Intercountry Adoptions: Regulatory Changes to Accreditation and Approval Regulations in Intercountry Adoption

Citation85 FR 74492
Published date20 November 2020
Record Number2020-24391
CourtState Department
Federal Register, Volume 85 Issue 225 (Friday, November 20, 2020)
[Federal Register Volume 85, Number 225 (Friday, November 20, 2020)]
                [Proposed Rules]
                [Pages 74492-74557]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-24391]
                [[Page 74491]]
                Vol. 85
                Friday,
                No. 225
                November 20, 2020
                Part II
                 Department of State
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                22 CFR Part 96
                Intercountry Adoptions: Regulatory Changes to Accreditation and
                Approval Regulations in Intercountry Adoption; Proposed Rule
                Federal Register / Vol. 85 , No. 225 / Friday, November 20, 2020 /
                Proposed Rules
                [[Page 74492]]
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                DEPARTMENT OF STATE
                22 CFR Part 96
                [Public Notice: 10732]
                RIN 1400-AE39
                Intercountry Adoptions: Regulatory Changes to Accreditation and
                Approval Regulations in Intercountry Adoption
                AGENCY: Department of State.
                ACTION: Notice of proposed rulemaking.
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                SUMMARY: The Department of State (the Department) is proposing
                revisions to the Code of Federal Regulations to amend requirements for
                accreditation and authorization by the United States to provide
                adoption services in intercountry adoption cases. This proposed rule
                amends regulations to provide clarification, updating, or other
                adaptation of familiar accreditation and approval standards for
                intercountry adoption. It includes long-awaited provisions for
                intercountry adoption by relatives. The new regulations simplify and
                streamline the process by limiting the number of adoption services the
                primary provider must provide and capitalizing on the adoptive family's
                understanding of local culture and institutions. It provides a
                comprehensive definition of relative to clarify the relationships that
                are encompassed in the amendments to the accreditation rule. Also
                featured in this proposed rule is a new focus on supporting children
                and families in the event their adoptive placement disrupts.
                DATES: The Department will accept comments on the proposed regulation
                until January 19, 2021.
                ADDRESSES: Internet: You may view this proposed rule and submit your
                comments by visiting the Regulations.gov website at
                www.regulations.gov, and searching for docket number DOS-2020-0048.
                Submitting comments electronically through this website is the
                preferred method.
                FOR FURTHER INFORMATION CONTACT:
                 Technical Information: Marisa Light, (202) 485-6042.
                 Legal Information: Carine L. Rosalia, (202) 485-6092.
                SUPPLEMENTARY INFORMATION:
                Preamble Contents
                I. Introduction
                II. Proposed Changes
                 A. Adoption by Relatives
                 B. Amendments Relating to Accrediting Entities and Accreditation
                 C. Child Buying and Protection of Prospective Adoptive Parents
                 D. Post-Placement Monitoring and Post-Adoption Services
                 E. Submission of Complaints
                 F. Reasonable Efforts To Find a Timely and Qualified Adoptive
                Placement in Outgoing Cases
                 G. Provisions Relating to Corporate Governance and Oversight
                 H. Procedures and Requirements for Adverse Action by the
                Secretary, Including for Challenges to Such Adverse Action
                 I. Miscellaneous Amendments
                III. Response to Regulatory Reform Solicitation of Comments
                IV. Timeline for Implementing Changes in the Proposed Rule, if
                Approved
                V. Regulatory Analysis
                I. Introduction
                 This proposed rule amends part 96 to provide clarification,
                updating, or other adaptation of familiar accreditation and approval
                standards for intercountry adoption. These changes derive from
                observations and experience with the practical operation of the
                accreditation and approval regulations in the fourteen years since the
                regulations went into effect. The Department engages in systematic
                review and analysis of its regulatory responsibilities. Since the
                inception of the accreditation scheme in 2006 and entry into force of
                the 1993 Hague Convention on Protection of Children and Co-operation in
                Respect of Intercountry Adoption (Convention) in 2008, we established
                ongoing formal and informal interactions with accrediting entities
                (AEs), adoption service providers (ASPs), and other stakeholders such
                as adoptive parents, law enforcement officials, and foreign Central
                Authorities. Through each of these interactions we seek greater insight
                into our work and the effectiveness of the tools we employ to achieve
                the objectives of our national law and regulations and the Convention
                itself.
                 Annually, we engage in an even deeper review process as we perform
                an evaluation of the work of our AEs, culminating in a senior level
                review meeting with AE and Department leaders. This review process
                allows for reflection and a chance to establish new benchmarks, to
                update and correct AE policies and procedures, as well as refine our
                own standard operating procedures. Through this analytical process we
                become aware of deficiencies in the regulations or areas in which
                additional information or clarification would be helpful and beneficial
                for children, their birth parents, and adoptive families in
                intercountry adoption.
                Background and Context
                 The accreditation regulations flow from the Intercountry Adoption
                Act of 2000 (IAA), which implements the Convention. The United States
                signed the Convention shortly after its completion in 1993, enacted the
                IAA implementing the Convention in 2000, and published implementing
                regulations, including the accreditation regulations in 22 CFR part 96,
                in 2006. With these milestones achieved, the United States deposited
                its instrument of ratification to the Convention in December 2007, and
                the Convention entered into force with respect to the United States on
                April 1, 2008. Effective in 2014, the Intercountry Adoption Universal
                Accreditation Act (UAA) extended the standards in this regulation to
                all adoption service providers providing intercountry adoption
                services. For additional information about the development of the
                Convention, the IAA, and the accreditation regulations, each is treated
                in detail in the preambular discussion of the proposed and final rules
                in 2003 and 2005, respectively. Those accounts are found in 68 FR 54064
                (September 15, 2003); and in 71 FR 8064 (February 15, 2006).
                Changes in the Number and Characteristics of Intercountry Adoptions
                Worldwide
                 In 2008, when the Convention entered into force for the United
                States, U.S. citizens adopted 17,456 children through intercountry
                adoptions, down from a historical peak of 22,884 intercountry adoptions
                in 2004. In FY 2019, the most recent year for which the Department has
                published data, U.S. citizens adopted 2,971 children through
                intercountry adoption. It is important to note that the trend in
                declining adoptions is not a trend experienced by the United States
                alone. All receiving countries have experienced this decline, and to
                similar degree. Most experts agree that this decline reflects numerous
                factors, many of which are discussed in the narratives to our Annual
                Report to the Congress.\1\
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                 \1\ https://travel.state.gov/content/travel/en/Intercountry-Adoption/adopt_ref/adoption-publications.html.
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                 Accompanying this decline in numbers has been a change in the
                characteristics of children adopted through intercountry adoption. Dr.
                Peter Selman of Newcastle University has studied worldwide intercountry
                adoption trends dating back to before World War II, with more attention
                given to adoption over the past 25 years. In 2015 he reported that
                adoption of
                [[Page 74493]]
                children with ``special needs'' are becoming more common, as are
                adoptions of older age children and of sibling groups. Dr. Selman notes
                that while there remains a lack of agreement on what exactly the term
                ``special needs'' covers, the trend first became obvious to him over
                the period from 2005 to 2009 with respect to adoptions from China. In
                2005, the percentage of children adopted from China with special needs
                was 9% for all adoptions in all receiving countries. By 2007, the
                number of adopted children from China with special needs had risen to
                30%. By 2009, 49% of all adopted children from China were children with
                special needs.
                 This trend was echoed in a report by a U.S. coalition of child
                welfare organizations that said many countries of origin are
                increasingly limiting intercountry adoption to older children or those
                who may have special needs. In addition, many children are remaining in
                orphanages for longer periods of time prior to family placement, and
                have increased risk factors for emotional, behavioral, and
                developmental difficulties. Citing Department of State statistics, the
                coalition noted that in 1999 over 50% of adopted children were under
                the age of 1 year; whereas in 2013 the number of adopted children under
                1 year had dropped to less than 8%.
                A Viable Option for Eligible Children in Every Country
                 The Department is dedicated to maintaining intercountry adoption as
                a viable option for eligible children in every country, world-wide. To
                do so, it engages in sustained bilateral diplomacy advocating that
                countries of origin establish procedures and essential safeguards that
                allow intercountry adoption for children who cannot find permanent
                family solutions in their country of origin. The Department also
                oversees the accreditation system through which the United States
                establishes these safeguards.
                 The proposed changes in this NPRM largely represent essential
                revisions to make the accreditation regulations more effective given
                the purposes of the Convention and implementing legislation, noted
                above, working for the best interests of children and enhanced
                viability of intercountry adoption world-wide.
                II. Proposed Changes to 22 CFR Part 96
                A. Adoption by Relatives
                 The Department is pleased to introduce provisions relating to the
                intercountry adoption of relatives in the new subpart R. Due to the
                reasons discussed below, the relative adoption provisions are the most
                universally requested addition from the public over the last ten years.
                Section 502(a) of the IAA (42 U.S.C. 14952) authorizes the Department
                to establish alternative regulations for adoption of children by
                individuals related to them by blood, marriage, or adoption to the
                extent consistent with the Convention. In support of this addition, we
                added the following definition of relative to the section on
                definitions, Sec. 96.2:
                 Relative, for the purposes of the alternative procedures for the
                intercountry adoption of relatives found in subpart R, means any of the
                following: Parent, step-parent, brother, step-brother, sister, step-
                sister, grandparent, aunt, uncle, half-brother to the child's parent,
                half-sister to the child's parent, half-brother, half-sister, or the
                U.S. citizen spouse of the person with one of these qualifying
                relationships with the child. The relationship can exist by virtue of
                blood, marriage, or adoption.
                 The new regulations on adoption by relatives in subpart R simplify
                the role of the primary provider in such cases by limiting the number
                of adoption services the primary provider is required to provide. Of
                the six adoption services, the required services primary providers
                would continue to need to provide for adoptions by relatives are:
                Performing a background study on a child or a home study on a
                prospective adoptive parent(s), and reporting on such a study (service
                3); Monitoring a case after a child has been placed with propective
                adoptive parent(s) until final adoption (service 5); and When necessary
                because of a disruption before final adoption, assuming custody and
                providing (including faciplitation the provision of) child care or any
                other social service pending an alternative placement (service 6).
                However, primary providers would not generally be required to provide:
                Identifying a child for adoption and arranging an adoption (service 1);
                Securing the necessary consent to termination of parental rights and to
                adoption (service 2); and Making non-judicial determinations of the
                best interests of a child and the appropriateness of an adoptive
                placement for the child (service 4). We are proposing this exemption
                because in many cases, these services may be provided by the adoptive
                family and/or local authorities, without the prior assistance of a
                primary provider. The Department notes, however, that the primary
                provider is responsible for any other adoption services (including
                services 1, 2, or 4) it actually provides or facilitates in the case.
                All services in relative adoption cases must be provided in accordance
                with Sec. 96.44.
                 The most persistent concerns expressed to the Department about the
                need for regulations relating to adoption by relatives are to reduce
                costs and to simplify the process associated with such adoptions such
                that they take less time. More specifically, stakeholders have
                indicated that the current regulations do not reflect the fact that
                families adopting relative children abroad already provide most of the
                key adoption services in such cases, handling many of the
                administrative tasks associated with an adoption abroad. Stakeholders
                also point out that many relative cases involve an emergent situation
                in which a child or children are suddenly bereft of their parents and
                action on the case needs to be taken quickly.
                 In addition to these concerns, ASPs have informed the Department
                that many relative cases occur in countries where few if any U.S. ASPs
                have adoption programs or expertise. The new provisions are thus
                crafted in a way to allow primary providers to rely on the intimate
                knowledge of family members in the country of origin. It is the
                Department's hope that this approach will make it less burdensome for
                ASPs to provide services in relative adoptions and thus encourage ASPs
                to serve as primary providers in relative adoption cases. This would
                relieve families trying to adopt their relative child abroad of the
                burden of contacting many ASPs seeking one willing to work in a country
                where it has little if any expertise. Often in such cases, when the
                family cannot find an ASP to serve as a primary provider in their case,
                they end up having to make alternative arrangements for the child,
                which may not be in the child's best interests. In some cases, the U.S.
                relative feels compelled to relocate to the child's country of origin
                or residence to reside with her/him in challenging conditions separated
                from family members in the United States, thus introducing additional
                stresses into a situation in which emotions and resources are already
                strained.
                 Prospective adoptive parents adopting a relative child abroad must
                fulfill the same 10 hours of training and preparation required in Sec.
                96.48(a) (which are unchanged in the proposed rulemaking) as in all
                other intercountry adoption cases. The proposed amendment in Sec.
                96.100(c) provides that this training should be completed prior to
                finalizing the adoption or grant of legal custody. The proposed
                amendment also recognizes that in some relative
                [[Page 74494]]
                cases, the adoption may be finalized before a primary provider becomes
                involved in the case. In such cases the primary provider ``must verify
                such training requirements have been met as soon as practicable.''
                B. Amendments Relating to Accrediting Entities and Accreditation
                 Primary responsibility for accreditation and approval of ASPs, and
                monitoring and oversight of ASPs' compliance with the IAA, the UAA, and
                their implementing regulations, rests not with the Department but with
                one or more designated accrediting entities (AEs) (42 U.S.C. 14922).
                The IAA does not permit a U.S. Federal agency to assume the role of AE.
                An AE must be either a nonprofit organization (as described in section
                501(c)(3) of the Internal Revenue Code), or a public entity other than
                a federal entity, that otherwise meets the requirements of the
                regulations. In accordance with these IAA principles, in 2006 the
                Department designated two AEs to accredit or approve U.S. adoption
                service providers who, upon such accreditation or approval, were
                authorized to provide adoption services in intercountry adoption cases
                subject to the Convention. Since 2008, both Department-designated AEs
                have withdrawn from that role. The Department designated the current
                accrediting entity, the Intercountry Adoption Accreditation and
                Maintenance Entity, Inc. (IAAME), in 2017.
                 The IAA and existing Sec. 96.4 provide that there can be more than
                one designated AE and that AE roles be defined in the Secretary's
                written agreement with AEs. Proposed revisions to various sections of
                the rule clarify how responsibilities may be allocated among AEs if
                more than one AE is designated. Revisions to Sec. 96.6(c) and (d)
                clarify that an AE must have the capacity to monitor and take
                appropriate adverse action against ASPs, even if the ASP was initially
                accredited or approved by a different AE. Revisions to Sec. Sec. 96.8
                and 96.9 clarify that the fees charged by an AE must relate to the
                functions it is authorized to provide, whether or not that AE is
                authorized to perform all AE functions. The Department notes that in
                the event multiple AEs are in operation at one time, under Sec. 96.4
                the Department can expressly designate the jurisdiction of each AE,
                thus preventing jurisdiction overlap, competition or unfair forum
                shopping for agencies seeking or holding accreditation. The Department
                also notes that Sec. 96.27(d) helps ensure that each AE uses methods
                that are ``substantially the same'' as those of any other designated
                AEs.
                 Revisions to Sec. 96.8 introduce a new element to the Secretary's
                approval of AE fee schedules. The new provisions require the Department
                to publish proposed fee schedules in the Federal Register for public
                comment and review before approving the schedules. The Department is
                introducing this requirement to enhance transparency on an issue of
                concern noted by some stakeholders, and expects this to result in
                increased trust between the AE and the ASPs subject to AE fees.
                 The amendment to Sec. 96.10(c)(2) modifies the criteria for
                finding an AE out of substantial compliance with the accreditation
                regulations, to include where an AE has accredited an ASP whose
                performance results in intervention by the Secretary.
                 Section 96.24(a) lists particular skills and expertise that AE
                evaluators must have in order to effectively carry out an AE's
                responsibility to evaluate an ASP for accreditation or approval. The
                proposed amendments to Sec. 96.24(a) adds finance and accounting to
                this list of skills and expertise, reflecting AE experience that
                indicates that such skills are important to be able to evaluate an
                ASP's compliance with financial requirements under the regulations.
                 Proposed edits to Sec. 96.26(b) clarify that information collected
                by an AE in the course of its work, including during monitoring and
                oversight, may be shared with appropriate tribal and foreign
                authorities. Section 96.26(d), formerly the last sentence of Sec.
                96.26(c), now appears as an independent subsection clarifying that an
                AE must maintain a complete and accurate record of all information it
                receives related to an agency or person and the basis for an AE's
                decisions concerning the agency or person. New Sec. 96.7(a)(9) imposes
                the same requirement as to other records relating to an AE's role.
                 Proposed revisions to Sec. 96.92 increase the frequency by which
                an AE is required to disseminate information to the public about the
                accreditation status of ASPs and adverse actions taken with respect to
                ASPs, thus ensuring that the most current information is regularly made
                available to the public. An AE typically disseminates this information
                via its website, which is updated regularly. Revisions to Sec. Sec.
                96.43 and 96.94 require expanded reporting to the Secretary about
                disruption, dissolution, and unregulated custody transfers, because of
                the potential risk of harm to children and the potential repercussion
                to U.S. bilateral relationships associated with this conduct. These
                revisions impose no additional requirements on ASPs or the public.
                 Subpart F's section on ``Scope'' was formerly Sec. 96.29, and
                under this proposal will be found at Sec. 96.28. The new Sec. 96.29
                is entitled ``Compliance with all Applicable Laws'' and explicitly
                includes as standards within subpart F, upon which an AE can rely in
                making accreditation, approval, renewal, and maintenance decisions,
                certain existing regulatory requirements. These provisions include the
                prohibition on unauthorized provision of adoption services, the
                requirement to provide essential information to an AE, and compliance
                with the laws of each domestic and foreign jurisdiction in which an ASP
                operates when providing adoption services, and with the Convention, the
                IAA, and the UAA. A proposed amendment to Sec. 96.45(a) makes more
                explicit the existing requirement that primary providers ensure that
                when using foreign supervised providers to provide adoption services,
                those foreign supervised providers do so in accordance with the
                Convention, the IAA and the UAA.
                C. Prevention of Child Buying and Protection of Prospective Adoptive
                Parents
                Child Care Contributions
                 The proposed rule revisions to Sec. Sec. 96.36(a) and 96.40(c)(4)
                aim to prohibit ASPs from charging prospective adoptive parents (PAPs)
                to care for a particular child prior to completion of the intercountry
                adoption process. Payment of monthly support fees to ASPs or local
                providers for the care of children where the intercountry adoption
                process is not complete can create an incentive to illicitly recruit
                children into institutions, while also providing a disincentive for
                expeditious processing of an adoption. In some cases, the fees charged
                to PAPs have been significantly higher than the normal costs associated
                with the care of children in the foreign country. AEs have identified
                these situations via ongoing internal research and monitoring,
                including comparisons of like-services provided by other ASPs as well
                as reviews of databases related to the provision of certain services.
                These practices substantially and unpredictably increase the costs of
                adoption for PAPs, who are not in a position either to object to the
                charges or to expedite the completion of the adoption, and may result
                in a situation where an adoptive family pays for long-term care of a
                child who is not in fact eligible for intercountry adoption.
                [[Page 74495]]
                 The proposed revisions do not prohibit the transfer of funds to a
                foreign country to provide food, medical care or other provisions for
                children. ASPs may still include fees for food, medical care or other
                provisions for children in their program costs and may charge such fees
                to parents as part of their program fees. However, those fees must be
                structured as broader assistance to a country's child welfare efforts,
                must be dissociated from the care of a specific child, must be charged
                only once during the adoption process, and must be disclosed to PAPs as
                part of the ASP's overall fee disclosure. These proposed regulations
                place the responsibility for transferring and monitoring the use of
                such funds on the ASPs, and prohibit ASPs from shifting this
                responsibility to PAPs, who may be vulnerable to pressure or
                exploitation. The proposed revisions also require ASPs to verify that
                the fees are not unreasonable for the country where the services are
                provided and are used for their intended purposes. While there is not a
                formal process AEs use for analyzing or auditing the reasonableness of
                the fees charged, the Department notes that AEs use administrative
                data, including publicly available resources and data.
                 To increase transparency and provide an AE with an effective tool
                for assessing an ASP's compliance with this prohibition on child
                buying, revisions to Sec. 96.36(b) would require the ASP to retain a
                record of all foreign financial transactions, to enhance transparency
                and provide a means of identifying potential child buying.
                Prohibited Compensation Practices
                 Section 96.34 prohibits the payment of incentive or contingent fees
                that likewise create an incentive to recruit children for intercountry
                adoption, and gives effect to this prohibition by requiring ASPs to
                compensate all service providers only for services rendered, and only
                on a wage, salary, or fee-for-service basis that is not unreasonably
                high in connection with the actual cost of services. Proposed revisions
                to Sec. 96.34 address known practices used to circumvent this
                limitation, such as making these excessive payments to associates of
                foreign supervised providers or other intermediaries who do not
                themselves provide adoption services, by extending this limitation on
                unreasonable compensation to any entity involved in an intercountry
                adoption.
                Transparency of Fees
                 The Department has received feedback from prospective adoptive
                parents who have noted that there are discrepancies in the amount of
                information that agencies and persons provide about their fees, making
                prospective adoptive parents' selection process difficult. The
                Department has determined that many prospective adoptive parents would
                benefit from an increased level of transparency about what to expect
                during the intercountry adoption process. This is in part because
                currently, many prospective adoptive parents fear that because some
                fees are described in very general terms, there may be undisclosed
                costs hidden from view. Undisclosed fees may stretch adoptive family
                resources so thin as to cast doubt on whether the family will be able
                to complete the adoption. To address these concerns, the proposed
                revisions in Sec. Sec. 96.39 and 96.40 enhance the general public's
                knowledge of ASP practice, and insulate PAPs from being charged
                unexpected or excessive fees at points in the adoption process where
                they are vulnerable to such overcharging. The proposed changes increase
                the amount and frequency of information disclosure relating to fees to
                the general public and to an ASP's prospective clients. In particular,
                the proposed rule in Sec. Sec. 96.39(a) and 96.40 would require ASPs
                to disclose a schedule of expected fees and expenses on their websites,
                and to provide an itemized disclosure of fees to PAPs before providing
                any adoption services. The rule also would require ASPs to distinguish
                fees for services provided in the United States from those provided in
                a foreign country.
                 Along these lines of fee transparency, Sec. 96.46(b)(7) and (8)
                are proposed to be amended to prohibit direct billing of PAPs by
                foreign supervised providers. Before this proposed change, foreign
                supervised providers could require direct payments for services abroad
                from PAPs, thus exposing PAPs to potential abuses such as overcharging.
                Under these changes, the primary provider would be responsible for
                assessing fees from PAPs and transmitting the fees to the foreign
                supervised provider. The change is also found at Sec. 96.40(c)(6).
                 The Department specifically requests comment on the cost of
                maintaining fee transparency under this proposal.
                Segregation of Client Funds
                 Proposed provisions in Sec. 96.40(f) would reinforce the principle
                that client funds received but not yet expended for agreed upon
                services are not part of the ASP's assets, and so must be segregated
                from both their general operating funds and the required two months'
                reserve fund.
                D. Post-Placement Monitoring and Post-Adoption Services
                 ASPs play a critical role in supporting families in the post-
                placement and post-adoption periods. Although the majority of
                intercountry adoptions are successful, some families experience
                adjustment challenges, discovery of unknown medical or emotional needs,
                or other issues that may lead to instability of the placement or the
                adoption.
                 In addition to the existing requirements relating to supervising a
                child's placement until final adoption and providing counseling in the
                event that a placement is in crisis, the proposed rule requires ASPs to
                take all appropriate measures to inform the parents of local and State
                laws and legal resources pertaining to disruption of a placement and
                appropriate measures for making another placement of a child, to
                explain the risks and implications of disruption for the child, and to
                provide resources to address potential future crises. ASPs would be
                required to provide specific points of contact for support in the event
                an adoptive family faces difficulties that place permanency at risk.
                 The Department has found that the generalized requirements related
                to providing support to the family experiencing disruption under
                current Sec. 96.50 did not provide sufficient information to PAPs to
                serve their needs nor those of the children. Proposed Sec. 96.50(c)
                through (h) delineate an ASP's specific responsibilities for responding
                to disruptions that occur while the PAPs and the child are still in the
                country of origin. These requirements are aimed at ensuring the PAPs
                are supported in the process of considering a possible disruption and
                are informed about the implications of a disrupted placement for the
                child and the family, including any siblings.
                 For disruptions in the United States, ASPs will be required to
                notify the Department and, in placing the child with a new family, to
                provide information about sibling relationships, outstanding post-
                placement reporting requirements, and the child's citizenship status,
                all of which are critical for the child's long-term safety and welfare.
                For disruptions in the country of origin, ASPs will be required to
                notify local authorities, as well as the Department, of the disruption
                and to ensure the safe and timely transfer or temporary placement of
                the child consistent with local law.
                 Proposed amendments to Sec. 96.50(f) would impose new requirements
                for notification to child welfare authorities, the foreign competent or
                Central
                [[Page 74496]]
                Authorities, and the Secretary, of a disruption or a family's intent to
                disrupt. Such notification will help to ensure the child's safety and
                welfare and will allow the Department to facilitate communication with
                foreign authorities to mitigate the potential repercussions to a
                country's willingness to continue to engage with the United States with
                respect to intercountry adoption. Throughout this section, there are
                revisions intended to address increasing awareness of the parents'
                responsibilities to the child and an ASP's responsibilities to both the
                child and the family.
                 Proposed amendments to Sec. 96.51(b) provide for informing the
                PAPs whether post-adoption services, including any post-adoption
                reporting, are included in the agency's or person's fees, and if not,
                enumerate the cost the agency or person would charge for such services
                and whether it would provide services if an adoption is dissolved.
                E. Submission of Complaints
                 An amendment to Sec. 96.2 permits complaints to be submitted
                electronically as well as in writing. Amendments to Sec. 96.41(b) and
                (e) allow for complaints to be submitted by any individual or entity,
                and extend the protection against retaliation to any individual or
                entity who makes a complaint, or otherwise expresses a grievance,
                provides information to an AE on the ASP's performance, or questions
                the conduct of or expresses an opinion about the performance of an ASP.
                F. Reasonable Efforts To Find a Timely and Qualified Adoptive Placement
                in Outgoing Cases
                 Article 4 of the Convention provides that a Convention adoption may
                occur when competent authorities have determined that the child is
                adoptable and that, after possibilities for placement of the child
                within the State of origin have been given due consideration, the
                authorities have determined that an intercountry adoption is in the
                child's best interests. The new provisions in Sec. 96.54 would require
                that ASPs demonstrate reasonable efforts to find a timely adoptive
                placement for the child in the United States in all cases (except for
                certain cases involving adoption by relatives). This revision will
                ensure that ASPs provide the information on the child to interested
                PAPs in the United States in an effort to find a timely placement, in
                accordance with Article 4 of the Convention. These efforts must be
                documented for a court's review. With this information, courts would be
                better able to determine whether a placement abroad is in the best
                interests of the child.
                 Also, the provision relating to adoption of siblings in Sec.
                96.54(d)(2) was expanded to make diligent efforts to place siblings
                together consistent with relevant laws in most States and with best
                practices within the child welfare community. While not directly
                addressed in the IAA or the Convention, placing siblings together
                whenever possible is consistent with the notion discussed at the time
                of the drafting of the Convention that termination of parental rights
                does not include termination of other familial relationships.
                G. Provisions Relating to Corporate Governance and Oversight
                 The proposed amendment to Sec. 96.32(c) requires the ASP to
                maintain for 25 years records relating to the selection, monitoring,
                and oversight of foreign supervised providers, financial transactions
                to and from foreign countries, and records relating to responding to
                complaints. The proposed amendment to Sec. 96.32(e)(4) requires the
                ASP to disclose to an AE certain related entities, to the extent they
                provided services to or receive payment from the ASP.
                 A period of 25 years was chosen to ensure that ASP records relevant
                to a particular adoption remain available to adopted children who,
                after becoming adults, wish to access their records in order to learn
                about their adoption and their origins.
                H. Procedures and Requirements for Adverse Action by the Secretary,
                Including for Challenges to Such Adverse Action
                 The proposed rule would amend provisions in subpart L regarding
                adverse action by the Secretary. The proposed rule sets forth
                procedural requirements for providing ASPs with adequate notice of any
                adverse action taken by the Secretary and the reasons for such action
                and describes the administrative process by which an ASP may contest
                such adverse action. Upon exercising these authorities for the first
                time in 2016, the Department determined that it would be appropriate to
                supply the public with relevant details as to the place, requirements,
                procedures and purpose of such notice and proceedings.
                 Section 96.83(b) describes the notification and supporting evidence
                to be provided to the ASP in the event of suspension or cancellation of
                accreditation by the Secretary, and Sec. Sec. 96.88(a) and 96.89(a)
                describe the notification and supporting evidence to be provided to the
                ASP in the event of a temporary or permanent debarment. New Sec. Sec.
                96.84(a) and (b) would set forth procedures by which an ASP can object
                to a suspension or cancellation as unjustified, and the standards by
                which the Department will review such an objection. This is
                distinguished from a petition for relief from suspension or
                cancellation based upon the ASP's correction of deficiencies, which is
                now addressed in Sec. 96.84(c).
                 Section 96.85(c) provides that the Secretary shall ordinarily give
                notice of a proposed finding of debarment and an opportunity to be
                heard before the debarment takes effect, and may make the debarment
                effective immediately only where the Secretary finds that doing so is
                necessary to address a substantial risk of significant harm to children
                and families. Section 96.88 sets forth in detail the procedures,
                requirements, time frames, and standards of review that apply where an
                ASP objects to a proposed debarment, and Sec. 96.89 sets forth the
                corresponding procedures, requirements, time frames, and standards of
                review for post-debarment review where an ASP objects to a debarment
                that is effective immediately. The time frames under Sec. 96.89 are
                somewhat shorter, in recognition of the fact that the ASP is unable to
                operate during the pendency of a post-debarment challenge, but the
                Department anticipates that the appointed hearing officer will extend
                the default time frames if the parties so request.
                 Clarifying changes to Sec. 96.85 specify that the Secretary may
                consider a detrimental effect on the ability of U.S. citizens to adopt
                children in the future in considering whether an ASP's continued
                accreditation is not in the best interests of children and families,
                and that an ASP that is debarred ceases to be accredited upon
                debarment. The proposed Sec. 96.88 includes information as to how an
                ASP subject to debarment may request an administrative hearing on the
                matter.
                 Section 96.83(c) adds USCIS, state licensing authorities, and
                foreign central authorities to the list of entities to be notified in
                the event of adverse action by the Secretary, and conforming changes
                are made to such notification provisions throughout this subpart.
                I. Miscellaneous Amendments
                 The requirement to retain a completed FBI Form FD-258 contained in
                Sec. 96.35(c)(4) and (d)(2) have been removed, as this form cannot be
                used for the purpose stated in those provisions under current FBI
                guidance.
                [[Page 74497]]
                 A proposed amendment to Sec. 96.25(c) allows an AE to take adverse
                action for ``engag[ing] in deliberate destruction of documentation, or
                provid[ing] false or misleading documents or information.''
                 We propose to add a definition to the list of terms in Sec. 96.2
                for ``authorization.'' This term derives from a key provision in the
                Hague Adoption Convention, and until now it was missing from our
                collection of key terms and definitions.
                 We propose to augment the definition of the term best interests of
                the child to include the situation in which the child is outside of the
                United States, in which case best interests shall be interpreted in
                light of the objects of the Convention without reference to any
                particular U.S. State.
                 Another new proposed term added to the definitions in Sec. 96.2 is
                unregulated custody transfer, which refers to the placement of a child
                with a person or entity with the intent of severing the child's
                existing parent-child or guardian-child relationship without taking the
                appropriate steps, both to ensure the child's safety and permanency and
                to transfer legal custody or guardianship of the child.
                 The proposed standards in Sec. 96.37 relate to education and
                experience requirements for ASP employees. In Sec. 96.37(c), we expand
                the standard to include not only clinical skills and judgment, but also
                training in the professional delivery of intercountry adoption
                services.
                 Section 96.38 addresses training requirements for social service
                personnel. Section 96.38(b) adds important topics on which the social
                service personnel need expertise, to include, among others, the
                physical, psychological, cognitive, and emotional issues facing
                children who have experienced trauma, abuse, including sexual abuse, or
                neglect and other factors with a long-term impact on a child's social
                and emotional development. A proposed amendment to Sec. 96.38(d)
                provides for an exemption from the orientation and initial training of
                newly-hired employees, if within the last two years they have received
                such orientation in another organization and are otherwise current in
                their other training requirements.
                 At the request of ASPs, we have proposed amendments to Sec. 96.47
                with instructions on how an ASP may withdraw its recommendation of PAPs
                for adoption when it withdraws its approval of the home study.
                 Minor proposed revisions to the definitions in Sec. 96.2 include
                simplification of the term child welfare services by removing elements
                suggestive of adoption services; clarification that the term public
                domestic authority includes ``an authority operated by a State, local,
                or tribal government within the United States or an agent of such
                government;'' and further clarification that the term public foreign
                authority only refers to courts or regulatory bodies operated by the
                national or subnational governments of a foreign country.
                 Finally, the Department proposes minor technical edits, including
                punctuation, to Sec. Sec. 96.2; 96.4(c); 96.5; 96.6(h); 96.7(a)(4);
                96.7(b)(1), 96.7(c); 96.10(c)(6) and (7); 96.12(a); 96.27; 96.33(f);
                96.35; 96.39(d); 96.45(b)(9); 96.49(e), (g) and (i); and 96.54(d)(1)
                and (2) that do not have substantive impacts on accreditation
                requirements and that removed references to temporary accreditation,
                which expired in 2010.
                III. Response to Regulatory Reform Solicitation of Comments
                 On August 7, 2018, the Department published a Federal Register
                document soliciting comments from the public on regulatory reform
                initiatives as outlined in Executive Order 13777 (``Enforcing the
                Regulatory Reform Agenda''). 83 FR 38669. The Department received
                comments relating to this proposed rule, which can be accessed at
                https://beta.regulations.gov/comment/DOS_FRDOC_0001-4901.
                 In response to the Department's Federal Register document, the
                Department received comments relating to foreign supervised providers
                (FSPs) as well as other concerns related to the regulation of
                intercountry adoption. At the present time, while we acknowledge the
                concerns identified by the commenter related to oversight of FSPs in
                certain limited circumstances, in this notice of proposed rulemaking,
                we are not addressing any regulatory changes to accreditation standards
                relating to FSPs. We will instead undertake a consultative process on
                this issue with a wide variety of stakeholders in intercountry adoption
                and consider the entire range of standards relating to FSPs. Through
                this consultative process, we will explore solutions for resolving
                concerns related to FSPs, including those that do not require changes
                in regulation.
                 The Department's responses to the proposed revisions follow:
                 (a) Proposed change: Remove Sec. Sec. 96.35(c)(4) and 96.35(d)(2).
                The Department's response: These sections have been removed in this
                proposed rule.
                 (b) Proposed change: Amend Sec. 96.8(b)(1) by removing the word
                ``non-refundable.'' The Department disagrees with the suggested
                deletion. The Department's response: AE fees have always been non-
                refundable to protect an AE's capacity to perform its roles and
                functions that they are required to perform by law and their agreement
                with the Department. An AE is required to charge no more than the fees
                necessary to perform its functions. AEs monitor ASP activity as a
                whole, not individual cases, and the expenditure of funds to cover
                accreditation services is not tied to any individual adoption.
                Accordingly, the current AE's schedule of fees was calculated based on
                its full cost of conducting accreditation responsibilities. This cost
                was divided by the estimated number of adoptions, based on currently
                available data, as a way of allocating the AE's costs across ASPs of
                significantly different size. If fees were made refundable where an
                individual case is withdrawn, the per-adoption fee would be
                correspondingly higher to cover the unchanged cost of accreditation
                services.
                 Proposed change: Amend Sec. 96.8(c) by adding the following
                sentence at the end of the existing paragraph: ``An accrediting entity
                must make available to the public its demonstration of compliance with
                Sec. 96.8(a) and (b), upon request.'' The Department's response: The
                Department has revised Sec. 96.8(b) as noted in Section II (b), above.
                 (c) Proposed change: Re-order paragraphs within Sec. 96.8 and add
                two new paragraphs as follows:
                 (1) Sec. 96.8(d): ``An accrediting entity must not charge
                additional fees for the placement of siblings, when placed for adoption
                with the same parents at the same time.'' The Department's response:
                The Department disagrees with this suggestion. The amount of the
                current AE's monitoring and oversight fee per adoption case was
                established based on the projected number of total adoption cases and
                the AE's projected expenses for conducting monitoring and oversight
                activities. At this time, there is insufficient data to allow the AE to
                create a model that exempts siblings from the monitoring and oversight
                fee structure. This may be considered in the future when adequate data
                is available.
                 (2) Sec. 96.8(e): ``If an accrediting entity establishes fees
                based on the number of prospective adoptive parents an accredited
                agency or approved person contracts with, such determinations shall
                take into account the number of applicants who complete adoptions with
                these adoption service providers.'' The Department's response: The
                Department disagrees with this suggestion. The current AE's schedule of
                fees was designed to cover the projected cost of conducting
                [[Page 74498]]
                accreditation and monitoring and oversight activities for all
                intercountry adoptions across ASPs and country programs. AEs monitor
                ASP activity as a whole. The fee model allows ASPs to pay fees
                incrementally as cases are accepted, rather than paying significantly
                larger fees as a lump sum at the beginning of the four-year
                accreditation cycle, and thus ensures that the costs of monitoring are
                borne proportionately to the number of adoption cases handled by each
                ASP. If the suggestion were accepted, the AE would be unable to fund
                its activities for the next four years without immediately assessing
                large accreditation fees on agencies.
                 (d) Proposed change: Amend the beginning of Sec. 96.39(a) to read:
                ``The agency or person fully discloses in writing to the general public
                upon request and to prospective client(s) prior to signing a
                contract:'' The Department's response: The Department disagrees with
                this suggestion, because the information to be disclosed is readily
                available even at first contact and thus creates no new burden to
                produce. Disclosure at first contact also provides a PAP with
                information it can use in selecting the ASP with which they want to
                work.
                 (e) Proposed change: Amend Sec. 96.49(i) to read: ``The agency or
                person ensures that any videotapes or photographs taken by the
                accredited agency or person are identified by the date on which the
                videotape or photograph was recorded or taken and that they were made
                in compliance with the laws in the country where recorded or taken.''
                The Department's response: We incorporated this suggested revision in
                the proposed rule; the amended provision only applies to photos taken
                by accredited or approved ASPs and their foreign supervised providers.
                The Department made this change in recognition that U.S. providers have
                limited or no ability to determine when and under what circumstances
                photos or videos provided by a foreign adoption authority or
                unaffiliated third party were taken.
                 (f) Proposed change: Amend Sec. 96.52(a) to read: ``When
                requested, the agency or person informs the Central Authority of the
                Convention country or the Secretary about necessary information
                regarding a specific adoption case and the measures taken to complete
                it, as well as about the progress of the placement if a probationary
                period is required.'' The Department's response: The Department
                understands the concern behind this suggestion and addressed it by
                modifying the suggested language to more precisely indicate the
                circumstances under which an agency or person must inform the Central
                Authorities about the case. Additionally, we added: In the case of
                information developed or new information relating to the suitability
                and eligibility of adoptive parents, inform USCIS, the sole authority
                for making suitability determinations.
                 (g) Proposed change: Strike Sec. 96.52(b)(4), because the actions
                described therein are performed by the Department, not accredited
                agencies or approved persons. The Department's response: Rather than
                deleting this provision, the Department takes the point and adapted it
                to include ``or confirm that this information has been transmitted to
                the foreign country's Central Authority or other competent authority by
                the United States' Central Authority.
                 (h) Proposed change: Amend Sec. 96.52(d) as follows: ``When
                requested by the Secretary or a foreign Central Authority, the agency
                or person returns the original home study on the prospective adoptive
                parent(s) and/or the original child background study to the authorities
                that forwarded them.'' The Department's response: The amendment has
                been made to Sec. 96.52(d) after adding the term ``original'' to it.
                The Department made the same changes in Sec. 96.55(c) in relation to
                requests for return of original home studies or child background
                studies when the transfer of the child has not taken place.
                 (i) Proposed change: Strike Sec. 96.52(e), as being too broad. The
                Department's response: The Department has not accepted this deletion
                but has modified the language to clarify that the obligation only
                applies to requirements that the Secretary has previously identified
                under existing authorities and made known (directly or via an AE) to
                ASPs.
                IV. Timeline for Implementing Changes in the Proposed Rule, if Approved
                 Some changes in the proposed rule would become effective 180 days
                after publication of the final rule. The Department invites comment on
                the timelines for implementation.
                 Provisions in Sec. 96.40 relating to fee disclosures would take
                effect 180 days after publication of the final rule. To comply with the
                new rule, ASPs will need to change their fee disclosures. The
                Department believes that this timeframe would allow ASPs to review
                already available information, determine whether such fees and expenses
                should be characterized as fees and expenses for services provided in
                the United States or overseas, respectively, and begin to provide this
                information to PAPs.
                 The Department plans to implement the new alternative procedures
                for adoption of relatives abroad three months after publication of the
                final rule.
                V. Regulatory Analysis
                Administrative Procedure Act (APA)
                 The Department is issuing this rule as a notice of proposed
                rulemaking (NPRM) as required by the IAA and welcome comments from the
                public on every aspect of the NPRM.
                Executive Order 13771: Reducing Regulation and Controlling Regulatory
                Costs
                 This proposed rule is expected to be an Executive Order 13771
                regulatory action. Details about the estimated costs of this proposed
                rule can be found in the RFA Discussion, below.
                Regulatory Flexibility Act/Executive Order 13272: Small Business
                 This section considers the effects that the proposed amendments to
                the accreditation regulations may have on accredited or approved ASPs
                as required by the Regulatory Flexibility Act (RFA, 5 U.S.C. et seq.,
                Pub. L. 96-354) as amended by the Small Business Regulatory Enforcement
                Fairness Act of 1996 (SBREFA). The RFA generally requires an agency to
                prepare a regulatory flexibility analysis of any rule subject to notice
                and comment rulemaking requirements under 5 U.S.C. 553(b). 42 U.S.C.
                14923(a)(3) provides that subsections (b), (c), and (d) of 5 U.S.C. 553
                apply to this rulemaking. The Department requests information and data
                from the public that would assist in better understanding the impact of
                this proposed rule on small entities. The Department also seeks input
                from the public on alternatives that will accomplish the same
                objectives and minimize the proposed rule's economic impact on small
                entities. Our preliminary initial regulatory flexibility analysis
                (IRFA) follows.
                 1. A description of the reasons why the action is being considered
                by the Department: This proposed rule clarifies, updates, or otherwise
                adapts a limited number of changes to accreditation and approval
                standards, most of which have been in full operation since 2006. The
                proposed changes derive from our observation of the rule's practical
                operation and from the observations of intercountry adoption
                stakeholders such as adoptive parents, ASPs, Congressional offices, and
                law enforcement authorities. Taken
                [[Page 74499]]
                together, these interactions with a broad cross section of
                organizations, critics, entities, and individuals have allowed us to
                reflect on potential improvements and regulatory adaptations. Through
                these changes we want to refine our work to better serve the birth
                families, adoptive parents, and children whose interests all intersect
                in the intercountry adoption process.
                 2. A succinct statement of the objectives of, and legal basis for,
                the proposed rule: The proposed rule supports many of the Department's
                policy goals. A primary consideration is making the accreditation rule
                as effective as possible in defining standards essential to protecting
                the safety and other interests of the participants in intercountry
                adoption. We aspire to implementing the lofty goals of the Hague
                Convention on Protection of Children and Co-operation in Respect of
                Intercountry Adoption (the Adoption Convention), which include in
                Article 1: To establish safeguards to ensure that intercountry
                adoptions take place in the best interests of the child and with
                respect for his or her fundamental rights as recognized in
                international law; and to establish a system of co-operation among
                Contracting States to ensure that those safeguards are respected and
                thereby prevent the abduction, the sale of, or traffic in children. The
                proposed changes to the accreditation rule focus on the individual
                participants in the process. But taking into account that even small
                changes in the regulations may have a significant impact, each proposed
                revision also contributes to preservation of intercountry adoption as a
                viable option for children in need of permanency the world over.
                 The legal authority to engage in these proposed changes derives
                from our treaty obligations found in the Adoption Convention and as
                implemented by the Intercountry Adoption Act of 2000, the Intercountry
                Adoption Universal Accreditation Act of 2012, and the Secretary's
                responsibilities to support foreign policy interests of our nation
                found in the U.S. Constitution.
                 Another objective of this proposed rule is to be responsive to the
                adoption community's calls for a different process for adoption by
                relatives, one that is faster and less costly, while maintaining
                essential safeguards to protect children and prospective adoptive
                parents. We share the community's desire to make intercountry adoption
                more accessible to relatives, which fits squarely into the Department's
                mission to support the viability of intercountry adoption for children
                in need as well. We are therefore proposing new relative adoption
                provisions, consistent with Section 502(a) of the Intercountry
                Adoptions Act (42 U.S.C. Chapter 143 sec. 14952(a)) (IAA Title V sec.
                502(a)) relating to alternative procedures for the adoption of children
                by individuals related to them by blood, marriage, or adoption.
                 3. A description--and, where feasible, an estimate of the number--
                of small entities to which the proposed rule will apply: The RFA
                defines a ``small entity'' as a small not-for-profit organization,
                small governmental jurisdiction, or small business. The RFA requires,
                with some exceptions, that agencies define small firms according to its
                size standards. SBA sets size standards by the number of employees or
                the amount of revenues for specific industries. These size standards
                are captured in the North American Industry Classification System
                (NAICS) codes. The work of intercountry adoption ASPs falls under the
                NAICS code 624110--Child and Youth Services. SBA's standard for a small
                business within this industry code is an entity with gross revenues of
                $11 million or less. Based off of public administrative data supplied
                by the ASPs themselves and the AE, the total number of entities subject
                to this rule is 118, as of June 2020. Of this total, 90 meet the SBA
                definition of small business entity. These firms are grouped based on
                gross revenues as follows: Gross receipts data were obtained from ASP
                public filings of IRS form 990, which non-profit organizations under
                section 501(c)(3) of the Internal Revenue Code are required to submit
                annually.
                 Table 1--US Accredited/Approved Adoption Service Providers Grouped by Annual Gross Receipts, NAICS Code 624110
                ----------------------------------------------------------------------------------------------------------------
                 Number of
                 adoption Percentage of
                 service small firms
                 providers
                ----------------------------------------------------------------------------------------------------------------
                Firms with Gross Receipts over $100M-$500M.................................... 3 N/A
                Firms with Gross Receipts over $11M-$100M..................................... 17 N/A
                Small Firms (Gross Receipts up to $11M)....................................... 90 100
                Firms with Gross Receipts over $5M-$11M....................................... 12 13
                Firms with Gross Receipts over $2M-$5M........................................ 17 19
                Firms with Gross Receipts over $1M-$2M........................................ 16 18
                Firms with Gross Receipts over $500K-$1M...................................... 19 21
                Firms with Gross Receipts $500K and under..................................... 26 29
                Firms for whom we have no financial data...................................... 8 N/A
                 ---------------------------------
                 Total U.S. Accredited and Approved ASPs................................... 118 ...............
                ----------------------------------------------------------------------------------------------------------------
                 Data for gross receipts were obtained from ASP public filings of
                IRS form 990, which non-profit organizations under section 501(c)(3) of
                the Internal Revenue Code are required to submit annually. The number
                of ASPs affected by this proposed rule making is very small. Agencies
                affected by this proposed rule typically provide child-related social
                services beyond intercountry adoption, though we understand some
                specialized exclusively in it. Of the ASPs engaged in intercountry
                adoption, most (112) are non-profit accredited agencies. Six ASPs are
                approved persons, which under the IAA are individuals, or for-profit
                entities. For the approved persons we have no financial data that would
                allow us to place them more accurately on Table 1. Two other agencies
                for whom we have no financial data are religious organizations not
                required to file IRS form 990, despite their classification as non-
                profit entities. It is our belief that they would fall within the scope
                of the small business rubric.
                 The Department would appreciate receiving feedback about the
                groupings of ASP firms in this description.
                 4. A description of projected reporting, recordkeeping, and other
                compliance requirements of the proposed rule. Some of the provisions of
                [[Page 74500]]
                this rule relate to reporting and record keeping. All provisions apply
                equally to all parts of this group of small firms, but also to the non-
                small firms that make up the total number of accredited and approved
                agencies and persons. In Table 2, below, we summarize the impact of the
                proposed changes, including reporting and record keeping elements and
                our understanding of the average cost of implementing those provisions.
                 5. An identification, to the extent possible, of all relevant
                federal rules that may duplicate, overlap, or conflict with the
                proposed rule. To our knowledge, there are not relevant federal rules
                that duplicate, or conflict with, the proposed rule.
                Considering Alternative Approaches
                Relative Adoptions
                 The relative adoption provisions illustrate how we approached
                considering alternative ways to address a need through this regulation.
                As previously noted, our objective in developing a new process for
                adoption by relatives was to reduce the cost and the time it takes to
                bring a relative adoption to a successful conclusion. Also important to
                us was a process that ASPs would find attractive for serving families
                with precious few options. Many relative cases arise in countries where
                there are no well-established intercountry adoption programs, and where
                few if any ASPs have expertise to work comfortably.
                 We considered three approaches:
                 1. No change
                 2. A minimalist approach in which the primary provider was not
                required to provide any adoption services in the case, and
                 3. Sharing services between adoptive families and a primary
                provider.
                 No change: We rejected the status quo as not acceptable as it
                achieved none of our goals for relative adoptions. We wanted a change
                the met the needs of the public and the ASPs and preserved key
                safeguards in relative cases.
                 Minimalist approach: We looked at various ways of limiting the role
                of a primary provider in the case to verification of services only,
                relieving the Primary Provider of the obligation of providing any
                services, or supervising the provisions of adoption services in the
                case. We rejected this very minimalist approach and the variations on
                the minimalist theme we considered because even though they might be
                cheaper for ASPs and PAPs than the proposed approach, the heightened
                risks to children, birth families, and adoptive families inherent in a
                very highly curtailed role for the primary provider were unacceptable.
                Taking the minimalist road would allow too much influence by
                unscrupulous foreign providers on family members and putting them in
                the way of corrupt officials without allowing for a modicum of
                oversight.
                 Sharing services: The proposed approach, in which families may
                provide certain services themselves instead of ASPs, leaving other
                services to be provided by a primary provider in the case, balances
                protecting against risks while promoting an efficient and cost-
                effective process for families. We are requiring the ASP primary
                provider to provide the home study and the post placement services.
                These services are the bedrock of social services in our regulations.
                Accredited ASPs have deep capacity to provide these services
                independent of special cultural knowledge or foreign bureaucratic know
                how. Permitting this division of labor in relative adoption cases plays
                to the strengths of both PAPs and ASPs. And it will reduce the time the
                ASP must spend on the case and the cost of their work on the case by
                limiting its scope. Reducing the cost to families will have the
                additional benefit of encouraging families to consult with a U.S.
                adoption professional sooner as the case gets underway and thereby
                avoid pitfalls that result from calling them in at the very tag end of
                the case. In this instance, the approach we landed on was not the very
                least costly option, but it will mean significant savings to ASPs and
                adoptive families alike, while building in effective controls on risks.
                Segregation of Client Funds
                 Our objective was to preserve unspent client funds so that they
                would be available when needed. We have observed and adoptive families
                have complained loudly when this occurs, that when an ASP is called
                upon to transfer cases to other agencies for completion (for a wide
                variety of possible reasons) sometimes those funds are no longer
                available. In the case of an ASP that has been suspended or lost its
                accreditation, the ASP is required to implement its case transfer
                plans, including transferring client funds not yet expended in the
                client's case. If the ASP was asked to transfer cases and its own
                finances are in disarray it may be that the coffers are now empty and
                the client must struggle to force the ASP to return funds or must
                proceed with the in-progress adoption case with another agency and must
                need to pay additional fees to do so. We wanted to help prospective
                adoptive families with a revision to the rule that will put them on
                protected footing.
                 There were a range of possible solutions:
                 1. No change, but work to educate families and ASPs about how to
                avoid this situation,
                 2. Imposing highly formalized fiduciary funds physical separation
                from the agency's funds process (similar to how most law firms do it),
                or
                 3. Requiring the segregation without specifying how the ASP should
                accomplish it, but build in reporting and AE oversight.
                 No change: The concept of separation of client funds from other
                client funds and ASP funds is not new and has been the subject of at
                least one law suit in which the court caused an ASP to lose its state
                license to provide adoption services for comingling client funds with
                its own. We were concerned that just talking about it and not tying it
                to some form of accountability would not invigorate enough ASPs to make
                needed changes. We wanted a solution that promised results.
                 Holding unspent client funds in an escrow account: Physical
                separation of client from agency funds in an escrow fund managed by a
                financial institution had its obvious attractions. While producing the
                highest level of protection for the adoptive families, this was also
                the most expensive option as most escrow accounts have fees associated
                with them and may involve administrative hassles to access protected
                funds on short notice. We liked the level of protection but the cost,
                especially if multiplied across all clients, was prohibitive.
                 Choose your own solution subject to AE verification and adverse
                action if you fail to put into place effective segregation of funds: In
                our interaction with ASPs we learned that there were many possible ways
                of effectively segregating client funds that reflect ASP management
                style, financial sophistication, and workforce savvy and budgetary
                solvency. This solution gave the ASP the greatest leeway to decide
                which method it preferred while creating accountability for protecting
                unspent client funds. Potential low cost and increased accountability.
                Creating Greater Transparency of Fees Charged by ASPs
                 On several levels, adoption-related fees are a source of friction,
                competition, and confusion within the adoption community at large.
                There are many who criticize ASPs for charging high adoption fees.
                Countries of origin raise this matter with us bilaterally when we speak
                with them in private, complaining that they don't understand why the
                fees are so high and what the
                [[Page 74501]]
                funds are used for. To address these concerns and to create greater
                transparency for prospective adoptive parents, we wanted to propose a
                change to how ASPs disclose their fees.
                 The options we considered were:
                 1. No change,
                 2. Create a form that ASPs would be required to use to provide a
                detailed list of information in a uniform manner with strong penalties
                for failure to conform, and
                 3. A hybrid approach somewhere between options (a) and (b).
                 No change: The cheapest option by far. It also does not improve
                transparency and accountability if we do nothing.
                 Create a draconian list of detailed fee information linked to
                strong sanctions for failure to comply: This option envisions forcing
                all ASPs to provide the exact kind of information and to the same level
                of detail for each country in which the offered adoption services and
                with strict consequences for noncompliance. Some agencies would favor
                this approach because it would force a level playing field for ASPs.
                Some are reluctant to reveal the details of their fees because the
                don't want to be ``outbid'' by other ASPs. Others do not want to be
                pinned down to exact fee levels because they want flexibility to keep
                up with local conditions. Yet others have used their published fees to
                provide camouflage for questionable fee practices. This approach is
                more akin to a licensing context, in which all ASPs must demonstrate
                the same high level of compliance to retain their license. Our system,
                by contrast, is an accreditation model in which APS have more leeway to
                demonstrate conformance with standards of practice and may also have
                acceptable levels of compliance short of perfect compliance. We
                wondered if some agencies would resist compliance to highlight this
                essential difference between the two models.
                 A hybrid approach: As we fleshed it out, we found that it offered
                greater transparency for adoptive families, other ASPs and countries of
                origin alike. It provided a framework for increasing the number of fee
                particulars that was scalable depending on the kind of intercountry
                adoption program your agency had, reflecting the complexity of
                adoptions in specific countries and allowing for streamlining
                information where appropriate. The key to success, we thought, would
                lie in getting the main categories right and separating the information
                in terms of where the service takes place, rather than under general
                headings of foreign program or domestic program fees. To mitigate the
                cost of implementation, we envisioned keeping the number of fees to
                report to a list larger than the status quo but not so detailed as to
                make conforming with a disclosure requirement too costly to launch or
                difficult to keep up to date.
                Calculating Staff Worker Hourly Rates
                 Using the most recent edition of Bureau of Labor Statistics (BLS)
                Occupational Employment Statistics (OES),\2\ we obtained several
                estimates for social workers ranging from about $24 per hour (as an
                average national wage rate) to nearly $30 per hour. We went a step
                further and found the average (mean) of the hourly rate for each state
                in the category ``Social Workers, All Other,'' as reported in the State
                by State data sets for OES code 21-1029 of May 18, 2018,\3\ the most
                recent data set available. On this basis, we arrived at an average
                national hourly rate of $30.12, which for ease of calculating we
                rounded to $31.
                ---------------------------------------------------------------------------
                 \2\ https://www.bls.gov/oes/.
                 \3\ https://www.bls.gov/oes/2018/may/oes211029.htm.
                ---------------------------------------------------------------------------
                 In a similar manner, we captured national wage rates for other
                staff and management workers from the BLS OES Data sets, including:
                 (1) Financial Managers,\4\ $70.59/hour (rounded to $71), whose
                duties include to plan, direct, or coordinate accounting, investing,
                banking, insurance, securities, and other financial activities of a
                branch, office, or department of an establishment;
                ---------------------------------------------------------------------------
                 \4\ https://www.bls.gov/oes/2018/may/oes113031.htm.
                ---------------------------------------------------------------------------
                 (2) Bookkeeping, Accounting, and Auditing Clerks,\5\ $20.25/hour
                (rounded to $21), whose duties may include to compute, classify, and
                record numerical data to keep financial records complete; to perform
                any combination of routine calculating, posting, and verifying duties
                to obtain primary financial data for use in maintaining accounting
                records; and to check the accuracy of figures, calculations, and
                postings pertaining to business transactions recorded by other workers;
                ---------------------------------------------------------------------------
                 \5\ https://www.bls.gov/oes/2018/may/oes433031.htm.
                ---------------------------------------------------------------------------
                 (3) Auditors,\6\ $37.89 (rounded to $38), whose duties include to
                examine, analyze, and interpret accounting records to prepare financial
                statements, give advice, or audit and evaluate statements prepared by
                others; and
                ---------------------------------------------------------------------------
                 \6\ https://www.bls.gov/oes/2018/may/oes132011.htm.
                ---------------------------------------------------------------------------
                 (4) Training and Development Specialists,\7\ $31.31 (rounded to
                $32), whose duties include to design and conduct training and
                development programs to improve individual and organizational
                performance. They may also analyze training needs.
                ---------------------------------------------------------------------------
                 \7\ https://www.bls.gov/oes/2018/may/oes131151.htm.
                ---------------------------------------------------------------------------
                 The Department requests public comment on the method used to
                estimate the cost of compliance with the amendments to this regulation,
                including the estimates of compensation noted here.
                 Table 2--Summary of Cost Data in Appendix A to the Preamble
                 [Each item in this summary and in Appendix A is numbered for ease or
                 comparison. The numbered items refer to the items in the Preamble
                 narrative.]
                ------------------------------------------------------------------------
                
                -------------------------------------------------------------------------
                 Projected Implementation Costs for Small Firms
                ------------------------------------------------------------------------
                
                Year 1 Costs For Each Small Firm:
                 Average Cost in the First Year: $14,165.
                Costs For Each Small Firm in Subsequent * Years:
                 Average Cost in Subsequent Years: $5,274.
                * For more information on subsequent year average costs and the services
                 with which they are associated, see the bottom of this table.
                ------------------------------------------------------------------------
                
                 Total Projected Implementation Costs for All Firms Regardless of Size
                ------------------------------------------------------------------------
                
                Year 1 Costs For All Firms Taken Together:
                 Average Cost in the First Year: $1,558,095.
                Costs in Subsequent Years for All Firms Taken Together:
                [[Page 74502]]
                
                 Average Cost in each Subsequent Year: $580,085.
                ------------------------------------------------------------------------
                
                 Average first year $
                 Average year 1 $ Average first year $ costs for all ASP
                 costs for 1 small costs for all small firms regardless of
                 firm ASP firms size
                ----------------------------------------------------------------------------------------------------------------
                1. Preamble II-A-1, Subpart R, Sec. Sec. Reduction in Costs Reduction in Costs Reduction in Costs
                 96.100-96.101, Adoption by Relatives. Expected. Expected. Expected.
                2. Preamble II-B-1, Sec. 96.43 and 96.94, 93.................. 8,370............... 10,230.
                 Additional data points to report in the event
                 of a disruption or dissolution.
                3. Preamble II-C-2, Sec. 96.36(a), Prohibits 610................. 54,900.............. 67,100.
                 payment of expenses for a specific child or
                 as an inducement to release a child for
                 adoption.
                4. Preamble II-C-3 Initial Year, Sec. 1,766............... 158,895............. 194,205.
                 96.36(b), Requires policies and procedures
                 prohibiting the sale of children and
                 incorporates in an employee training.
                4. Preamble II-C-3 Subsequent Years........... See Table Below.....
                5. Preamble II-C-4 Initial Year, Sec. 96.34, 731................. 65,745.............. 80,355.
                 No incentive or contingent fees or plans to
                 compensate formally or informally for
                 locating or placing children.
                6. Preamble II-C-5 Initial Year, Sec. 96.40, 2,123............... $191,025............ 233,475.
                 Expanded categories of estimated fees and
                 expenses in the United States and abroad
                 associated with an intercountry adoption.
                6. Preamble II-C-5 Subsequent Years........... See Table Below.....
                7. Preamble II-C-6 Initial Year, Sec. 1,020............... 91,755.............. 112,145.
                 96.40(c)(4)(i), Prohibits regular payments
                 for care of a particular child, unreasonably
                 high fees, and fees based on a period of time
                 it takes to complete adoption.
                8. Preamble II-C-7 Initial Year, Sec. 427................. 38,385.............. 46,915.
                 96.46(b)(7) and (8), Prohibits direct
                 payments to foreign supervised providers.
                 Fees for FSPs paid by the ASP not PAPs.
                9. Preamble II-C-8 Initial Year, Now located 1,880............... 169,200............. 206,800.
                 in Sec. 96.40(f), Holding Unspent Client
                 Funds Separate from ASP Operating Funds.
                9. Preamble II-C-8 Subsequent Year............ See Table Below.....
                10. Preamble II-D-1 Initial Year, Sec. 731................. 65,745.............. 80,355.
                 96.50(c) through (h), Provides increased
                 detail on post placement monitoring,
                 notification requirements and time frames for
                 notification when adoption is in crisis.
                11. Preamble II-D-2, Sec. 96.51(b), 731................. 65,745.............. 80,355.
                 Addressing post adoption services in the ASP-
                 PAP service agreement; returning child to COO.
                12. Preamble II-E-1, Sec. 96.41, ASPs accept 731................. 65,745.............. 80,355.
                 all written complaints.
                13. Preamble II-F-1, Sec. 96.54(a), Outgoing Not possible to Not possible to Not possible to
                 Cases--Removes the provisions on birth parent- determine. determine. determine.
                 selected PAPs. ASPs make reasonable efforts
                 to find a timely U.S. adoptive placement.
                14. Preamble II-F-2, Sec. 96.54(d)(2), 731................. 65,745.............. 80,355.
                 Diligent Efforts to place siblings together.
                15. Preamble II-G-1, Sec. 96.32(c), Retain 610................. 54,900.............. 67,100.
                 board meeting records and records about
                 supervised providers, financial transactions
                 with foreign countries for 25 years.
                16. Preamble II-G-2, Sec. 96.32(e)(4), ASP 610................. 54,900.............. 67,100.
                 discloses to the AE orgs that share with it
                 any leadership, officers, boards or family
                 relationships and whether it provides
                 services to or receives payment from the
                 agency or person.
                17. Preamble II-I-1, Sec. 96.25(c), 62.................. 5,580............... 6,820.
                 Deliberate destruction of documentation or
                 provision of false or misleading information.
                18. Preamble II-I-2, Sec. 96.37(c), Training Not possible to Not possible to Not possible to
                 topics for social service personnel may be determine. determine. determine.
                 waived due to training or experience.
                19. Preamble II-I-3, Sec. 96.38(b), Topics 610................. 54,900.............. 67,100.
                 relating to intercountry adoption about which
                 agency social service personnel require
                 training.
                20. Preamble II-I-4, Sec. 96.38(d), 93.................. 8,370............... 10,230.
                 Exemption from training for newly hired
                 social service staff in certain circumstances.
                21. Preamble II-I-5, Sec. 96.47(e), 610................. 54,900.............. 67,100.
                 Procedures for withdrawal of home study
                 approval.
                ----------------------------------------------------------------------------------------------------------------
                 Average Additional Costs in Subsequent Years
                ----------------------------------------------------------------------------------------------------------------
                4. Preamble II-C-3 Subsequent Years Average $2,772.............. $249,480............ $304,920.
                 Costs.
                6. Preamble II-C-5 Subsequent Year Average $2,601.............. $185,445............ $226,655.
                 Costs.
                9. Preamble II-C-8 Subsequent Year Average $441................ $39,690............. $48,510.
                 Costs.
                 -----------------------------------------------------------------
                 Total Average Costs for Subsequent Years.. $5,274.............. $474,615............ $580,085.
                ----------------------------------------------------------------------------------------------------------------
                [[Page 74503]]
                 Table 3--Revenue Test for Accredited or Approved Adoption Service Providers (NAICS Code 624110)--$11 Million Small Firm Size Standard--Cost of
                 Implementation as a Percentage of Gross Annual Receipts
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                 Average $ cost
                 Average annual Number of % of small Average $ cost Revenue test per firm in Revenue test
                 Firm Size (by gross receipts) $ receipts firms firms per firm in (%) subsequent (%)
                 first year years
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                Firms with Receipts from $100M up to 150,638,293 3 N/A 14,103 

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