Revisions to Export Enforcement Provisions
| Published date | 18 November 2020 |
| Citation | 85 FR 73411 |
| Record Number | 2020-25453 |
| Section | Rules and Regulations |
| Court | Industry And Security Bureau |
Federal Register, Volume 85 Issue 223 (Wednesday, November 18, 2020)
[Federal Register Volume 85, Number 223 (Wednesday, November 18, 2020)]
[Rules and Regulations]
[Pages 73411-73418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25453]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 734, 748, 750, 758, 762, 764, and 766
[Docket No. 201110-0299]
RIN 0694-AH81
Revisions to Export Enforcement Provisions
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
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SUMMARY: In this final rule, the Bureau of Industry and Security (BIS)
is amending and clarifying certain provisions of the Export
Administration Regulations (EAR) to promote compliance with existing
EAR requirements and implement the export enforcement portions of the
Export Control Reform Act of 2018 (ECRA). ECRA affirmed existing
authorities under the EAR and provided expanded export control
authorities to the Secretary of Commerce (Secretary). BIS is also
amending certain provisions of the EAR not strictly related to the
implementation of ECRA concerning the issuance of licenses and denial
orders and the payment of civil penalties.
DATES: This rule is effective November 18, 2020.
FOR FURTHER INFORMATION CONTACT: John Sonderman, Director, Office of
Export Enforcement, Bureau of Industry and Security, Phone: (202) 482-
5079, Email: [email protected].
SUPPLEMENTARY INFORMATION:
Background
On August 13, 2018, the President signed into law the John S.
McCain National Defense Authorization Act for Fiscal Year 2019, which
included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-
4852). In its enactment, ECRA repealed most of the Export
Administration Act of 1979 (EAA), which had lapsed. ECRA continues
existing authorities under the EAR that had been issued pursuant to,
and been maintained in force under, the EAA until its lapse, and
thereafter under the International Emergency Economic Powers Act
(IEEPA). ECRA provides the Secretary of Commerce (Secretary) with
additional authorities to ensure the implementation of effective export
controls in furtherance of U.S. national security and foreign policy
interests.
Accordingly, BIS is amending the EAR to reflect enforcement
authorities and to update certain EAR provisions to make them
consistent with ECRA. These amendments include replacing existing
references to the EAA currently in the EAR with references to ECRA and
other export laws and regulations. There are also amendments to the EAR
that reflect the expanded scope of authority provided to the Secretary
in ECRA. Specifically, this rule amends the EAR to implement the
following enforcement provisions: Pre-license checks (PLCs) and post-
shipment verifications (PSVs) (in Sec. Sec. 734.11 and 750.4 of the
EAR); overseas investigative authority; searches, inspections,
detentions, and seizures, and related authorities concerning exports,
reexports, and transfers (in-country) (in Sec. 734.11 of the EAR and
in part 758 of the EAR, specifically in Sec. Sec. 758.7, 758.8, and
758.9); inspection of books, records, and other information (in
Sec. Sec. 758.7 and 762.7 of the EAR); and violations and penalties
under ECRA (in part 764 of the EAR, and specifically in Sec. Sec.
748.4, 764.1, 764.2, 764.3, and 766.25).
Revisions to Enforcement Provisions To Implement ECRA
Pre-License Checks and Post-Shipment Verifications
In new Sec. 734.11 of the EAR, BIS is including a reference to
BIS's authority to conduct PLCs and PSVs outside the United States. BIS
is also amending Sec. 750.4(b)(2) of the EAR to clarify that the
results of PLCs, when available, will be communicated to licensing
officials within existing timeframes governing the conduct of PLCs, and
will be considered in determining the outcome of a license application.
These changes are consistent with ECRA section 1761(a)(7) (50 U.S.C.
4820(a)(7)), which sets forth the Secretary's authority to conduct PLCs
and PSVs, and provide increased transparency regarding the purposes for
which information is collected.
Inspection of Books, Records, and Other Information
BIS is amending Sec. 762.7(a) of the EAR regarding the production
for inspection of books, records, and other information required to be
kept pursuant to the EAR by persons located within the United States to
align with ECRA section 1761(a)(2) (50 U.S.C. 4820(a)(2)). This
includes the removal of references to the authority of the U.S. Customs
Service, which is not reflected in ECRA. This change does not affect
the authorities of other agencies or officials under other statutes and
regulations.
BIS is amending Sec. 762.7(b) of the EAR to specify that persons
located outside the United States must produce for inspection books and
other information required to be kept pursuant to the EAR in addition
to records as specified in ECRA section 1761(a)(2) (50 U.S.C.
4820(a)(2)). BIS is also specifying in Sec. 762.7(b) of the EAR that
only officials of the United States designated by BIS may rely on the
authority in ECRA to require persons outside the United States to
produce for inspection the books, records, and other information such
persons are required to keep pursuant to the EAR. Consequently, BIS is
removing from Sec. 762.7(b) of the EAR the existing reference to
requests for
[[Page 73412]]
records required to be kept pursuant to the EAR by a Foreign Service
Post or the U.S. Customs Service. This change does not affect the
authorities of other agencies or officials under other statutes and
regulations.
Overseas Investigative Authority; Searches, Inspections, Detentions,
and Seizures, and Related Authorities Concerning Exports, Reexports,
and Transfers (In-Country) Both Within and Outside the United States
ECRA provides the Secretary the authority to conduct export
enforcement investigations both within and outside the United States
consistent with applicable law, as described in ECRA section 1761(a)(4)
(50 U.S.C. 4820(a)(4)). Accordingly, BIS is adding Sec. 734.11 to part
734 of the EAR entitled ``BIS Activities conducted outside the United
States,'' which describes the manner in which such activities will be
conducted.
BIS is renaming part 758 of the EAR as ``Export clearance
requirements and authorities'' and renaming Sec. 758.7 of the EAR as
``Authorities of the Bureau of Industry and Security, Office of Export
Enforcement (OEE).'' As amended, these provisions more accurately
describe the requirements for clearing export shipments and reflect the
broader authorities of OEE, and other officials of the United States
designated by OEE, including requirements for reexports and transfers
(in-country).
BIS is also adding a new paragraph, (a)(4), to EAR Sec. 758.7 to
reflect the authority under ECRA section 1761(a) (50 U.S.C. 4820(a)) to
enforce provisions of the EAR that restrict the activities of U.S.
persons in connection with certain weapons of mass destruction-related
end uses described in Sec. 744.6 of the EAR.
BIS is updating and revising Sec. 758.7(b) of the EAR to outline
actions OEE may take to ensure that exports, reexports, and transfers
(in-country) comply with all laws and regulations administered or
enforced by the Secretary in conformance with section 1761(a)(4)-(5) of
ECRA (50 U.S.C. 4820(a)(4), (5)), as well as 13 U.S.C. 305, 22 U.S.C.
401, the EAR, and the Foreign Trade Regulations (FTR) (15 CFR part 30).
Because the EAR are regulations implemented by the Secretary to
carry out his express statutory authority in ECRA and 22 U.S.C. 401,
BIS is removing reference to authorities granted to Postmasters and the
U.S. Customs Service in Sec. Sec. 758.7 and 758.8 of the EAR. This
change does not affect the authorities of other agencies or officials
under other statutes and regulations. BIS is also renaming Sec. 758.8
of the EAR as ``Return or Unloading of Cargo.''
Under revised Sec. 758.7(b)(2) of the EAR, OEE officials are
authorized to require all persons subject to the export laws and
regulations administered or enforced by the Secretary to produce books,
records, and other information for inspection, consistent with ECRA
section 1761(a)(2) (50 U.S.C. 4820(a)(2)).
Section 758.7(b)(6) of the EAR now addresses the provisions
previously provided for in Sec. 758.7(b)(7) and BIS is accordingly
renaming Sec. 758.7(b)(7) as ``Administrative Forfeiture Authority.''
BIS is revising Sec. 758.7(b)(8) of the EAR to reflect that other
legal and procedural principles may govern the conduct of BIS's
enforcement activities. The authority to order the unloading of items
previously described in Sec. 758.7(b)(8), as well as the authority to
order the return of cargo previously described in Sec. 758.7(b)(9) is
now set forth in Sec. 758.8(b) of the EAR. Accordingly, BIS is
removing Sec. 758.7(b)(9) from the EAR. BIS is also removing Sec.
758.7(b)(10) from the EAR as that provision previously described the
authority of another agency, the U.S. Customs Service, to designate the
time and place of export clearance, which is not reflected in ECRA.
However, this change does not affect the authorities of other agencies
or officials under other statutes and regulations.
Section 758.8(b) of the EAR is revised to specify actions a carrier
must take to return and unload cargo when ordered by OEE and to clarify
that OEE may order the return and unloading of cargo to ensure
compliance with export laws and regulations administered or enforced by
the Secretary. BIS is revising Sec. 758.8(c) of the EAR to update
references to relevant provisions of Sec. 758.5 of the EAR.
Section 758.9 of the EAR is revised to clarify that the provisions
of part 758 apply to certain activities of U.S. persons, in addition to
exports, reexports, and transfers (in-country).
Violations and Penalties Under ECRA
BIS is making multiple amendments to part 764 of the EAR as well as
Sec. 748.4(c) of the EAR to align their provisions with ECRA section
1760 (50 U.S.C. 4819). Section 764.1 is revised to include references
to conduct that violates ECRA, while retaining references to three
sections of the EAA (sections 11A, B, and C) (50 U.S.C. 4611-4613),
which remain in force. Section 764.2(f)--``Possession with intent to
export illegally''--of the EAR is removed and reserved, as this
provision is based on the lapsed EAA and is not carried forward in
ECRA. The provisions related to criminal penalties for willful
violations of the EAR previously set forth in Sec. 764.3(b)(2) are
relocated to Sec. 764.3(b), while Sec. 764.3(b)(2) and (3) are
removed from the EAR. Supplement no. 1 to part 764 of the EAR is
amended to include a prohibition on transfers (in-country) to, or on
behalf of, a denied person in the terms of a standard denial order.
Revisions To Enforcement Provisions Unrelated to the Implementation of
ECRA
BIS is making several additional changes to the EAR unrelated to
the implementation of ECRA. First, consistent with existing language in
Sec. 748.4(d) of the EAR, BIS is amending Sec. 750.7(a) of the EAR to
clarify that any license obtained based on a false or misleading
misrepresentation or the falsification or concealment of a material
fact is void as of the date of issuance. Second, consistent with
current BIS practice, BIS is amending Sec. 764.3(a)(1)(ii) of the EAR
to change the maximum time period for payment of civil penalties, as a
condition of receiving certain privileges under the EAR, from one year
to two years. Third, BIS is renaming Sec. 764.3(c)(2)(ii) of the EAR
to ``Actions by other agencies'' to reflect collateral actions that
other U.S. government agencies may take with respect to persons based
on indictment or conviction for criminal export control violations or
the issuance of a denial order. BIS is also revising Sec.
764.3(c)(2)(ii)(A) of the EAR to reflect more accurately when the
Directorate of Defense Trade Controls, Department of State, may not
issue licenses, or may deny licenses, involving certain parties
indicted for, or convicted of, violations of certain statutes specified
in the Arms Export Control Act (22 U.S.C. 2778(g)(1)(A)). Finally, BIS
is amending Sec. 766.25(a), (b), (c), and (h) of the EAR to specify
that the Director of OEE is the designated BIS official for the
issuance of orders denying the export privileges of persons convicted
of certain criminal offenses; providing notification of the issuance of
such orders to affected persons; and determining the terms of such
orders, as well as their applicability to related persons. The
authority to issue an authorization to engage in activities otherwise
prohibited by the terms of a denial order will remain with the Director
of the Office of Exporter Services (OExS), in consultation with the
Director of OEE.
Export Control Reform Act of 2018
On August 13, 2018, the President signed into law the John S.
McCain National Defense Authorization Act for
[[Page 73413]]
Fiscal Year 2019, which included the Export Control Reform Act of 2018
(ECRA) (50 U.S.C. 4801-4852) that provides the legal basis for BIS's
principal authorities and serves as the authority under which BIS
issues this rule.
Rulemaking Requirements
1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been determined to be not significant for
purposes of Executive Order 12866. This rule is not an Executive Order
13771 regulatory action because this rule is not significant under
Executive Order 12866.
2. Notwithstanding any other provision of law, no person is
required to respond to nor be subject to a penalty for failure to
comply with a collection of information, subject to the requirements of
the Paperwork Reduction Act of 1995 (44 U.S.C 3501 et seq.), unless
that collection of information displays a currently valid Office of
Management and Budget (OMB) Control Number. This regulation involves
collections currently approved by OMB under control numbers 0694-0096,
``Five Year Records Retention Period,'' and 0694-0122, ``Miscellaneous
Licensing Responsibilities and Enforcement.'' Both collections include,
among other things, the maintenance and production of certain records
associated with exports, reexports, and transfers (in-country) subject
to the EAR and carry burden estimates of less than one minute per
transaction. This regulation does not change the scope of records
currently required to be kept and made available for inspection by BIS.
Accordingly, this regulation is not expected to increase or reduce the
existing burden estimates currently associated with OMB control numbers
0694-0096 and 0694-0122. This regulation simply clarifies the
circumstances under which persons already subject to recordkeeping and
production requirements may be asked to make such records available for
inspection. You may submit comments regarding the collections of
information associated with this rule, including suggestions for
reducing the burden, at the following website: www.reginfo.gov/public/do/PRAMain. Find the particular information collection by using the
search function and entering OMB Control Number 0648-0096 or 0648-0122.
3. This rule does not contain policies with Federalism implications
as that term is defined in Executive Order 13132.
4. Pursuant to ECRA section 1762, this action is exempt from the
Administrative Procedure Act (5 U.S.C. 553) requirements for notice of
proposed rulemaking, opportunity for public participation, and delay in
effective date.
5. Because a notice of proposed rulemaking and an opportunity for
public comment are not required to be given for this rule by 5 U.S.C.
553, or by any other law, the analytical requirements of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., are not applicable.
Accordingly, no regulatory flexibility analysis is required and none
has been prepared.
List of Subjects
15 CFR Part 734
Scope of the Export Administration Regulations.
15 CFR Part 748
Applications (classification, advisory, and license) and
documentation.
15 CFR Part 750
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Part 758
Export clearance requirements and authorities.
15 CFR Part 762
Recordkeeping.
15 CFR Part 764
Enforcement and protective measures.
15 CFR Part 766
Administrative practice and procedure, confidential business
information, exports, law enforcement, penalties.
Accordingly, parts 734, 748, 750, 758, 762, 764 and 766 of the EAR
are amended as follows:
PART 734--SCOPE OF THE EAR
0
1. The authority citation for part 734 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 1701 et seq.; E.O.
12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 219; E.O. 13026, 61 FR
58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR,
2001 Comp., p. 783; E.O. 13637, 78 FR 16129, 3 CFR, 2014 Comp., p.
223; Notice of November 12, 2019, 84 FR 61817 (November 13, 2019).
0
2. Add Sec. 734.11 to read as follows:
Sec. 734.11 BIS activities conducted outside the United States.
The Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-4852)
authorizes the Secretary of Commerce, in carrying out its provisions,
to undertake activities outside the United States, including, but not
limited to, conducting investigations; requiring and obtaining
information from persons; and conducting pre-license checks and post-
shipment verifications. BIS officials will act with due care in the
jurisdiction of a foreign nation and, to the extent possible,
consistent with the applicable host nation government's laws. For any
action taken outside the United States, BIS officials will consult and
coordinate with the appropriate U.S. Government agencies and act in a
manner consistent with the United States' international commitments and
international agreements to which the United States is a party.
PART 748--APPLICATIONS (CLASSIFICATION, ADVISORY, AND LICENSE) AND
DOCUMENTATION
0
3. The authority citation for part 748 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 1701 et seq.; E.O.
13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR
44025, 3 CFR, 2001 Comp., p. 783.
0
4. Section 748.4 is amended by revising paragraph (c) to read as
follows:
Sec. 748.4 Basic guidance related to applying for a license.
* * * * *
(c) Prohibited from applying for a license. No person subject to a
denial order based on a conviction for a violation of any statute
specified at 50 U.S.C. 4819(e)(1)(B) may apply for any license for a
period up to 10 years from the date of the conviction. The duration of
the prohibition shall be included as a term of the denial order. See
Sec. 766.25 of the EAR.
* * * * *
PART 750--APPLICATION PROCESSING, ISSUANCE, AND DENIAL
0
5. The authority citation for part 750 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 1701 et seq.; Sec.
1503, Pub. L. 108-11, 117 Stat. 559; E.O. 13026, 61 FR 58767, 3 CFR,
[[Page 73414]]
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; E.O. 13637, 78 FR 16129, 3 CFR, 2013 Comp., p. 223;
Presidential Determination 2003-23, 68 FR 26459, 3 CFR, 2004 Comp.,
p. 320.
0
6. Section 750.4 is amended by revising paragraph (b)(2) to read as
follows:
Sec. 750.4 Procedures for processing license applications.
* * * * *
(b) * * *
(2) Pre-license checks. BIS conducts pre-license checks in order to
establish the identity and reliability of the recipient of the items
subject to the EAR that require a license, as well as to substantiate
representations made on the license application. The results of the
pre-license check, including the U.S. government's inability to conduct
the pre-license check due to the end user's or host government's
actions, will be considered in determining the outcome of a license
application. The time required to conduct a pre-license check is not
included in license application processing time calculations according
to this paragraph, if the pre-license check is:
(i) Conducted through government channels, and
(ii) The request for a pre-license check is made by the Secretary
or by another agency within the following time frames:
(A) The pre-license check is requested within 5 days of the
determination that it is necessary; and
(B) The analysis resulting from the pre-license check is completed
and reported to licensing officials within 5 days.
* * * * *
0
7. Section 750.7 is amended by revising paragraph (a) to read as
follows:
Sec. 750.7 Issuance of licenses.
(a) Scope. Unless limited by a condition set out in a license, the
export, reexport, or transfer (in-country) authorized by a license is
for the item(s), end-use(s), and parties described in the license
application and any letters of explanation. The applicant must inform
the other parties identified on the license, such as the ultimate
consignees and end users, of the license's scope and of the specific
conditions applicable to them. BIS grants licenses in reliance on
representations the applicant made or submitted in connection with the
license application, letters of explanation, and other documents
submitted. Any license obtained in which a false or misleading
representation was made, or a material fact was falsified or concealed
on the license application, letters of explanation, or any document
submitted in connection with the license application, shall be deemed
void as of the date of issuance. See Sec. 750.8(a) of the EAR, which
provides that all licenses are subject to revocation, in whole or in
part, without notice. See part 764 of the EAR for other sanctions that
may result in the event a violation occurs. A BIS license authorizing
the release of ``technology'' to an entity also authorizes the release
of the same ``technology'' to the entity's foreign persons who are
permanent and regular employees (and who are not proscribed persons) of
the entity's facility or facilities authorized on the license, except
to the extent a license condition limits or prohibits the release of
the ``technology'' to foreign persons of specific countries or country
groups.
* * * * *
PART 758--EXPORT CLEARANCE REQUIREMENTS AND AUTHORITIES
0
8. The authority citation for part 758 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 1701 et seq.; 13
U.S.C. 305, 22 U.S.C. 401; E.O. 13222, 66 FR 44025, 3 CFR, 2001
Comp., p. 783.
0
9. The heading for part 758 is revised to read as set forth above.
0
10. Section 758.7 is revised to read as follows:
Sec. 758.7 Authorities of the Bureau of Industry and Security, Office
of Export Enforcement (OEE).
(a) Actions to assure compliance with export laws and regulations.
OEE officials and any other officials of the United States designated
by OEE are authorized and directed to take appropriate action to
enforce the authorities granted to the Secretary under the laws and
regulations of the United States, including ECRA, 13 U.S.C. 305, 22
U.S.C. 401, 50 U.S.C. 1701 et seq., the EAR, and the Foreign Trade
Regulations (FTR) (15 CFR part 30). This includes, but is not limited
to, assuring that:
(1) Exports, reexports, and transfers (in-country) without a
license issued by BIS are either outside the scope of the license
requirements of the EAR or authorized by a license exception and comply
with the terms of the license exception;
(2) Exports, reexports, transfers (in-country) purporting to be
authorized by licenses issued by BIS are, in fact, so authorized and
the transaction complies with the terms of the license;
(3) Accurate EEI filings have been made for exports as required by
this part, the FTR, and other federal regulations; and
(4) The activities of U.S. persons, wherever located, which are
subject to a license requirement pursuant to Sec. 744.6 of the EAR,
are authorized by and comply with the terms of a BIS license.
(b) Types of actions. In carrying out the authorities granted to,
and exercised by, the Secretary pursuant to ECRA, 13 U.S.C. 305, 22
U.S.C. 401, 50 U.S.C. 1701 et seq., the EAR, the FTR, and other
applicable laws and regulations of the United States, including the
authority to control the export, reexport, and transfer (in-country) of
items, in any form, subject to the jurisdiction of the United States,
whether by U.S. or foreign persons; control the activities of U.S.
persons, wherever located, as described in Sec. 744.6 of the EAR;
ensure compliance with export controls; monitor shipments and other
means of transfer; conduct investigations; and issue orders, OEE
officials and any other officials of the United States designated by
OEE are authorized to take the types of enforcement actions described
below.
(1) Inspection, search, and detention of items--(i) Purpose of
inspection, search, and detention. All items subject to export laws and
regulations administered or enforced by the Secretary that have been,
are being, or are about to be exported, reexported, or transferred (in-
country) are subject to inspection, search, and detention. The scope of
inspection may include, but is not limited to, item identification;
technical appraisal (analysis) or both; verifying the accuracy of the
EEI filing, or if there is no EEI filing, the air waybill, bill of
lading or other loading document covering the item about to be
exported, reexported, or transferred (in-country); and verifying the
value and quantity of such item.
(ii) Place of inspection, search, and detention. Inspection,
search, and detention may take place at any location inside or outside
of the United States, to include, but not limited to, the borders of
the United States, all ports of exit, the premises of freight
forwarders, bonded warehouses, foreign trade zones, and manufacturing,
transportation, and storage facilities.
(iii) Technical identification. Where, in the judgment of the
official making the inspection, the item cannot be properly identified,
a sample may be taken for more detailed examination or for laboratory
analysis.
(A) Obtaining samples. The sample will be obtained by the official
making the inspection in accordance with the provisions for sampling
imported merchandise. The size of the sample
[[Page 73415]]
will be the minimum representative amount necessary for identification
or analysis. This will depend on such factors as the physical condition
of the material (whether solid, liquid, or gas) and the size and shape
of the container.
(B) Notification. When a sample is taken, the exporter, reexporter,
or transferor, or their agent(s), and the ultimate consignee will be
notified by letter from an OEE official, documenting the port of
export, reexport, or other place of inspection, date of sampling, BIS
license number (if any) or other authorization, invoice number,
quantity of sample taken, description of item, marks and packing case
numbers, and manufacturer's number for the item. A copy of the letter
will be placed in the container that had been opened by the inspecting
official, and a copy will be retained by the inspecting official's
office.
(C) Disposal of samples. Samples will be disposed of in accordance
with the U.S. Customs and Border Protection procedure for imported
commodities.
(2) Inspection and production of books, records, and other
information. OEE officials are authorized to require any person subject
to export laws and regulations administered or enforced by the
Secretary, including, but not limited to, exporters, reexporters,
transferors, or their agent(s), and owners and operators of carriers or
their agents, as well as intermediate consignees, ultimate consignees,
and end users, and their agent(s) to produce for inspection and copying
any books, records and other information, including, but not limited
to, invoices, orders, letters of credit, inspection reports, technical
documentation, packing lists, shipping documents and instructions, and
correspondence.
(3) Questioning of individuals. OEE officials are authorized to
question any person, including, but not limited to, the owner or
operator of a carrier and the carrier's agent(s), as well as the
exporter, reexporter, transferor (in-country), or their agent(s).
(4) Prohibiting lading. OEE officials may prevent the lading of
items on a conveyance.
(5) Inspection, search, and detention of conveyance. OEE officials
are authorized to inspect, search, and detain any conveyance at any
time to determine whether items have been, are being, or are about to
be exported, reexported, or transferred (in-country). Inspection,
search, and detention of a conveyance may take place at any location
inside or outside of the United States, to include, but not limited to,
the borders of the United States, all ports of exit, the premises of
freight forwarders, bonded warehouses, foreign trade zones, and
manufacturing, transportation, and storage facilities.
(6) Seizure of property. OEE officials are authorized to seize any
property, tangible or intangible, when there is probable cause to
believe that such property is subject to administrative forfeiture
(nonjudicial civil forfeiture or summary forfeiture), civil judicial
forfeiture, or criminal forfeiture. Seizures of property subject to
forfeiture may take place at any location inside or outside of the
United States, to include, but not limited to, the borders of the
United States, all ports of exit, the premises of freight forwarders,
bonded warehouses, foreign trade zones, and manufacturing,
transportation, and storage facilities.
(7) Administrative forfeiture authority. OEE is authorized to
initiate administrative forfeiture (nonjudicial civil forfeiture or
summary forfeiture) proceedings and forfeit property in accordance with
the procedures set forth in 18 U.S.C. 981(d) and the Customs laws (19
U.S.C. 1602 et seq).
(8) Enforcement activity. (i) All BIS actions taken to implement,
administer, and enforce the authorities granted to the Secretary shall
be conducted pursuant to the U.S. Constitution and all applicable laws
and regulations, including judicially recognized exceptions to the
requirement for a search warrant under the Fourth Amendment, for
example, consent of the person to be searched, exigent circumstances,
searches incident to a lawful arrest, and border searches.
(ii) BIS may enter into any such agreements (e.g., memoranda of
understanding) with other Federal agencies as deemed necessary by BIS
to execute the authorities set forth in this part in a lawful and
orderly manner.
(iii) BIS shall issue additional guidance as necessary to ensure
the lawful and orderly execution of the Secretary's authorities.
(iv) Nothing in this section is intended to limit or abridge BIS
law enforcement officers from exercising their lawful authority in
carrying out their official duties.
0
11. Section 758.8 is revised to read as follows:
Sec. 758.8 Return or unloading of cargo.
(a) Carrier. As used in this section, the term ``carrier'' includes
a connecting or on-forwarding carrier, as well as the owner, charterer,
agent, master, or any other person in possession, control, or charge of
the vessel, aircraft, vehicle, or other kind of conveyance, whether
such person is located in the United States or in a foreign country.
(b) Ordering return or unloading of shipment. In order to ensure
compliance with export laws and regulations administered or enforced by
the Secretary, OEE officials, or any other official of the United
States designated by OEE, may, with respect to a particular export,
reexport, or transfer (in-country), order any carrier to return or
unload the shipment. For the purpose of this section, furnishing a copy
of the order to any person included within the definition of carrier
will be sufficient notice of the order to the carrier. The carrier
must, as ordered:
(1) Unload the shipment and make it available to OEE officials for
search and inspection; or
(2) Return the shipment to the United States or cause it to be
returned; or
(3) Unload the shipment at a port of call and take steps to assure
that it is placed in custody under bond or other guaranty not to enter
the commerce of any foreign country without the prior approval of BIS.
(c) Requirements regarding shipment to be unloaded. The provisions
of Sec. 758.5(d) and (e) of this part, relating to reporting,
notification to BIS, and the prohibition against unauthorized delivery
or entry of the item into a foreign country shall apply also when items
are unloaded at a port of call, as provided in paragraph (b)(3) of this
section.
(d) Notification. Upon discovery by any person included within the
term ``carrier,'' as defined in paragraph (a) of this section, that a
violation of the export laws and regulations administered or enforced
by the Secretary has occurred, is occurring, or is about to occur with
respect to a shipment on board, or otherwise in the possession or
control of the carrier, such person must immediately notify both:
(1) The Office of Export Enforcement at the following address: Room
H-4508, U.S. Department of Commerce, 14th Street and Constitution Ave.
NW, Washington, DC 20230, Telephone: (202) 482-1208, Facsimile: (202)
482-0964; and
(2) The person in actual possession or control of the shipment.
0
12. Section 758.9 is revised to read as follows:
Sec. 758.9 Other applicable laws and regulations.
The provisions of this part apply only to exports, reexports, and
transfers (in-country), as well as the activities of U.S. persons
described in Sec. 744.6 of the EAR, which are subject to the export
laws and regulations administered or enforced by the Secretary. Nothing
contained in this part shall relieve any person from
[[Page 73416]]
complying with any other law of the United States or rules and
regulations issued thereunder, including those governing EEI filings to
AES, manifests, or any other applicable rules and regulations.
PART 762--RECORDKEEPING
0
13. The authority citation for part 762 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 1701 et seq.; E.O.
13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.
0
14. Section 762.7 is revised to read as follows:
Sec. 762.7 Producing and inspecting records.
(a) Persons located in the United States. Persons located in the
United States may be asked to produce books, records, and other
information that are required to be kept by any provision of the EAR,
or any license, order, or authorization issued thereunder and to make
them available for inspection and copying by any authorized official of
the BIS, or any other official of the United States designated by BIS,
without any charge or expense to such official. OEE and the Office of
Antiboycott Compliance encourage voluntary cooperation with such
requests. When voluntary cooperation is not forthcoming, OEE and the
Office of Antiboycott Compliance are authorized to issue subpoenas
requiring persons to appear and testify, or to produce books, records,
and other writings. In instances where a person does not comply with a
subpoena, the Department of Commerce may petition a district court to
have the subpoena enforced.
(b) Persons located outside of the United States. Persons located
outside of the United States that are required to keep books, records,
and other information by any provision of the EAR or by any license,
order, or authorization issued thereunder shall produce all books,
records, and other information required to be kept, or reproductions
thereof, and make them available for inspection and copying upon
request by an authorized official of BIS without any charge or expense
to such official. BIS may designate any other official of the United
States to exercise the authority of BIS under this subsection.
PART 764--ENFORCEMENT AND PROTECTIVE MEASURES
0
15. The authority citation for part 764 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4611-4613; 50 U.S.C.
1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.
0
16. Section 764.1 is revised to read as follows:
Sec. 764.1 Introduction.
In this part, references to the EAR are references to 15 CFR
chapter VII, subchapter C. This part specifies conduct that constitutes
a violation of the ECRA and/or the EAR and the sanctions that may be
imposed for such violations. Antiboycott violations are described in
part 760 of the EAR, and the violations and sanctions specified in part
764 also apply to conduct relating to part 760, unless otherwise
stated. This part describes administrative sanctions that may be
imposed by BIS. This part also describes criminal sanctions that may be
imposed by a United States court and other sanctions that are neither
administrative nor criminal pursuant to sections 11A, B, and C of the
Export Administration Act EAA and other statutes. Information is
provided on how to report and disclose violations. Finally, this part
identifies protective administrative measures that BIS may take in the
exercise of its regulatory authority.
0
17. Section 764.2 is revised to read as follows:
Sec. 764.2 Violations.
(a) Engaging in prohibited conduct. No person may engage in any
transaction or take any other action prohibited by or contrary to, or
refrain from engaging in any transaction or take any other action
required by ECRA, the EAR, or any order, license or authorization
issued thereunder.
(b) Causing, aiding, or abetting a violation. No person may cause
or aid, abet, counsel, command, induce, procure, permit, or approve the
doing of any act prohibited, or the omission of any act required, by
ECRA, the EAR, or any order, license or authorization issued
thereunder.
(c) Solicitation and attempt. No person may solicit or attempt a
violation of ECRA, the EAR, or any order, license, or authorization
issued thereunder.
(d) Conspiracy. No person may conspire or act in concert with one
or more persons in any manner or for any purpose to bring about or to
do any act that constitutes a violation of ECRA, the EAR, or any order,
license, or authorization issued thereunder.
(e) Acting with knowledge of a violation. No person may order, buy,
remove, conceal, store, use, sell, loan, dispose of, transfer,
transport, finance, forward, or otherwise service, in whole or in part,
or conduct negotiations to facilitate such activities with respect to,
any item that has been, is being, or is about to be exported,
reexported, or transferred (in-country), or that is otherwise subject
to the EAR, with knowledge that a violation of ECRA, the EAR, or any
order, license, or authorization issued thereunder, has occurred, is
about to occur, or is intended to occur in connection with the item.
(f) [Reserved]
(g) Misrepresentation and concealment of facts. (1) No person may
make any false or misleading representation, statement, or
certification, or falsify or conceal any material fact, either directly
to BIS or an official of any other United States agency, or indirectly
through any other person:
(i) In the course of an investigation or other action subject to
the EAR; or
(ii) In connection with the preparation, submission, issuance, use,
or maintenance of any ``export control document'' or any report filed
or required to be filed pursuant to the EAR; or
(iii) For the purpose of or in connection with effecting an export,
reexport, transfer (in-country) or other activity subject to the EAR.
(2) All representations, statements, and certifications made by any
person are deemed to be continuing in effect. Every person who has made
any representation, statement, or certification must notify BIS, and
any other relevant agency, in writing, of any change of any material
fact or intention from that previously represented, stated, or
certified, immediately upon receipt of any information that would lead
a reasonably prudent person to know that a change of material fact or
intention has occurred or may occur in the future.
(h) Evasion. No person may engage in any transaction or take any
other action with intent to evade the provisions of ECRA, the EAR, or
any order, license or authorization issued thereunder.
(i) Failure to comply with reporting, recordkeeping requirements.
No person may fail or refuse to comply with any reporting or
recordkeeping requirement of ECRA, the EAR, or of any order, license,
or authorization issued thereunder.
(j) License alteration. Except as specifically authorized in the
EAR or in writing by BIS, no person may alter any license,
authorization, export control document, or order issued under ECRA or
the EAR.
(k) Acting contrary to the terms of a denial order. No person may
take any action that is prohibited by a denial order or a temporary
denial order issued
[[Page 73417]]
by BIS to prevent imminent violations of ECRA, the EAR, or any order,
license or authorization issued thereunder.
0
18. Section 764.3 is revised to read as follows:
Sec. 764.3 Sanctions.
(a) Administrative. Violations of ECRA, the EAR, or any order,
license or authorization issued thereunder are subject to the
administrative sanctions described in this section and to any other
liability, sanction, or penalty available under law. The protective
administrative measures that are described in Sec. 764.6 of this part
are distinct from administrative sanctions.
(1) Civil monetary penalty. (i) A civil monetary penalty not to
exceed the amount set forth in ECRA may be imposed for each violation,
and in the event that any provision of the EAR is continued or revised
by IEEPA or any other authority, the maximum monetary civil penalty for
each violation shall be that provided by such other authority.
(ii) The payment of any civil penalty may be made a condition, for
a period not exceeding two years after the imposition of such penalty,
to the granting, restoration, or continuing validity of any export
license, license exception, permission, or privilege granted or to be
granted to the person upon whom such penalty is imposed.
(iii) The payment of any civil penalty may be deferred or suspended
in whole or in part during any probation period that may be imposed.
Such deferral or suspension shall not bar the collection of the penalty
if the conditions of the deferral, suspension, or probation are not
fulfilled.
(2) Denial of export privileges. An order may be issued that
restricts the ability of the named persons to engage in exports,
reexports, and transfers (in-country) involving items subject to the
EAR, or that restricts access by named persons to items subject to the
EAR. An order denying export privileges may be imposed either as a
sanction for a violation of ECRA, the EAR, or any other statute set
forth at 50 U.S.C. 4819(e)(1)(B); or as a protective administrative
measure described in Sec. 764.6(c) or (d) of this part. An order
denying export privileges may suspend or revoke any or all outstanding
licenses issued under the EAR to a person named in the denial order or
in which such person has an interest; may deny or restrict exports,
reexports, and transfers (in-country) by or to such person of any item
subject to the EAR; and may restrict dealings in which that person may
benefit from any export, reexport, or transfer (in-country) of such
items. The standard terms of a denial order are set forth in supplement
no. 1 to this part. A non-standard denial order, narrower in scope, may
be issued. Authorization to engage in actions otherwise prohibited by a
denial order may be given by the Office of Exporter Services, in
consultation with the Office of Export Enforcement, upon a written
request by a person named in the denial order or by a person seeking
permission to deal with a named person. Submit such requests to: Bureau
of Industry and Security, Office of Exporter Services, Room 2099b, U.S.
Department of Commerce, 14th Street and Pennsylvania Ave. NW,
Washington, DC 20230.
(3) Exclusion from practice. Any person acting as an attorney,
accountant, consultant, freight forwarder, or in any other
representative capacity for any license application or other matter
before BIS may be excluded by order from any or all such activities
before BIS.
(b) Criminal. Whoever willfully commits, willfully attempts to
commit, or willfully conspires to commit, or aids and abets in the
commission of, an unlawful act described in 50 U.S.C. 4819(a) shall be
fined not more than $1,000,000; and in the case of the individual,
shall be imprisoned for not more than 20 years, or both.
(c) Other sanctions. Conduct that violates ECRA, the EAR, or any
order, license, or authorization issued thereunder, and other conduct
specified in sections 11A, B, and C of the EAA may be subject to
sanctions or other measures in addition to criminal and administrative
sanctions under ECRA or the EAR. These include, but are not limited to,
the following:
(1) Statutory sanctions. Statutorily-mandated sanctions may be
imposed on account of specified conduct related to weapons
proliferation. Such statutory sanctions are not civil or criminal
penalties, but restrict imports and procurement (See section 11A of the
EAA, Multilateral Export Control Violations, and section 11C of the
EAA, Chemical and Biological Weapons Proliferation), or restrict export
licenses (See section 11B of the EAA, Missile Proliferation Violations,
and the Iran-Iraq Arms Non-Proliferation Act of 1992).
(2) Other sanctions and measures--(i) Seizure and forfeiture. Any
property seized pursuant to export laws and regulations administered or
enforced by the Secretary is subject to forfeiture. (50 U.S.C. 4819(d)
and 4820(j); 22 U.S.C. 401; and 13 U.S.C. 305).
(ii) Actions by other agencies. (A) The Department of State may not
issue licenses or approvals for the export or reexport of defense
articles and defense services controlled under the Arms Export Control
Act to persons convicted of criminal offenses specified at 22 U.S.C.
2778(g)(1)(A), or to persons denied export privileges by BIS or another
agency; and may deny such licenses or approvals where the applicant is
indicted for, or any party to the export is convicted of, those
specified criminal offenses. (22 CFR 126.7(a) and 127.11(a)).
(B) The Department of Defense, among other agencies, may suspend
the right of any person to contract with the United States Government
based on export control violations. (Federal Acquisition Regulations at
48 CFR 9.407-2).
0
19. Supplement no. 1 to part 764 is amended by revising paragraph (b)
to read as follows:
Supplement No. 1 to Part 764--Standard Terms of Orders Denying Export
Privileges
* * * * *
(b) Standard denial order terms. The following are the standard
terms for imposing periods of export denial. Some orders also contain
other terms, such as those that impose civil penalties, or that suspend
all or part of the penalties or period of denial.
``It is therefore ordered:
First, that [the denied person(s)] may not, directly or indirectly,
participate in any way in any transaction involving any commodity,
software or technology (hereinafter collectively referred to as
``item'') exported or to be exported from the United States that is
subject to the Export Administration Regulations (EAR), or in any other
activity subject to the EAR, including, but not limited to:
A. Applying for, obtaining, or using any license, license
exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying,
receiving, using, selling, delivering, storing, disposing of,
forwarding, transporting, financing, or otherwise servicing in any way,
any transaction involving any item exported or to be exported from the
United States that is subject to the EAR, or in any other activity
subject to the EAR; or
C. Benefiting in any way from any transaction involving any item
exported or to be exported from the United States that is subject to
the EAR, or in any other activity subject to the EAR.
Second, that no person may, directly or indirectly, do any of the
following:
A. Export, reexport, or transfer (in-country) to or on behalf of
the denied person any item subject to the EAR;
[[Page 73418]]
B. Take any action that facilitates the acquisition or attempted
acquisition by a denied person of the ownership, possession, or control
of any item subject to the EAR that has been or will be exported from
the United States, including financing or other support activities
related to a transaction whereby a denied person acquires or attempts
to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition
or attempted acquisition from the denied person of any item subject to
the EAR that has been exported from the United States;
D. Obtain from the denied person in the United States any item
subject to the EAR with knowledge or reason to know that the item will
be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the EAR
that has been or will be exported from the United States and which is
owned, possessed or controlled by a denied person, or service any item,
of whatever origin, that is owned, possessed or controlled by a denied
person if such service involves the use of any item subject to the EAR
that has been or will be exported from the United States. For purposes
of this paragraph, servicing means installation, maintenance, repair,
modification or testing.
Third, that, after notice and opportunity for comment as provided
in Sec. 766.23 of the EAR, any person, firm, corporation, or business
organization related to the denied person by affiliation, ownership,
control, or position of responsibility in the conduct of trade or
related services may also be made subject to the provisions of this
order.
This order, which constitutes the final agency action in this
matter, is effective [DATE OF ISSUANCE].''
PART 766--ADMINISTRATIVE ENFORCEMENT PROCEEDINGS
0
20. The authority citation for part 766 is revised to read as follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783.
0
21. Section 766.25 is amended by revising paragraphs (a), (b), (c), and
(h), to read as follows:
Sec. 766.25 Administrative action denying export privileges.
(a) General. The Director of the Office of Export Enforcement
(OEE), in consultation with the Director of the Office of Exporter
Services, may deny the export privileges of any person who has been
convicted of a violation of any of the statutes set forth at 50 U.S.C.
4819(e)(1)(B), including any regulation, license, or order issued
pursuant to such statutes.
(b) Procedure. Upon notification that a person has been convicted
of a violation of one or more of the provisions specified in paragraph
(a) of this section, the Director of OEE, in consultation with the
Director of the Office of Exporter Services, will determine whether to
deny such person export privileges, including but not limited to
applying for, obtaining, or using any license, License Exception, or
export control document; or participating in or benefitting in any way
from any export or export-related transaction subject to the EAR.
Before taking action to deny a person export privileges under this
section, the Director of OEE will provide the person written notice of
the proposed action and an opportunity to comment through a written
submission, unless exceptional circumstances exist. In reviewing the
response, the Director of OEE will consider any relevant or mitigating
evidence why these privileges should not be denied. Upon final
determination, the Director of OEE will notify by letter each person
denied export privileges under this section.
(c) Criteria. In determining whether and for how long to deny U.S.
export privileges to a person previously convicted of one or more of
the statutes set forth in paragraph (a) of this section, the Director
of OEE may take into consideration any relevant information, including,
but not limited to, the seriousness of the offense involved in the
criminal prosecution, the nature and duration of the criminal sanctions
imposed, and whether the person has undertaken any corrective measures.
* * * * *
(h) Applicability to related person. The Director of OEE, in
consultation with the Director of the Office of Exporter Services, may
take action in accordance with Sec. 766.23 of this part to make
applicable to related persons an order that is being sought or that has
been issued under this section.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2020-25453 Filed 11-17-20; 8:45 am]
BILLING CODE 3510-33-P
