Manufacture, Sale, Wear, and Quality Control of Heraldic Items

Published date04 October 2021
Record Number2021-21121
SectionRules and Regulations
CourtArmy Department,Defense Department
Federal Register, Volume 86 Issue 189 (Monday, October 4, 2021)
[Federal Register Volume 86, Number 189 (Monday, October 4, 2021)]
                [Rules and Regulations]
                [Pages 54615-54620]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2021-21121]
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                DEPARTMENT OF DEFENSE
                Department of the Army
                32 CFR Part 507
                [Docket ID: USA-2018-HQ-0016]
                RIN 0702-AA70
                Manufacture, Sale, Wear, and Quality Control of Heraldic Items
                AGENCY: Department of the Army, Department of Defense (DoD).
                ACTION: Final rule.
                -----------------------------------------------------------------------
                SUMMARY: The Department of the Army is finalizing its regulation
                describing the Army Heraldic Quality Control Program and the
                certification process for manufacturers in order to make Military
                Insignia. The rule establishes procedures governing the manufacture,
                commercial sale, reproduction, possession, and wear of military
                decorations, medals, badges, insignia and their components and
                appurtenances also discussed is the five-year renewal period for
                manufacturer certification and insignia authorizations and the
                procedure for authorizing the use of insignia on commercial items.
                DATES: This rule is effective on November 3, 2021.
                FOR FURTHER INFORMATION CONTACT: Charles V. Mugno, Office of the
                Administrative Assistant to the Secretary of the Army, Director of the
                Institute of Heraldry, (571) 515-0320.
                SUPPLEMENTARY INFORMATION:
                I. Background
                 a. This final rule revises the Department of the Army's (DA)
                regulation, 32 Code of Federal Regulations (CFR) part 507, for
                implementing the Army Heraldic Quality Control Program which was last
                published on May 18, 1998 (63 FR 27208). The revisions being finalized
                include a procedural change to manufacturer certification and insignia
                authorizations which add a five-year renewal period for manufacturer
                certification and insignia authorizations. This change insures the
                manufacturing base is current and insignia is periodically examined for
                quality. The second change is to the approving authority for the use of
                insignia images in commercial items. Pursuant to Title 10 U.S.C. 2260,
                Licensing of intellectual property: Retention of fees, the Secretary of
                the Army established the Army Trademark Licensing Program in 2006,
                formalizing the process for the licensing of marks owned by the
                Department of the Army, including heraldic insignia and other
                collective marks.
                 The authorities for this rule are 10 U.S.C. 7594; 15 U.S.C. 1051 et
                seq.; 10 U.S.C. 2260; 18 U.S.C. 701, 704; 36 U.S.C. 901. Title 10
                U.S.C. 7594 grants the Secretary of the Army the authority to design
                flags, insignia, badges, medals, seals, decorations, guidons,
                streamers, finial pieces for flagstaffs, buttons, buckles, awards,
                trophies, marks, emblems, rosettes, scrolls, braids, ribbons, knots,
                tabs, cords and similar items for other military departments and to
                advise other Federal departments and agencies on matters of heraldry.
                Title 15 U.S.C. 1051 et seq. is the statutory basis for the ownership
                and control of trademarks, service marks, certification marks, and
                collective marks. Title 10 U.S.C. 2260 grants the Secretary of the Army
                the authority to license trademarks, service marks, certification
                marks, and collective marks owned or controlled by the Secretary of the
                Army. Title 18 U.S.C. 701 states manufacturing, selling and possession
                of any badge, identification card or insignia prescribed by the head of
                any department or agency of the United States is unlawful unless
                authorized by regulations made pursuant to law. Title 18 U.S.C. 704,
                also known as the ``Stolen Valor Act'' makes it illegal for a person to
                fraudulently claim having received a valor award specified in the Act,
                with the intention of obtaining money, property, or other tangible
                benefit by convincing another that he or she received the award. Title
                36 U.S.C. 901 grants authority to the Secretary of Defense to approve a
                service flag and lapel button for display by members of the immediate
                family of an individual serving in the Armed Forces of the United
                States during any period of war or hostilities in which the armed
                forces are engaged. Persons must apply to the Secretary of Defense for
                a license to manufacture and sell the approved service flag. That
                authority was delegated in DoD Manual 1348.33 to the Secretary of the
                Army. (Available at https://www.esd.whs.mil/Directives/issuances/dodm/.)
                II. Summary of Major Provisions
                 Subpart A--Introduction. Includes discussion on purpose and
                applicability; references; provides a list of definitions, terms, and
                abbreviations; responsibly; outlines the responsibilities for the
                implementation of the program; statutory authority; identifies and
                defines the applicable statutes.
                 Subpart B--Manufacture and Sale of Decorations, Badges, and
                Insignia includes discussion on the process to become a certified
                manufacturer; provides requirements for the certification of insignia;
                discusses process to incorporate designs in commercial articles;
                discusses the possession and wear of decoration, service medal, badge,
                service ribbon, lapel button, or insignia.
                 Subpart C--Heraldic Quality Control Program discusses the program
                and the controlled heraldic items that fall under the program and
                identified insignia that are not authorized for commercial sale. This
                subpart also discusses penalties for
                [[Page 54616]]
                violating the Quality Control Program and how complaints are processed.
                 Subpart D--License and Manufacture of the Service Flag and Service
                Lapel Button describes the application process for approval to make the
                Service Flag and Service Lapel Button.
                III. Comments and Responses
                 The proposed rule was published in the Federal Register on June 12,
                2020 (85 FR 35846-35852) for a 60-day comment period. The Department of
                the Army received 1 comment. The comment was not pertinent to the rule,
                so no action was taken and this rule is being finalized with no changes
                from the proposed rule.
                Expected Impact of the Final Rule
                 This rule facilitates the Department of the Army Heraldic Quality
                Control Program and the manufacturing of all military decorations,
                medals, badges, insignia and their components and appurtenances. The
                manufacturer certification process requires the manufacturer to submit
                four samples of insignia to show they have the capability to make
                insignia in accordance with government specifications. The submitted
                samples have a negligible value, under ten dollars, and less than five
                manufactures apply each year. The recertification process consists of a
                review of a manufacturer's performance during the certification period.
                There is no cost to the manufacturer for the review and recertification
                process.
                B. Regulatory Reviews
                Regulatory Flexibility Act
                 The Department of the Army does not expect this rule to have a
                significant economic impact on a substantial number of small entities
                within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et
                seq., because the rule is not creating any new requirements for
                manufacturers of military insignia.
                Unfunded Mandates Reform Act
                 The Department of the Army certifies that this action does not
                include a mandate that may result in estimated costs to State, local or
                tribal governments in the aggregate or the private sector of $100
                million or more.
                Congressional Review Act, 5 U.S.C. 804(2)
                 The Congressional Review Act, 5 U.S.C. 801 et seq., as amended by
                the Small Business Regulatory Enforcement Fairness Act of 1996,
                generally provides that before a rule may take effect, the agency
                promulgating the rule must submit a rule report, which includes a copy
                of the rule, to each House of the Congress and to the Comptroller
                General of the United States. The DoD will submit a report containing
                this rule and other required information to the U.S. Senate, the U.S.
                House of Representatives, and the Comptroller General of the United
                States. A major rule cannot take effect until 60 days after it is
                published in the Federal Register. This final rule is not a ``major
                rule'' as defined by 5 U.S.C. 804(2).
                National Environmental Policy Act
                 The Department of the Army has determined that this action is not
                covered under the National Environmental Policy Act because the rule is
                not a major Federal action that significantly affects the quality of
                the human environment.
                Paperwork Reduction Act
                 The Department of the Army has determined that the Paperwork
                Reduction Act does not apply. Manufacturers wanting to be certified
                provide general information already available to the public about the
                company such as name, address, points of contact, contact information
                and the type of insignia they want to produce. Annually, fewer than
                five manufacturers request certification.
                Executive Order 12630 (Government Actions and Interference With
                Constitutionally Protected Property Rights)
                 The Department of the Army has determined that Executive Order
                12630 does not apply because the rule does not impair private property
                rights.
                Executive Order 12866 (Regulatory Planning and Review) and Executive
                Order 13563 (Improving Regulation and Regulatory Review)
                 Executive Order 12866 directs agencies to assess all costs and
                benefits of available regulatory alternatives and, if regulation is
                necessary, to select regulatory approaches that maximize net benefits
                (including potential economic, environmental, public health and safety
                effects, distributive impacts, and equity). In accordance with the
                provisions of Executive Order 12866, this is not significant rule and
                was not reviewed by the Office of Management and Budget.
                Executive Order 13045 (Protection of Children From Environmental Health
                Risk and Safety Risks)
                 The Department of the Army has determined that Executive Order
                13045 does not apply because this substantive action in rulemaking is
                neither economically significant nor does the action concern
                environment health or safety risks that may disproportionally affect
                children.
                Executive Order 13132 (Federalism)
                 The Department of the Army has determined that Executive Order
                13132 does not apply because this rule will not have a substantial
                effect on the States, on the relationship between the National
                Government and the States, or on the distribution of power and
                responsibilities among various levels of government.
                List of Subjects in 32 CFR Part 507
                 Decorations, medals, awards.
                0
                For reasons discussed in the preamble, the Department of the Army
                revises 32 CFR part 507 to read as follows:
                PART 507--MANUFACTURE, SALE, WEAR, AND QUALITY CONTROL OF HERALDIC
                ITEMS
                Subpart A--Introduction
                Sec.
                507.1 Purpose.
                507.2 References.
                507.3 Explanation of abbreviations and terms.
                507.4 Responsibilities.
                507.5 Statutory authority.
                Subpart B--Manufacture and Sale of Decorations, Badges, and Insignia
                507.6 Authority to manufacture.
                507.7 Certification of controlled heraldic items.
                507.8 Authority to sell.
                507.9 Reproduction of designs.
                507.10 Incorporation of designs or likenesses of approved designs in
                commercial articles.
                507.11 Possession and wear.
                Subpart C--Heraldic Quality Control Program
                507.12 General.
                507.13 Controlled heraldic items.
                507.14 Articles not authorized for manufacture or commercial sale.
                507.15 Violations and penalties.
                507.16 Processing complaints of alleged breach of policies.
                Subpart D--License and Manufacture of the Service Flag and Service
                Lapel Button
                507.17 Authority to manufacture.
                507.18 Application for licensing.
                 Authority: 10 U.S.C. 7594; 18 U.S.C 701, 704; 36 U.S.C. 901.
                Subpart A--Introduction
                Sec. 507.1 Purpose.
                 This part prescribes the Department of the Army policy governing
                the manufacture, commercial sale, reproduction, possession, and wear of
                [[Page 54617]]
                military decorations, medals, badges, insignia, and their components
                and appurtenances. It also establishes the Heraldic Quality Control
                Program to improve the appearance of the Army by controlling the
                quality of heraldic items purchased from commercial sources.
                Sec. 507.2 References.
                 Related publications are listed in paragraphs (a) through (d) of
                this section. (A related publication is merely a source of additional
                information. The user does not have to read it to understand this
                part.)
                 (a) Department of Defense Manual 1348.33, Volume 3, Manual of
                Military Decorations and Awards: DoD-Wide Personal Performance and
                Valor Decorations. (Available at https://www.esd.whs.mil/Directives/issuances/dodm/).
                 (b) Army Regulation 360-1, Army Public Affairs Program. (Available
                at https://armypubs.army.mil/ProductMaps/PubForm/AR.aspx).
                 (c) Army Regulation 670-1, Wear and Appearance of Army Uniforms and
                Insignia. (Available at https://armypubs.army.mil/ProductMaps/PubForm/AR.aspx).
                 (d) Army Regulation 840-1, Department of the Army Seal, and Emblem
                and Branch of Service Plaques. (Available at https://armypubs.army.mil/ProductMaps/PubForm/AR.aspx).
                 (e) Army Regulation 27-60, Intellectual Property. (Available at
                https://armypubs.army.mil/ProductMaps/PubForm/AR.aspx).
                Sec. 507.3 Explanation of abbreviations and terms.
                 (a) Abbreviations. (1) CFR--Code of Federal Regulations.
                 (2) DA--Department of the Army.
                 (3) DAASA--Deputy Administrative Assistant to the Secretary of the
                Army.
                 (4) DLA--Defense Logistics Agency.
                 (5) DUI--Distinctive unit insignia.
                 (6) ID--Identification
                 (7) MCS--Military Clothing Store.
                 (8) RDI--Regimental Distinctive Insignia.
                 (9) ROTC--Reserve Officers' Training Corps.
                 (10) SSI--Shoulder sleeve insignia.
                 (11) TIOH--The Institute of Heraldry.
                 (12) U.S.C.--United States Code.
                 (b) Terms--(1) Appurtenances. Devices such as stars, letters,
                numerals, or clasps worn on the suspension ribbon of the medal, or on
                the ribbon bar that indicate additional awards, participation in
                specific events, or other distinguishing characteristics of the award.
                 (2) Awards. An all-inclusive term that consists of any decoration,
                medal, badge, ribbon, or appurtenance bestowed on an individual or
                unit.
                 (3) Badge. An award given to an individual for identification
                purposes or that is awarded for attaining a special skill or
                proficiency. Certain badges are available in full, miniature, and dress
                miniature sizes.
                 (4) Cartoon. A drawing, six times actual size, showing placement of
                stitches, color of yarn and number of stitches.
                 (5) Certified manufacturer. A manufacturer who demonstrated the
                capability to manufacture controlled heraldic items according to
                Government standards.
                 (6) Certificate of authority to manufacture. A certificate
                assigning manufacturers a hallmark and authorizing manufacture of
                heraldic items.
                 (7) Decoration. An award given to an individual as a distinctively
                designed mark of honor denoting heroism or meritorious or outstanding
                service or achievement.
                 (8) Die. The block of steel that is used to form a metal insignia
                and is the intricate three dimensional reversed design of the insignia
                cut into the surface of a block of steel.
                 (9) Hallmark. A distinguishing mark consisting of a letter and
                numbers assigned to certified manufacturers for use in identifying
                manufacturers of insignia.
                 (10) Heraldic items. All items worn on the uniform to indicate
                unit, skill, branch, award or identification and for which a design has
                been established by TIOH on an official drawing.
                 (11) Heraldic Quality Control Program. A program that improves the
                public image of the Army by controlling the quality of insignia
                purchased from commercial sources.
                 (12) Hub. The block of steel that is used to form a die and is the
                intricate three dimensional raised design of the insignia cut into the
                surface of a block of steel.
                 (13) Lapel button. A miniature enameled replica of an award, which
                is worn only on civilian clothing.
                 (14) Letter of agreement. A letter signed by manufacturers before
                certification, stating that the manufacturer agrees to produce heraldic
                items in accordance with specific requirements.
                 (15) Letter of authorization. A letter issued by TIOH that
                authorizes the manufacture of a specific heraldic item after quality
                assurance inspection of a preproduction sample.
                 (16) Medal. An award issued to an individual for the performance of
                certain duties, acts, or services, consisting of a suspension ribbon
                made in distinctive colors and from which hangs a medallion.
                 (17) Rosette. A lapel device created from gathering the suspension
                ribbon of a medal into a circular shape. The device is worn on the
                lapel of civilian clothing.
                 (18) Service medal. An award made to personnel who participated in
                designated wars, campaigns, or expeditions or who have fulfilled
                specified service requirements in a creditable manner.
                 (19) Tools. The generic term used for hubs, dies, cartoons, and
                drawings used in the manufacture of heraldic items.
                 (20) Unit award. An award made to an operating unit, which is worn
                by members of that unit who participated in the cited action (permanent
                unit award).
                Sec. 507.4 Responsibilities.
                 The Director of The Institute of Heraldry (TIOH) will--
                 (a) Monitor the overall operation of the Heraldic Quality Control
                Program.
                 (b) Establish policy and procedures to:
                 (1) Certify manufacturers of insignia and plaques.
                 (2) Control the manufacture and quality assurance of military
                decorations, the DA seal and emblem, Branch of Service plaques, and
                other heraldic items.
                 (3) Grant certificates of authority for the manufacture and
                commercial sale of Service flags and Service lapel buttons.
                 (4) Provide heraldic services to the Executive branch, Department
                of Defense, and other Federal agencies on a reimbursable basis.
                 (5) Provide advisory opinions on the use of Army heraldic items for
                licensing or other commercial purposes (for example, the Army Emblem,
                Army Flag, unit insignia, and items approved for wear on uniforms), at
                the request of the Army Trademark Licensing Program.
                Sec. 507.5 Statutory authority.
                 (a) The manufacture, commercial sale, possession, and reproduction
                of badges, identification cards, insignia, or other designs prescribed
                by the head of a U.S. department or agency, or colorable imitations of
                them, are governed by Title 18, United States Code, section 701 (18
                U.S.C. 701).
                 (b) The wear, manufacture, and commercial sale of military
                decorations, medals, badges, and their components and appurtenances, or
                colorable imitations thereof, are governed by 18 U.S.C. 704.
                 (c) The Army's providing heraldic services to other Military
                departments and Federal agencies is governed by 10 U.S.C. 7594.
                [[Page 54618]]
                 (d) The display of and license to manufacture and sell the approved
                Service flag or Service lapel button is governed by 36 U.S.C. 901.
                 (e) The ownership and licensing of trademarks, service marks, and
                collective marks such as DUI, RDI, SSI, and other Army-owned heraldic
                insignia are governed by 15 U.S.C. 1051 et seq., and 10 U.S.C. 2260.
                Subpart B--Manufacture and Sale of Decorations, Badges, and
                Insignia
                Sec. 507.6 Authority to manufacture.
                 (a) Only manufacturers that TIOH has certified and has issued a
                certificate of authority to may produce heraldic items.
                 (1) TIOH will issue a certificate of authority to manufacturers who
                can demonstrate they have the capability to manufacture controlled
                heraldic items according to Government specifications or purchase
                descriptions through the certification process.
                 (2) The certificate of authority to manufacture is applicable only
                for the individual, firm, or corporation indicated and will be valid
                for 5 years.
                 (3) TIOH will assign a hallmark to each certified manufacturer. All
                controlled heraldic items manufactured for commercial sale will bear
                the manufacturer's hallmark.
                 (4) TIOH exclusively uses the ``IOH'' hallmark for the development
                of new controlled heraldic items; it is not authorized for use on items
                for commercial sale.
                 (b) A certificate of authority to manufacture may be revoked or
                suspended under the procedures prescribed in Sec. 507.16.
                 (c) A list of certified manufacturers is on the TIOH web page at
                https://tioh.army.mil/.
                Sec. 507.7 Certification of controlled heraldic items.
                 (a) The manufacture and commercial sale of controlled heraldic
                items are not authorized until the certified manufacturer receives a
                letter of authorization from TIOH. Manufacturers who want to
                manufacture and sell controlled heraldic items must submit four
                production samples of each item to TIOH for authorization. If TIOH
                approves the production samples, it will provide a letter of
                authorization to manufacture along with one certified production sample
                to the manufacturer. Letters of authorization for certified heraldic
                items are valid for 5 years.
                 (b) The Director of TIOH may revoke or suspend a letter of
                authorization for failure to manufacture the heraldic item in
                accordance with applicable Government specifications.
                Sec. 507.8 Authority to sell.
                 No certificate of authority to manufacture is required for selling
                controlled heraldic items listed in Sec. 507.13. However, all sellers
                must ensure that all articles they sell bear hallmarks assigned by TIOH
                and are manufactured by certified manufacturers in conformance with
                applicable Government specifications.
                Sec. 507.9 Reproduction of designs.
                 (a) The photographing or printing of any decoration, service medal,
                service ribbon, badge, lapel button, insignia, or other device of a
                design the Secretary of the Army has prescribed for members of the Army
                to use is authorized, provided that such reproduction does not
                discredit the U.S. Army and is not used to defraud or misrepresent the
                identification or status of an individual, organization, society, or
                other group of persons.
                 (b) The making or executing in any manner of any engraving,
                impression, or colorable imitation in the likeness of any decoration,
                service medal, service ribbon, badge, lapel button, insignia, or other
                device of a design the Secretary of the Army has prescribed for members
                of the Army to use is prohibited without prior approval in writing from
                the Army Trademark Licensing Program.
                 (c) Except when used to illustrate a particular article that is
                offered for commercial sale, Army Regulation 360-1, paragraph 8-9e,
                prohibits the use of Army themes, material, uniforms, or insignia in
                advertisements and promotions for entertainment-oriented products that
                could imply Army endorsement of the product. Direct requests to the
                Chief, Public Affairs (SAPA-ZA), 1500 Army Pentagon, Washington, DC
                20310-1500.
                Sec. 507.10 Incorporation of designs or likenesses of approved
                designs in commercial articles.
                 (a) Federal law and Army policy restrict the use of military
                designs. The manufacture of articles for commercial sale that
                incorporate designs or likenesses of decorations, service medals,
                service ribbons, and lapel buttons is prohibited. Certain designs or
                likenesses of insignia, such as badges or organizational insignia, may
                be incorporated in articles manufactured for commercial sale, provided
                that the Army Trademark Licensing Program has granted permission in
                writing as specified in paragraph (b) of this section.
                 (b) The Army Trademark Licensing Program is responsible for
                reviewing requests for permission to incorporate certain insignia and
                other Army-owned marks in articles manufactured for commercial sale.
                Requests should be directed to the Director, Army Trademark Licensing
                Program, 2530 Crystal Drive, Suite 12140, Arlington, VA 22202-3934.
                Sec. 507.11 Possession and wear.
                 (a) The wearing of any decoration, service medal, badge, service
                ribbon, lapel button, or insignia that the Army has prescribed or
                authorized by any person not properly authorized to wear such device or
                the use of any decoration, service medal, badge, service ribbon, lapel
                button, or insignia to misrepresent the identification or status of the
                person by whom such is worn is prohibited. Any person who violates this
                paragraph (a) is subject to punishment as prescribed in the statutes
                referred to in Sec. 507.5.
                 (b) Mere possession by a person of any of the articles prescribed
                in Sec. 507.13 (except identification cards) is authorized, provided
                that such possession is not used to defraud or misrepresent the
                identification or status of the individual concerned.
                 (c) Articles specified in Sec. 507.13, or any distinctive parts
                (including suspension ribbons and service ribbons) or colorable
                imitations thereof, will not be used by any organization, society, or
                other group of persons without prior approval in writing by the Army
                Trademark Licensing Program as specified in Sec. 507.10(b).
                Subpart C--Heraldic Quality Control Program
                Sec. 507.12 General.
                 The Heraldic Quality Control Program provides a method for ensuring
                that controlled heraldic items are manufactured by certified
                manufacturers in accordance with Government specifications. The design
                of metal insignia will be an exact duplicate of the design of the
                Government die or loaned hub from which the certified manufacturer's
                working die is extracted. The design of textile insignia will be
                embroidered in accordance with Government-furnished specification and
                cartoon.
                Sec. 507.13 Controlled heraldic items.
                 (a) Controlled heraldic items will be manufactured in accordance
                with Government specifications, using Government loaned hubs, dies, or
                cartoons, by TIOH-certified manufacturers.
                 (b) The heraldic items listed in paragraphs (b)(1) through (13) of
                this section are controlled and authorized for manufacture and
                commercial sale
                [[Page 54619]]
                under the Heraldic Quality Control Program when specifically authorized
                by TIOH.
                 (1) All authorized appurtenances and devices for decorations,
                medals, and ribbons such as oak leaf clusters, service stars,
                arrowheads, ``V'' device, and clasps.
                 (2) Combat, special skill, and qualification badges and bars.
                 (3) Identification badges.
                 (4) All approved Shoulder Sleeve Insignia.
                 (5) All approved Distinctive Unit Insignia.
                 (6) All approved Regimental Distinctive Insignia.
                 (7) All approved Combat Service Identification Badges.
                 (8) Fourrag[egrave]res and lanyards.
                 (9) Lapel buttons.
                 (10) Decorations, service medals, and ribbons, except for the Medal
                of Honor.
                 (11) Replicas of decorations and service medals for grave markers.
                Replicas are to be at least twice the size prescribed for decorations
                and service medals.
                 (12) Service ribbons and unit awards.
                 (13) Rosettes, except for the Medal of Honor.
                 (c) Deviations from the prescribed specifications for the items
                listed in paragraph (b) of this section are not permitted without prior
                approval, in writing, by TIOH.
                 (d) Hubs, dies, and cartoons are not provided to manufacturers for
                the following items. However, manufacturing will be in accordance with
                the Government-furnished drawing.
                 (1) Shoulder Loop Insignia, Reserve Officers' Training Corps
                (ROTC), U.S. Army.
                 (2) Institutional SSI, ROTC, U.S. Army.
                 (3) Background trimming/flashes, U.S. Army.
                 (4) Hand-embroidered bullion insignia.
                Sec. 507.14 Articles not authorized for manufacture or commercial
                sale.
                 The following articles are not authorized for manufacture and
                commercial sale, except under contract with the Defense Logistics
                Agency, Troop Support (DLA Troop Support):
                 (a) The Medal of Honor.
                 (b) Service ribbon for the Medal of Honor.
                 (c) Medal of Honor Rosette.
                 (d) Medal of Honor Flag.
                 (e) Military Department Service flags (prescribed in Army
                Regulation 840-10).
                 (f) Articles for commercial sale that incorporate designs or
                likenesses of insignia listed in Sec. 507.13, except when authorized
                in writing by the Army Trademark Licensing Program as specified in
                Sec. 507.10(b).
                Sec. 507.15 Violations and penalties.
                 (a) TIOH will revoke a certificate of authority to manufacture when
                the holder intentionally violates any of the provisions of this part or
                does not comply with the agreement the manufacturer signed to receive a
                certificate.
                 (b) Violations are also subject to penalties as prescribed in the
                statutes referred to in Sec. 507.5.
                 (c) Repetition or continuation of violations after official notice
                will be deemed as corroborating evidence of intentional violation.
                Sec. 507.16 Processing complaints of alleged breach of policies.
                 (a) Suspension or revocation of a certificate of authority to
                manufacture. TIOH may suspend or revoke a certificate of authority to
                manufacture if the manufacturer breaches quality control policies. The
                term ``quality control policies'' includes the obligation of a
                manufacturer to produce insignia in accordance with all applicable
                Government specifications, manufacturing drawings, and cartoons and
                other applicable instructions TIOH provided. Breaches of quality
                control policies may be identified by TIOH through the Quality Control
                Inspection Program or through registered complaints to TIOH.
                 (b) Reporting alleged breach of quality control. Complaints and
                reports of an alleged breach of quality control policies will be
                forwarded to the Director, The Institute of Heraldry, 9325 Gunston
                Road, Room S113, Fort Belvoir, VA 22060-5579.
                 (c) Informal investigation of allegations. The Director may decide
                to suspend or revoke a certificate of authority to a manufacture based
                on evidence gathered during a TIOH heraldic quality control inspection
                or from a registered complaint. The Director may initiate an informal
                investigation of an allegation of breach(es) of the heraldic quality
                control policy.
                 (d) Heraldic Quality Control Inspection Program. (1) TIOH will
                conduct periodic quality control inspections of on hand stocks of
                heraldic items maintained by:
                 (i) Exchange military clothing stores.
                 (ii) Certified manufacturers.
                 (2) Upon completion of quality control inspections, TIOH will
                provide a report of deficiencies to the appropriate retail outlet or
                Commander, DLA Troop Support, and the certified manufacturer
                responsible for the production of the item. The notification to the
                manufacturer will require assurances of compliance with quality control
                policies. The report of deficiencies will be reviewed upon
                recertification of the manufacturer. Any recurrence of the same breach
                will be considered a refusal to perform, and the Director will take
                further action to suspend or revoke certification.
                 (e) Complaint of alleged breach of quality control policy. (1) If
                an investigation is initiated, the appointed investigator will
                impartially ascertain facts and gather appropriate evidence to
                substantiate or invalidate allegations of impropriety. The investigator
                will submit a report containing a summarized record of the
                investigation with findings of each allegation and supporting evidence
                to the Director.
                 (2) If the investigation substantiates allegation(s) of a breach of
                quality control, the Director will notify the manufacturer in writing
                that the Director is contemplating suspending or revoking the
                certificate. The notification will include:
                 (i) The specific allegations and findings of the investigator;
                 (ii) All evidence provided to the Director in the investigation;
                 (iii) A citation to this part as the authority under which the
                Director may suspend or revoke the certificate of authority if the
                situation warrants after the manufacturer has had an opportunity to
                reply;
                 (iv) What actions, if the allegations are undisputed, are required
                to provide adequate assurance that future performance will conform to
                quality control policies;
                 (v) The right to reply within 45 days of receipt of the
                notification in order to submit additional materials and evidence for
                consideration, to refute the allegations, or provide assurances that
                future performance will conform to quality control policies; and
                 (vi) That a failure to reply within 45 days, or if there is any
                recurrence of the same breach will be considered a refusal to perform,
                and the Director will take further action to suspend or revoke
                certification.
                 (f) Refusal to perform. (1) If the manufacturer fails to reply
                within a reasonable time to the letter authorized by paragraph (e) of
                this section, refuses to give adequate assurances that future
                performance will conform to quality control policies, indicates by
                subsequent conduct that the breach is continuous or repetitive, or
                disputes the allegations of breach, the Director will
                [[Page 54620]]
                direct that a public hearing be conducted on the allegations.
                 (2) A hearing examiner will be appointed by appropriate orders. The
                examiner may be either a commissioned officer or a civilian employee
                above the grade of GS-7.
                 (3) The specific written allegations, together with other pertinent
                material, will be transmitted to the hearing examiner for introduction
                as evidence at the hearing.
                 (4) For failure to return a loaned tool, manufacturers may be
                suspended without referral to a hearing specified in paragraph (f)(1)
                of this section; however, the manufacturer will be advised, in writing,
                that tools are overdue and suspension will take effect if tools are not
                returned within the specified time.
                 (g) Notification to the manufacturer by examiner. Within a 7-day
                period following the receipt by the examiner of the allegations and
                other pertinent material, the examiner will transmit a registered
                letter of notification to the manufacturer informing him or her of
                the--
                 (1) Specific allegations.
                 (2) Directive of the Director requiring the holding of a public
                hearing on the allegations.
                 (3) Examiner's decision to hold the public hearing at a specific
                time, date, and place that will be not earlier than 30 days from the
                date of the letter of notification.
                 (4) Ultimate authority of the Director to suspend or revoke the
                certificate of authority if the record developed at the hearing so
                warrants.
                 (5) Right to--
                 (i) A full and fair public hearing.
                 (ii) Be represented by counsel during the hearing at no cost to the
                Government.
                 (iii) Request a change in the date, time, or place of the hearing,
                for purposes of having reasonable time in which to prepare the case.
                 (iv) Submit evidence and present witnesses in his or her own
                behalf.
                 (v) Obtain at no cost a verbatim transcript of the proceedings,
                upon written request filed before the commencement of the hearing.
                 (h) Public hearing by examiner. (1) At the time, date, and place
                designated in accordance with paragraph (g)(3) of this section, the
                examiner will conduct the public hearing.
                 (i) A verbatim record of the proceedings will be maintained.
                 (ii) All previous material received by the examiner will be
                introduced into evidence and made part of the record.
                 (iii) The Government may be represented by counsel at the hearing.
                 (2) Subsequent to the conclusion of the hearing, the examiner will
                make specific findings on the record before him or her concerning each
                allegation.
                 (3) The complete record of the case will be forwarded to the
                Director.
                 (i) Action by the Director. (1) The Director will review the record
                of the hearing and either approve or disapprove the findings.
                 (2) Upon arrival of a finding of breach of quality control
                policies, the manufacturer will be so advised.
                 (3) After review of the findings, the certificate of authority may
                be revoked or suspended. If the certificate of authority is revoked or
                suspended, the Director will--
                 (i) Notify the manufacturer of the revocation or suspension.
                 (ii) Remove the manufacturer from the list of certified
                manufacturers.
                 (iii) Inform the Army & Air Force Exchange Service (AAFES) and the
                Defense Logistics Agency-Troop Support of the action.
                 (j) Reinstatement of certificate of authority. Upon receipt of
                adequate assurance that the manufacturer will comply with quality
                control policies, the Director may reinstate a certificate of authority
                that has been suspended or revoked.
                Subpart D--License and Manufacture of the Service Flag and Service
                Lapel Button
                Sec. 507.17 Authority to manufacture.
                 (a) The Secretary of Defense has designated the Secretary of the
                Army to grant certificates of authority for the manufacture and
                commercial sale of Service flags and Service lapel buttons.
                 (b) Any person, firm, or corporation that wishes to manufacture the
                Service flag or lapel button must apply for a certificate of authority
                to manufacture from TIOH.
                Sec. 507.18 Application for licensing.
                 (a) Applicants who want to manufacture and sell Service flags or
                Service lapel buttons should contact the Director, The Institute of
                Heraldry, 9325 Gunston Road, Room S113, Fort Belvoir, VA 22060-5579, to
                obtain an agreement to manufacture, drawings, and instructions for
                manufacturing the Service flag and Service lapel button.
                 (b) Certificates of authority to manufacture Service flags and
                Service lapel buttons will be valid for 5 years from the date of
                issuance, at which time applicants must reapply for a new certificate
                of authority.
                James W. Satterwhite Jr.,
                Army Federal Register Liaison Officer.
                [FR Doc. 2021-21121 Filed 10-1-21; 8:45 am]
                BILLING CODE 5061-AP-P
                

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