This entry does not apply to ``equipment'' ``specially
designed'' for training in the use of hunting or sporting weapons.

    b. through w. [Reserved]
    x. ``Parts,'' ``components,'' and ``accessories and
attachments'' that are ``specially designed'' for a commodity
controlled by this entry or an article enumerated in USML Category
IX, and not specified elsewhere in the CCL or the USML.

    Note:  Forgings, castings, and other unfinished products, such
as extrusions and machined bodies, that have reached a stage in
manufacturing where they are clearly identifiable by material
composition, geometry, or function as commodities controlled by ECCN
0A614.x are controlled by ECCN 0A614.x.

    y. Specific ``parts,'' ``components,'' ``accessories and
attachments'' ``specially designed'' for a commodity subject to
control in this ECCN and not elsewhere specified in the CCL, as
follows:
    y.1 to y.98 [Reserved]
    y.99. Commodities not identified on the CCL that (i) have been
determined, in an applicable commodity jurisdiction determination
issued by the U.S. Department of State, to be subject to the EAR and
(ii) would otherwise be controlled elsewhere in ECCN 0A614.

    5. In Supplement No. 1 to Part 774, the Commerce Control List, add,
between the entries for Export Control Classification Numbers 0B006 and
0B968, a new entry for Export Control Classification Number 0B614 to
read as follows:

0B614 Test, inspection, and production ``equipment'' for military
training ``equipment'' and ``specially designed'' ``parts,''
``components,'' and ``accessories and attachments'' therefor, as
follows (see list of items controlled).

License Requirements

Reason for Control: NS, RS, AT

------------------------------------------------------------------------
                Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry except 0B614.y.  NS Column 1
------------------------------------------------------------------------
RS applies to entire entry except 0B614.y.  RS Column 1
------------------------------------------------------------------------
AT applies to entire entry................  AT Column 1
------------------------------------------------------------------------

License Exceptions

LVS: $1500
GBS: N/A
CIV: N/A
STA: Paragraph (c)(1) of License Exception STA (Sec.  740.20(c)(1))
may be used for items in 0B614 without the need for a determination
described in Sec.  740.20(g). Paragraph (c)(2) of License Exception
STA (Sec.  740.20(c)(2)) of the EAR may not be used for any item in
0B614.

List of Items Controlled

Unit: N/A
Related Controls:
Related Definitions: N/A
Items:

    a. Test, inspection, and other production ``equipment''
``specially designed'' for the ``production'' of commodities
controlled by ECCN 0A614 or articles enumerated in USML Category IX.
    b. through .w [Reserved]
    x. ``Parts,'' ``components,'' and ``accessories and
attachments'' that are ``specially designed'' for a commodity
controlled by ECCN 0B614.

    Note 1: Forgings, castings, and other unfinished products, such
as extrusions and machined bodies, that have reached a stage in
manufacturing where they are clearly identifiable by material
composition, geometry, or function as commodities controlled by ECCN
0B614.x are controlled by ECCN 0B614.x.

    y. Specific ``parts,'' ``components,'' and ``accessories and
attachments'' ``specially designed'' for a commodity subject to
control in this ECCN and not elsewhere specified in the CCL, as
follows:
    y.1 to y.98 [Reserved]
    y.99. Commodities not identified elsewhere on the CCL that (i)
have been determined, in an applicable commodity jurisdiction
determination issued by the U.S. Department of State, to be subject
to the EAR and (ii) would otherwise be controlled elsewhere in this
entry.

    6. In Supplement No. 1 to Part 774, the Commerce Control List, add,
between the entries for Export Control Classification Number 0C201 and
before the header that reads ``D. Software'' a new entry for Export
Control Classification Number 0D614 to read as follows:
0D614 ``Software'' related to military training ``equipment,'' as
follows (See list of items controlled).

License Requirements

Reason for Control: NS, RS, AT

------------------------------------------------------------------------
                Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry except 0D614.y.  NS Column 1
------------------------------------------------------------------------
RS applies to entire entry except 0D614.y.  RS Column 1
------------------------------------------------------------------------
AT applies to entire entry................  AT Column 1
------------------------------------------------------------------------

 License Exceptions

CIV: N/A
TSR: N/A

STA: Paragraph (c)(2) of License Exception STA (Sec.
740.20(c)(2))of the EAR may not be used for any ``software'' in
0D614.

List of Items Controlled

Unit: $ value
Related Controls: ``Software'' directly related to articles
enumerated in USML Category IX is subject to the control of USML
paragraph IX(e). See ECCN 0A919 for foreign made ``military
commodities'' that incorporate more than 10% U.S.-origin ``600
series'' items.
Related Definitions: N/A
Items:

    a. ``Software'' (other than ``software'' controlled in paragraph
.y of this entry) ``specially designed'' for the ``development,''
``production,'' operation or maintenance of commodities controlled
by ECCNs 0A614 (except 0A614.y) or 0B614 (except 0B614.y).
    b. to x. [RESERVED]
    y. Specific ``software'' ``specially designed'' for the
``production,'' ``development,'' or operation or maintenance of
commodities controlled by ECCNs 0A614 or 0B614, as follows:
    y.1. Specific ``software'' ``specially designed'' for the
``production,'' ``development,'' operation or maintenance of
commodities controlled by ECCNs 0A614.y or 0B614.y.
    y.2 through y.98 [RESERVED]
    y.99. ``Software'' that would otherwise be controlled elsewhere
in this entry but that (i) has been determined to be subject to the
EAR in a commodity jurisdiction determination issued by the U.S.
Department of State and (ii) is not otherwise identified elsewhere
on the CCL.

    7. In Supplement No. 1 to Part 774, the Commerce Control List, add,
between the entries for Export Control Classification Numbers 0E018 and
0E918, a new entry for Export Control Classification Number 0E614 to
read as follows:

0E614 ``Technology,'' as follows (See list of items controlled).

License Requirements

Reason for Control: NS, RS, AT

------------------------------------------------------------------------
                Control(s)                          Country chart
------------------------------------------------------------------------
NS applies to entire entry except 0E614.y.  NS Column 1
------------------------------------------------------------------------
RS applies to entire entry except 0E614.y.  RS Column 1
------------------------------------------------------------------------
AT applies to entire entry................  AT Column 1
------------------------------------------------------------------------

License Exceptions

CIV: N/A
TSR: N/A
STA: Paragraph (c)(2) of License Exception STA (Sec.  740.20(c)(2))
of the EAR may not be used for any technology in 0E614.

List of Items Controlled

Unit: $ value
Related Controls: ``Technical data'' directly related to articles
enumerated in USML Category IX is subject to the control of USML
paragraph IX(e).
Related Definitions: N/A
Items:

    a. ``Technology'' (other than ``technology'' controlled by
paragraph .y of this entry) ``required'' for the ``development,''
``production,'' operation, installation, maintenance, repair
overhaul, or refurbishing of commodities or ``software'' controlled
by ECCNs 0A614 (except 0A614.y), 0B614 (except 0B614.y), or 0D614
(except 0D614.y).
    b. through x. [RESERVED]
    y. Specific ``technology'' ``required'' for the ``production,''
``development,'' operation, installation, maintenance, repair, or
overhaul of commodities controlled by ECCNs 0A614.y or 0B614.y, or
``software'' controlled by ECCN 0D614.y, as follows:
    y.1. Specific ``technology'' ``required'' for the
``production,'' ``development,'' operation, installation,
maintenance, repair or overhaul of commodities controlled by ECCNs
0A614.y or 0B614.y or ``software'' controlled by ECCN 0D614.y.
    y.2. through y.98 [RESERVED]
    y.99. ``Technology'' that would otherwise be controlled
elsewhere in this entry but that (i) has been determined to be
subject to the EAR in a commodity jurisdiction determination issued
by the U.S. Department of State and (ii) is not otherwise identified
elsewhere on the CCL.

    Dated: June 6, 2012.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2012-14444 Filed 6-12-12; 8:45 am]
BILLING CODE 3510-33-P


[Federal Register Volume 81, Number 133 (Tuesday, July 12, 2016)]
[Notices]
[Page 45203]
[FR Doc No: 2016-16411]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. 2016-83]

Petition for Exemption; Summary of Petition Received; Airborne
Heat Ballooning

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of Title 14 of the Code of Federal
Regulations. The purpose of this notice is to improve the public's
awareness of, and participation in, the FAA's exemption process.
Neither publication of this notice nor the inclusion or omission of
information in the summary is intended to affect the legal status of
the petition or its final disposition.

DATES: Comments on this petition must identify the petition docket
number and must be received on or before August 1, 2016.

ADDRESSES: Send comments identified by docket number FAA-2016-7151
using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S.
Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its rulemaking process. DOT posts
these comments, without edit, including any personal information the
commenter provides, to http://www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at
http://www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at
http://www.regulations.gov at any time. Follow the online instructions
for accessing the docket or go to the Docket Operations in Room W12-140
of the West Building Ground Floor at 1200 New Jersey Avenue SE.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Brent Hart<PHONE_NUMBER>, Office of
Rulemaking, Federal Aviation Administration, 800 Independence Avenue
SW., Washington, DC 20591.
    This notice is published pursuant to 14 CFR 11.85.

    Issued in Washington, DC, on June 30, 2016.
Dale Bouffiou,
Acting Director, Office of Rulemaking.

Petition for Exemption

    Docket No.: FAA-2016-7151.
    Petitioner: Airborne Heat Ballooning.
    Section(s) of 14 CFR Affected: 61.19(a)(2), (b) and (c).
    Description of Relief Sought: A request to exempt balloon pilots
from obtaining plastic student pilot certificates since they are
already exempt from Transportation Security Administration (TSA)
screening requirements.

[FR Doc. 2016-16411 Filed 7-11-16; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 80, Number 36 (Tuesday, February 24, 2015)]
[Proposed Rules]
[Pages 9667-9669]
[FR Doc No: 2015-03677]

========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

========================================================================

Federal Register / Vol. 80, No. 36 / Tuesday, February 24, 2015 /
Proposed Rules

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2015-0246; Directorate Identifier 2014-NM-187-AD]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

-----------------------------------------------------------------------

SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain The Boeing Company Model 737-300, -400, and -500 series
airplanes. This proposed AD was prompted by reports of fatigue cracking
found at the left-side and right-side upper frame, at a certain area.
This proposed AD would require repetitive medium frequency eddy current
(MFEC) inspections for cracking of the left-side and right-side upper
frame, and repair (including open hole high frequency eddy current
(HFEC) inspections for cracking of fastener holes) if necessary. This
proposed AD also provides an optional preventative modification which
would terminate the repetitive inspections at the modified location. We
are proposing this AD to detect and correct fatigue cracking, which if
not corrected, can grow in size and result in a severed frame, which
could lead to rapid decompression and reduced structural integrity of
the airplane.

DATES: We must receive comments on this proposed AD by April 10, 2015.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management, P.
O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone<PHONE_NUMBER>,
extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com.
You may view this referenced service information at the FAA, at the
FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA.
For information on the availability of this material at the FAA, call
425-227-1221. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
0246.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
0246; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Office (phone:<PHONE_NUMBER>) is in the ADDRESSES section. Comments will
be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Wayne Lockett, Aerospace Engineer,
Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office
(ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-
6447; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under the ADDRESSES section. Include ``Docket No. FAA-2015-0246;
Directorate Identifier 2014-NM-187-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD because of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    We received reports of fatigue cracking found at frame station 360
between stringer 13 and stringer 14. At the time of crack detection,
the airplanes had accumulated between 37,826 to 42,986 total flight
cycles. The reported cracks ranged from 0.35 inches to 1.5 inches in
length. Cracking of the left-side or right-side upper frame at station
360 between stringer 13 and stringer 14, if not corrected, can grow in
size and result in a severed frame, which could lead to rapid
decompression and reduced structural integrity of the airplane.

Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Alert Service Bulletin 737-53A1339, dated August
12, 2014. This service information describes procedures for inspections
for cracking of the left-side and right-side upper frame, at station
360 between stringer 13 and stringer 14; repair, and optional
preventative modification. For information on the procedures and
compliance times, see this service information. This service
information is reasonably available; see ADDRESSES for ways to access
this service information.

FAA's Determination

    We are proposing this AD because we evaluated all the relevant
information and determined the unsafe condition described previously is
likely to exist or develop in other products of the same type design.

Proposed AD Requirements

    This proposed AD would require accomplishing the actions specified
in the service information described previously, except as discussed
under ``Differences Between This Proposed AD and the Service
Information.''

Explanation of ``RC'' Steps in Service Information

    The FAA worked in conjunction with industry, under the
Airworthiness Directives Implementation Aviation Rulemaking Committee
(ARC), to enhance the AD system. One enhancement was a new process for
annotating which steps in the service information are required for
compliance with an AD. Differentiating these steps from other tasks in
the service information is expected to improve an owner's/operator's
understanding of crucial AD requirements and help provide consistent
judgment in AD compliance. The steps identified as RC (required for
compliance) in any service information identified previously have a
direct effect on detecting, preventing, resolving, or eliminating an
identified unsafe condition.
    Steps that are identified as RC in any service information must be
done to comply with the proposed AD. However, steps that are not
identified as RC are recommended. Those steps that are not identified
as RC may be deviated from using accepted methods in accordance with
the operator's maintenance or inspection program without obtaining
approval of an alternative method of compliance (AMOC), provided the
steps identified as RC can be done and the airplane can be put back in
a serviceable condition. Any substitutions or changes to steps
identified as RC will require approval of an AMOC.

Differences Between This Proposed AD and the Service Information

    Boeing Alert Service Bulletin 737-53A1339, dated August 12, 2014,
specifies to contact the manufacturer for instructions on how to repair
certain conditions, but this proposed AD would require repairing those
conditions in one of the following ways:
     In accordance with a method that we approve; or
     Using data that meet the certification basis of the
airplane, and that have been approved by the Boeing Commercial
Airplanes Organization Designation Authorization (ODA) whom we have
authorized to make those findings.

Costs of Compliance

    We estimate that this proposed AD affects 109 airplanes of U.S.
registry.
    We estimate the following costs to comply with this proposed AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
             Action                     Labor cost          Parts cost     Cost per product        operators
----------------------------------------------------------------------------------------------------------------
Inspections....................  14 work-hours x $85 per              $0  $1,190 per          $129,710 per
                                  hour = $1,190 per                        inspection cycle.   inspection cycle.
                                  inspection cycle.
Preventative modification        15 work-hours x $85 per              $0  $1,275 per          $138,975 per
 (optional).                      hour = $1,275 per                        inspection cycle.   inspection cycle.
                                  inspection cycle.
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary on-condition
actions that would be required based on the results of the proposed
inspection. We have no way of determining the number of aircraft that
might need these actions:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                   Action                                 Labor cost                Parts cost        product
----------------------------------------------------------------------------------------------------------------
Repair and open hole HFEC inspection.......  36 work-hours x $85 per hour =                   $0          $3,060
                                              $3,060.
----------------------------------------------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This proposed regulation is
within the scope of that authority because it addresses an unsafe
condition that is likely to exist or develop on products identified in
this rulemaking action.

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

The Boeing Company: Docket No. FAA-2015-0246; Directorate Identifier
2014-NM-187-AD.

(a) Comments Due Date

    We must receive comments by April 10, 2015.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to The Boeing Company Model 737-300, -400, and -
500 series airplanes, certificated in any category, as identified in
Boeing Alert Service Bulletin 737-53A1339, dated August 12, 2014.

(d) Subject

    Air Transport Association (ATA) of America Code 53: Fuselage.

(e) Unsafe Condition

    This AD was prompted by reports of fatigue cracking found at the
left-side and right-side upper frame, at station 360 between
stringer 13 and stringer 14. We are issuing this AD to detect and
correct fatigue cracking of the left-side and right-side upper frame
at station 360 between stringer 13 and stringer 14, which if not
corrected, can grow in size and result in a severed frame, which
could lead to rapid decompression and reduced structural integrity
of the airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Repetitive Inspections for Cracking

    At the applicable times specified in table 1 of paragraph 1.E.,
``Compliance,'' of Boeing Alert Service Bulletin 737-53A1339, dated
August 12, 2014, except as required by paragraph (i)(2) of this AD:
Do a medium frequency eddy current (MFEC) inspection for cracking on
the left-side and right-side of the upper frame at Station 360
between stringer 13 and stringer 14, in accordance with Part 2 of
the Accomplishment Instructions of Boeing Alert Service Bulletin
737-53A1339, dated August 12, 2014. If no cracking is found, repeat
the inspections at the applicable times specified in Table 1 of
paragraph 1.E., ``Compliance,'' of Boeing Alert Service Bulletin
737-53A1339, dated August 12, 2014. Accomplishment of the actions
specified in paragraph (j) of this AD terminates the repetitive
inspections required by this paragraph at the modified area only.

(h) Repair

    If any cracking is found during any inspection required by
paragraph (g) of this AD: Before further flight, repair the cracking
including doing an open hole high frequency eddy current (HFEC)
inspection for cracking of the holes, in accordance with Part 3 of
the Accomplishment Instructions of Boeing Alert Service Bulletin
737-53A1339, dated August 12, 2014, except as required by paragraph
(i)(1) of this AD. Repair of any crack terminates the repetitive
inspection requirements of paragraph (g) of this AD for the repaired
area only. If any cracking is found during any inspection required
by this paragraph, repair using a method approved in accordance with
the procedures specified in paragraph (l) of this AD.

(i) Exceptions to the Service Information

    (1) Where Boeing Alert Service Bulletin 737-53A1339, dated
August 12, 2014, specifies contacting Boeing for repair
instructions: Before further flight, repair using a method approved
in accordance with the procedures specified in paragraph (l) of this
AD.
    (2) Where Boeing Alert Service Bulletin 737-53A1339, dated
August 12, 2014, specifies a compliance time ``after the original
issue date of this service bulletin,'' this AD requires compliance
within the specified time after the effective date of this AD.

(j) Optional Preventative Modification

    Modification of an inspection area specified in paragraph (g) of
this AD, including doing open hole and surface HFEC inspections for
cracking of the area to be modified, in accordance with Part 4 of
the Accomplishment Instructions of Boeing Alert Service Bulletin
737-53A1339, dated August 12, 2014, except as required by paragraph
(i)(1) of this AD, terminates the repetitive inspections required by
paragraph (g) of this AD at the modified location only.

(k) Post-Repair and Post-Modification Inspections

    The post-repair and post-modification inspections specified in
Tables 4 and 5 of paragraph 1.E., ``Compliance,'' of Boeing Alert
Service Bulletin 737-53A1339, dated August 12, 2014, are not
required by this AD.
    Note 1 to paragraph (k) of this AD: The post-repair and post-
modification inspections specified in Tables 4 and 5 of paragraph
1.E., ``Compliance,'' of Boeing Alert Service Bulletin 737-53A1339,
dated August 12, 2014, may be used in support of compliance with
section 121.1109(c)(2) or 129.109(b)(2) of the Federal Aviation
Regulations (14 CFR 121.1109(c)(2) or 14 CFR 129.109(b)(2)).

(l) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the manager of the ACO, send it to the
attention of the person identified in paragraph (m)(1) of this AD.
Information may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair required by this AD if it is approved by Boeing
Commercial Airplanes Organization Designation Authorization (ODA)
that has been authorized by the Manager, Seattle ACO, to make those
findings. For a repair method to be approved, the repair must meet
the certification basis of the airplane, and the approval must
specifically refer to this AD.
    (4) Except as required by paragraph (i)(1) of this AD: If any
service information contains steps that are identified as RC
(Required for Compliance), those steps must be done to comply with
this AD; any steps that are not identified as RC are recommended.
Those steps that are not identified as RC may be deviated from using
accepted methods in accordance with the operator's maintenance or
inspection program without obtaining approval of an AMOC, provided
the steps identified as RC can be done and the airplane can be put
back in a serviceable condition. Any substitutions or changes to
steps identified as RC require approval of an AMOC.

(m) Related Information

    (1) For more information about this AD, contact Wayne Lockett,
Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft
Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-
3356; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P. O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-
5000, extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com. You may view this referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

    Issued in Renton, Washington, on February 11, 2015.
Jeffrey E. Duven,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2015-03677 Filed 2-23-15; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 77, Number 75 (Wednesday, April 18, 2012)]
[Notices]
[Pages 23294-23295]
[FR Doc No: 2012-9342]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66808; File No. SR-BATS-2012-013]

Self-Regulatory Organizations; BATS Exchange, Inc.; Order
Approving a Proposed Rule Change To Amend BATS Exchange, Inc. Rule 2.12
To Make Permanent the Pilot Program That Permits BATS Exchange, Inc. To
Receive Inbound Routes of Equities Orders Through BATS Trading, Inc.,
BATS Exchange's Routing Broker-Dealer, From BATS-Y Exchange, Inc.

April 13, 2012.

I. Introduction

    On March 8, 2012, BATS Exchange, Inc. (``BATS'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change
requesting permanent approval of the Exchange's pilot program that
permits the Exchange to receive inbound routes of equities orders
through BATS Trading, Inc. (``BATS Trading''), the Exchange's routing
broker-dealer, from BATS Y-Exchange, Inc. (``BATS-Y''). The proposed
rule change was published for comment in the Federal Register on March
14, 2012.\3\ The Commission received no comment letters regarding the
proposed rule change. This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 66571 (March 12,
2012), 77 FR 15153 (``Notice'').
---------------------------------------------------------------------------

II. Background

    BATS Trading is a broker-dealer that is a member of the Exchange
and is permitted to provide members of BATS-Y optional routing services
to other market centers.\4\ BATS Trading is owned by BATS Global
Markets (``Corporation''). The Corporation also owns two registered
securities exchanges--the Exchange \5\ and BATS-Y.\6\ Thus, BATS
Trading is an affiliate of the Exchange and BATS-Y.
---------------------------------------------------------------------------

    \4\ BATS Trading operates as a facility of BATS-Y that provides
outbound routing from BATS-Y to other market centers, subject to
certain conditions. See Securities Exchange Act Release No. 62716
(August 13, 2010), 75 FR 51295 (August 19, 2010) (File No. 10-198)
(Order granting the exchange registration of BATS-Y Exchange, Inc.)
(``BATS-Y Approval Order'').
    \5\ See Securities Exchange Act Release No. 58375 (August 18,
2008), 73 FR 49498 (August 21, 2008) (File No. 10-182) (order
granting the exchange registration of BATS Exchange, Inc.).
    \6\ See generally BATS-Y Approval Order, supra note 4.
---------------------------------------------------------------------------

    On September 9, 2010, the Exchange filed an immediately effective
proposed rule change to, among other things, permit the Exchange to
receive inbound routes of orders that BATS Trading routes in its
capacity as a facility of BATS-Y on a pilot basis ending October 15,
2011.\7\ On September 29, 2011, the Exchange filed an immediately
effective proposed rule change to extend the pilot period six months
ending April 15, 2012.\8\ The Exchange now seeks permanent approval of
this inbound routing pilot.\9\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 62901 (September 13,
2010), 75 FR 57097 (September 17, 2010) (SR-BATS-2010-024)
(``Inbound Router Notice'').
    \8\ See Securities Exchange Act Release No. 65516 (October 7,
2011), 76 FR 63977 (October 14, 2011) (SR-BATS-2011-040).
    \9\ See Notice, supra note 3.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\10\ Specifically, the Commission finds that the proposed rule
change is consistent with Section 6(b)(1) of the Act,\11\ which
requires, among other things, that a national securities exchange be so
organized and have the capacity to carry out the purposes of the Act,
and to comply and enforce compliance by its members and persons
associated with its members, with the provisions of the Act, the rules
and regulation thereunder, and the rules of the Exchange. Further, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\12\ which requires, among other things,
that the rules of a national securities exchange be designed to prevent
fraudulent and manipulative acts and practices; to promote just and
equitable principles of trade; to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, and processing
information with respect to, and facilitating transactions in
securities; to remove impediments to and perfect the mechanism of a
free and open market and a national market system; and, in general, to
protect investors and the public interest. Section 6(b)(5) also
requires that the rules of an exchange not be designed to permit unfair
discrimination among customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \10\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78f(b)(1).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Recognizing that the Commission has previously expressed concern
regarding the potential for conflicts of interest in instances where a
member firm is affiliated with an exchange to which it is routing
orders, the Exchange previously implemented limitations and conditions
to BATS Trading's affiliation with the Exchange to permit the Exchange
to accept inbound orders that BATS Trading routes in its capacity as a
facility of BATS-Y, on a pilot basis.\13\ The Exchange now seeks to
make this pilot permanent. Specifically, the Exchange states it is in
compliance with the following limitations and conditions: \14\
---------------------------------------------------------------------------

    \13\ See Inbound Router Notice, 75 FR at 57097.
    \14\ See Notice, 77 FR at 15154.

---------------------------------------------------------------------------

     The Exchange shall enter into a plan pursuant to Rule 17d-
2 under the Exchange Act with a non-affiliated self-regulatory
organization (``SRO'') to relieve the Exchange of regulatory
responsibilities for BATS Trading with respect to rules that are common
rules between the Exchange and the non-affiliated SRO, and enter into a
regulatory contract (``Regulatory Contract'') with a non-affiliated SRO
to perform regulatory responsibilities for BATS Trading for unique
Exchange rules.
     The Regulatory Contract shall require the Exchange to
provide the non-affiliated SRO with information, in an easily
accessible manner, regarding all exception reports, alerts, complaints,
trading errors, cancellations, investigations, and enforcement matters
(collectively ``Exceptions'') in which BATS Trading is identified as a
participant that has potentially violated Exchange or Commission Rules,
and shall require that the non-affiliated SRO provide a report, at
least quarterly, to the Exchange quantifying all Exceptions in which
BATS Trading is identified as a participant that has potentially
violated Exchange or Commission Rules.
     The Exchange, on behalf of the Corporation, shall
establish and maintain procedures and internal controls reasonably
designed to ensure that BATS Trading does not develop or implement
changes to its system on the basis of non-public information regarding
planned changes to Exchange systems, obtained as a result of its
affiliation with the Exchange, until such information is available
generally to similarly situated member organizations of the Exchange in
connection with the provision of inbound order routing to the Exchange.
     The Exchange may furnish to BATS Trading the same
information on the same terms that the Exchange makes available in the
normal course of business to any other member organization.

The Exchange believes that by meeting the above-listed conditions it
has set up mechanisms that protect the independence of the Exchange's
regulatory responsibility with respect to BATS Trading, and has
demonstrated that BATS Trading cannot use any information that it may
have because of its affiliation with the Exchange to its advantage.\15\
---------------------------------------------------------------------------

    \15\ See id.
---------------------------------------------------------------------------

    In the past, the Commission has expressed concern that the
affiliation of an exchange with one of its members raises potential
conflicts of interest, and the potential for unfair competitive
advantage.\16\ Although the Commission continues to be concerned about
potential unfair competition and conflicts of interest between an
exchange's self-regulatory obligations and its commercial interest when
the exchange is affiliated with one of its members, for the reasons
discussed below, the Commission believes that it is consistent with the
Act to permit BATS Trading, in its capacity as a facility of BATS-Y, to
provide inbound routing to the Exchange on a permanent basis instead of
a pilot basis, subject to the other conditions described above.
---------------------------------------------------------------------------

    \16\ See, e.g., Securities Exchange Act Release Nos. 54170 (July
18, 2006), 71 FR 42149 (July 25, 2006) (SR-NASDAQ-2006-006) (order
approving Nasdaq's proposal to adopt Nasdaq Rule 2140, restricting
affiliations between Nasdaq and its members); 53382 (February 27,
2006), 71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77) (order
approving the combination of the New York Stock Exchange, Inc. and
Archipelago Holdings, Inc.); 58673 (September 29, 2008), 73 FR 57707
(October 8, 2008) (SR-Amex-2008-62) (order approving the combination
of NYSE Euronext and the American Stock Exchange LLC); 59135
(December 22, 2008), 73 FR 79954 (December 30, 2008) (SR-ISE-2009-
85) (order approving the purchase by ISE Holdings of an ownership
interest in DirectEdge Holdings LLC); and 59281 (January 22, 2009),
74 FR 5014 (January 28, 2009) (SR-NYSE-2008-120) (order approving a
joint venture between NYSE and BIDS Holdings L.P.).
---------------------------------------------------------------------------

    The Exchange has proposed four ongoing conditions applicable to
BATS Trading's inbound routing activities in its capacity as a facility
of BATS-Y, which are enumerated above. The Commission believes that
these conditions mitigate its concerns about potential conflicts of
interest and unfair competitive advantage. In particular, the
Commission believes that a non-affiliated SRO's oversight of BATS
Trading,\17\ combined with a non-affiliated SRO's monitoring of BATS
Trading's compliance with the Exchange's rules and quarterly reporting
to the Exchange, will help to protect the independence of the
Exchange's regulatory responsibilities with respect to BATS Trading.
---------------------------------------------------------------------------

    \17\ This oversight will be accomplished through a 17d-2
Agreement. See Inbound Router Notice, 75 FR at 57097.
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\18\ that the proposed rule change (SR-BATS-2012-013) be, and
hereby is, approved.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9342 Filed 4-17-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 18 (Monday, January 28, 2013)]
[Notices]
[Pages 5799-5800]
[FR Doc No: 2013-01706]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OECA-2012-0956; FRL-9773-8]

Public Comment on EPA's National Enforcement Initiatives for
Fiscal Years 2014-2016

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of public comment period.

-----------------------------------------------------------------------

SUMMARY: The Environmental Protection Agency (EPA) is soliciting public
comment and recommendations on national enforcement initiatives to be
undertaken in fiscal years 2014-2016. EPA selects these priority areas
every three years in order to focus federal resources on the most
important environmental problems where noncompliance is a significant
contributing factor and where federal enforcement attention can make a
difference. For the FY 2011-2013 time period, the U.S. Environmental
Protection Agency, Office of Enforcement and Compliance Assurance, has
six national enforcement initiatives. These initiatives are (1)
Municipal Infrastructure--addressing sewage discharges from combined
sewer systems, sanitary sewer systems, and municipal separate storm
sewer systems; (2) Mineral Processing--addressing hazardous waste at
phosphoric acid facilities and high risk mineral processing sites; (3)
New Source Review--controlling emissions from coal fired utility
sector, cement plants, glass plants, and acid production plants; (4)
Air Toxics--addressing toxic emissions from high risk facilities by
examining leak detection and repair (LDAR), flares, and excess emission
sources; (5) Energy Extraction--addressing land-based natural gas
extraction facilities, including corporate-wide evaluations; and (6)
Concentrated Animal Feeding Operations--addressing animal waste
discharges from large animal feeding facilities. For more information
on the current initiatives, full descriptions can be found on our Web
site: http://www.epa.gov/compliance/data/planning/initiatives/index.html.
    In addition to these sector-based approaches, EPA could choose to
focus a national initiative on a strategic area that would improve the
Agency's ability to conduct its enforcement and compliance program. For
example, EPA is investing in a new approach called Next Generation
Compliance to dramatically improve compliance by, among other things,
employing advances in emissions monitoring and information technology;
expanding transparency by making information publicly available. This
availability of information will empower communities to play an active
role in compliance oversight and improve the performance of both the
government and regulated entities.
    The public is invited to comment on extending the current six
national enforcement initiatives for the 2014-2016 cycle. The public is
also invited to propose new sectors or other important strategic areas
for consideration. Commenters should keep in mind the Agency's resource
constraints, given that final decisions will need to consider the
Agency's funding level. Final selection will be incorporated into the
EPA Office of Enforcement and Compliance Assurance Final National
Program Manager Guidance (that provides national program direction for
all EPA regional offices) to be released in the Spring 2013. EPA will
consider these comments as it moves forward in the decision-making
process, but will not respond to all comments received.

DATES: Comments must be received on or before February 27, 2013.

ADDRESSES: Information in support of this Notice of Public Comment is
available via the Internet at: http://www.epa.gov/compliance/data/planning/initiatives/index.html.
    Submit your comments via www.regulations.gov, identified by Docket
ID No. EPA-HQ-OECA-2012-0956. Follow the on-line instructions for
submitting comments.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OECA-
2012-0956. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov. The
www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA without going through www.regulations.gov, your email
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.

FOR FURTHER INFORMATION CONTACT: Michele McKeever, Branch Chief,
National Planning and Measures Branch, Office of Enforcement and
Compliance Assurance, Mail Code: M2221A, Environmental Protection
Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone
number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. What are EPA enforcement and compliance national enforcement
initiatives?

    EPA is voluntarily soliciting public comment and recommendations on
national enforcement initiatives to be undertaken in fiscal years 2014-
2016. EPA selects these initiatives every three years in order to focus
federal resources on the most important environmental problems where
noncompliance is a significant contributing factor and where federal
enforcement attention can make a difference. Sector-based enforcement
and compliance national enforcement initiatives are selected according
to three criteria: (1) Environmental impact; (2) significant
noncompliance; and (3) appropriate federal role. The national
enforcement initiatives do not impose any legally binding requirements
on any outside parties. EPA will also consider strategic program areas
that are not sector-based as potential national enforcement
initiatives. These areas include programs such as Next Generation
Compliance (e.g., increasing use of advanced emissions monitoring,
expanding transparency by increasing

data availability, and developing more effective regulations).

II. On what is EPA requesting comment?

    EPA's Office of Enforcement and Compliance Assurance is collecting
external comment on the current set of national enforcement initiatives
and whether there are other new enforcement initiatives or strategic
directions of national significance and warranting federal enforcement
attention that should be considered. For example, in addition to
considering traditional sector-based approaches, EPA is considering
broadening the scope of a national enforcement initiative to include
innovative programs, such as Next Generation Compliance, where the
Agency feels the application of enforcement program resources would
help address critical issues. Examples of Next Generation Compliance
strategies include moving away from paper reporting to electronic
reporting, incorporating compliance drivers into regulations, using
advanced environmental monitoring technologies, and increasing
transparency by making data more readily accessible. The public is
invited to propose any other areas for consideration, keeping in mind
the Agency's resource constraints. Please note that some current
national enforcement initiatives may be carried forward or refined and
continued into FY 2014-2016.

III. Can the deadline for comments be extended?

    No. EPA issues National Program Manager Guidance (NPM Guidance) to
enable EPA, states, and federally-recognized Indian tribes (tribes) to
effectively align their joint implementation of environmental laws to
achieve mutual goals. The NPM guidance must be timely released for
state, tribal, and public comment in order to allow the states and
tribes with approved programs to consider the NPM Guidance fully in
their annual planning processes. These processes direct state and
tribal resources according to their fiscal calendars. As a result, EPA
must receive public comments by February 27, 2013 in order to make
national enforcement initiative selections in keeping with this
schedule.

    Dated: January 18, 2013.
Lisa Lund,
Director, Office of Compliance.
[FR Doc. 2013-01706 Filed 1-25-13; 8:45 am]
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