[Federal Register Volume 80, Number 133 (Monday, July 13, 2015)]
[Rules and Regulations]
[Pages 39950-39957]
[FR Doc No: 2015-16904]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 736, 740, 744, 748, and 774

[Docket No. 150325297-5297-01]
RIN 0694-AG59

Clarifications and Corrections to the Export Administration
Regulations (EAR): Control of Spacecraft Systems and Related Items the
President Determines No Longer Warrant Control Under the United States
Munitions List (USML)

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

ACTION: Final rule.

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SUMMARY: This final rule makes additional clarifications and
corrections to the interim final rule that was published on May 13,
2014. The May 13 rule added controls to the Export Administration
Regulations (EAR) for spacecraft and related items that the President
has determined no longer warrant control under United States Munitions
List (USML) Category XV--spacecraft and related items.
    The changes included in this final rule are limited to corrections
and clarifications to what was included in the interim final rule. This
is the second corrections and clarifications rule BIS has published for
the May 13 rule. These corrections and clarifications were also
informed by comments received in response to the May 13 rule that
included a request for comments.
    The corrections and clarifications to the May 13 rule are also part
of Commerce's retrospective regulatory review plan under Executive
Order (EO) 13563 (see the SUPPLEMENTARY INFORMATION section of this
rule for information on the availability of the plan).

DATES: This rule is effective July 13, 2015.

FOR FURTHER INFORMATION CONTACT: For questions about the ECCNs included
in this rule, contact Dennis Krepp, Office of National Security and
Technology Transfer Controls, Bureau of Industry and Security, U.S.
Department of Commerce, Telephone:<PHONE_NUMBER>, email:
<EMAIL_ADDRESS>For general questions about the regulatory
changes pertaining to satellites, spacecraft, and related items,
contact the Regulatory Policy Division, Office of Exporter Services,
Bureau of Industry and Security, at<PHONE_NUMBER> or email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    This final rule makes corrections and clarifications to the interim
final rule, Revisions to the Export Administration Regulations (EAR):
Control of Spacecraft Systems and Related Items the President
Determines No Longer Warrant Control Under the United States Munitions
List (USML), that was published on May 13, 2014 (79 FR 27417) (May 13
rule). The May 13 rule added controls to the Export Administration
Regulations (EAR) for spacecraft and related items that the President
has determined no longer warrant control under United States Munitions
List (USML) Category XV--spacecraft and related items. The vast
majority of the changes included in the May 13 rule have been
implemented as published in the interim final rule and are not
republished in this final rule. A full description of those changes can
be found in the Background section and the regulatory text of the May
13 rule. BIS also published corrections and clarifications to the May
13 rule in a final rule published on November 12, 2014 (79 FR 67055).
    The changes included in this final rule are limited to corrections
and clarifications to what was included in the May 13 rule but are also
informed by comments received in response to the May 13 rule. These
corrections and clarifications to the May 13 rule are described below.
    In Sec.  736.2 (General Prohibitions), this final rule revises the
heading of paragraph (b)(3)(iii) (Additional country scope of
prohibition for 9x515 or ``600 series'' items) to remove the term
``additional.'' The country scope of prohibition of paragraph
(b)(3)(iii) for the 9x515 and ``600 series'' items is specified in this
paragraph for purposes of General Prohibition Three. The country scope
of prohibition of paragraph (b)(3)(iii) for the 9x515 items applies to
destinations in Country Groups D:5 and E:1 (see Supplement No. 1 to
part 740 of the EAR). However, because of the use of the term
``additional'' in the heading of paragraph (b)(3)(iii), BIS has
received questions from the public whether the country scope of
prohibition specified in paragraph (b)(3)(i) also needs to be

considered for purposes of the 9x515 items. The country scope of
paragraph (b)(3)(i) does not apply to 9x515 items, so this final rule
revises the heading of paragraph (b)(3)(iii) to clarify this point by
removing the term ``additional.'' This rule does not change the country
scope of prohibition for the 9x515 or ``600 series'' items. Reexporters
are reminded that the country scope of prohibition for the ``600
series'' items, which includes Country Groups D:1, D:3, D:4, D:5 or
E:1, is broader than that for 9x515 items.
    In Sec.  740.20 under paragraph (d) (Prior Consignee Statement),
this final rule revises the introductory text of paragraph (d)(2) to
remove two sentences that were intended to be removed in a December 29,
2014 (79 FR 77866) final rule, but were not removed as intended because
of ambiguity in the amendatory instruction. This rule removes the two
outdated sentences. This final rule sets out the full text of paragraph
(d)(2) to ensure the text of this paragraph accurately reflects past
revisions of the EAR.
    In addition, this final rule makes three minor clarifications to
the text of paragraph (d)(2) to make the intent of the paragraph
clearer. First, this rule removes the term ``and'' in the phrase
``exporter, reexporter and transferor'' and replaces it with ``or'' in
two places in paragraph (d)(2). This clarification is made because the
party making the export, reexport or transfer (in-country) authorized
under License Exception STA is the person responsible for obtaining the
prior consignee statement and maintaining a log or other record
consistent with the requirements of paragraph (d)(2). The use of the
term ``and'' may have given the misimpression that the exporter
receiving the prior consignee statement would also need to obtain a
prior consignee statement for subsequent transfers (in-country) or
reexports authorized under License Exception STA, which is not required
under paragraph (d)(2). Second, this final rule adds the parenthetical
phrase ``(such as documents created in the ordinary course of
business)'' to provide an example of an ``other record'' in paragraph
(d)(2). Third, this final rule adds an ``(S)'' at the end of the terms
``NAME'' and ``CONSIGNEE'' in the bracketed text at the end of
paragraph (d)(2). Making these two terms plural clarifies that multiple
consignees may be included on the same prior consignee statement,
provided all of the applicable requirements of paragraph (d)(2) are
met. This is an existing BIS interpretation of paragraph (d)(2) that
this edit clarifies.
    In Sec.  744.21 (Restrictions on certain `military end uses' in the
People's Republic of China (PRC) or for a `military end use' or
`military end user' in Russia or Venezuela), this final rule revises
the general prohibition in paragraph (a)(2) in Sec.  744.21 for the
9x515 and ``600 series'' ECCNs to clarify that the use in, with, or for
the International Space Station (ISS) for exports, reexports, or
transfers within Russia of these 9x515 and ``600 series'' items is not
within the scope of the general prohibition, including launch to the
ISS. Exports, reexports, and transfers (in-country) to China and
Venezuela are not eligible for the ISS exclusion from the Sec.  744.21
license requirements in paragraph (a)(2) because China and Venezuela
are not ISS partner countries, unlike Russia, which is an ISS partner
country.
    In Supplement No. 2 to part 748 (Unique application and submission
requirements), this final rule revises the introductory text of
paragraphs (y)(1) and (y)(2) to clarify that for purposes of the
license applications for satellite exports, the requirements specified
in paragraphs (y)(1)(i) and (ii) and (y)(2)(i) and (ii), respectively,
can be met either at the time of application or prior to export or
reexport.
    ECCN 3A611. This final rule makes a clarification to the Related
Controls paragraph (6) in ECCN 3A611 by adding two references to the
9x515 ECCNs. These references added in this rule clarify that
electronic items ``specially designed'' for military application that
are not controlled in any USML category but are within the scope of a
9x515 ECCN are controlled by that 9x515 ECCN. This Related Controls
paragraph (6) already established this relationship between 3A611 and
other ``600 series'' ECCNs, but references to the 9x515 ECCNs also need
to be added to clarify the relationship between 3A611 and the 9x515
ECCNs. This clarification will help exporters determine when they
should review ECCN 3A611 or a 9x515 ECCN when classifying electronic
items. Lastly, this final rule corrects the last sentence of the
Related Controls paragraph (6) to replace ECCN 0A604 that is referenced
at the end of the paragraph with the correct ECCN 9A604. This change
corrects a mistake in the cross reference for the ECCN referenced in
this Related Controls paragraph (6).
    ECCN 9A515. This final rule makes six corrections and
clarifications to ECCN 9A515. Specifically, these corrections and
clarifications are made to the MT Control in the License Requirement
table, to the Related Definitions paragraph and to ``items'' paragraphs
(d), (e), (x) and (y) in the List of Items Controlled section, as
described below.
    ECCN 9A515--MT Control. This final rule revises the MT Control
paragraph in the License Requirements section to add the phrase
``microcircuits in'' before the reference to 9A515.d and adds the new
9A515.e.2 to the MT controls. This final rule makes this change to add
greater specificity regarding what parts of ECCN 9A515.d and 9A515.e.2
are controlled for MT reasons. This clarification also addresses
questions BIS has received from the public and will align the ECCN's
text more closely with the MTCR Annex.
    ECCN 9A515--Related Definitions. This final rule adds a definition
of `microcircuit' to clarify how the term is understood in the context
of ECCN 9A515. This rule clarifies that for purposes of ECCN 9A515 a
`microcircuit' means a device in which a number of passive or active
elements are considered as indivisibly associated on or within a
continuous structure to perform the function of a circuit. The addition
of the Related Definition will make the intent of this ECCN clearer.
This ECCN 9A515 specific definition of `microcircuit' does not change
the meaning or interpretation of microcircuit under the EAR. The
definition of `microcircuit' this final rule adds to ECCN 9A515 is the
same definition as found in ECCN 3A001 and also as defined by the
Missile Technology Control Regime (MTCR) Annex. The ECCN 9A515
definition is limited to providing guidance on the application of the
definition based on current BIS practice and past interpretive guidance
BIS has provided, including how the term is defined in that ECCN on the
CCL and by the MTCR.
    ECCN 9A515.d. This final rule also revises items paragraph (d) in
the List of Items Controlled section of ECCN 9A515 to conform to the
intended commodities classified under this paragraph. In the
introductory text of paragraph (d), this final rule adds MOSFETS to the
parenthetical phrase that provides examples for microelectronic
circuits classified under paragraph (d). Importantly, such MOSFETS are
already classified under 9A515.d. In response to the public's
questions, however, this addition provides clarity without changing the
scope of the ECCN. This final rule also adds the phrase ``and discrete
electronic components'' to ECCN 9A515.d to help the public self-
classify such items and avoid the need to submit classification
requests. Lastly, this final rule removes the hyphen in the term
``micro-circuits'' in the

introductory text of paragraph (d) in the List of Items Controlled
section of ECCN 9A515 to conform to the other uses of ``microcircuits''
in 9A515, including the clarifications being made in this rule where
the term ``microcircuits'' is used in 9A515.
    ECCN 9A515.e. This final rule also revises items paragraph (e) in
the List of Items Controlled section of ECCN 9A515 to conform to the
intended commodities classified under this paragraph. Because of an
oversight in the control parameter added in the May 13 rule, certain
commodities that were intended to be classified under this paragraph
(e) were not classified under this ECCN 9A515. In order to address this
oversight and provide additional clarity regarding the scope of this
control parameter, this final rule makes the following changes to
paragraph (e). In the introductory text of paragraph (e), this final
rule adds MOSFETS to the parenthetical phrase that provides examples
for microelectronic circuits classified under paragraph (e).
Importantly, such MOSFETS are already classified under 9A515.e, so the
impact of the addition of MOSFETS to the parenthetical phrase is
limited to providing additional specificity to the phrase, in order to
make it easier for the public to determine that such MOSFETS are
classified under 9A515.e. BIS had received questions from the public on
why BIS had not included MOSFETS in the illustrative parenthetical
phrase and so, to assist the public and add greater specificity, BIS
adds MOSFETS to the illustrative list. This final rule also adds the
phrase ``and discrete electronic components'' to ECCN 9A515.e. Although
BIS already classifies discrete electronic components under 9A515.e,
the agency has received questions on this issue. The additional text
will assist the public with self-classifying such items and avoid the
submission of unneeded classification requests. This final rule also
adds to ECCN 9A515 a definition of `microcircuit' in the Related
Definition as described above. Lastly, in the introductory text of
paragraph (e), this final rule removes the term ``all'' before
``characteristics'' and adds in its place the phrase ``meeting or
exceeding the characteristics in either paragraph e.1 or e.2'' to
clarify that the control parameters specified in paragraph (e)(1) and
(e)(2) are applied in the disjunctive. As a conforming change to the
introductory text of paragraph (e), this final rule consolidates the
control parameter of (e)(2) with paragraph (e)(1), removes the term
``and'' at the end of paragraph (e)(1) and adds in its place the term
``or''. This final rule removes the ``AND'', but because of the
consolidation of the control parameters of (e)(2) with paragraph (e)(1)
and the use of ``or'' between the two control parameters in the revised
paragraph (e)(1), this aspect of the clarification does not
substantively change what is classified under paragraph (e).
    Lastly, for the changes to paragraph (e), this final rule adds a
new paragraph (e)(2) to clarify that microelectronic circuits and
discrete components that meet the scope of the introductory text of
paragraph (e), have a total dose >= 5 x 10 \5\ Rads (Si) (5 x 10 \3\ Gy
(Si)), and are not described in 9A515.d are also within the scope of
ECCN 9A515.e. This is a correction to the control parameter of
paragraph (e) that addresses questions BIS has received from the public
regarding the classification of the commodities described under this
revised paragraph (e)(2). Specifically, the commodities that meet the
new control parameter under paragraph (e)(2) that this final rule adds
to ECCN 9A515 are commodities that would have been classified under the
United States Munitions List (USML) prior to the effective date of the
May 13 rule. The Summary of the May 13 rule states that ``New Export
Control Classification Numbers (ECCNs) 9A515, 9B515, 9D515, and 9E515
created by this rule and existing ECCNs on the Commerce Control List
(CCL) will control such items.'' In other words, any item that was
formerly classified under USML Category XV that was moved to the CCL
would be classified under a 9x515 ECCN or in another ECCN on the CCL
(such as one of the ECCNs that use space qualified). However, because
of a mistake in the control parameter under paragraph (e) of ECCN
9A515, certain commodities that were intended to be classified in this
ECCN inadvertently dropped to an EAR99 designation, which was contrary
to the May 13 rule's description of where the commodities formerly
classified under USML Category XV would be classified on the CCL. As
noted above, BIS has received inquiries from the public questioning the
odd result and asking for clarification whether such commodities are
intended to be EAR99, or if, as specified in the May 13 rule, the
intent is for such items to be classified in 9A515.e. The questioners
are correct that the intent was for such commodities to be classified
under 9A515, and this final rule adds a control parameter to 9A515.e.2
to ensure consistency with the stated intent of the May 13 rule.
    ECCN 9A515.x. This final rule revises paragraph (x) in the List of
Items Controlled section. This final rule revises the existing
exclusions under paragraphs (1), (2) and (4) to clarify what
commodities are not within the scope of paragraph (x). Specifically,
under paragraph (1) this final rule adds a reference to ECCN 9A004 to
clarify that commodities enumerated or controlled in 9A004 are not
within the scope of 9A515.x. This final rule revises the existing
exclusion under paragraph (2) by adding the phrase ``discrete
electronic components'' to clarify that, in addition to microelectronic
circuits, discrete electronic components are not within the scope of
ECCN 9A515.x, a change that also conforms with the clarification being
made to 9A515.e.2 described above. This final rule revises the existing
exclusion under paragraph (4) to add ECCN 7A003.d.2 to the list of
ECCNs containing ``space-qualified'' as a control criterion that are
not within the scope of 9A515.x and deletes 3A002.a.3 because it is no
longer needed. This final rule also revises the list of items excluded
from paragraph (x) by adding paragraphs (5), (6), and (7). These
additional exclusions clarify that the following commodities are also
not within the scope of 9A515.x: microwave solid state amplifiers and
microwave assemblies (refer to ECCN 3A001.b.4 for controls on these
items); traveling wave tube amplifiers (refer to ECCN 3A001.b.8 for
controls on these items); and commodities elsewhere specified in ECCN
9A515.y. These clarifications to the exclusions from paragraph (x) will
address questions BIS has received from the public that asked whether
certain commodities that were excluded from USML Category XV (on the
basis of the former Note to USML Category XV) were classified in ECCN
9A515.x. General Order No. 5 in Supplement No. 1 to part 736 of the EAR
under paragraph (e)(3) (Prior commodity jurisdiction determinations)
already provides guidance that such commodities would not be classified
under a 9A515 entry, but this final rule makes this reading explicit in
the context of 9A515.x. This clarification makes no change to the scope
of items classified under 9A515.x and merely provides additional
guidance to assist the public in understanding the scope of 9A515, in
particular as it relates to commodities that previously were determined
to not be subject to the ITAR on the basis of the former Note to USML
Category XV(e).
    ECCN 9A515.y. This final rule adds a paragraph 9A515.y.1 as the
first commodity specified under paragraph (y) in this ECCN. As noted in
the introductory text of paragraph (y), the U.S. Government through the
section

748.3(e) process will identify the items that warrant being classified
under 9x515.y items, such as the commodities being specified under
9A515.y.1 in this final rule. Specifically, discrete electronic
``components'' not specified in 9A515.e have been identified in an
interagency-cleared commodity classification (CCATS) pursuant to Sec.
748.3(e) as warranting control in 9A515.y.1. This final rule also
reserves paragraph (y.2) to conform to Federal Register drafting
requirements.
    The addition described above for ECCN 9A515.y.1 is the first
approved population of a .y control being added to 9A515. As stated in
the May 13 rule, BIS (along with State and Defense) will continue to
populate the 9A515.y with additional entries as additional
classification determinations are made in response to requests from the
public under Sec.  748.3(e).
    ECCN 9D001. This final rule revises the NS Controls paragraph in
the License Requirements section of ECCN 9D001 to add 9A004. ECCN 9A004
is included in the heading of 9D001, but is not included in the range
of ECCNs identified in the NS Controls paragraph. ECCN 9A004 should
have been added to the NS Controls paragraph in 9D001 to conform to the
changes made to 9A004 in the May 13 rule. This final rule corrects this
by adding ECCN 9A004 to the NS Controls paragraph for 9D001. In
addition, for the purposes of clarification, this final rule revises
the heading of ECCN 9D001 to remove the parenthetical phrase that
follows 9A004 and revises the Related Controls paragraph of ECCN 9D001
to remove the reference to 9A004. These clarifications are made because
there are no longer commodities that are subject to the ITAR in ECCN
9A004, so there is no need for the parenthetical phrase when
referencing 9A004 in the heading of 9D001 and there is no need to
reference 9A004 in the Related Controls paragraph of 9D001. Lastly,
this final rule removes the parenthetical phrase ``(see 22 CFR parts
120 through 130)'' after the defined term ``Subject to the ITAR'' in
the Related Controls paragraph of ECCN 9D002 because the text is
redundant. The citation information is already included in the
definition of ``subject to the ITAR'' in Sec.  772.1 of the EAR and
therefore does not need to be restated on the CCL.
    ECCN 9D002. This final rule revises the NS Controls paragraph in
the License Requirements section of ECCN 9D002 to add 9A004. ECCN 9A004
is included in the heading of 9D002, but is not included in the range
of ECCNs identified in the NS Controls paragraph. ECCN 9A004 should
have been added to the NS Controls paragraph in 9D002 to conform to the
changes made to 9A004 in the interim final rule. In addition, for the
purposes of clarification, this final rule revises the heading of ECCN
9D002 to remove the parenthetical phrase that follows 9A004 and revises
the Related Controls paragraph of ECCN 9D002 to remove the reference to
9A004. These clarifications are made because there are no longer
commodities that are subject to the ITAR in ECCN 9A004, so there is no
need for the parenthetical phrase when referencing 9A004 in the heading
of 9D002 and there is no need to reference 9A004 in the Related
Controls paragraph of 9D002. Lastly, this final rule removes the
parenthetical phrase ``(see 22 CFR parts 120 through 130)'' after the
defined term ``Subject to the ITAR'' in the Related Controls paragraph
of ECCN 9D002 because the text is redundant as already noted above.
    ECCN 9D515. This final rule reserves the ``items'' paragraphs (f)
through (x) in the List of Items Controlled section and adds a new
``items'' paragraph (y) in ECCN 9D515. This change is made to conform
to the changes made to 9A515.y. In addition, this final rule revises
the NS and RS Controls paragraph in the License Requirements section to
exclude software classified under 9D515.y from these controls. Similar
to the ``600 series'' ECCNs, the (y) software and technology entries
for the 9x515 items will be controlled at the same level as the related
(y) commodities.
    ECCN 9E001. This final rule revises the NS Controls paragraph in
the License Requirements section of ECCN 9E001 to add 9A004. ECCN 9A004
is included in the heading of 9E001, but is not included in the range
of ECCNs identified in the NS controls paragraph. ECCN 9A004 should
have been added to the NS Controls paragraph in 9E001 to conform to the
changes made to 9A004 in the interim final rule. This final rule
corrects this by adding ECCN 9A004 to the NS Controls paragraph for
9E001. In addition, for the purposes of clarification, this final rule
revises the heading of ECCN 9E001 to remove the parenthetical phrase
that follows 9A004 and revises Related Controls paragraph (2) to remove
the reference to 9A004. These clarifications are made because there are
no longer commodities that are subject to the ITAR in ECCN 9A004, so
there is no need for the parenthetical phrase when referencing 9A004 in
the heading of 9E001 and there is no need to reference 9A004 in the
Related Controls paragraph of 9E001. Lastly, this final rule removes
the parenthetical phrase ``(see 22 CFR parts 120 through 130)'' after
the defined term ``Subject to the ITAR'' in the Related Controls
paragraph of ECCN 9E001 because the text is redundant as already noted
above.
    ECCN 9E002. Similar to the changes described above for ECCN 9E001,
this final rule for clarification revises the heading of 9E002 to
remove the parenthetical phrase that follows 9A004. In addition, for
the purposes of clarification revises Related Controls paragraph (3) to
remove the reference to 9A004. These clarifications are made because
there are no longer commodities that are subject to the ITAR in ECCN
9A004, so there is no need for the parenthetical phrase when
referencing 9A004 in the heading of 9E002 and there is no need to
reference 9A004 in the Related Controls paragraph of 9E002. Lastly,
this final rule removes the parenthetical phrase ``(see 22 CFR parts
120 through 130)'' after the defined term ``Subject to the ITAR'' in
the Related Controls paragraph of ECCN 9E002 because the text is
redundant as already noted above.
    ECCN 9E515. This final rule reserves ``items'' paragraphs (f)
through (x) in the List of Items Controlled section and adds a new
``items'' paragraph (y) to ECCN 9E515. This change is made to conform
to the changes made to 9A515.y. In addition, this final rule revises
the NS and RS Controls paragraph in the License Requirements section to
exclude technology classified under 9E515.y from the controls in ECCN
9E515. Similar to the ``600 series'' ECCNs, the (y) software and
technology entries for the 9x515 items will be controlled at the same
level as the related (y) commodities. Lastly, this final rule revises
the MT Control paragraph in the License Requirements section to add
9A515.e.2 to the MT controls. This final rule makes this change to
conform to the changes described above for the MT controls in ECCN
9A515.e.2 and to conform to the MTCR Annex. The rule specifies that the
control applies to technology for items in 9A515.d and 9A515.e.2
controlled for MT reasons.

Addressing Public Comments Received

    The May 13 rule requested public comment by November 10, 2014. BIS
is still in the process of reviewing the comments received at that time
and will address them through a subsequent rulemaking.
    As required by Executive Order (EO) 13563, BIS intends to review
this rule's impact on the licensing burden on exporters. Commerce's
full plan is available at: http://open.commerce.gov/

news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.
Data are routinely collected on an ongoing basis, including through the
comments to be submitted and as a result of new information and results
from AES data. These results and data have been, and will continue to
form, the basis for ongoing reviews of the rule and assessments of
various aspects of the rule. As part of its plan for retrospective
analysis under EO 13563, BIS intends to conduct periodic reviews of
this rule and to modify, or repeal, aspects of this rule, as
appropriate, and after public notice and comment. With regard to a
number of aspects of this rule, assessments and refinements will be
made on an ongoing basis. This is particularly the case with regard to
possible modifications that will be considered based on public comments
described above.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001,
the President, through Executive Order 13222 of August 17, 2001, 3 CFR,
2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March
8, 2013, 78 FR 16129 (March 13, 2013) and as extended by the Notice of
August 7, 2014, 79 FR 46959 (August 11, 2014), has continued the Export
Administration Regulations in effect under the International Emergency
Economic Powers Act. BIS continues to carry out the provisions of the
Export Administration Act, as appropriate and to the extent permitted
by law, pursuant to Executive Order 13222 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 final 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 regulation involves collections previously
approved by the OMB under control numbers 0694-0088, ``Multi-Purpose
Application,'' which carries a burden hour estimate of 43.8 minutes for
a manual or electronic submission. This rule does not alter any
information collection requirements; therefore, total burden hours
associated with the PRA and OMB control number 0694-0088 are not
expected to increase as a result of this rule. You may send comments
regarding the collection of information associated with this rule,
including suggestions for reducing the burden, to Jasmeet K. Seehra,
Office of Management and Budget (OMB), by email to
<EMAIL_ADDRESS>or by fax to<PHONE_NUMBER>.
    3. This rule does not contain policies with Federalism implications
as that term is defined under E.O. 13132.
    4. The Department finds that there is good cause under 5 U.S.C.
553(b)(B) to waive the provisions of the Administrative Procedure Act
(APA) requiring prior notice and the opportunity for public comment
because they are either unnecessary or contrary to the public interest.
The following revisions are non-substantive or are limited to ensure
consistency with the intent of the May 13, 2014 interim final rule, and
thus prior notice and the opportunity for public comment is
unnecessary. Sections 736.2 and 740.20 and ECCNs 9D001, 9D002, 9E001,
9E002 were revised to make corrections to the EAR that resulted from
mistakes or other ambiguity in amendatory instructions in past
rulemakings. In addition to the revisions above, BIS revises Sec.
744.21, ECCNs 3A611, 9A515, 9D515 and 9E515 to provide guidance on
existing interpretations of current EAR provisions and necessary
conforming changes, and thus prior notice and the opportunity for
public comment is contrary to the public interest. Finally, as
contemplated in the May 13 rule, BIS has added an entry to the .y
paragraph of ECCN 9A515, which was added as a result of the Sec.
748.3(e) process. For purposes of the APA, there is good cause and it
is in the public interest to incorporate this change so the public can
benefit from understanding the classification of the item. These
revisions are important to get in place as soon as possible so the
public will be aware of the correct text and meaning of current EAR
provisions.
    BIS finds good cause to waive the 30-day delay in effectiveness
under 5 U.S.C. 553(d)(3). As mentioned previously, the revisions made
by this rule consist of both technical corrections and clarifications
that need to be in place as soon as possible to avoid confusion by the
public regarding the intent and meaning of changes to the EAR.
    Because a notice of proposed rulemaking and an opportunity for
public comment are not required to be given for these amendments by 5
U.S.C. 553, or by any other law, the analytical requirements of the
Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are not applicable.

List of Subjects

15 CFR Part 736

    Exports.

15 CFR Parts 740 and 748

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

15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, the Export Administration Regulations (15 CFR parts
730-774) are amended as follows:

PART 736--[AMENDED]

0
1. The authority citation for 15 CFR part 736 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. 2151 note; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; 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. 13222, 66 FR 44025, 3
CFR, 2001 Comp., p. 783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp.,
p. 168; Notice of August 7, 2014, 79 FR 46959 (August 11, 2014);
Notice of November 7, 2014, 79 FR 67035 (November 12, 2014); Notice
of May 6, 2015, 80 FR 26815 (May 8, 2015).

0
2. Section 736.2 is amended by revising the heading of paragraph
(b)(3)(iii) to read as follows:

Sec.  736.2  General prohibitions and determination of applicability.

* * * * *
    (b) * * *
    (3) * * *
    (iii) Country scope of prohibition for 9x515 or ``600 series''
items. * * *
* * * * *

PART 740--[AMENDED]

0
3. The authority citation for 15 CFR part 740 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. 7201 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 7, 2014, 79 FR 46959 (August 11, 2014).

0
4. Section 740.20 is amended by revising the introductory text of
paragraph (d)(2) and the bracketed text at the end of the introductory
text of paragraph (d)(2) to read as follows:

Sec.  740.20  License Exception Strategic Trade Authorization (STA).

* * * * *
    (d) * * *
    (2) Prior Consignee Statement. The requirements in this paragraph
(d)(2) apply to each party using License Exception STA to export,
reexport or transfer (in-country), including reexporters and
transferors of items previously received under License Exception STA.
The exporter, reexporter, or transferor must obtain the following
statement in writing from its consignee prior to shipping the item and
must retain the statement in accordance with part 762 of the EAR. One
statement may be used for multiple shipments of the same items between
the same parties so long as the party names, the description(s) of the
item(s) and the ECCNs are correct. The exporter, reexporter, or
transferor must maintain a log or other record (such as documents
created in the ordinary course of business) that identifies each
shipment made pursuant to this section and the specific consignee
statement that is associated with each shipment. Paragraphs (d)(2)(i)
through (vi) of this section are required for all transactions. In
addition, paragraph (d)(2)(vii) is required for all transactions in
``600 series'' items and paragraph (viii) of this section is required
for transactions in ``600 series'' items if the consignee is not the
government of a country listed in Country Group A:5 (See Supplement No.
1 to part 740 of the EAR). Paragraph (d)(2)(viii) is also required for
transactions including 9x515 items.
    [INSERT NAME(S) OF CONSIGNEE(S)]:
* * * * *

PART 744--[AMENDED]

0
5. The authority citation for 15 CFR part 744 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; 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. 12947, 60 FR 5079, 3 CFR,
1995 Comp., p. 356; 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; Notice of August 7, 2014, 79 FR 46959
(August 11, 2014); Notice of September 17, 2014, 79 FR 56475
(September 19, 2014); Notice of November 7, 2014, 79 FR 67035
(November 12, 2014); Notice of January 21, 2015, 80 FR 3461 (January
22, 2015).

0
6. Section 744.21 is amended by revising paragraph (a)(2) to read as
follows:

Sec.  744.21  Restrictions on certain `Military end uses' in the
People's Republic of China (PRC) or for a `Military end use' or
`Military end user' in Russia or Venezuela.

    (a) * * *
    (2) General prohibition. In addition to the license requirements
for 9x515 and ``600 series'' items specified on the Commerce Control
List (CCL), you may not export, reexport, or transfer (in-country) any
9x515 or ``600 series'' item, including items described in a .y
paragraph of a 9x515 or ``600 series'' ECCN, to the PRC, Russia or
Venezuela without a license. The use in, with, or for the International
Space Station (ISS) for exports, reexports or transfers within Russia
is not within the scope of this paragraph's general prohibition,
including launch to the ISS. (See Sec.  740.11(e)(1) of the EAR for a
definition of the ISS).
* * * * *

PART 748--[AMENDED]

0
7. The authority citation for 15 CFR 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 7, 2014, 79 FR
46959 (August 11, 2014).

0
8. Supplement No. 2 to part 748 (Unique Application and Submission
Requirements) is amended by revising the introductory text of paragraph
(y)(1) and the introductory text of paragraph (y)(2) to read as
follows:

Supplement No. 2 to Part 748--Unique Application and Submission
Requirements

* * * * *
    (y) * * *
    (1) A license application to export a satellite controlled by ECCN
9A515.a for launch in or by a country that is not a member of the North
Atlantic Treaty Organization (NATO) or a major non-NATO ally of the
United States (as defined in 22 CFR 120.31 and 120.32), must include a
statement affirming that at the time of application or prior to export
or reexport the following will be in place:
* * * * *
    (2) A license application to export a satellite controlled by ECCN
9A515.a for launch in or by a country that is a member of the North
Atlantic Treaty Organization (NATO) or that is a major non-NATO ally of
the United States (as defined in 22 CFR 120.31 and 120.32), must
include a statement affirming that at the time of application or prior
to export or reexport the following will be in place:
* * * * *

PART 774--[AMENDED]

0
9. The authority citation for 15 CFR part 774 continues to read as
follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et
seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; Notice of August 7, 2014, 79 FR 46959 (August 11, 2014).

0
10. In Supplement No. 1 to Part 774, Category 3--Electronics, Export
Control Classification Number (ECCN) 3A611 is amended by revising
Related Controls paragraph (6) in the List of Items Controlled section
to read as follows:

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

* * * * *

3A611 Military electronics, as follows (see List of Items
Controlled).
* * * * *

List of Items Controlled

Related Controls: * * * (6) Electronic items ``specially designed''
for military application that are not controlled in any USML
category but are within the scope of another ``600 series'' ECCN or
a 9x515 ECCN are controlled by that ``600 series'' ECCN or 9x515
ECCN. For example, electronic components not enumerated on the USML
or a ``600 series'' other than 3A611 that are ``specially designed''
for a military aircraft controlled by USML Category VIII or ECCN
9A610 are controlled by the catch-all control in ECCN 9A610.x.
Electronic components not enumerated on the USML or another ``600
series'' entry that are ``specially designed'' for a military
vehicle controlled by USML Category VII or ECCN 0A606 are controlled
by ECCN 0A606.x. Electronic components not enumerated on the USML
that are ``specially designed'' for a missile controlled by USML
Category IV are controlled by ECCN 9A604. * * *
* * * * *

0
11. In Supplement No. 1 to Part 774, Category 9--Aerospace and
Propulsion, Export Control Classification Number (ECCN) 9A515 is
amended:
0
a. By revising the fourth entry in the License Requirements table;
0
b. By revising the Related Definitions paragraph in the List of Items
Controlled section;
0
c. By revising the introductory text of paragraph d. in the Items
section;
0
d. By revising paragraphs e. introductory text, e.1, and e.2 in the
Items section; and
0
e. By revising paragraphs x. and y. in the Items section to read as
follows.

9A515 ``Spacecraft'' and related commodities, as follows (see List
of Items Controlled).

License Requirements

* * * * *

                                            Country Chart (see Supp. No.
                Control(s)                         1 to part 738)

                                * * * * *
MT applies to microcircuits in 9A515.d and  MT Column 1
 9A515.e.2 when ``usable in'' ``missiles''
 for protecting ``missiles'' against
 nuclear effects (e.g. Electromagnetic
 Pulse (EMP), X-rays, combined blast and
 thermal effects).

                                * * * * *

* * * * *

List of Items Controlled

* * * * *
Related Definitions: `Microcircuit' means a device in which a number
of passive or active elements are considered as indivisibly
associated on or within a continuous structure to perform the
function of a circuit.

Items:
* * * * *
    d. Microelectronic circuits (e.g., integrated circuits,
microcircuits, MOSFETs) and discrete electronic components rated,
certified, or otherwise specified or described as meeting or
exceeding all the following characteristics and that are ``specially
designed'' for defense articles, ``600 series'' items, or items
controlled by 9A515:
* * * * *
    e. Microelectronic circuits (e.g., integrated circuits,
microcircuits, MOSFETs) and discrete electronic components that are
rated, certified, or otherwise specified or described as meeting or
exceeding the characteristics in either paragraph e.1 or e.2, AND
``specially designed'' for defense articles controlled by USML
Category XV or items controlled by 9A515:
    e.1. A total dose >=1 x 10\5\ Rads (Si) (1 x 10\3\ Gy(Si)) and
<5 x 10\5\ Rads (Si) (5 x 10\3\ Gy(Si)); and a single event effect
(SEE) (i.e., single event latchup (SEL), single event burnout (SEB),
or single event gate rupture (SEGR)) immunity to a linear energy
transfer (LET) >=80 MeV-cm2/mg; or
    e.2. A total dose >= 5 x 10\5\ Rads (Si) (5 x 10\3\ Gy (Si)) and
not described in 9A515.d.
* * * * *
    x. ``Parts,'' ``components,'' ``accessories'' and
``attachments'' that are ``specially designed'' for defense articles
controlled by USML Category XV or items controlled by 9A515, and
that are NOT:
    1. Enumerated or controlled in the USML or elsewhere within
ECCNs 9A515 or 9A004;
    2. Microelectronic circuits and discrete electronic components;
    3. Described in ECCNs 7A004 or 7A104;
    4. Described in an ECCN containing ``space-qualified'' as a
control criterion (i.e., 3A001.b.1, 3A001.e.4, 3A002.g.1, 3A991.o,
3A992.b.3, 6A002.a.1, 6A002.b.2, 6A002.d.1, 6A004.c and .d,
6A008.j.1, 6A998.b, or 7A003.d.2);
    5. Microwave solid state amplifiers and microwave assemblies
(refer to ECCN 3A001.b.4 for controls on these items);
    6. Travelling wave tube amplifiers (refer to ECCN 3A001.b.8 for
controls on these items); or
    7. Elsewhere specified in ECCN 9A515.y.

    Note to 9A515.x:  ``Parts,'' ``components,'' ``accessories,''
and ``attachments'' specified in USML subcategory XV(e) or
enumerated in other USML categories are subject to the controls of
that paragraph or category.

    y. Items that would otherwise be within the scope of ECCN
9A515.x but that have been identified in an interagency-cleared
commodity classification (CCATS) pursuant to Sec.  748.3(e) as
warranting control in 9A515.y.
    y.1. Discrete electronic components not specified in 9A515.e;
and
    y.2. [RESERVED]

0
12. In Supplement No. 1 to Part 774, Category 9--Aerospace and
Propulsion, Export Control Classification Number (ECCN) 9D001 is
amended:
0
a. By revising the heading;
0
b. By revising the first entry in the License Requirements table; and
0
b. By revising the Related Controls paragraph in the List of Items
Controlled section to read as follows:

9D001 ``Software'' ``specially designed'' or modified for the
``development'' of equipment or ``technology'' controlled by ECCN
9A001 to 9A004, 9A012, 9A101 (except for items in 9A101.b that are
``subject to the ITAR,'' see 22 CFR part 121), 9A106.d. or .e,
9A110, or 9A120, 9B (except for ECCNs 9B604, 9B610, 9B619, 9B990,
and 9B991), or ECCN 9E003.

License Requirements

* * * * *

                                            Country Chart (see Supp. No.
                Control(s)                         1 to part 738)

NS applies to ``software'' for equipment    NS Column 1
 controlled by 9A001 to 9A004, 9A012,
 9B001 to 9B010, and technology controlled
 by 9E003..

                                * * * * *

* * * * *

List of Items Controlled

Related Controls: ``Software'' that is ``required'' for the
``development'' of items specified in ECCNs 9A005 to 9A011, 9A101.b
(except for items that are subject to the EAR), 9A103 to 9A105,
9A106.a, .b, and .c, 9A107 to 9A109, 9A110 (for items that are
``specially designed'' for use in missile systems and subsystems),
and 9A111 to 9A119 is ``subject to the ITAR.''
* * * * *

0
13. In Supplement No. 1 to Part 774, Category 9--Aerospace and
Propulsion, Export Control Classification Number (ECCN) 9D002 is
amended:
0
a. By revising the heading;
0
b. By revising the first entry in the License Requirements table; and
0
c. By revising the Related Controls paragraph in the List of Items
Controlled section to read as follows:

9D002 ``Software'' ``specially designed'' or modified for the
``production'' of equipment controlled by ECCN 9A001 to 9A004,
9A012, 9A101 (except for items in 9A101.b that are ``subject to the
ITAR,'' see 22 CFR part 121), 9A106.d or .e, 9A110, or 9A120, 9B
(except for ECCNs 9B604, 9B610, 9B619, 9B990, and 9B991).

License Requirements

* * * * *

                                            Country Chart (see Supp. No.
                Control(s)                         1 to part 738)

NS applies to ``software'' for equipment    NS Column 1
 controlled by 9A001 to 9A004, 9A012,
 9B001 to 9B010.

                                * * * * *

* * * * *

List of Items Controlled

Related Controls: ``Software'' that is ``required'' for the
``production'' of items specified in ECCNs 9A005 to 9A011, 9A101.b
(except for items that are subject to the EAR), 9A103 to 9A105,
9A106.a, .b, and .c, 9A107 to 9A109, 9A110 (for items that are
``specially designed'' for use in

missile systems and subsystems), and 9A111 to 9A119 is ``subject to
the ITAR.''
* * * * *

0
14. In Supplement No. 1 to Part 774, Category 9--Aerospace and
Propulsion, Export Control Classification Number (ECCN) 9D515 is
amended:
0
a. By revising the License Requirements table;
0
b. By adding and reserving items paragraphs f. through x. in the Items
section; and
0
c. By adding paragraph y. in the Items section to read as follows:

9D515 ``Software'' ``specially designed'' for the ``development,''
``production,'' operation, installation, maintenance, repair,
overhaul, or refurbishing of ``spacecraft'' and related commodities,
as follows (see List of Items Controlled)

License Requirements

* * * * *

                                            Country Chart (see Supp. No.
                Control(s)                         1 to part 738).

NS applies to entire entry except 9D515.y.  NS Column 1
RS applies to entire entry except 9D515.y.  RS Column 1
AT applies to entire entry................  AT Column 1

* * * * *

List of Items Controlled

* * * * *
Items:
* * * * *
    f. through x. [RESERVED]
    y. Specific ``software'' ``specially designed'' for the
``development,'' ``production,'' operation, or maintenance of
commodities enumerated in ECCN 9A515.y.

0
15. In Supplement No. 1 to Part 774, Category 9--Aerospace and
Propulsion, Export Control Classification Number (ECCN) 9E001 is
amended:
0
a. By revising the heading;
0
b. By revising the first entry in the License Requirements table;
0
c. By revising Related Controls paragraph (2) in the List of Items
Controlled section to read as follows:

9E001 ``Technology'' according to the General Technology Note for
the ``development'' of equipment or ``software'', controlled by
9A001.b, 9A004, 9A012, 9B (except for ECCNs 9B604, 9B610, 9B619,
9B990 and 9B991), or ECCN 9D001 to 9D004, 9D101, or 9D104.

License Requirements

* * * * *

                                            Country Chart (see Supp. No.
                Control(s)                         1 to part 738).

NS applies to ``technology'' for items      NS Column 1
 controlled by 9A001.b, 9A004, 9A012,
 9B001 to 9B010, 9D001 to 9D004 for NS
 reasons.

                                * * * * *

* * * * *

List of Items Controlled

Related Controls: * * * * * (2) ``Technology'' required for the
``development'' of equipment described in ECCNs 9A005 to 9A011 or
``software'' described in ECCNs 9D103 and 9D105 is ``subject to the
ITAR.''
* * * * *

0
16. In Supplement No. 1 to Part 774, Category 9--Aerospace and
Propulsion, Export Control Classification Number (ECCN) 9E002 is
amended:
0
a. By revising the heading; and
0
b. By revising Related Controls paragraph (3) in the List of Items
Controlled section to read as follows:
9E002 ``Technology'' according to the General Technology Note for the
``production'' of ``equipment'' controlled by ECCN 9A001.b, 9A004 or 9B
(except for ECCNs 9B117, 9B604, 9B610, 9B619, 9B990, and 9B991).
* * * * *

List of Items Controlled

Related Controls: * * * * * (3) ``Technology'' that is required for
the ``production'' of equipment described in ECCNs 9A005 to 9A011 is
``subject to the ITAR.''
* * * * *

0
17. In Supplement No. 1 to Part 774, Category 9--Aerospace and
Propulsion, Export Control Classification Number (ECCN) 9E515 is
amended:
0
a. By revising the License Requirements table;
0
b. By adding and reserving paragraphs f. through x. in the Items
section; and
0
c. By adding paragraph y. in the items paragraph in the Items section
to read as follows:

9E515 ``Technology'' ``required'' for the ``development,''
``production,'' operation, installation, repair, overhaul, or
refurbishing of ``spacecraft'' and related commodities, as follows
(see List of Items Controlled).

License Requirements

* * * * *

                                            Country Chart (see Supp. No.
                Control(s)                         1 to part 738)

NS applies to entire entry except 9E515.y.  NS Column 1
MT applies to technology for items in       MT Column 1
 9A515.d and 9A515.e.2 controlled for MT
 reasons.
RS applies to entire entry except 9E515.y.  RS Column 1
AT applies to entire entry................  AT Column 1

* * * * *
    f. through x. [RESERVED]
    y. Specific ``technology'' ``required'' for the ``production,''
``development,'' operation, installation, maintenance, repair,
overhaul, or refurbishing of commodities or software enumerated in
ECCN 9A515.y or 9D515.y.

    Dated: July 2, 2015.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2015-16904 Filed 7-10-15; 8:45 am]
BILLING CODE 3510-33-P


[Federal Register: October 3, 2007 (Volume 72, Number 191)]
[Notices]
[Page 56396-56399]
[DOCID:fr03oc07-104]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56567; File No. SR-Amex-2007-96]

Self-Regulatory Organizations; American Stock Exchange LLC; Order
Granting Accelerated Approval to a Proposed Rule Change, as Modified by
Amendment No. 1, Relating to an Extension and Expansion of the Options
Quoting Pilot Program

September 27, 2007.

I. Introduction

    On August 21, 2007, the American Stock Exchange LLC (``Amex'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to extend and expand a pilot program to quote
certain options in smaller increments (``Pilot Program'' or ``Pilot'').
The proposed rule change was published for comment in the Federal
Register on August 29, 2007.\3\ The Commission received one comment

letter on the proposed rule change.\4\ On September 27, 2007, the
Exchange filed Amendment No. 1 to the proposed rule change.\5\ This
order approves the proposed rule change as modified by Amendment No. 1
on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56307 (August 22,
2007), 72 FR 49750 (``Amex Notice'').
    \4\ See letter to Nancy Morris, Secretary, Commission, from John
C. Nagel, Director & Associate General Counsel, Citadel, dated
September 12, 2007 (``Citadel Letter'').
    \5\ In Partial Amendment No. 1, Amex made non-substantive
modifications to the description of the proposal and text of the
proposed information circular. The notice of Amex's proposal that
was published for comment reflected all of these changes, except two
technical amendments to the proposed information circular to: (1)
Include a reference to QQQQ, which was inadvertently left out, in
the list of the thirteen existing Pilot classes; and (2) change the
ticker symbol for Sun Microsystems. See Amex Notice, supra note 3,
at note 3 (noting that the proposed rule change submitted by the
Exchange contained non-substantive errors which, for purposes of the
notice, were corrected and further noting that the Exchange would
address those errors in an amendment following publication of the
notice). The amendments not included in the notice of Amex's
proposal published for comment are technical in nature and therefore
are not subject to notice and comment.
---------------------------------------------------------------------------

II. Description of the Proposal

    Currently, the six options exchanges, including the Amex,
participate in the thirteen class Pilot Program,\6\ which is scheduled
to expire on September 27, 2007.\7\ The Exchange proposes to extend and
expand the Pilot Program to include fifty additional classes, in two
phases.
---------------------------------------------------------------------------

    \6\ The thirteen option classes currently in the Pilot are:
Ishares Russell 2000 (IWM); NASDAQ-100 Index Tracking Stock (QQQQ);
SemiConductor Holders Trust (SMH); General Electric Company (GE);
Advanced Micro Devices, Inc. (AMD), Microsoft Corporation (MSFT);
Intel Corporation (INTC); Caterpillar, Inc. (CAT); Whole Foods
Market, Inc. (WFMI); Texas Instruments, Inc. (TXN); Flextronics
International Ltd. (FLEX); Sun Microsystems, Inc. (JAVA); and
Agilent Technologies, Inc. (A).
    \7\ The Pilot Program began on January 26, 2007 and is currently
set to expire on September 27, 2007. See Securities Exchange Act
Release No. 56159 (July 27, 2007), 72 FR 43300 (August 3, 2007) (SR-
Amex-2007-76). See also Securities Exchange Act Release No. 55162
(January 24, 2007), 72 FR 4738 (February 1, 2007) (SR-Amex-2006-106)
(``Original Pilot Program Approval Order'').
---------------------------------------------------------------------------

    Phase One will begin on September 28, 2007 and will continue for
six months, until March 27, 2008. Phase One will add the following
twenty-two options classes to the Pilot: SPDRs (SPY); Apple, Inc.
(AAPL); Altria Group Inc. (MO); Dendreon Corp. (DNDN); Amgen Inc.
(AMGN); Yahoo! Inc. (YHOO); QUALCOMM Inc. (QCOM); General Motors
Corporation (GM); Energy Select Sector (XLE); DIAMONDS Trust, Series 1
(DIA); Oil Services HOLDRs (OIH); NYSE Euronext, Inc. (NYX); Cisco
Systems, Inc. (CSCO); Financial Select Sector SPDR (XLF); AT&T Inc.
(T); Citigroup Inc. (C); Amazon.com Inc. (AMZN); Motorola Inc. (MOT);
Research in Motion Ltd. (RIMM); Freeport-McMoRan Copper & Gold Inc.
(FCX); ConocoPhillips (COP); and Bristol-Myers Squibb Co. (BMY). These
twenty-two options classes are among the most actively-traded,
multiply-listed options classes, and account, together with the current
thirteen Pilot classes, for approximately 35% of total industry trading
volume.\8\
---------------------------------------------------------------------------

    \8\ This volume is based on the Options Clearing Corporation
(``OCC'') year-to-date trading volume data through July 16, 2007.
---------------------------------------------------------------------------

    Phase Two will begin on March 28, 2008, and will continue for one
year, until March 27, 2009. During the second phase, the number of
options classes trading in pennies will again increase. The Exchange
proposes to add twenty-eight more classes from among the most actively-
traded, multiply-listed options classes.\9\
---------------------------------------------------------------------------

    \9\ The Exchange has committed to file a proposed rule change
under section 19(b)(3)(A) of the Act to identify the options classes
to be included in the second expansion.
---------------------------------------------------------------------------

    The minimum price variation for all classes to be included in the
Pilot Program, except for the QQQQs, will continue to be $0.01 for all
quotations in option series that are quoted at less than $3 per
contract and $0.05 for all quotations in option series that are quoted
at $3 per contract or greater. The QQQQs will continue to be quoted in
$0.01 increments for all options series.
    During the extended and expanded Pilot Program, the Amex commits to
deliver four reports to the Commission. Each report will analyze the
impact of penny pricing on market quality and options system capacity.
The first report will analyze the penny pilot results from May 1, 2007
through September 27, 2007; the second will analyze the results from
September 28, 2007 through January 31, 2008; the third will analyze the
results from February 1, 2008 through July 31, 2008; and the fourth and
final report will examine the results from August 1, 2008 through
January 31, 2009. These reports will be provided to the Commission
within thirty days of the conclusion of the reporting period.

III. Discussion

    After careful review of the proposal and the comment letter, the
Commission finds that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\10\ In particular, the
Commission finds that the proposal is consistent with section 6(b)(5)
of the Act,\11\ which requires, among other things, that the rules of
an exchange be designed to promote just and equitable principles of
trade, to remove impediments to and perfect the mechanism of a free and
open market and a national market system, and, in general, to protect
investors and the public interest.
---------------------------------------------------------------------------

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

    On June 28, 2005, the Pacific Exchange (now known as NYSE Arca)
announced its intention to begin quoting and trading all listed options
in penny increments.\12\ In June 2006, to facilitate the orderly
transition to quoting a limited number of options in penny increments,
Chairman Cox sent a letter to the six options exchanges urging the
exchanges that chose to begin quoting in smaller increments to plan for
the implementation of a limited penny pilot program to commence in
January 2007.\13\ All six of the options exchanges submitted proposals
to permit quoting a limited number of classes in smaller increments,
and, in January 2007, the Commission approved those proposals to
implement the current Pilot Program.\14\ The exchanges have now
submitted proposals to extend and further expand the Pilot.
---------------------------------------------------------------------------

    \12\ PCX News Release, ``Pacific Exchange to Trade Options in
Pennies,'' June 28, 2005.
    \13\ Commission Press Release 2006-91, ``SEC Chairman Cox Urges
Options Exchanges to Start Limited Penny Quoting,'' June 7, 2006.
    \14\ See Securities Exchange Act Release Nos. 55162 (January 24,
2007), 72 FR 4738 (February 1, 2007) (Amex-2006-106); 55155 (January
23, 2007), 72 FR 4741 (February 1, 2007) (SR-BSE-2006-49); 55154
(January 23, 2007), 72 FR 4743 (February 1, 2007) (SR-CBOE-2006-92);
55161 (January 24, 2007), 72 FR 4754 (February 1, 2007) (SR-ISE-
2006-62); 55156 (January 23, 2007), 72 FR 4759 (February 1, 2007)
(SR-NYSEArca-2006-73); and 55153 (January 23, 2007), 72 FR 4553
(January 31, 2007) (SR-Phlx-2006-74). As noted above, supra note 7
and accompanying text, the current Pilot is scheduled to expire on
September 27, 2007.
---------------------------------------------------------------------------

    The continued operation and phased expansion of the Pilot Program
will provide further valuable information to the exchanges, the
Commission, and others about the impact of penny quoting in the options
market. In particular, extending and expanding the Pilot Program as
proposed by the Amex will allow further analysis of the impact of penny
quoting in the Pilot classes over a longer period of time on, among
other things: (1) Spreads; (2) peak quote rates; (3) quote message
traffic; (4) displayed size; (5) ``depth of book'' liquidity; and (6)
market structure. Amex has committed to provide the Commission with
periodic reports, which will analyze the impact of the expanded Pilot
Program. The Commission expects the Exchange to

include statistical information relating to these factors in its
periodic reports.
    An analysis of the current Pilot shows that the reduction in the
minimum quoting increment has resulted in narrowing the average quoted
spreads in all classes in the Pilot.\15\ A reduction in quoted spreads
means that customers and other market participants may be able to trade
options at better prices. The reduction in spreads also has led the
exchanges to reduce or eliminate their exchange-sponsored payment-for-
order-flow programs.\16\ The Commission believes that the proposed rule
change is designed to continue the narrowing of spreads.
---------------------------------------------------------------------------

    \15\ See Amex, Penny Quoting Pilot Program Report, June 8, 2007
(``Amex Report''). See also Box, Penny Pilot Data Review, June 18,
2007 (``Box Report''); CBOE, Penny Pilot Report, June 1, 2007
(``CBOE Report''); ISE, Penny Pilot Analysis, May 23, 2007 (``ISE
Report''); NYSE Arca Options, Understanding Economic and Capacity
Impacts of the Penny Pilot, May 31, 2007 (``NYSE Arca Report''); and
Phlx, Options Penny Pricing Pilot Report, May 31, 2007 (``Phlx
Report'').
    \16\ See Securities Exchange Act Release Nos. 55328 (February
21, 2007), 72 FR 9050 (February 28, 2007) (SR-Amex-2007-16); 55197
(January 30, 2007), 72 FR 5772 (February 7, 2007) (SR-BSE-2007-02);
55265 (February 9, 2007), 72 FR 7697 (February 16, 2007) (SR-CBOE-
2007-11); 55271 (February 12, 2007), 72 FR 7699 (February 16, 2007)
(SR-ISE-2007-08); 55223 (February 1, 2007) 72 FR 6306 (February 9,
2007) (SR-NYSEArca-2007-07); and 55290 (February 13, 2007), 72 FR
8051 (February 22, 2007) (SR-Phlx-2007-05).
---------------------------------------------------------------------------

    The Commission notes that, as anticipated, the Pilot has
contributed to the increase in quotation message traffic from the
options markets. However, while the increase in quotation message
traffic is appreciable, it has been manageable by the exchanges and the
Options Price Reporting Authority, and the Commission did not receive
any reports of disruptions in the dissemination of pricing information
as a result of quote capacity restraints. Although the Commission
anticipates that the proposed expansion of the Pilot Program may
contribute to further increases in quote message traffic, the
Commission believes that Amex's proposal is sufficiently limited such
that it is unlikely to increase quote message traffic beyond the
capacity of market participants' systems and disrupt the timely receipt
of quote information. The Commission also notes that Amex has adopted
and will continue to utilize quote mitigation strategies that should
mitigate the expected increase in quote traffic.\17\
---------------------------------------------------------------------------

    \17\ See Securities Exchange Act Release No. 55162 (January 24,
2007), 72 FR 4738 FR (February 1, 2007) (SR-Amex-2006-106). In its
filing, Amex proposes to extend the effectiveness of its quote
mitigation strategies through March 27, 2009. Further, the
Commission notes that the other options exchanges participating in
the Pilot also have adopted and will continue to utilize quote
mitigation strategies.
---------------------------------------------------------------------------

    Overall trading activity in the options markets is very
concentrated, with relatively few options classes accounting for a
significant share of total options volume. Amex's proposal, which will
expand the Pilot to include a limited number of options from among the
most actively-traded classes (based on average trading volume), will
provide an opportunity for reduced spreads where the greatest amount of
trading occurs, thus maximizing the economic benefit of the Pilot while
minimizing the impact of increased quote traffic.
    The commenter suggests that relative trading volume is the measure
that should be used to assess the success of quoting in smaller
increments.\18\ The commenter reported the percentage change in the
relative trading volume before and after the Pilot for each of the
thirteen classes.\19\ The commenter's data shows an increase in
relative trading volume for QQQQ, IWM, SHM, AMD, and SUNW, and a
decrease in relative trading volume for MSFT, INTC, GE, TXN, A, CAT,
WFMI and FLEX. The commenter believes the data shows that the Pilot
works well for index and sector products, but smaller increments caused
a decline in the relative trading volume for single stock options. The
commenter argues that much of the decrease in relative trading volume
in Pilot classes is a symptom of the decrease in displayed size
available for those classes. On the basis of a decline in the relative
trading volume, the commenter argues that single stock option classes
should be removed from the Pilot and replaced with liquid index or
sector option classes.
---------------------------------------------------------------------------

    \18\ See Citadel Letter, supra note 4.
    \19\ The commenter measures the relative trading volume of a
class as that class' trading volume as a percentage of total OCC
volume. The change in relative trading volume is the relative
trading volume from date of entrance into the Pilot to August 27,
2007 divided by the relative trading volume from November 1, 2006
through entrance in the Pilot.
---------------------------------------------------------------------------

    Much of the recent growth in options volume has been in the large
index and ETF products, such as the SPX, SPY, and the QQQQ. As their
relative trading volume increases, the aggregate relative trading
volume of other products necessarily declines (although actual volume
levels may increase). For example, the SPX, SPY, QQQQ, and IWM
accounted for 16.1% of total options volume in the four months before
the pilot and rose to 21.7% of volume in the five months after the
pilot.\20\ By definition, the relative trading volume of all other
classes (Pilot and non-Pilot) falls from 83.9% in the pre-Pilot period
to 78.3% in the post-Pilot period. Using the commenter's numerical
approach, the relative market share of SPX, SPY, QQQ, and IWM increased
by 34.8% ((21.7%/16.1%)-;1). In contrast, the relative trading volume
of all other classes fell by 6.7% (78.3/83.9%)-1) in the post-Pilot
period compared to the pre-Pilot period. Thus, in addition to the
random variation in relative trading volume that occurs over time,
there was an overall decline in the relative trading volume of issues
outside the four largest index and ETF options, although their actual
aggregate volume levels increased.
---------------------------------------------------------------------------

    \20\ The pre-Pilot period consists of the four months before the
Pilot commenced (October 1-January 25, 2007) and the post-Pilot
period consists of the five months after the Pilot commenced
(February 9, 2007-June 30, 2007). The two-week period when the Pilot
classes were introduced are excluded from the analysis.
---------------------------------------------------------------------------

    More specifically, for the 100 and 500 most active classes,\21\
relative trading volume fell for 63% and 56%, respectively, of non-
Pilot classes. In the Pilot classes, seven, or 54%, of the thirteen
Pilot classes had a decline in market share and seven, or 70%, of the
ten single stock option classes had a decline in relative trading
volume.\22\
---------------------------------------------------------------------------

    \21\ All of the thirteen Pilot classes fall into the 500 most
actively-traded, and nine are within the 100 most actively-traded
group.
    \22\ The change in relative trading volume for the median stock
for the top 500 (100) classes is -8% (-13%), compared to a change of
-3% for the thirteen Pilot stocks and a change of -24% for the ten
single stock options. The Commission notes that, with a Pilot sample
size of thirteen or ten, these statistics will be highly sensitive
to the performance of one or two classes.
---------------------------------------------------------------------------

    The Commission does not believe that the data at this time supports
the conclusion that a decrease in relative trading volume in the Pilot
classes is due to a reduction of the minimum quoting variation. In
fact, the data demonstrates that declines in relative trading volume
were not limited to stocks included in the Pilot, and substantial
declines in relative trading volume, as defined by the commenter,
describe a large portion of classes that were not in the Pilot.
Therefore, based on the data reviewed to date, the Commission cannot
conclude that the Pilot has had an adverse impact on volume in the
Pilot securities. Therefore, the Commission believes that Amex's
proposal to select additional classes from among the most actively-
traded options has a reasonable basis and is consistent with the
Act.\23\
---------------------------------------------------------------------------

    \23\ The Commission notes that the classes the commenter
specifically recommends for inclusion in the expanded Pilot--SPY,
DIA, OIH, XLF, and XLE--are among classes proposed by Amex to be
included in the Pilot Program beginning September 28, 2007.
---------------------------------------------------------------------------

    The Commission believes that the impact of smaller increments on
trading

volume is one of the more difficult aspects of the Pilot to assess, and
notes that the exchange reports did not show a clear change in trading
volume.\24\ While some industry participants expressed disappointment
that volume had not increased, the bid-ask spread is only one factor
that influences volume. Other factors that impact option volume are
trading activity in the underlying security and in related products,
volatility in the market and in the underlying security, as well as
firm and market specific information and events. The Commission
believes that the addition of more securities in the next phase will
increase the sample size and should help in further analysis of such
issues.
---------------------------------------------------------------------------

    \24\ See Amex Report, supra note 15, at 6-7; CBOE Report, supra
note 15, Attachment at pages 5-6; ISE Report, supra note 15, at 17-
20; and NYSE Arca Report, supra note 15, at 15.
---------------------------------------------------------------------------

    The commenter also expressed concern that the quoted size in the
Pilot classes is dropping to levels that are ``sub-optimal'' or
``inadequate'' for institutional size orders, and recommended that the
Commission carefully evaluate the impact of penny quoting on liquidity
before allowing the exchanges to expand the Pilot. The Commission fully
agrees that the impact of the Pilot on displayed size, as well as non-
displayed ``depth of book,'' and the impact of any decreased size on
market and execution quality, is an area that should be carefully
analyzed as the Pilot continues. The Commission also recognizes that
the exchange reports show there has, in fact, been a reduction in the
displayed size available in the Pilot classes.\25\ The Commission is
not at this time, however, able to conclude that this decrease has
caused a decrease in trading volume or relative trading volume, or
other harm to the market, as a result of the Pilot Program. The
Commission does, however, expect Amex to include in its reports an
analysis of the market impact of reducing the minimum price increment,
particularly on the ability of market participants to effectively
execute large-sized orders. The Commission will analyze the information
provided in the Exchange's reports, in conjunction with the information
provided by other exchanges and market participants, to inform its
evaluation and consideration of any exchange's proposed further
expansion of the Pilot.
---------------------------------------------------------------------------

    \25\ See Amex Report, supra note 15, at 6; BOX Report, supra
note 15, at 2; CBOE Report, supra note 15, at Attachment page 2; ISE
Report, supra note 15, at 7-8; NYSE Arca Report, supra note 15, at
9-10; and Phlx Report, supra note 15, at 3-4 and 6-7.
---------------------------------------------------------------------------

    The commenter further noted, to the extent that additional size may
be available below the best bid or offer,\26\ options market
participants discount the value of such liquidity because it is
generally not transparent to the market and is not easily accessible
even if displayed.\27\ The commenter noted that, unlike in the equities
markets, market participants cannot quickly sweep multiple markets
through multiple price levels to reach such additional liquidity. The
Commission encourages the exchanges to consider measures that would
facilitate access to depth of book quotes.
---------------------------------------------------------------------------

    \26\ Only two exchanges provided information on ``depth of
book'' on their markets in the Pilot classes. See NYSE Arca Report
at 8-10, supra note 15, and ISE Report, supra note 15, at 9. ISE
reported that the average total size of all quotes on its book at
all price levels, weighted for volume, for all thirteen Pilot
classes was reduced by 61%. See ISE Report, supra note 15, at 9.
NYSE Arca compared liquidity resident in its book within the legacy
minimum price variation to pre-Pilot top of book liquidity and
reported that volume weighted liquidity across all thirteen Pilot
classes decreased 1%. See NYSE Arca Report, supra note 15, at 8.
    \27\ The Commission notes that currently only NYSE Arca makes
available quotes and orders on its book below the NBBO. See http://www.nysedata.com/nysedata/
 InformationProducts/ArcaBook/tabid/293/

Default.aspx. The Commission anticipates that to the extent this
display of information proves to be valuable to the options market
as a whole, other exchanges may choose to make this information
available as well.
---------------------------------------------------------------------------

    Finally, the commenter recommends removing the poorest performing
single stock names from the Pilot and replacing them with liquid index
or sector products.\28\ The Commission agrees that there should be a
mechanism for removing option classes from the Pilot. The Commission
specifically requested comment in the notice of Amex's proposal on: (1)
Whether there are circumstances under which classes included in the
Pilot should be removed; (2) if so, what factors should be considered
in making the determination to remove a class from the Pilot,
specifically whether an objective standard should be used or whether a
more subjective analysis should be allowed; (3) what concerns might
arise by removing a class from the Pilot, and how could such concerns
be ameliorated; (4) how frequently should such an analysis be
undertaken, or should the evaluation be automated; and (5) if a class
is to be removed from the Pilot, how much notice should be given to
market participants that the quoting increment will change, but did not
receive any comments. The Commission will continue to consider comments
on how to fairly and objectively determine if a class should be removed
from the Pilot. Finally, to the extent that the Exchange files a
proposed rule change to further expand the Pilot, the Commission urges
it to include in any such proposal a methodology for removing classes
from the Pilot.
---------------------------------------------------------------------------

    \28\ See supra, note 23.
---------------------------------------------------------------------------

    The Commission finds good cause for approving the proposed rule
change, as amended, prior to the thirtieth day after publication of the
notice in the Federal Register.\ 29\ The Commission notes that in this
filing the Amex is proposing to participate in an industry-wide
extension and expansion of the Penny Pilot, which is scheduled to begin
on September 28, 2007. Concurrent with this approval, the Commission
also is approving proposed rule changes submitted by the other five
options exchanges to extend and expand the Pilot. Accelerating approval
of this filing will permit the Exchange to continue its participation
in the Pilot without interruption.
---------------------------------------------------------------------------

    \29\ The Commission notes that the thirtieth day after
publication of notice of this filing in the Federal Register is
September 28, 2007.
---------------------------------------------------------------------------

    Accordingly, the Commission finds good cause, consistent with
section 19(b)(2) of the Act,\30\ to approve the proposal, as modified
by Amendment No. 1, on an accelerated basis. For the reasons discussed
above, the Commission believes that the proposed rule change is
consistent with the Act.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\31\ that the proposed rule change (SR-Amex-2007-96), as modified
by Amendment No. 1, be, and hereby is, approved on an accelerated
basis, for a pilot period, which will end on March 27, 2009.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\32\
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-19497 Filed 10-2-07; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 67 (Thursday, April 7, 2011)]
[Notices]
[Pages 19373-19374]
[FR Doc No: 2011-8218]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2010-N-0443]

Cathryn Lyn Chatman (also known as Cathryn Lyn Garcia): Debarment
Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) is issuing an order
under the Federal Food, Drug, and Cosmetic Act (the FD&C Act) debarring

Cathryn Lyn Chatman (also known as Cathryn Lyn Garcia) for 5 years from
providing services in any capacity to a person that has an approved or
pending drug product application. FDA bases this order on findings that
Ms. Chatman was convicted of a misdemeanor under Federal law for
conduct relating to the regulation of a drug product under the FD&C Act
and that the type of conduct underlying the conviction undermines the
process for the regulation of drugs. Ms. Chatman was given notice of
the proposed debarment and an opportunity to request a hearing within
the timeframe prescribed by regulation. Ms. Chatman failed to respond.
Ms. Chatman's failure to respond constitutes a waiver of her right to a
hearing concerning this action.

DATES: This order is effective April 7, 2011.

ADDRESSES: Submit applications for termination of debarment to the
Division of Dockets Management (HFA-305), Food and Drug Administration,
5630 Fishers Lane, rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Kenny Shade, Office of Regulatory
Affairs (HFC-230), Food and Drug Administration, 5600 Fishers Lane,
Rockville, MD 20857,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 306(b)(2)(B)(i)(I) of the FD&C Act (21 U.S.C.
335a(b)(2)(B)(i)(I)) permits FDA to debar an individual if it finds
that the individual has been convicted of a misdemeanor under Federal
law for conduct relating to the regulation of drug products under the
FD&C Act, and if FDA finds that the type of conduct that served as the
basis for the conviction undermines the process for the regulation of
drugs.
    On March 14, 2006, Cathryn Lyn Chatman (also known as Cathryn Lyn
Garcia) pleaded guilty to a misdemeanor offense of misbranding a drug.
On August 14, 2006, the United States District Court for the District
of Oregon entered judgment against Ms. Chatman for misdemeanor
misbranding a drug, in violation of 21 U.S.C. 331(k) and 333(a)(1).
    FDA's finding that debarment is appropriate is based on the
misdemeanor conviction referenced herein. The factual basis for the
conviction is as follows: Ms. Chatman was a registered nurse licensed
by the Oregon Board of Nursing. Throughout 2004, she assisted a
codefendant in operating two clinics that offered treatments they
claimed could combat the effects of aging, including injection with
BOTOX. From August 2004 through December 2004, Ms. Chatman offered a
botulinum toxin called ``Refinex'' for sale for injection to patients
under the name of another drug, BOTOX. Refinex is manufactured by the
Shandong Bioresearch Institute in the People's Republic of China and
has never been approved or licensed by FDA for any use. Ms. Chatman
misbranded a drug, namely botulinum toxin type A manufactured by
Shandong Bioresearch Institute and known as Refinex, while it was held
for sale and after shipment in interstate commerce, in that she offered
Refinex for sale by injection to patients under the name of another
drug that is approved, namely BOTOX, all in violation of 21 U.S.C.
331(k) and 333(a)(1).
    As a result of her conviction, on January 5, 2011, FDA sent Ms.
Chatman a notice by certified mail proposing to debar her for 5 years
from providing services in any capacity to a person that has an
approved or pending drug product application. The proposal was based on
a finding, under section 306(b)(2)(B)(i)(I) of the FD&C Act, that Ms.
Chatman was convicted of a misdemeanor under Federal law for conduct
relating to the regulation of drug products under the FD&C Act, and
that the conduct that served as a basis for the conviction undermines
the process for the regulation of drugs. The proposal also offered Ms.
Chatman an opportunity to request a hearing, providing her 30 days from
the date of receipt of the letter in which to file the request, and
advised her that failure to request a hearing constituted a waiver of
the opportunity for a hearing and of any contentions concerning this
action. Ms. Chatman failed to respond within the timeframe prescribed
by regulation and has, therefore, waived her opportunity for a hearing
and waived any contentions concerning her debarment (21 CFR part 12).

II. Findings and Order

    Therefore, the Director, Office of Enforcement, Office of
Regulatory Affairs, under section 306(b)(2)(B)(i)(I) of the FD&C Act,
under authority delegated to him (Staff Manual Guide 1410.35), finds
that Cathryn Lyn Chatman has been convicted of a misdemeanor under
Federal law for conduct relating to the regulation of a drug product
under the FD&C Act, and that the type of conduct that served as a basis
for the conviction undermines the process for the regulation of drugs.
    As a result of the foregoing finding, Ms. Chatman is debarred for 5
years from providing services in any capacity to a person with an
approved or pending drug product application under sections 505, 512,
or 802 of the FD&C Act (21 U.S.C. 355, 360b, or 382), or under section
351 of the Public Health Service Act (42 U.S.C. 262), effective (see
DATES), (see sections 306(c)(1)(B), (c)(2)(A)(iii), and 201(dd) of the
FD&C Act (21 U.S.C. 321(dd)). Any person with an approved or pending
drug product application who knowingly employs or retains as a
consultant or contractor, or otherwise uses the services of Ms.
Chatman, in any capacity during Ms. Chatman's debarment, will be
subject to civil money penalties (section 307(a)(6) of the FD&C Act (21
U.S.C. 335b(a)(6))). If Ms. Chatman provides services in any capacity
to a person with an approved or pending drug product application during
her period of debarment she will be subject to civil money penalties
(section 307(a)(7) of the FD&C Act). In addition, FDA will not accept
or review any abbreviated new drug applications submitted by or with
the assistance of Ms. Chatman during her period of debarment (section
306(c)(1)(B) of the FD&C Act (21 U.S.C. 335a(c)(1)(B)). Any application
by Ms. Chatman for termination of debarment under section 306(d)(1) of
the FD&C Act should be identified with Docket No. FDA-2010-N-0443 and
sent to the Division of Dockets Management (see ADDRESSES). All such
submissions are to be filed in four copies. The public availability of
information in these submissions is governed by 21 CFR 10.20(j).
    Publicly available submissions may be seen in the Division of
Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

    Dated: March 22, 2011.
Howard Sklamberg,
Director, Office of Enforcement, Office of Regulatory Affairs.
[FR Doc. 2011-8218 Filed 4-6-11; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 84, Number 73 (Tuesday, April 16, 2019)]
[Notices]
[Page 15623]
[FR Doc No: 2019-07467]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket Nos. FDA-2011-N-0742; FDA-2018-N-1967; FDA-2018-N-2970; FDA-
2017-N-1779; FDA-2008-N-0500; FDA-2012-N-0129; FDA-2009-D-0268; FDA-
2014-D-0609; and FDA-2011-N-0776]

Agency Information Collection Activities; Announcement of Office
of Management and Budget Approvals

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) is publishing a list of
information collections that have been approved by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995.

FOR FURTHER INFORMATION CONTACT: Ila S. Mizrachi, Office of Operations,
Food and Drug Administration, Three White Flint North, 10A-12M, 11601
Landsdown St., North Bethesda, MD 20852,<PHONE_NUMBER>,
[email protected].

SUPPLEMENTARY INFORMATION: The following is a list of FDA information
collections recently approved by OMB under section 3507 of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3507). The OMB control
number and expiration date of OMB approval for each information
collection are shown in table 1. Copies of the supporting statements
for the information collections are available on the internet at
https://www.reginfo.gov/public/do/PRAMain. An Agency may not conduct or
sponsor, and a person is not required to respond to, a collection of
information unless it displays a currently valid OMB control number.

        Table 1--List of Information Collections Approved by OMB
------------------------------------------------------------------------
                                            OMB control    Date approval
           Title of collection                  No.           expires
------------------------------------------------------------------------
Registration of Producers of Drugs and         0910-0045      12/31/2021
 Listing of Drugs in Commercial
 Distribution...........................
Biosimilar User Fee Program.............       0910-0718      12/31/2021
Surveys and Interviews with                    0910-0863      12/31/2021
 Investigational New Drug Sponsors to
 Assess Current Communication Practices
 with FDA Review Staff Under the Sixth
 Authorization of the Prescription Drug
 User Fee Act...........................
Disclosures of Descriptive Presentations       0910-0864      12/31/2021
 in Professional Oncology Prescription
 Drug Promotion.........................
Requirements on Content and Format of          0910-0572       1/31/2022
 Labeling for Human Prescription Drug
 and Biological Products................
General Licensing Provisions; Section          0910-0719       1/31/2022
 351(k) Biosimilar Applications.........
Labeling of Certain Beers Subject to the       0910-0728       1/31/2022
 Labeling Jurisdiction of the FDA.......
Implementation of the Drug Supply Chain        0910-0806       1/31/2022
 Security Act--Identification of Suspect
 Product and Notification...............
Reclassification Petitions for Medical         0910-0138       2/28/2022
 Devices................................
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    Dated: April 10, 2019.
Lowell J. Schiller,
Acting Associate Commissioner for Policy.
[FR Doc. 2019-07467 Filed 4-15-19; 8:45 am]
 BILLING CODE 4164-01-P