[Federal Register Volume 83, Number 205 (Tuesday, October 23, 2018)]
[Proposed Rules]
[Pages 53411-53412]
[FR Doc No: 2018-23044]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740 and 758

[Docket No. 180831812-8812-01]
RIN 0694-XC047

Request for Public Comments Regarding Foreign Disposition of
Certain Commodities

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Notice of inquiry; request for comments.

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SUMMARY: The Bureau of Industry and Security (BIS) is seeking public
comments on the effects and costs that would result if BIS were to
amend its regulations to reflect new export authorization requirements
regarding electronic waste, including new recordkeeping requirements,
reporting requirements, and data elements in the Automated Export
System, maintained by the U.S. Census Bureau, to track electronic waste
that is exported. Comments from all interested persons are welcome and
will help BIS determine the feasibility and cost of implementing a
mechanism for tracking and controlling electronic waste exports.

DATES: Comments must be received by BIS no later than December 24,
2018.

ADDRESSES: Comments on this rule may be submitted to the Federal
rulemaking portal (www.regulations.gov). The regulations.gov ID for
this rule is: BIS-2018-0022. All relevant comments (including any
personally identifying information) will be made available for public
inspection and copying.

FOR FURTHER INFORMATION CONTACT: Eileen Albanese, Director, Office of
National Security and Technology Transfer Controls, Bureau of Industry
and Security, Department of Commerce, by phone at<PHONE_NUMBER>, or by
email at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    In recent years, a number of Congressional studies and actions,
including the ``Inquiry into Counterfeit Electronic Parts in the
Department of Defense Supply Chain'' published by the Committee on
Armed Services in the United States Senate (Armed Services Report), as
well as the ``Secure E-Waste Export and Recycling Act'' (H.R. 917),
have raised concerns regarding counterfeit goods that may enter the
United States' military and civilian electronics supply chain. One of
the potential sources for these counterfeit goods identified in the
Armed Services Report is the unregulated recycling of discarded
electronic equipment that has typically been shipped overseas from the
United States for disposal.
    Although no specific legislation has yet been passed mandating
export controls related to electronic waste, prior Congressional
studies and actions have prompted the Bureau of Industry and Security
(BIS) to seek comments on potential regulatory changes that would limit
the export of discarded electronic equipment (electronic waste) by
defining the term ``electronic waste'' and prohibiting its export from
the United States unless certain conditions are met. If electronic
waste does not meet these contemplated conditions, persons could be
prohibited from exporting the electronic waste and would need to
identify a means of disposal within the United States. If electronic
waste meets the contemplated conditions, it would be exempt from the
prohibition, potentially eligible to export under a new license
exception or other reporting requirement, and the export of these items
could require new recordkeeping and tracking requirements.
    BIS is seeking public comments on a contemplated new definition of
electronic waste, on this potential prohibition on electronic waste
exports, and on the basis for an exemption from that prohibition
(through criteria for electronic waste exemptions). BIS is also seeking
comments on potential regulatory changes, in the form of two reporting
approaches identified by BIS that could be used to track the export of
electronic waste that is exempt from the prohibition as well as new
recordkeeping requirements. In addition, BIS is seeking comments on the
potential cost of the regulatory and policy changes associated with a
prohibition on the export of electronic waste and the expected
effectiveness, if any, of a prohibition to address the issue of
counterfeit goods. BIS is also interested in observations from members
of the public regarding counterfeit goods and electronic waste exports
in the electronics supply chain. Relevant comments from all interested
persons are welcome and may help BIS assess the prevalence of
counterfeit goods in military and civilian electronic supply chains,
the estimated cost to industry to implement these potential regulatory
changes, and the effectiveness of the potential strategy to reduce
counterfeit goods that enter the military and civilian electronics
supply chains.

Potential Criteria Regarding Prohibition and Exemption of Electronic
Waste Exports

(1) Definition of ``Electronic Waste''

    The definition for electronic waste being considered by BIS would
include any of the following used items containing electronic
components or fragments thereof, including parts or subcomponents of
such items:
    (i) Computers and related equipment;
    (ii) Data center equipment (including servers, network equipment,
firewalls, battery backup systems, and power distribution units);
    (iii) Mobile computers (including notebooks, netbooks, tablets, and
e-book readers);
    (iv) Televisions (including portable televisions and portable DVD
players);
    (v) Video display devices (including monitors, digital picture
frames, and portable video devices);
    (vi) Digital imaging devices (including printers, copiers,
facsimile machines, image scanners, and multifunction machines);
    (vii) Consumer electronics, including digital cameras, projectors,
digital audio

players, cellular phones and wireless internet communication devices,
audio equipment, video cassette recorders, DVD players, video game
systems (including portable systems), video game controllers, signal
converter boxes, and cable and satellite receivers; and
    (viii) Portable global positioning system navigation.
BIS welcomes comments from the public on the definition, or any
alternative construct for a definition of electronic waste.

2) Electronic Waste Exemptions

    Electronic waste that would be exempted from the prohibition on
export could include consumer appliances that have electronic features,
electronic parts of a motor vehicle, tested working used electronics,
and recalled electronics. Tested working used electronics would be
determined, through testing methodologies, to be fully functional for
the purpose for which they were designed or, in the case of
multifunction devices, fully functional for at least one of the primary
purposes for which the items were designed. This exemption from the
potential export prohibition would include refurbished items or items
exported for reuse for the purpose for which they were designed.
Recalled electronics include items that have been recalled by the
manufacturer or are subject to a recall notice issued by the U.S.
Consumer Product Safety Commission or other pertinent Federal
authority.
    Also exempt from the prohibition would be items that are unusable
that are exported as feedstock, with no additional mechanical or hand
separation required, in a reclamation process to render the electronic
components or items recycled consistent with the laws of the foreign
country performing the reclamation process. Feedstock means any raw
material constituting the principal input for an industrial process.
    BIS welcomes comments from the public on criteria regarding
exempted electronic waste items. Items that do not meet the criteria
for exemption could be subject to a prohibition on export. Persons
would need to determine a means of disposal or destruction of non-
exempted electronic waste within the United States.
    BIS recognizes that other organizations and government agencies may
have different criteria or definitions for electronic waste and other
relevant terms. BIS seeks comment from the public regarding these terms
and any discrepancies and uncertainties that may arise from the
definition used in this notice of inquiry.

Potential Changes to the Regulations

(1) Reporting Requirements for the Export of Exempted Electronic Waste

    BIS is seeking public comments on two approaches that could be used
to track the export of electronic waste that is exempt from the
prohibition. The first approach would be to allow electronic waste that
is exempt from the prohibition to be exported under a potential new
license exception in the Export Administration Regulations (EAR) (15
CFR, subchapter C, parts 730-774). A second approach would be to track
and record exempted electronic waste exports through a new data element
in the Automated Export System (AES), maintained by the U.S. Census
Bureau (Census). BIS recognizes that Census proposed the introduction
of a similar data element in the Federal Register on March 9, 2016 (81
FR 12423), and ultimately removed the proposed requirement in their
final rule published on April 19, 2017 (82 FR 18385), because of public
comments and concerns. BIS is nevertheless considering re-introducing
an electronic waste indicator in AES as an alternate means to track the
export of electronic waste that qualifies for an exemption from the
prohibition. BIS welcomes comments and suggestions on other possible
approaches and mechanisms that would help the public comply with
requirements for the export of electronic waste.

(2) New Recordkeeping Requirements

    BIS is seeking comments on new recordkeeping requirements that
would apply to exports of exempted electronic waste under a potential
new license exception and exports of electronic waste tracked under a
potential new AES data element. Exporters would be required to keep
documentation on all electronic waste that is exported, including how
the electronic waste met the criteria for exemption, and including but
not limited to the methodology used to test the items and the test
results for each item.

Cost to Industry for Potential Changes to the Regulations and the
Prevalence of Counterfeit Items in Electronic Supply Chains

    BIS seeks public comments on the costs to exporters of determining
eligibility for exemption of items that fall under the definition of
electronic waste (including the workability of the testing of used
electronics), new recordkeeping requirements for exempted electronic
waste, updates to filing systems to reflect regulatory changes (either
in the form of a new license exception or an electronic waste indicator
in AES), and costs or effects that may arise from the potential changes
described in this notice. In addition, BIS seeks comments on the
prevalence of counterfeit commodities in the electronic supply chains
and whether the changes contemplated in this notice of inquiry would
alleviate this problem.

    Dated: October 17, 2018.
Richard E. Ashooh,
Assistant Secretary for Export Administration.
[FR Doc. 2018-23044 Filed 10-22-18; 8:45 am]
 BILLING CODE 3510-33-P