10 June 1998
Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html

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

[Federal Register: June 10, 1998 (Volume 63, Number 111)]
[Rules and Regulations]
[Page 31622-31623]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10jn98-18]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Part 705

[Docket No. 980508121-8121-01]
RIN 0694-AB58


Effect of Imported Articles on the National Security

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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

SUMMARY: The Department of Commerce is revising its regulation on the
``Effect of Imported Articles on the National Security'' (47 FR 14693,
April 6, 1982; redesignated at 54 FR 601, January 6, 1989; and amended
at 54 FR 19355, May 5, 1989 (15 C.F.R. Part 705)) to reflect amendments
to Section 232 of the Trade Expansion Act of 1962. These amendments
include requirements for additional action to be taken by the Secretary
of Commerce upon commencing, conducting, and completing an
investigation, and reporting the disposition of an investigation to the
Congress. The amendments also specify action to be taken by the
President in making a determination to take action to adjust the
imports of the article which is the subject of the investigation.

EFFECTIVE DATE: This rule is effective July 10, 1998.

FOR FURTHER INFORMATION CONTACT: Brian H. Nilsson, Section 232
Investigations Program Manager, Office of Strategic Industries and
Economic Security, Room 3876, U.S. Department of Commerce, 14th Street
and Constitution Avenue, Washington, D.C. 20230; telephone: (202) 482-
3795, FAX: (202) 482-5650, and E-Mail: bnilsson@bxa.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    Section 232 of the Trade Expansion Act of 1962, as amended (19
U.S.C. 1862) (the Act) authorizes investigations to determine the
effects on the national security of imports of articles which are the
subject of a request for an investigation. The implementing regulation,
``Effect of Imported Articles on the National Security'' (47 FR 14693,
April 6, 1982; redesignated at 54 FR 601, January 6, 1989; and amended
at 54 FR 19355, May 5, 1989 (15 C.F.R. Part 705)), prescribes
procedures to be followed by the Department of Commerce (the
Department) to commence and conduct such investigations. Because of
amendments in 1988 to Section 232 of the Act, this regulation must be
revised to set forth requirements for additional action to be taken by
the Secretary of Commerce upon commencing, conducting, and completing
an investigation, and reporting the disposition of the investigations
to the Congress. The amendments also specify action to be taken by the
President in making determinations to take action to adjust the imports
of the article which is the subject of the investigation.
    Changes to the regulation with reference to the applicable sections
of the Act include the following:
    1. Section 705.3 (Commencing an investigation) is revised to
require the Secretary of Commerce to provide immediate notice to the
Secretary of Defense of any investigation initiated under the
regulation [Section 232(b)(1)(B) of the Act; 19 U.S.C. 1862(b)(1)(B)].
    2. Section 705.7(d) (Conduct of an investigation) is revised to
require consultation by the Secretary of Commerce with the Secretary of
Defense regarding the methodology and policy questions raised in an
investigation, and, upon the request of the Secretary of Commerce, to
require the Secretary of Defense to provide an assessment of the
defense requirements of the article being investigated [Section
232(b)(2) of the Act; 19 U.S.C. 1862(b)(2)].
    3. Section 705.10 (Report of an investigation and recommendation)
is revised to simplify the organization of the report of an
investigation, to reduce the time from one year to 270 days for the
Department to conduct an investigation and report to the President, and
to provide for publication in the Federal Register of an Executive
Summary of the report and availability to the public of the full report
[Section 232(b)(3); 19 U.S.C. 1862(b)(3)].
    4. A new section 705.11 (Determination by the President and
adjustment of imports) is added to include in the regulation the
requirements imposed upon the President under Section 232(c) of the Act
[19 U.S.C. 1862(c)]. Upon submission of the report of an investigation
by the Secretary of Commerce in which the Department has found that an
article is being imported into the U.S. in such quantities or under
such circumstances as to threaten to impair the national security, the
President must take certain action within a specified period of time as
set forth in the Act.
    5. A new section 705.12 (Disposition of an investigation and report
to the Congress) is also added to require reports to the Congress
pertaining to the disposition of each request, application, or motion
for an investigation and the operation of the Act's provisions [Section
232(e); 19 U.S.C. 1862(e)].
    6. Finally, in sections 705.5(a) (Request or application for an
investigation), 705.7(b) (Conduct of an investigation), and 705.8(b)(6)
(Public hearings), technical revisions are made to update the
references to the Office of Industrial Resource Administration and the
room number of the Bureau of Export Administration Freedom of
Information Records Inspection Facility.

Rulemaking Requirements

    The Department has made certain determinations with respect to the
following rulemaking requirements:
    1. Classification under E.O. 12866: The revision of this regulation
(15 CFR Part 705) has been determined to be ``not significant'' for
purposes of Executive Order 12866.
    2. Administrative Procedure Act and Regulatory Flexibility Act:
Because this rule pertains to agency procedures and the rulemaking
procedures of the Administrative Procedure Act (5 U.S.C. 553(b)(A)) or
any other are not applicable, this rule is not subject to the
analytical requirements of Section 3(a) of the Regulatory Flexibility
Act (5 U.S.C. 601-612).
    3. Paperwork Reduction Act: This rule does not contain a collection
of information for purposes of the Paperwork Reduction Act of 1980 (44
U.S.C. 3501-3520).
    4. Executive Order 12612: This proposed rule does not contain
policies with Federalism implications sufficient to warrant preparation
of a Federalism assessment under E.O. 12612.

[[Page 31623]]

List of Subjects in 15 CFR Part 705

    Administrative practice and procedure, Business and industry,
Classified information, Confidential business information, Imports,
Investigations, National Security.

    For the reasons set forth in the preamble, part 705 of Subchapter
A, National Security Industrial Base Regulations is amended as follows:

PART 705--[AMENDED]

    1. The authority citation for 15 CFR part 705 is revised to read as
follows:

    Authority: Section 232 of the Trade Expansion Act of 1962, as
amended (19 U.S.C. 1862) and Reorg. Plan No. 3 of 1979 (44 FR 69273,
December 3, 1979).

    2. Section 705.3 is amended by designating the existing text as
paragraph (a) and by adding a new paragraph (b), as follows:

Sec. 705.3  Commencing an investigation.

    (a) * * *
    (b) The Secretary shall immediately provide notice to the Secretary
of Defense of any investigation initiated under this part.

Sec. 705.5  [Amended]

    3. In Sec. 705.5(a), the reference to ``Office of Industrial
Resource Administration'' is revised to read ``Office of Strategic
Industries and Economic Security.''
    4. Section 705.7 is amended by revising paragraph (d) to read as
follows:

Sec. 705.7  Conduct of an investigation.

* * * * *
    (d) The Department shall, as part of an investigation, seek
information and advice from, and consult with, appropriate officers of
the United States or their designees, as shall be determined. The
Department shall also consult with the Secretary of Defense regarding
the methodological and policy questions raised in the investigation.
Upon the request of the Secretary, the Secretary of Defense shall
provide the Secretary with an assessment of the defense requirements of
the article in question. Communications received from agencies of the
U.S. government or foreign governments will not be made available for
public inspection.
* * * * *

Secs. 705.7 and 705.8  [Amended]

    5. In Secs. 705.7(b) and 705.8(b)(6), the references to room number
``H-4886'' are revised to read ``H-4525''.
    6. Section 705.10 is revised to read as follows:

Sec. 705.10  Report of an investigation and recommendation.

    (a) When an investigation conducted pursuant to this part is
completed, a report of the investigation shall be promptly prepared.
    (b) The Secretary shall report to the President the findings of the
investigation and a recommendation for action or inaction within 270
days after beginning an investigation under this part.
    (c) An Executive Summary of the Secretary's report to the President
of an investigation, excluding any classified or proprietary
information, shall be published in the Federal Register. Copies of the
full report, excluding any classified or proprietary information, will
be available for public inspection and copying in the Bureau of Export
Administration Freedom of Information Records Inspection Facility, Room
H-4525, U.S. Department of Commerce, 14th Street, N.W., Washington,
D.C. 20230; tel. (202) 482-5653.
    7. A new section 705.11 is added to read as follows:

Sec. 705.11  Determination by the President and adjustment of imports.

    (a) Upon the submission of a report to the President by the
Secretary under Sec. 705.10(b) of this part, in which the Department
has found that an article is being imported into the United States in
such quantities or under such circumstances as to threaten to impair
the national security, the President is required by Section 232(c) of
the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862(c)) to take
the following action
    (1) Within 90 days after receiving the report from the Secretary,
the President shall determine:
    (i) Whether the President concurs with the Department's finding;
and
    (ii) If the President concurs, the nature and duration of the
action that must be taken to adjust the imports of the article and its
derivatives so that the such imports will not threaten to impair the
national security.
    (2) If the President determines to take action under this section,
such action must be taken no later than fifteen (15) days after making
the determination.
    (3) By no later than thirty (30) days after making the
determinations under paragraph (a)(1) of this section, the President
shall submit to the Congress a written statement of the reasons why the
President has decided to take action, or refused to take action.
    (b) If the action taken by the President under this section is the
negotiation of an agreement to limit or restrict the importation into
the United States of the article in question, and either no such
agreement is entered into within 180 days after making the
determination to take action, or an executed agreement is not being
carried out or is ineffective in eliminating the threat to the national
security, the President shall either:
    (1) Take such other action as deemed necessary to adjust the
imports of the article so that such imports will not threaten to impair
the national security. Notice of any such additional action taken shall
be published in the Federal Register; or
    (2) Not take any additional action. This determination and the
reasons on which it is based, shall be published in the Federal
Register.
    8. A new section 705.12 is added to read as follows:

Sec. 705.12  Disposition of an investigation and report to the
Congress.

    (a) Upon the disposition of each request, application, or motion
made under this part, a report of such disposition shall be submitted
by the Secretary to the Congress and published in the Federal Register.
    (b) As required by Section 232(e) of the Trade Expansion Act of
1962, as amended (19 U.S.C. 1862(c)), the President shall submit to the
Congress an annual report on the operation of this part.

    Dated: June 5, 1998.
Iain S. Baird,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 98-15411 Filed 6-9-98; 8:45 am]
BILLING CODE 3510-JT-P
