[Federal Register Volume 79, Number 68 (Wednesday, April 9, 2014)]
[Proposed Rules]
[Pages 19552-19564]
[FR Doc No: 2014-07918]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 730, 742, 748, 762, and 772

[Docket No. 131018874-3874-01]
RIN 0694-AG00

Proposed Revisions to the Support Document Requirements of the
Export Administration Regulations in Response to Executive Order 13563
Retrospective Regulatory Review

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

ACTION: Proposed rule.

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SUMMARY: This rule proposes changes to support documents required to be
submitted for license applications under the Export Administration
Regulations (EAR) and changes to the Bureau of Industry and Security's
(BIS's) role in issuing documents for the Import Certificate and
Delivery Verification system. This proposed rule would remove the
requirement to obtain an International Import Certificate or Delivery
Verification in connection with license applications, require a
Statement by Ultimate Consignee and Purchaser for most license
applications previously requiring an International Import Certificate,
and increase the license application value requirement for obtaining a
Statement by Ultimate Consignee and Purchaser. In addition, BIS would
cease issuing U.S. Import Certificates or Delivery Verifications for
imports into the United States. Finally, this rule revises the
structure and description of support document requirements to improve
clarity. BIS is proposing these changes in response to public comments
received in response to BIS's notice of inquiry on retrospective
regulatory review being undertaken under Executive Order 13563.

DATES: Comments must be received by June 9, 2014.

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-2014-0009.
     By email directly to<EMAIL_ADDRESS>Include
RIN 0694-AG00 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-AG00.

FOR FURTHER INFORMATION CONTACT: Patricia Muldonian, Office of National
Security and Technology Transfer Controls,<PHONE_NUMBER>,
<EMAIL_ADDRESS>Steven Emme, Office of the Assistant
Secretary for Export Administration,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    On January 18, 2011, President Barack Obama issued Executive Order
13563 to improve regulation and regulatory review. See 76 FR 3821 (Jan.
21, 2011). Among other things, the President stressed the need for the
regulatory system to allow for public participation and an open
exchange of ideas, as well as to promote predictability and reduce
uncertainty. The President also emphasized that regulations must be
accessible, consistent, written in plain language, and easy to
understand. Under Executive Order 13563, each agency is required to
``periodically review its existing significant regulations to determine
whether any such regulations should be modified, streamlined, expanded,
or repealed so as to make the agency's regulatory program more
effective or less burdensome in achieving the regulatory objectives.''
Through a notice of inquiry on this retrospective regulatory review
published on August 5, 2011 (76 FR 47527), the Bureau of Industry and
Security (BIS) sought comments on aspects of the Export Administration
Regulations (EAR) that are not immediately affected by the Export
Control Reform initiative and that could improve clarity in the EAR or
streamline requirements to improve efficiency and reduce burden.
    Among the public comments received, three commenters proposed
improvements to aspects of the support document requirements in part
748 of the EAR. Specifically, two commenters suggested removing the
requirement to obtain International Import Certificates (ICs) under
Sec.  748.10 of the EAR, and one commenter recommended that BIS
explicitly allow the use of electronic signatures. After reviewing
these comments, BIS proposes to amend the EAR to remove the requirement
for ICs under Sec.  748.10, remove the Delivery Verification
Certificate (DVs) in Sec.  748.13, change certain prior approval
requirements involving support documents to recordkeeping requirements,
raise the license application value threshold for requiring the
submission of a Statement by Ultimate Consignee and Purchaser, remove
language that suggests the preclusion of electronic signatures
currently in Sec.  748.11, and streamline the support document
requirements to improve clarity. BIS believes that these proposals
further the aims of Executive Order 13563 by tailoring the requirements
of the EAR to reduce unnecessary burdens imposed on license applicants
while continuing to further the national security and foreign policy
objectives of the United States.

Proposal To Remove Requirement To Obtain International Import
Certificate or Delivery Verification for Exports, Reexports, or
Transfers (In-Country) Subject to the EAR; Proposal To Eliminate
Issuance of U.S. Import Certificate, U.S. Import Certificate With
Triangular Transaction Stamp, or Delivery Verification Certificate by
BIS

Background

    The current International Import Certificate and Delivery
Verification (IC/DV) system is a remnant of the Coordinating Committee
on Multilateral Export Controls (COCOM). COCOM was a multilateral
organization that restricted strategic exports to controlled countries
during the Cold War. On March 31, 1994, COCOM disbanded and was later
replaced by the Wassenaar Arrangement on Export Controls for
Conventional Arms and Dual-Use Goods and Technologies. The IC/DV system
addressed diversion of items from COCOM countries or countries
cooperating with COCOM, and this system has remained in place under the
Wassenaar Arrangement.
    Under the IC/DV system, the importer in an international
transaction is required to certify that it will import the goods into
the destination country and will not reexport or otherwise divert the
goods without the authorization of the government of the importing
country. This certification takes the form of a document issued by the
government of the importing country. When goods are exported to the
United States, the United States Government may issue a U.S. IC (Form
BIS-645P/ATF-4522) for this purpose.
    Along with the IC (or other certification used by foreign
governments), an importer in an international transaction may be
required to have the government of the importing country complete a DV
in order to give greater assurance to the exporter's country that the
importing country will be aware and thus in a better position to
prevent potential diversion. When a DV is required, it is presented
together with evidence of entry of the goods for certification by the
customs authority of the importing

country. The form is then delivered from the importer to the exporter
and from the exporter to its export control licensing authority. When
goods are exported to the United States, the United States Government
may issue a DV (Form BIS-647P) when requested for this purpose.
    As commenters to the notice of inquiry pointed out, while the IC/DV
system is intended to prevent diversion and increase awareness among
participating countries of potential enforcement concerns, the system's
utility has diminished over time. While the IC provides information
about the importation of items, it lacks an affirmative statement on
the actual end use of the item by the ultimate consignee or end user.
Similarly, a DV does not provide the same level of assurance that a
pre-license check or post-shipment verification would achieve. This
lack of utility and information under the IC/DV system serves little
purpose for licensing and enforcement operations. Further, many
countries participating in the Wassenaar Arrangement do not require
their exporters to obtain an IC from the country of destination for
dual-use items. Consequently, the IC/DV system imposes additional
burdens on the public and the U.S. Government without achieving the
system's intended objectives.
    While the U.S. Government has previously attempted to implement
changes to the IC/DV system through the Wassenaar Arrangement, the
participating countries have not reached a consensus on this issue.
Since the IC/DV system is not addressed in the Wassenaar Arrangement
Initial Elements and there is no applicable U.S. statutory requirement
for the IC/DV system, BIS is initiating, under national discretion,
changes to the implementation of the IC/DV system through this proposed
rule.

Proposed Changes Impacting License Applications Submitted to BIS

    In this proposed rule, BIS proposes to remove the requirement in
Sec.  748.10 to obtain an IC for a license application, and instead
require that the exporter obtain a Statement by Ultimate Consignee and
Purchaser. Under Sec.  748.10, an IC is required for license
applications of items controlled for national security reasons valued
over $50,000 that are destined for countries listed in Sec.
748.9(b)(2), with the exception of the People's Republic of China
(PRC). This proposed change would treat countries in current Sec.
748.9(b)(2) like most other countries under the current requirements.
This proposed change would not, however, apply to the PRC or Argentina.
License applications for the PRC would continue to require a PRC End-
User Statement, as is currently the case under Sec.  748.10. License
applications for Argentina would be treated like most other countries
and territories in the Americas and only require a support document for
applications involving firearms and related commodities under current
Sec.  740.14 of the EAR.
    BIS believes that this proposed change would significantly reduce
burden and improve timeliness for shipping under an approved license.
Currently, U.S. exporters must receive a signed original of the IC
prior to shipping commodities under an approved license. As one
commenter pointed out, the time necessary to obtain an original IC can
be significant. Generally, the U.S. exporter would need to request that
the foreign importer obtain an IC from the foreign government, the
foreign importer would have to fill out and submit the IC by mail or
hand delivery to the foreign government, the foreign government would
have to process and certify the IC, the foreign government would have
to return the IC by mail to the foreign importer or have the foreign
importer pick up the form, the foreign importer would have to mail the
certified original to the U.S. exporter, and the IC may have to be
translated into English prior to submission or record retention.
Consequently, the current requirement to obtain an IC can put U.S.
exporters at a competitive disadvantage since many of the other member
states of the Wassenaar Arrangement do not require their own exporters
to obtain an IC from other Wassenaar Arrangement member states when
importing dual-use items.
    To address this time-consuming burden, BIS believes that requiring
a Statement by Ultimate Consignee and Purchaser rather than an IC would
benefit U.S. exporters. Unlike ICs, Statements by Ultimate Consignee
and Purchaser only require the engagement of parties directly involved
in the transaction. Further, U.S. exporters currently do not have to
wait for an original Statement by Ultimate Consignee and Purchaser
before shipping under an approved license so long as the exporter
receives the original within 60 days from the date the document is
signed by the ultimate consignee. In addition to greatly reducing
burden and delays, this proposal would provide greater transparency and
information for BIS in processing license applications and for
enforcement officials to monitor potential concerns.
    To implement these changes for ICs, this proposed rule removes all
references to ICs in Sec.  748.9 of the EAR. Further, this proposed
rule removes references to ICs in Sec.  748.10 while maintaining the
requirements described for the PRC End-User Statement. In addition,
since BIS is proposing the removal of the requirement to obtain an IC,
this proposed rule also eliminates the need for BIS to request that a
DV be obtained from a foreign government for a transaction. As a
result, this proposed rule eliminates all current text in Sec.  748.13
of the EAR and Supplement No. 4 to part 748, which lists contact
information for the IC/DV authorities of foreign governments.

Proposed Elimination of Issuance of U.S. Import Certificate, U.S.
Import Certificate With Triangular Transaction Stamp, and Delivery
Verification Certificate by BIS

    As described in Supplement No. 5 to part 748, BIS currently issues
U.S. ICs or DVs for items subject to the EAR that are controlled for
national security reasons or for items subject to the jurisdiction of
the Nuclear Regulatory Commission. BIS may also issue a U.S. IC with a
triangular transaction stamp when the U.S. importer in a transaction is
uncertain whether the items in question will be imported into the
United States or knows that the items will not be imported into the
United States. As previously mentioned, the issuance of a U.S. IC or DV
provides little utility to the U.S. Government or to the foreign
country granting an export license as no representation is made by the
ultimate consignee or end user on the documents. Eliminating the
review, processing, and issuance of U.S. ICs and DVs will allow BIS to
focus its resources on more effective methods to adjudicate license
applications and focus its efforts on the risk of diversion.
Consequently, under this proposed rule, BIS would cease accepting Form
BIS-645P and BIS-647P and thus cease issuing a U.S. IC or DV when
requested by a foreign government. Accordingly, this rule proposes to
remove and reserve Supplement No. 5 to part 748 and to remove entries
for information collections related to ICs and DVs in Supplement No. 1
to part 730.
    This proposal would not impact the participation by other agencies
of the U.S. Government in the IC/DV system. Currently, the Department
of Justice's Bureau of Alcohol, Tobacco, Firearms and Explosives issues
U.S. ICs for the permanent import of defense articles described on
either the U.S. Munitions List (USML) in 22 CFR part 121 or the U.S.
Munitions Import List in 27 CFR

part 447. Also, should U.S. Government documentation acknowledging a
temporary import of defense articles described on the USML in 22 CFR
part 121 be required, U.S. importers may obtain a DSP-61 Application/
License for Temporary Import of Unclassified Defense Articles from the
Department of State's Directorate of Defense Trade Controls.

Proposal To Increase Value Threshold for Requiring a Statement by
Ultimate Consignee and Purchaser

    Prior to June 19, 2007, the EAR applied a consistent value
threshold of $5,000 for obtaining a support document for a license
application, with the exception of license applications for computers
destined for the PRC. On June 19, 2007, BIS published a final rule that
increased the value threshold for license applications requiring an IC
and for most license applications requiring a PRC End-User Statement.
The final rule increased the value threshold from $5,000 to $50,000,
with the exception of license applications for computers and certain
cameras destined for the PRC. The value threshold for a Statement by
Ultimate Consignee and Purchaser, however, remained at $5,000. This
change resulted in requiring support documents for more license
applications involving close allies and regime partners for items
controlled for reasons other than national security than for license
applications involving the same items destined for the PRC. As such,
BIS believes that the varying value levels add to the complexity of
support document requirements without providing a necessary national
security or foreign policy rationale.
    To address the inconsistency in value threshold, this proposed rule
raises the value of license applications requiring a Statement by
Ultimate Consignee and Purchaser from $5,000 to $50,000. This change
would further reduce the burden for U.S. exporters by eliminating a
requirement for transactions with controlled items valued between
$5,000 and $50,000. As is currently required, license applicants may
not split an order into multiple license applications in order to avoid
the value threshold requiring a Statement by Ultimate Consignee and
Purchaser.
    Additional proposed changes to part 748 impacting the Statement by
Ultimate Consignee and Purchaser are addressed herein.

Proposed Revisions to Part 748 To Improve Clarity of Support Document
Requirements

    The current framework for describing support document requirements
in the EAR is found in Sec. Sec.  748.9 through 748.14. The proposal to
remove the requirement to obtain ICs and DVs affords BIS the
opportunity to streamline the framework of the support document
requirements and improve clarity. This proposed rule revises Sec.
748.6(a) to provide greater clarity on general instructions for license
applications and then revises the framework in current Sec. Sec.  748.9
through 748.14 as follows:

Proposed Sec.  748.9

    Section 748.9 is currently drafted as a decision tree to inform
readers when a support document is required for a license application.
This framework has led to difficulty in clearly and efficiently
determining whether a support document is required for a specific
license application. Under this rule, proposed paragraph (a) provides a
general overview of and need for support document requirements.
Proposed paragraph (b) outlines when a support document is required for
a license application and provides citations to the relevant provision
that further describes the specific support document in question.
Proposed paragraph (c) details when reexport license applications and
transfer (in-country) license applications would require a support
document. Proposed paragraph (d) lists exceptions to the requirements
to obtain support documents outlined in paragraph (b). Proposed
paragraph (e) describes general requirements for the content of all
support documents. Proposed paragraph (f) incorporates recordkeeping
information currently in Sec.  748.12(e) and addresses returning unused
or partially used support documents to foreign importers. Proposed
paragraph (g) parallels the language in current Sec.  748.9(h) on the
impact of a support document on BIS's review of a license application.
Proposed paragraph (h) contains the information on grace periods for
compliance following regulatory changes, which is currently in Sec.
748.12(a).

Proposed Sec. Sec.  748.10 Through 748.12

    With the removal of ICs and DVs under this proposed rule, the
remaining support documents would be described in separate, consecutive
sections--Sec.  748.10 for the PRC End-User Statement, Sec.  748.11 for
the Statement by Ultimate Consignee and Purchaser, and Sec.  748.12 for
import certificates for firearms and related items. This rule also
proposes to rename import certificates described in current Sec.
748.14 as FC Import Certificates. This change is being made to reduce
potential ambiguity between the Import Certificate for firearms and
related items in current Sec.  748.14 and the IC in current Sec.
748.10.
    For each description of the support documents proposed to remain
under this rule, BIS is revising and reorganizing the descriptions into
parallel, uniform topics in proposed Sec. Sec.  748.12 through 748.14.
Thus, all three sections will provide the requirements for the
applicable support document under the following topics--(a) requirement
to obtain document, (b) obtaining the document, (c) content of the
document, (d) procedures for using document with license application,
and (e) recordkeeping. BIS believes this new organization should allow
readers to more readily identify the applicable requirements for each
support document.

Proposed Sec.  748.10

    Currently, Sec.  748.10 combines requirements for ICs and PRC End-
User Statements. This proposed rule revises Sec.  748.10 to remove all
references to ICs and make this section applicable to PRC End-User
Statements only. Under this proposed rule, paragraph (a) separates the
three combinations of commodity and value thresholds requiring a PRC
End-User Statement rather than listing all three in one paragraph. In
addition, this proposed rule attempts to tighten the language of the
requirements to make clear the applicability of the value thresholds.
For example, if a license application is submitted to export cameras
controlled under ECCN 6A003 to the PRC, the value of the 6A003 cameras
must be over $5,000 to generate a requirement for a PRC End-User
Statement. If the same order includes other items that do not require a
license, the value of the other items should not be factored in to the
$5,000 value threshold for 6A003 cameras. However, if the license
application includes 6A003 cameras valued at, for example, $4,000 and
includes other commodities requiring a license to the PRC valued at
$47,000, a PRC End-User Statement would still be required because the
cumulative total of commodities requiring a license to the PRC exceeds
$50,000.
    Proposed paragraph (b) provides information in current Sec.
748.10(c)(1) and Supplement No. 4 to part 748. Proposed paragraph (c)
provides information in current Sec.  748.10(c)(2), (c)(3), and (h).
Proposed paragraph (d) largely reflects information in current Sec.
748.9(c), (e), (f), and (h). Proposed paragraph (e) details the
recordkeeping requirements and amends the current

procedure in Sec.  748.9(j), which describes the process by which
exporters must submit the PRC End-User Statement and other information
to BIS for determination on whether a PRC End-User Statement may be
returned to the foreign importer. This proposed rule removes the
submission requirement and instead adds a recordkeeping obligation,
thereby simplifying the process and reducing the burden for both
exporters and the U.S. Government.

Specific Changes in Proposed Sec.  748.11

    Under this proposed rule, information regarding the Statement by
Ultimate Consignee and Purchaser would remain under Sec.  748.11, but
this section would be amended to reflect the changes in requirements to
obtain a Statement by Ultimate Consignee and Purchaser due to the
removal of ICs. Within this section, proposed paragraph (a) describes
the revised requirement to obtain a Statement by Ultimate Consignee and
Purchaser to reflect that license applications currently requiring an
IC under Sec.  748.10 would now require a Statement by Ultimate
Consignee and Purchaser, unless the items are destined for Argentina.
To conform to this change, the requirement in proposed paragraph (a)
applies to destinations not located in the ``Americas.'' The proposed
definition of ``Americas'' in part 772, which is derived from the list
of countries found in current Sec.  748.9(a)(1), provides the list of
countries and territories that are considered to be in the Americas for
purposes of the EAR. The definition makes clear, however, that while
Cuba would geographically be considered part of the Americas, it does
not fall under the definition in part 772 and would thus be subject to
the requirement for obtaining a Statement by Ultimate Consignee and
Purchaser. Proposed paragraph (a) also describes the limited use of a
Statement by Ultimate Consignee and Purchaser for license applications
involving the PRC. Currently, Sec.  748.9(b)(2)(i) addresses the use of
a Statement by Ultimate Consignee and Purchaser for limited
applications involving the PRC. The proposed paragraph (a) also
includes a new Note 2 to paragraph (a) that would allow BIS to require
applicants to obtain a Statement by Ultimate Consignee and Purchaser
for a license application even if one would not otherwise be required.
This note would conform to current Sec.  748.10(b)(3)(iii) for ICs and
PRC End-User Statements.
    Proposed paragraph (b) incorporates text from current Sec.
748.11(c). Proposed paragraph (c) incorporates the current text of
Sec.  748.11(d) and (e). Proposed paragraph (d) consolidates text in
current Sec. Sec.  748.9(c)(2), 748.9(e), and 748.11(b). In addition,
proposed paragraph (d) changes the current requirement on when to
submit a copy of the Statement by Ultimate Consignee and Purchaser with
the license application into a recordkeeping requirement. Also, this
proposed rule removes references to wording such as ``original
statement'' and ``manually signed original'' in proposed paragraph (d)
to allow for the use of electronic signatures. Proposed paragraph (e)
retains the current requirements on recordkeeping in Sec.  748.11(b).

Proposed Sec.  748.12

    This proposed rule reorganizes the information in current Sec.
748.12 and generally places such information in proposed Sec. Sec.
748.9 or 748.13. In its place, this proposed rule moves the information
on Import Certificates or equivalent documents for license applications
of firearms and related commodities (to be collectively renamed FC
Import Certificates) from Sec.  748.14 to Sec.  748.12 to position it
next to the requirements for the other support documents in Sec. Sec.
748.10 and 748.11. With the exception of proposed Sec.  748.12(e), this
proposed rule makes no substantive changes to the information in
current Sec.  748.14. Proposed Sec.  748.12(e) combines the
requirements applicable to returning the Import Certificate or
equivalent statement to the foreign importer under current Sec. Sec.
748.9(j) and 748.14(j) and replaces the submission requirement with a
recordkeeping requirement. This is similar to the text proposed in
Sec.  748.10(e) for PRC End-User Statements.

Proposed Sec.  748.13

    With the proposed removal of the requirement to obtain an IC in
Sec.  748.10, this proposed rule also removes the text describing DVs
in current Sec.  748.13. This rule proposes to move information on
granting exceptions to the support document requirements from current
Sec.  748.12(c) and (d) to proposed Sec.  748.13.

Additional Revisions to Part 748

    Since this rule proposes to move the section on FC Import
Certificates from Sec.  748.14 to Sec.  748.12, this rule proposes to
remove and reserve Sec.  748.14. In addition, this rule proposes to
remove the table of foreign IC/DV authorities in current Supplement No.
4 to part 748 and replace it with a table providing guidance on support
document requirements. This table would serve as guidance only; it is
not meant to contravene or supersede the support document requirements
described in Sec. Sec.  748.9 through 748.13. Also, current Supplement
No. 5 to part 748 would be removed and reserved since BIS is proposing
to no longer issue U.S. ICs or DVs.

Additional Conforming Changes to the EAR

    This proposed rule also revises Sec.  742.17 to change a citation
reference back to part 748 and update the name of the FC Import
Certificate, revises references to the support documents in the
recordkeeping requirements of Sec.  762.2, and inserts a definition of
``Americas'' in Sec.  772.1 for purposes of support document
requirements in part 748. This definition updates the list of
destinations currently in Sec.  748.9(a)(1).

Export Administration Act

    Since August 21, 2001, the Export Administration Act of 1979, as
amended, has been in lapse. However, the President, through Executive
Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as
amended by Executive Order 13637 of March 8, 2013, 78 FR 16129 (March
13, 2013), and as extended by the Notice of August 8, 2013, 78 FR 49107
(August 12, 2013) has continued the EAR 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 as
amended by Executive Order 13637.

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 proposed rule is part of BIS's retrospective
regulatory review being undertaken under Executive Order 13563. This
rule has been determined to be not significant for purposes of
Executive Order 12866.
    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 four collection numbers: Approval of
Triangular Transactions Involving Commodities Covered by a U.S. Import
Certificate (collection number 0694-0009), Delivery Verification
Certificate (0694-0016), International Import Certificate (0694-0017),
Statement by Ultimate Consignee and Purchaser (0694-0021), and Import
Certificates And End-User Certificates (0694-0093).
    Under this proposed rule, BIS would cease issuing Import
Certificates and Delivery Verifications, which are addressed in
collection numbers 0694-0016 and 0694-0017, respectively. This would
lead to an annual reduction in burden of 56 hours for 0694-0016 and 52
hours for 0694-0017. With the removal of Import Certificates under
0694-0017, this rule would also remove Import Certificates requiring a
Triangular Transaction Stamp, as addressed under collection 0694-0009.
BIS has not received a request for approval of a triangular transaction
in the past ten years, so the removal of this information collection
would result in a reduction of one hour.
    Additionally, this proposed rule would amend the requirements for
support documents required in conjunction with a license application.
Collection number 0694-0093 addresses Import Certificates and End-User
Certificates, changes to Import Certificates and End-User Certificates,
exception requests to Import Certificates and End-User Certificates,
Delivery Verifications, exception requests to Delivery Verifications,
and related recordkeeping. This proposed rule would eliminate the
requirement for obtaining a Delivery Verification in conjunction with a
license application submitted to BIS. This would result in an annual
reduction in burden of 361 hours for Delivery Verifications and 0.5
hours for Delivery Verification exception requests. Also, this rule
would eliminate the requirement to obtain an Import Certificate in
conjunction with a license application. This change would result in the
reduction of the following annual burden hour estimates: 354.5 hours
for preparing the Import Certificate, 23.6 hours for recordkeeping
related to the Import Certificate, 99 hours for changes to Import
Certificates, and 7 hours for Import Certificate exception requests.
    The proposed changes to support documents required in conjunction
with a license application would also impact collection number 0694-
0021, which addresses the Statement by Ultimate Consignee and
Purchaser. This proposed rule would increase the license application
value threshold for requiring a Statement by Ultimate Consignee and
Purchaser from $5,000 to $50,000. In addition, with the exception of
licenses for Argentina, this proposed rule would require obtaining a
Statement by Ultimate Consignee and Purchaser for those license
applications previously requiring an Import Certificate. These proposed
changes result in a net increase of 135.7 burden hours measured under
collection number 0694-0021.
    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) for 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, 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. 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 by reducing the burden of having to obtain certain
support documents for certain license applications. Therefore, the
impact on any affected small entities will be wholly positive. 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.

List of Subjects

15 CFR Part 730

    Administrative practice and procedure, Advisory committees,
Exports, Reporting and recordkeeping requirements, Strategic and
critical materials.

15 CFR Part 742

    Exports, Terrorism.

15 CFR Part 748

    Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.

15 CFR Part 762

    Administrative practice and procedure, Business and industry,
Confidential business information, Exports, Reporting and recordkeeping
requirements.

15 CFR Part 772

    Exports.

    For the reasons stated in the preamble, the Bureau of Industry and
Security proposes to amend the Export Administration Regulations, 15
CFR parts 730, 742, 748, 762, and 772, as follows:

PART 730--[AMENDED]

0
1. The authority citation for part 730 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. 2151
note; 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. 11912, 41 FR 15825, 3 CFR, 1976 Comp., p. 114; E.O. 12002, 42
FR 35623, 3 CFR, 1977 Comp., p. 133; E.O. 12058, 43 FR 20947, 3 CFR,
1978 Comp., p. 179; E.O. 12214, 45 FR 29783, 3 CFR, 1980 Comp., p.
256; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12854,
58 FR 36587, 3 CFR, 1993 Comp., p. 179; E.O. 12918, 59 FR 28205, 3
CFR, 1994 Comp., p. 899; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp.,
p. 950; E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 356; E.O.
12981, 60 FR 62981, 3 CFR, 1995 Comp., p. 419; E.O. 13020, 61 FR
54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p.
208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224,
66 FR 49079, 3 CFR, 2001 Comp., p. 786; E.O. 13338, 69 FR 26751, 3
CFR, 2004 Comp., p 168; E.O. 13637 of March 8, 2013, 78 FR 16129
(March 13, 2013); Notice of January 17, 2013, 78 FR 4303 (January
22, 2013); Notice of May 7, 2013, 78 FR 27301 (May 9, 2013); Notice
of August 8, 2013, 78 FR 49107 (August 12, 2013); Notice of
September 18, 2013, 78 FR 58151 (September 20, 2013); Notice of
November 7, 2013, 78 FR 67289 (November 12, 2013).

0
2. Supplement No. 1 to part 730 is amended by removing the rows for
collection numbers 0694-0009, 0694-0016, and 0694-0017.

PART 742--[AMENDED]

0
3. The authority citation for 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 8, 2013, 78 FR
49107 (August 12, 2013); Notice of November 7, 2013, 78 FR 67289
(November 12, 2013).

0
4. Section 742.17 is amended by:
0
a. Revising the last sentence of paragraph (a);
0
b. Revising ``Import Certificate'' to read ``FC Import Certificate'' in
paragraph (b); and
0
c. Revising paragraph (g).
    The revisions read as follows:

Sec.  742.17  Exports of firearms to OAS member countries.

    (a) * * * Licenses will generally be issued on a Firearms
Convention (FC) Import Certificate or equivalent official document,
satisfactory to BIS, issued by the government of the importing OAS
member country.
* * * * *
    (g) Validity period for licenses. Although licenses generally will
be valid for a period of four years, your ability to ship items that
require an FC Import Certificate or equivalent official document under
this section may be affected by the validity of the FC Import
Certificate or equivalent official document (see Sec.  748.12(d)(4) of
the EAR).

PART 748--[AMENDED]

0
5. The authority citation for part 748 continues to read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
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 8, 2013, 78 FR
49107 (August 12, 2013).

0
6. Revise Sec.  748.6(a) to read as follows:

Sec.  748.6  General instructions for license applications.

    (a) Instructions. (1) General instructions for filling out license
applications are in Supplement No. 1 to this part.
    (2) License applications may require additional information due to
the type of items requested in the application or the characteristics
of the transaction. Special instructions for applications requiring
such additional information are listed in Sec.  748.8 and described
fully in Supplement No. 2 to this part.
    (3) License applications may also require additional information
for evaluation of the parties in the transaction. Special instructions
for applications requiring such additional information are listed in
Sec. Sec.  748.9 through 748.13. Additional guidance for determining
requirements is located in Supplement No. 4 to this part.
* * * * *
0
7. Revise Sec.  748.9 to read as follows:

Sec.  748.9  Support documents for evaluation of foreign parties in
license applications.

    (a) Scope. License applicants may be required to obtain support
documents concerning the foreign parties and the disposition of the
items intended for export or reexport. Some support documents are
issued by foreign governments, while other support documents are signed
and issued by the purchaser and/or ultimate consignee. For support
documents issued by foreign governments, any foreign legal restrictions
or obligations exercised by the government issuing the support document
is in addition to the conditions and restrictions placed on the
transaction by BIS. However, the laws and regulations of the United
States are in no way modified, changed, or superseded by the issuance
of a support document by a foreign government.
    (b) Requirements to obtain support documents for export license
applications. Unless an exception in paragraph (d) of this section
applies, a support document is required for the following export
license applications:
    (1) License applications for exports to the People's Republic of
China (PRC). License applications for commodities ultimately destined
for the PRC require a PRC End-User Statement for certain transactions.
Under narrow circumstances, a Statement by Ultimate Consignee and
Purchaser may be substituted for a PRC End-User Statement. See
Sec. Sec.  748.10 and 748.11(a)(2) for specific requirements.
    (2) License applications for exports of firearms and related
commodities to member countries of the Organization of American States
(OAS). License applications for firearms or related commodities
classified under ECCN 0A984, 0A986, or 0A987 require a Firearms
Convention (FC) Import Certificate when such commodities are destined
for a member country of the OAS. See Sec.  748.12 for specific
requirements.
    (3) License applications for exports to all other destinations that
are not countries or territories located in the ``Americas.'' License
applications for commodities requiring a license for any reason on the
Commerce Control List may require a Statement by Ultimate Consignee and
Purchaser if the items are ultimately destined for a country (other
than the PRC) or a territory that is not located in the ``Americas.''
See Sec.  748.11 for specific requirements and Sec.  772.1 for the
definition of ``Americas.''

    Note to Paragraph (b): For End-Use Certificate requirements
under the Chemical Weapons Convention, see Sec.  745.2 of the EAR.

    (c) Requirement to obtain support documents for reexport or
transfer (in-country) license applications. If a support document would
be required for an export from the United States under paragraph (b) of
this section, then the same support document would also be required for
license applications to reexport or transfer (in-country) if the final
destination is a country in Country Group D:1 or E:1.
    (d) Exceptions to requirements to obtain support documents. (1)
Even if a support document requirement exists in paragraphs (b) or (c)
of this section, no support document is required for any of the
following situations:
    (i) The ultimate consignee or purchaser is a foreign government(s)
or foreign government agency(ies), other than the government of the
People's Republic of China. To determine whether the parties in a
transaction meet the definition of ``foreign government agency,'' refer
to the definition contained in part 772 of the EAR. If either the
ultimate consignee or purchaser is not a foreign government or foreign
government agency, however, a support document may still be required
from the nongovernmental party;
    (ii) The license application is filed by, or on behalf of, a relief
agency registered with the Advisory Committee on Voluntary Foreign Aid,
U.S. Agency for International Development, for export to a member
agency in the foreign country;
    (iii) The license application is submitted for commodities for
temporary exhibit, demonstration, or testing purposes;
    (iv) The license application is submitted for commodities
controlled for short supply reasons (see part 754 of the EAR);
    (v) The license application is submitted under the Special
Comprehensive License procedure described in part 752 of the EAR;
    (vi) The license application is submitted for software or
technology; or
    (vii) The license application is submitted for encryption
commodities controlled under ECCN 5A002 or 5B002.
    (2) BIS will consider granting an exception to the requirement for
obtaining a support document where the requirements cannot be met due
to circumstances beyond the applicant's control. An exception will not
be

granted contrary to the objectives of the U.S. export control laws and
regulations. Refer to Sec.  748.13 of this part for specific
instructions on procedures for requesting an exception.
    (e) Content of support documents. In addition to specific
requirements described for each support document in Sec. Sec.  748.10,
748.11, and 748.12, the use and submission of support documents must
comply with the following requirements.
    (1) English translation. All abbreviations, coded terms, or other
expressions on support documents having special significance in the
trade or to the parties to the transaction must be explained on an
attachment to the document. Documents in a language other than English
must be accompanied by an attachment giving an accurate English
translation, either made by a translating service or certified by the
applicant to be correct. Explanations or translations should be
provided on a separate piece of paper, and not entered on the support
documents themselves.
    (2) Responsibility for full disclosure. (i) Information contained
in a support document cannot be construed as extending or expanding or
otherwise modifying the specific information supplied in a license
application or license issued by BIS. The license application covering
the transaction discloses all facts pertaining to the transaction. The
authorizations contained in the resulting license are not extended by
information contained in the support document regarding reexport from
the country of destination, transfer (in-country), or any other facts
relative to the transaction that are not reported on the license
application.
    (ii) Misrepresentations, either through failure to disclose facts,
concealing a material fact, or furnishing false information, may
subject responsible parties to administrative or criminal action by
BIS.
    (iii) In obtaining the required support document, the applicant is
not relieved of the responsibility for full disclosure of any other
information concerning the ultimate destination and end use, end user
of which the applicant knows, even if inconsistent with the
representations made in the applicable support document. The applicant
is responsible for promptly notifying BIS of any change in the facts
contained in the support document that comes to the applicant's
attention.
    (f) Recordkeeping provisions. (1) License applicants must retain on
file the original copy of any support document issued in support of a
license application submitted to BIS. All recordkeeping provisions in
part 762 apply to this requirement, except that reproductions may not
be substituted for the officially authenticated, original support
document. To ensure compliance with this recordkeeping requirement, BIS
may require applicants, on a random basis, to submit specific original
certificates and statements that have been retained on file. Applicants
will be notified in writing of any such request.
    (2) See Sec. Sec.  748.10(e)(2) and 748.12(e)(2) for recordkeeping
requirements for returning support documents issued by foreign
governments.
    (g) Effect on license application review. BIS reserves the right in
all respects to determine to what extent any license will be issued
covering items for which a support document has been issued. If a
support document was issued by a foreign government, BIS will not seek
or undertake to give consideration to recommendations from the foreign
government as to the action to be taken on a license application. A
support document will be only one of the factors upon which BIS will
base its licensing action, since end uses and other considerations are
important factors in the decision making process.
    (h) Grace period for complying with requirements following
regulatory change. (1) Whenever the requirement for an End-User
Statement, Statement by Ultimate Consignee or Purchaser, or Import
Certificate is imposed or extended by a change in the regulations, the
license application need not conform to the new support documentation
requirements for a period of 45 days after the effective date of the
regulatory change published in the Federal Register.
    (2) License applications filed during the 45 day grace period must
be accompanied by any evidence available to the applicant that will
support representations concerning the ultimate consignee, ultimate
destination, and end use, such as copies of the order, letters of
credit, correspondence between the applicant and ultimate consignee, or
other documents received from the ultimate consignee. Applicants must
also identify the regulatory change (including its effective date) that
justifies exercise of the 45 day grace period.
0
8. Revise Sec.  748.10 to read as follows:

Sec.  748.10  People's Republic of China (PRC) End-User Statement.

    (a) Requirement to obtain document. Unless the provisions of
Sec. Sec.  748.9(d) or 748.11(a)(2) apply, a PRC End-User Statement is
required for any of the following license applications for commodities
destined for China:
    (1) The license application includes cameras classified under ECCN
6A003 and the value of such cameras exceeds $5,000;
    (2) The license application includes computers requiring a license
for any reason on the Commerce Control List, regardless of the value of
the computers; or
    (3) The license application includes any commodity(ies) requiring a
license for any reason on the Commerce Control List, and the value of
the commodity(ies) requiring a license exceeds $50,000.

    Note 1 to Paragraph (a):  If an order meets the commodity(ies)
and value requirements listed above, then a PRC End-User Statement
is required. An order may not be split into multiple license
applications solely to avoid a requirement to obtain a PRC End-User
Statement.

    Note 2 to Paragraph (a): If an order includes both items that do
require a license to the PRC and items that do not require a license
to the PRC, the value of the latter items should not be factored in
to the value thresholds described above. Also, if a license
application includes 6A003 cameras and other items requiring a
license to the PRC, then the value of the 6A003 cameras should be
factored into the value threshold described in paragraph (a)(3).

    Note 3 to Paragraph (a): On a case-by-case basis, BIS may
require license applicants to obtain a PRC End-User Statement for a
license application that would not otherwise require a PRC End-User
Statement under the requirements of paragraph (a) of this section.

    (b) Obtaining the document. (1) If a PRC End-User Statement is
required for any reason under paragraph (a) of this section, then
applicants must request that the importer obtain a PRC End-User
Statement for all items on a license application that require a license
to the PRC for any reason listed on the CCL. Applicants must obtain the
original PRC End-User Statement from the importer.
    (2) PRC End-User Statements are issued and administered by the
Ministry of Commerce; Department of Mechanic, Electronic and High
Technology Industries; Export Control Division I; Chang An Jie No. 2;
Beijing 100731 China; Phone: (86)(10) 6519 7366 or 6519 7390; Fax:
(86)(10) 6519 7543; http://cys.mofcom.gov.cn/ag/ag.html.
    (c) Content of the document. (1) The license applicant's name must
appear on the PRC End-User Statement submitted to BIS as the applicant,
supplier, or order party.
    (2) License applicants must ensure that the following information
is included on the PRC End-User

Statement signed by an official of the Department of Mechanic,
Electronic and High Technology Industries, Export Control Division I,
of the PRC Ministry of Commerce (MOFCOM), with MOFCOM's seal affixed to
it:
    (i) Title of contract and contract number (optional);
    (ii) Names of importer and exporter;
    (iii) End user and end use;
    (iv) Description of the commodity, quantity and dollar value; and
    (v) Signature of the importer and date.
    (3) After a support document is issued by MOFCOM, no corrections,
additions, or alterations may be made on the document by any person. If
a license applicant desires to explain any information contained on the
statement, the applicant may include a signed letter of explanation as
part of the application.

    Note to paragraph (c): The license applicant should furnish the
consignee with the commodity description contained in the CCL to be
used in applying for the PRC End-User Statement. It is also
advisable to furnish a manufacturer's catalog, brochure, or
technical specifications if the commodity is new.

    (d) Procedures for using document with license application--(1)
Timing for obtaining PRC End-User Statement and submitting license
application. License applicants must obtain a PRC End-User Statement
prior to submitting the license application. Applicants, however, may
submit the license application upon receipt of a facsimile or other
legible copy of the PRC End-User Statement, provided that no shipment
is made against any issued license prior to receipt of the original PRC
End-User Statement.
    (2) Information necessary for license application. License
applicants should not submit the original or copy of the PRC End-User
statement with the license application. Rather, applicants must
indicate ``Import/End-User Certificate'' in Block 7 of the application
with an ``X'' in the appropriate box. In addition, applicants must
identify China as the originating country and input the number of the
PRC End-User Statement in Block 13 of the application. If a license
application is submitted without either the correct Block or Box marked
on the application and no exception request is made pursuant to Sec.
748.13, the license application will be immediately returned without
action.
    (3) Using a PRC End-User Statement for multiple applications. A PRC
End-User Statement may cover more than one purchase order and more than
one item. Where the Statement includes items for which more than one
license application will be submitted, you must include in Block 24 on
your application, or in an attachment to each license application
submitted against the Statement, the following certification:

    I (We) certify that the quantities of items shown on this
license application, based on the PRC End-User Statement identified
in Block 13 of this license application, when added to the
quantities shown on all other license applications submitted to BIS
based on the same PRC End-User Statement, do not total more than the
total quantities shown on the above cited PRC End-User Statement.

    (4) Alterations. After a PRC End-User Statement is issued by the
Government of the People's Republic of China, no corrections,
additions, or alterations may be made on the certificate by any person.
If an applicant desires to explain any information contained on the
certificate, the applicant may submit a signed statement describing
such information as part of the license application.
    (5) Validity period. (i) When a PRC End-User Statement is required
to support one or more license applications, an applicant must submit
the first license application within the validity period shown on the
PRC End-User Statement or 6 months from the date the PRC End-User
Statement was signed, whichever is shorter.
    (ii) All subsequent license applications supported by the same PRC
End-User Statement must be submitted to BIS within one year from the
date the first license application supported by the same PRC End-User
Statement was submitted to BIS.
    (e) Recordkeeping--(1) General requirement. Original PRC End-User
Statements used to support license applications must be retained on
file by the applicant. All recordkeeping provisions in part 762 apply
to this requirement, except that reproductions may not be substituted
for the officially authenticated, original PRC End-User Statement.
    (2) Returning PRC End-User Statement to foreign importer. A foreign
importer may request that an unused or partially used PRC End-User
Statement be returned. In such circumstances, the PRC End-User
Statement may be returned to the foreign importer provided that the
applicant makes a copy of the PRC End-User Statement and attaches to it
a printout or copy of each license covered by the PRC End-User
Statement as well as a letter of explanation citing the foreign
importer's request for return of the PRC End-User Statement, the
license number(s) that have been issued against the PRC End-User
Statement (including both outstanding and expired licenses), and a
statement that the PRC End-User Statement cannot be used in connection
with another license application. The copies of the PRC End-User
Statement, license(s), and attached letter of explanation must be
retained on file along with the correspondence with the foreign
importer in accordance with the recordkeeping provisions in part 762 of
the EAR.
0
9. Revise Sec.  748.11 to read as follows:

Sec.  748.11  Statement by Ultimate Consignee and Purchaser.

    (a) Requirement to obtain document--(1) General requirement for all
countries excluding the PRC. Unless an exception in Sec.  748.9(d) or
paragraph (a)(3) of this section applies, a Statement by Ultimate
Consignee and Purchaser is required if:
    (i) The license application includes item(s) requiring a license
for any reason on the Commerce Control List and such item(s) are valued
at over $50,000; and
    (ii) The items are destined for a country or territory other than
the PRC or the ``Americas'' (see Sec.  772.1 for the definition of
``Americas'').
    (2) Permissive substitute of Statement by Ultimate Consignee and
Purchaser in place of PRC End-User Statement. The requirement to obtain
a support document for license applications involving the PRC is
generally determined by Sec.  748.10(a) of the EAR. However, a
Statement by Ultimate Consignee and Purchaser may be substituted in
place of a PRC End-User Statement when the commodities to be exported
(i.e., replacement parts and sub-assemblies) are valued at $75,000 or
less and are for servicing previously exported commodities.
    (3) Exception to general requirement. The general requirement
described in paragraph (a)(1) of this section does not apply if the
applicant is the same person as the ultimate consignee, provided the
required statements are contained in Block 24 on the license
application. This exemption does not apply, however, where the
applicant and consignee are separate entities, such as parent and
subsidiary, or affiliated or associated firms.

    Note 1 to paragraph (a): If an order meets the destination and
value requirements listed above, then a Statement by Ultimate
Consignee and Purchaser is required. An order may not be split into
multiple license applications solely to avoid a requirement to
obtain a Statement by Ultimate Consignee and Purchaser.

    Note 2 to paragraph (a): On a case-by-case basis, BIS may
require license applicants to obtain a Statement by Ultimate
Consignee and Purchaser for a license application that would not
otherwise require a Statement by Ultimate Consignee and Purchaser
under the requirements of paragraph (a) of this section.

    (b) Obtaining the document. (1) The ultimate consignee and
purchaser must complete either a statement on company letterhead, as
described in paragraph (c)(1) of this section, or Form BIS-711,
Statement by Ultimate Consignee and Purchaser, as described in
paragraph (c)(2) of this section. Unless otherwise specified, any
reference in this section to ``Statement by Ultimate Consignee and
Purchaser'' applies to both the statement on company letterhead and to
Form BIS-711.
    (2) If the consignee and purchaser elect to complete the statement
on letterhead and both the ultimate consignee and purchaser are the
same entity, only one statement is necessary.
    (3) If the ultimate consignee and purchaser are separate entities,
separate statements must be prepared and signed.
    (4) If the ultimate consignee and purchaser elect to complete Form
BIS-711, only one Form BIS-711 (containing the signatures of the
ultimate consignee and purchaser) need be completed.
    (5) Whether the ultimate consignee and purchaser sign a written
statement or complete Form BIS-711, the following constraints apply:
    (i) Responsible officials representing the ultimate consignee or
purchaser must sign the statement. ``Responsible official'' is defined
as someone with personal knowledge of the information included in the
statement, and authority to bind the ultimate consignee or purchaser
for whom they sign, and who has the power and authority to control the
use and disposition of the licensed items.
    (ii) The authority to sign the statement may not be delegated to
any person (agent, employee, or other) whose authority to sign is not
inherent in his or her official position with the ultimate consignee or
purchaser for whom he or she signs. The signing official may be located
in the United States or in a foreign country. The official title of the
person signing the statement must also be included.
    (iii) The consignee and/or purchaser must submit information that
is true and correct to the best of their knowledge and must promptly
send a new statement to the applicant if changes in the facts or
intentions contained in their statement(s) occur after the statement(s)
have been forwarded to the applicant. Once a statement has been signed,
no corrections, additions, or alterations may be made. If a signed
statement is incomplete or incorrect in any respect, a new statement
must be prepared, signed and forwarded to the applicant.
    (c) Content of the document. If a statement on company letterhead
will be obtained to meet the requirement of paragraph (a) of this
section, follow the requirements described in paragraph (c)(1) of this
section. If Form BIS-711 will be obtained to meet the requirement of
paragraph (a) of this section, follow the requirements described in
paragraph (c)(2) of this section.
    (1) Statement on company letterhead. Information in response to
each of the following criteria must be included in the statement. If
any information is unknown, that fact should be disclosed in the
statement. Preprinted information supplied on the statement, including
the name, address, or nature of business of the ultimate consignee or
purchaser appearing on the letterhead or order form is acceptable but
will not constitute evidence of either the signer's identity, the
country of ultimate destination, or end use of the items described in
the license application.
    (i) Paragraph 1. One of the following certifications must be
included depending on whether the statement is proffered in support of
a single license application or multiple license applications:
    (A) Single. This statement is to be considered part of a license
application submitted by [name and address of applicant].
    (B) Multiple. This statement is to be considered a part of every
license application submitted by [name and address of applicant] until
two years from the date this statement is signed.
    (ii) Paragraph 2. One or more of the following certifications must
be included. Note that if any of the facts related to the following
statements are unknown, this must be clearly stated.
    (A) The items for which a license application will be filed by
[name of applicant] will be used by us as capital equipment in the form
in which received in a manufacturing process in [name of country] and
will not be reexported or incorporated into an end product.
    (B) The items for which a license application will be filed by
[name of applicant] will be processed or incorporated by us into the
following product(s) [list products] to be manufactured in [name of
country] for distribution in [list name of country or countries].
    (C) The items for which a license application will be filed by
[name of applicant] will be resold by us in the form in which received
for use or consumption in [name of country].
    (D) The items for which a license application will be filed by
[name of applicant] will be reexported by us in the form in which
received to [name of country or countries].
    (E) The items received from [name of applicant] will be [describe
use of the items fully].
    (iii) Paragraph 3. The following two certifications must be
included:
    (A) The nature of our business is [possible choices include:
broker, distributor, fabricator, manufacturer, wholesaler, retailer,
value added reseller, original equipment manufacturer, etc.].
    (B) Our business relationship with [name of applicant] is [possible
choices include; contractual, franchise, distributor, wholesaler,
continuing and regular individual business, etc.] and we have had this
business relationship for [number of years].
    (iv) Paragraph 4. The final paragraph must include all of the
following certifications:
    (A) We certify that all of the facts contained in this statement
are true and correct to the best of our knowledge and we do not know of
any additional facts that are inconsistent with the above statements.
We shall promptly send a replacement statement to [name of the
applicant] disclosing any material change of facts or intentions
described in this statement that occur after this statement has been
prepared and forwarded to [name of applicant]. We acknowledge that the
making of any false statement or concealment of any material fact in
connection with this statement may result in imprisonment or fine, or
both, and denial, in whole or in part, of participation in U.S. exports
or reexports.
    (B) Except as specifically authorized by the U.S. Export
Administration Regulations, or by written approval from the Bureau of
Industry and Security, we will not reexport, resell, or otherwise
dispose of any items approved on a license supported by this statement:
    (1) To any country not approved for export as brought to our
attention by the exporter; or
    (2) To any person if there is reason to believe that it will result
directly or indirectly in disposition of the items contrary to the
representations made in this statement or contrary to the U.S. Export
Administration Regulations.
    (C) We understand that acceptance of this statement as a support
document cannot be construed as an authorization by BIS to reexport or
transfer (in country) the items in the form in which received even
though we may have indicated the intention to reexport or transfer (in
country), and that authorization to reexport (or transfer in country)
is not granted in an export license on the basis of information

provided in the statement, but as a result of a specific request in a
license application.
    (2) Form BIS-711. Form BIS-711 is available at http://www.bis.doc.gov/index.php/component/rsform/form/21-request-bis-forms?task=forms.edit. Instructions on completing Form BIS-711 are
contained in Supplement No. 3 to this part. The ultimate consignee and
purchaser may sign a legible copy of Form BIS-711. It is not necessary
to require the ultimate consignee and purchaser to sign an original
Form BIS-711, provided all information contained on the copy is
legible.
    (d) Procedures for using document with license application--(1)
Timing for obtaining Statement by Ultimate Consignee and Purchaser and
submitting license application--(i) A license application may be
submitted upon receipt of a facsimile or other legible copy of the
signed statement.
    (ii) All subsequent license applications supported by the same
Statement by Ultimate Consignee and Purchaser must be submitted within
two years of the first application if the statement was completed as a
single transaction statement. If the statement was completed as a
multiple transaction statement, all applications must be submitted
within two years of signature by the consignee or purchaser, whichever
was last.
    (2) Information necessary for license application. (i) Applicants
are not required to submit a copy of the statement with the
application. The applicant should, however, mark the correct Box in
Block 7 of the license application to notify BIS that a copy of the
statement is on file with the applicant.
    (ii) If a license application is submitted without either the
correct Block or Box marked on the application and no exception request
is made pursuant to Sec.  748.13, the license application will be
immediately returned without action.
    (3) Validity period. (i) When a Statement by Ultimate Consignee and
Purchaser is required to support one or more license applications, an
applicant must submit the first license application within 6 months
from the date the statement was signed, whichever is shorter.
    (ii) All subsequent license applications supported by the same
Statement by Ultimate Consignee and Purchaser must be submitted within
two years of the first application if the statement was completed as a
single transaction statement. If the statement was completed as a
multiple transaction statement, all applications must be submitted
within two years of signature by the consignee or purchaser, whichever
was last.
    (e) Recordkeeping. The applicant must, upon receipt, retain the
signed statement, and both the ultimate consignee and purchaser should
retain a copy of the statement in accordance with the recordkeeping
provisions contained in part 762 of the EAR.
0
10. Revise Sec.  748.12 to read as follows:

Sec.  748.12  Firearms Convention (FC) Import Certificate.

    (a) Requirement to obtain document. Unless an exception in Sec.
748.9(d) applies, an FC Import Certificate is required for license
applications for firearms and related commodities, regardless of value,
that are destined for member countries of the Organization of American
States (OAS). This requirement is consistent with the OAS Model
Regulations described in Sec.  742.17.
    (1) Items subject to requirement. Firearms and related commodities
are those commodities controlled for ``FC Column 1'' reasons under
ECCNs 0A984, 0A986, or 0A987.
    (2) Countries subject to requirement. (i) OAS member countries
include: Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize,
Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominica,
Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana,
Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru,
Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines,
Suriname, Trinidad and Tobago, Uruguay, and Venezuela.
    (ii) [Reserved]
    (3) Equivalent official document in place of FC Import Certificate.
For those OAS member countries that have not yet established or
implemented an FC Import Certificate procedure, BIS will accept an
equivalent official document (e.g., import license or letter of
authorization) issued by the government of the importing country as
supporting documentation for the export of firearms.
    (b) Obtaining the document. Applicants must request that the
importer (e.g., ultimate consignee or purchaser) obtain the FC Import
Certificate or an equivalent official document from the government of
the importing country, and that it be issued covering the quantities
and types of firearms and related items that the applicant intends to
export. (See Supplement No. 6 to this part for a list of the OAS member
countries' authorities administering the FC Import Certificate System.)
Upon receipt of the FC Import Certificate or its official equivalent,
the importer must provide the original or a certified copy of the FC
Import Certificate or the original or a certified copy of the
equivalent official document to the license applicant. The license
applicant shall obtain the required documents prior to submitting a
license application, except as provided in paragraphs (d)(2)(i) and
(d)(2)(ii) of this section.
    (c) Content of the document. The FC Import Certificate or its
official equivalent must contain the following information:
    (1) Applicant's name and address. The applicant may be either the
exporter, supplier, or order party.
    (2) FC Import Certificate Identifier/Number.
    (3) Name of the country issuing the certificate or unique country
code.
    (4) Date the FC Import Certificate was issued, in international
date format (e.g., 24/12/12 (24 December 2012), or 3/1/99 (3 January
1999)).
    (5) Name of the agency issuing the certificate, address, telephone
and facsimile numbers, signing officer name, and signature.
    (6) Name of the importer, address, telephone and facsimile numbers,
country of residence, representative's name if commercial or government
body, citizenship, and signature.
    (7) Name of the end user(s), if known and different from the
importer, address, telephone and facsimile numbers, country of
residence, representative's name if commercial (authorized distributor
or reseller) or government body, citizenship, and signature. Note that
BIS does not require the identification of each end user when the
firearms and related commodities will be resold by a distributor or
reseller if unknown at the time of export.
    (8) Description of the commodities approved for import including a
technical description and total quantity of firearms, parts and
components, ammunition and parts.

    Note to paragraph (c)(8): You must furnish the consignee with a
detailed technical description of each commodity to be given to the
government for its use in issuing the FC Import Certificate. For
example, for shotguns, provide the type, barrel length, overall
length, number of shots, the manufacturer's name, the country of
manufacture, and the serial number for each shotgun. For ammunition,
provide the caliber, velocity and force, type of bullet,
manufacturer's name and country of manufacture.

    (9) Expiration date of the FC Import Certificate in international
date format (e.g., 24/12/12) or the date the items must be imported,
whichever is earlier.
    (10) Name of the country of export (i.e., United States).

    (11) Additional information. Certain countries may require the
tariff classification number, by class, under the Brussels Convention
(Harmonized Tariff Code) or the specific technical description of a
commodity. For example, shotguns may need to be described in barrel
length, overall length, number of shots, manufacturer's name and
country of manufacture. The technical description is not the Export
Control Classification Number (ECCN).
    (d) Procedures for using document with license application--(1)
Timing for obtaining FC Import Certificate and submitting license
application. An FC Import Certificate or equivalent official document
can only be used to support one license application. An applicant may
submit an application before obtaining the original or certified copy
of the FC Import Certificate, or the official original or certified
copy of the equivalent document, provided that:
    (i) The applicant has received a facsimile or other legible copy of
the FC Import Certificate or equivalent official document at the time
the license application is filed; and
    (ii) The applicant states on the application that a facsimile of
the FC Import Certificate or equivalent official document has been
received and that no export will be made against the license prior to
obtaining the original or certified copy of the FC Import Certificate
or the original or certified copy of the equivalent official document
issued by the importing country and retaining it on file. Generally,
BIS will not consider any license application for the export of
firearms and related commodities if the application is not supported by
an FC Import Certificate or its official equivalent. If the government
of the importing country will not issue an FC Import Certificate or its
official equivalent, the applicant must supply the information
described in paragraphs (c)(1) and (c)(6) through (8) of this section
on company letterhead.
    (2) Information necessary for license application. The license
application must include the same commodities as those listed on the FC
Import Certificate or the equivalent official document. The applicant
must clearly note the number and date of the FC Import Certificate or
equivalent official document in Block 13 for all export license
applications supported by that Certificate or equivalent official
document. The applicant must also indicate in Block 7 of the
application that the FC Import Certificate or equivalent official
document has been received and will be retained on file.
    (3) Alterations. After an FC Import Certificate or official
equivalent document is used to support the issuance of a license, no
corrections, additions, or alterations may be made on the FC Import
Certificate by any person. If an applicant desires to explain any
information contained on the FC Import Certificate or official
equivalent document, the applicant may submit a signed statement with a
copy of the Import Certificate or official equivalent.
    (4) Validity period. FC Import Certificates or equivalent official
documents issued by an OAS member country will be valid for a period of
one year or less. Although licenses generally are valid for four years,
an applicant's ability to export may be affected by the validity of the
FC Import Certificate or equivalent official document.
    (e) Recordkeeping--(1) General requirement. The applicant must
obtain and retain on file either the original or certified copy of the
FC Import Certificate, or an original or certified copy of equivalent
official document issued by the government of the importing country in
support of any license application for export of firearms and related
commodities classified as ECCN 0A984, 0A986, or 0A987. Unless otherwise
provided in this paragraph, all other recordkeeping provisions of part
762 of the EAR apply to this requirement.
    (2) Returning FC Import Certificate to foreign importer. A foreign
importer may request that an unused or partially used FC Import
Certificate or equivalent official document be returned. In such
circumstances, the FC Import Certificate or equivalent official
document may be returned to the foreign importer provided that you make
a copy of the FC Import Certificate (or official equivalent) and attach
to it a copy of the license covered by the FC Import Certificate (or
official equivalent) as well as a letter of explanation citing the
foreign importer's request for return of the FC Import Certificate (or
official equivalent), the license number that has been issued against
the FC Import Certificate (or official equivalent), and a statement
that the FC Import Certificate (or official equivalent) cannot be used
in connection with another license application. The copies of the FC
Import Certificate (or official equivalent), license, and attached
letter of explanation must be retained on file along with
correspondence with the importer in accordance with the recordkeeping
provisions in part 762 of the EAR.
0
11. Revise Sec.  748.13 to read as follows:

Sec.  748.13  Granting of exceptions to the support documentation
requirements.

    (a) Overview. An exception to obtaining the required support
documentation will be considered by BIS; however, an exception will not
be granted contrary to the objectives of the U.S. export control
program. A request for exception may involve either a single
transaction or, where the reason necessitating the request is
continuing in nature, multiple transactions. If satisfied by the
evidence presented, BIS may waive the support document requirement and
accept the license application for processing. Favorable consideration
of a request for exception generally will be given in instances where
the support document requirement:
    (1) Imposes an undue hardship on the applicant or ultimate
consignee (e.g., refusal by the foreign government to issue the
requisite support document and such refusal constitutes discrimination
against the applicant and/or ultimate consignee);
    (2) Cannot be complied with (e.g., the commodities will be held in
a foreign trade zone or bonded warehouse for subsequent distribution in
one or more countries); or
    (3) Is not applicable to the transaction (e.g., the items will not
be imported for consumption into the named country of destination).
    (b) Procedures for requesting an exception. (1) Requests for
exception must be submitted with the license application to which the
request relates. Where the request relates to more than one license
application, it should be submitted with the first license application
and referred to in Block 24 on any subsequent license application. The
request for exception must be submitted in writing on the applicant's
letterhead.
    (2) In instances where the applicant is requesting an exception
from obtaining a PRC End-User Statement under Sec.  748.10 or an FC
Import Certificate under Sec.  748.12, the request must be accompanied
by a Statement by Ultimate Consignee and Purchaser as described in
Sec.  748.11 of this part.
    (3) At a minimum, the letter request must include:
    (i) Name and address of ultimate consignee;
    (ii) Name and address of purchaser, if different from ultimate
consignee;
    (iii) Location of foreign trade zone or bonded warehouse if the
items will be exported to a foreign trade zone or bonded warehouse;
    (iv) Type of request, i.e., whether for a single transaction or
multiple transactions;

    (v) Full explanation of the reason(s) for requesting the exception;
    (vi) Nature and duration of the business relationship between the
applicant and ultimate consignee and purchaser shown on the license
application;
    (vii) Whether the applicant has previously obtained or submitted to
BIS a support document issued in the name of the ultimate consignee or
purchaser, and a list of the Application Control Number(s) to which the
certificate(s) applied; and
    (viii) Any other facts to justify granting an exception.
    (4) Action by BIS--(i) Single transaction request. Where a single
transaction is involved, BIS will act on the request for exception at
the same time as the license application with which the request is
submitted. In those instances where the related license application is
approved, the issuance of the license will serve as an automatic notice
to the applicant that the exception was approved. If any restrictions
are placed on granting of the exception, these will appear on the
approval. If the request for exception is not approved, BIS will advise
the applicant.
    (ii) Multiple transactions request. Where multiple transactions are
involved, BIS will advise the applicant of the action taken on the
exception request. The response from BIS will contain any conditions or
restrictions that BIS finds necessary to impose (including an exception
termination date if appropriate). In addition, a written acceptance of
these conditions or restrictions may be required from the parties to
the transaction.
0
12. Remove and reserve Sec.  748.14.
0
13. Revise supplement No. 4 to part 748 to read as follows:

Supplement No. 4 to Part 748--Guidance on Support Document Requirements
for License Applications

    Unless an exception under Sec.  748.9(d) applies, a support
document may be required for license applications in the following
circumstances.

----------------------------------------------------------------------------------------------------------------
                                                                Commodity/value
          Support document                 Destination            requirements         Regulatory citation(s)
----------------------------------------------------------------------------------------------------------------
None (unless FC Import Certificate   Countries and
 or equivalent official document      territories located
 required below for OAS-member        in the ``Americas''
 countries).                          (see definition in
                                      Sec.   772.1 of the
                                      EAR; definition
                                      specifically excludes
                                      Cuba).
FC Import Certificate or equivalent  Organization of         Firearms and related   Sec.   748.12.
 official document.                   American States:        commodities,
                                      Antigua and Barbuda,    regardless of value,
                                      Argentina, the          controlled under
                                      Bahamas, Barbados,      ECCNs 0A984, 0A986,
                                      Belize, Bolivia,        or 0A987.
                                      Brazil, Canada,
                                      Chile, Colombia,
                                      Costa Rica, Dominica,
                                      Dominican Republic,
                                      Ecuador, El Salvador,
                                      Grenada, Guatemala,
                                      Guyana, Haiti,
                                      Honduras, Jamaica,
                                      Mexico, Nicaragua,
                                      Panama, Paraguay,
                                      Peru, St. Kitts and
                                      Nevis, Saint Lucia,
                                      Saint Vincent and the
                                      Grenadines, Suriname,
                                      Trinidad and Tobago,
                                      Uruguay, and
                                      Venezuela.
PRC End-User Statement.............  People's Republic of    6A003 cameras valued   Sec.   748.10 (see also Sec.
                                      China (PRC).            above $5,000.            748.11(a)(2)).
                                                             Computers regardless
                                                              of value..
                                                             Commodities requiring
                                                              a license for any
                                                              reason on the CCL
                                                              and valued above
                                                              $50,000.
Statement by Ultimate Consignee and  All other destinations  Commodities requiring  Sec.   748.11.
 Purchaser.                           not listed in this      a license for any
                                      table.                  reason on the CCL
                                                              and valued above
                                                              $50,000.
----------------------------------------------------------------------------------------------------------------

0
14. Remove and reserve supplement No. 5 to part 748.

PART 762--[AMENDED]

0
15. The authority citation for part 762 continues to read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August
8, 2013, 78 FR 49107 (August 12, 2013).

0
16. Section 762.2 is amended by:
0
a. Revising paragraphs (b)(22) and (b)(24); and
0
b. Removing and reserving paragraph (b)(25).
    The revisions read as follows:

Sec.  762.2  Records to be retained.

* * * * *
    (b) * * *
    (22) Sec.  748.10, PRC End-User Statement;
* * * * *
    (24) Sec.  748.12, FC Import Certificate;
* * * * *

PART 772--[AMENDED]

0
17. The authority citation for part 772 continues to read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August
8, 2013, 78 FR 49107 (August 12, 2013).

0
18. Section 772.1 is amended by adding the definition for ``Americas''
in alphabetical order to read as follows:

Sec.  772.1  Definitions of terms as used in the Export Administration
Regulations (EAR).

* * * * *
    Americas. (Part 748) For purposes of part 748 of the EAR, the term
Americas includes the following countries and territories: Anguilla,
Antigua and Barbuda, Argentina, Aruba, Bahamas, Barbados, Belize,
Bermuda, Bolivia, Bonaire, Brazil, British Virgin Islands, Canada,
Cayman Islands, Chile, Colombia, Costa Rica, Cura[ccedil]ao, Dominica,
Dominican Republic, Ecuador, El Salvador, Falkland Islands, French
Guiana, Greenland, Grenada, Guadeloupe, Guatemala, Guyana, Haiti,
Honduras, Jamaica, Martinique, Mexico, Montserrat, Nicaragua, Panama,
Paraguay, Peru, Saint Barth[eacute]lemy, Saint Kitts and Nevis, Saint
Lucia, Saint Martin, Saint Pierre and Miquelon, Saint Vincent and the
Grenadines, Sint Maarten, Suriname, Trinidad and Tobago, Turks and
Caicos, United

States, Uruguay, and Venezuela. This definition also includes locations
not listed above that are part of the French West Indies, Leeward and
Windward Islands, or Leeward Antilles, but this definition
intentionally omits Cuba.
* * * * *

    Dated: April 3, 2014.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2014-07918 Filed 4-8-14; 8:45 am]
BILLING CODE 3510-33-P


[Federal Register Volume 74, Number 122 (Friday, June 26, 2009)]
[Notices]
[Pages 30565-30566]
[FR Doc No: E9-15205]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER02-2001-012; Docket No. ER07-1250-000]

Electric Quarterly Reports; PowerGrid Systems, Inc. Order on
Intent To Revoke Market-Based Rate Authority

Issued June 22, 2009.
    1. Section 205 of the Federal Power Act (FPA),\1\ and the
Commission's regulations at 18 CFR Part 35, require, among other
things, that all rates, terms, and conditions of jurisdictional
services be filed with the Commission. In Order No. 2001, the
Commission revised its public utility filing requirements and
established a requirement for public utilities, including power
marketers, to file Electric Quarterly Reports summarizing the
contractual terms and conditions in their agreements for all
jurisdictional services (including market-based power sales, cost-based
power sales, and transmission service) and providing transaction
information (including rates) for short-term and long-term power sales
during the most recent calendar quarter.\2\
---------------------------------------------------------------------------

    \1\ 16 U.S.C. 824d (2006).
    \2\ Revised Public Utility Filing Requirements, Order No. 2001,
FERC Stats. & Regs. ] 31,127, reh'g denied, Order No. 2001-A, 100
FERC ] 61,074, reconsideration and clarification denied, Order No.
2001-B, 100 FERC ] 61,342, order directing filing, Order No. 2001-C,
101 FERC ] 61,314 (2002), order directing filing, Order No. 2001-D,
102 FERC ] 61,334 (2003).
---------------------------------------------------------------------------

    2. Commission staff's review of the Electric Quarterly Report
submittals indicates that one utility with authority to sell electric
power at market-based rates has failed to file its Electric Quarterly
Reports. This order notifies PowerGrid Systems, Inc. (PowerGrid) that
its market-based rate authorization will be revoked unless it complies
with the Commission's requirements within 15 days of the date of
issuance of this order.
    3. In Order No. 2001, the Commission stated that,

    [i]f a public utility fails to file a[n] Electric Quarterly
Report (without an appropriate request for extension), or fails to
report an agreement in a report, that public utility may forfeit its
market-based rate authority and may be required to file a new
application for market-based rate authority if it wishes to resume
making sales at market-based rates.3
---------------------------------------------------------------------------

    \3\ Order No. 2001 at P 222.

---------------------------------------------------------------------------
    4. The Commission further stated that,

    [o]nce this rule becomes effective, the requirement to comply
with this rule will supersede the conditions in public utilities'
market-based rate authorizations, and failure to comply with the
requirements of this rule will subject public utilities to the same
consequences they would face for not satisfying the conditions in
their rate authorizations, including possible revocation of their
authority to make wholesale power sales at market-based
rates.4
---------------------------------------------------------------------------

    \4\ Id. P 223.

    5. Pursuant to these requirements, the Commission has revoked the
market-based rate tariffs of several market-based rate sellers that
failed to submit their Electric Quarterly Reports.\5\
---------------------------------------------------------------------------

    \5\ See, e.g., Electric Quarterly Reports, 73 Fed. Reg. 31460
(June 2, 2008); Electric Quarterly Reports, 115 FERC ] 61,073
(2006), Electric Quarterly Reports, 114 FERC ] 61,171 (2006).
---------------------------------------------------------------------------

    6. As noted above, Commission staff's review of the Electric
Quarterly Report submittals identified one public utility with
authority to sell power at market-based rates that failed to file
Electric Quarterly Reports through the first quarter of 2009.
Commission staff contacted this entity to remind it of its regulatory
obligations.\6\ PowerGrid has not met those obligations.\7\
Accordingly, this order notifies PowerGrid that its market-based rate
authorization will be revoked unless it complies with the Commission's
requirements within 15 days of the issuance of this order.
---------------------------------------------------------------------------

    \6\ See PowerGrid Systems, Inc., Docket No. ER07-1250-000 (April
22, 2009) (unpublished letter order).
    \7\ \\ According to the Commission's records, PowerGrid last
filed its Electric Quarterly Reports for the 3rd quarter of 2008.
---------------------------------------------------------------------------

    7. In the event that PowerGrid has already filed its Electric
Quarterly Report in compliance with the Commission's requirements, its
inclusion herein is inadvertent. We direct PowerGrid, within 15 days of
the date of issuance of this order, to make a filing with the
Commission identifying

itself and providing details about its prior filings that establish
that it complied with the Commission's Electric Quarterly Report filing
requirements.
    8. If PowerGrid does not wish to continue having market-based rate
authority, it may file a notice of cancellation with the Commission
pursuant to section 205 of the FPA to cancel its market-based rate
tariff.

The Commission Orders

    (A) Within 15 days of the date of issuance of this order, PowerGrid
shall file with the Commission all delinquent Electric Quarterly
Reports. If PowerGrid fails to make this filing, the Commission will
revoke its authority to sell power at market-based rates and will
terminate its electric market-based rate tariff. The Secretary is
hereby directed, upon expiration of the filing deadline in this order,
to promptly issue a notice, effective on the date of issuance, listing
the public utility whose tariff has been revoked for failure to comply
with the requirements of this order and the Commission's Electric
Quarterly Report filing requirements.
    (B) The Secretary is hereby directed to publish this order in the
Federal Register.

    By the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. E9-15205 Filed 6-25-09; 8:45 am]
BILLING CODE 6717-01-P