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

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2024-14628

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** July 12, 2024
- **Citation:** 89 FR 57238

## Text

DEPARTMENT OF STATE
22 CFR Part 96
[Public Notice: 12242]
RIN 1400-AE39
Intercountry Adoption: Regulatory Changes to Accreditation and Approval Regulations in Intercountry Adoption

AGENCY:

Department of State.

ACTION:

Final rule.

SUMMARY:

The Department of State (the Department) publishes a final rule revising the Code of Federal Regulations to amend requirements for accreditation and approval by the United States to provide adoption services in intercountry adoption cases. This rule amends regulations to provide clarification, updates, or other adaptation of familiar accreditation and approval standards for intercountry adoption. It also includes a new section with alternative procedures for primary providers that apply in intercountry adoption by relatives. The new regulations for adoption by relatives simplify and streamline the adoption process by limiting the number of adoption services the primary provider must provide. The final rule emphasizes that accredited agencies and approved persons comply with all applicable laws in foreign countries where they provide adoption services.

DATES:

This final rule becomes effective January 8, 2025.

FOR FURTHER INFORMATION CONTACT:

• Technical Information: Emily Spencer, (202) 647-4000,
adoptionoversight@state.gov.

SUPPLEMENTARY INFORMATION:

Preamble Contents

I. Introduction

II. Overview of Major Changes and Provisions in the Final Rule

A. Adoption by Relatives

B. Compliance With All Applicable Laws

C. Child Care Payments

D. Procedures and Requirements for Adverse Action by the Secretary, Including for Challenges to Such Adverse Action

E. Pausing on Revising Standards in Subpart F

F. Other Significant Changes

III. Section-by-Section Discussion of Significant Public Comments

IV. Timeline for Implementing Changes in the Final Rule

V. Regulatory Analysis

I. Introduction

This final rule amends 22 CFR part 96 and the changes clarify and update the 2006 final rule that established the regulatory framework for the accreditation and approval function required under the 1993 Hague Convention on Protection of Children and Co-operation in Respect of Intercountry Adoption (the Convention), the Intercountry Adoption Act of 2000 (IAA), and the Intercountry Adoption Universal Accreditation Act of 2012 (UAA). The Department drew from its 17 years of observations and experience with the accreditation regulations to reflect the rule's practical operation, and from the observations of adoption stakeholders including, but not limited to, adoptive parents, adoption service providers (ASPs), Congressional offices, adult adoptees, and law enforcement authorities.

On November 20, 2020, the Department published a notice of proposed rulemaking (NPRM, often referred in this preamble as the proposed rule). The proposed rule included changes to subparts A, B, E, F, L, and M and a new subpart R. The Department intends to examine changes to the remaining subparts at a later time.

This final rule takes into account public comments received in response to the NPRM. The Department appreciates the extensive feedback received from stakeholders in response to the NPRM and notes the many contributions from stakeholders who recommended substantive revisions to the Department's changes in the proposed rule. The final rule incorporates many of the substantive revisions proposed by the public. Additionally, as explained below, this rule does not include three major sections of the proposed rule. The Department will consider consultations with stakeholders before making further regulatory proposals relating to these three sections.

II. Overview of Major Changes and Provisions in the Final Rule

This section of the final rule summarizes the major differences between the proposed rule and the final rule. This overview is followed in part III by a detailed, section-by-section discussion of significant comments received in response to the NPRM.

A. Adoption by Relatives

The long-anticipated
1

new provisions on adoption by relatives were welcomed by most commenters, though some thought the new provisions did not go far enough in streamlining the required adoption services and should have further limited the role of primary providers in relative cases. Most commenters, however, welcomed the simplified role of the primary provider in the proposed rule requiring primary providers to focus on three of the six adoption services listed in the CFR:
2

1
The IAA provided in section 502(a) for establishment by regulation of alternative procedures for adoption of children by relatives. The Department did not include alternative procedures for adoption by relatives in its accreditation rule published in 2006, which this rule amends, opting to pursue it later once the new accreditation rule was implemented. Adoption service providers with clients adopting relatives asked frequently over the intervening years when the Department would produce alternative procedures for relative cases.

2
22 CFR 96.2 Definitions:
Adoption service
means any one of the following six services:

(1) Identifying a child for adoption and arranging an adoption;

(2) Securing the necessary consent to termination of parental rights and to adoption;

(3) Performing a background study on a child or a home study on a prospective adoptive parent(s), and reporting on such a study;

(4) Making non-judicial determinations of the best interests of a child and the appropriateness of an adoptive placement for the child;

(5) Monitoring a case after a child has been placed with prospective adoptive parent(s) until final adoption; or

(6) When necessary because of a disruption before final adoption, assuming custody and providing (including facilitating the provision of) child care or any other social service pending an alternative placement.

• (3) Performing a background study on a child or a home study on a prospective adoptive parent(s), and reporting on such a study;

• (5) Monitoring a case after a child has been placed with prospective adoptive parent(s) until final adoption; and

• (6) When necessary because of a disruption before final adoption, assuming custody and providing (including facilitating the provision of) childcare or any other social service pending an alternative placement.

The new provisions in § 96.100 allow a primary provider to develop and implement an adoption service plan addressing only three adoption services noted above in adoption by relatives. In all other intercountry adoptions, the primary provider must develop and implement a service plan for providing all six adoption services, in accordance with § 96.44. The provisions in § 96.100(d) require that the alternative procedures in § 96.100 be performed in accordance with the Convention, the IAA, the UAA and their implementing regulations.

Some commenters expressed the preference that post-placement monitoring should not be required at all in adoptions by relatives. The Department emphasizes that post-placement monitoring mandated in the IAA remains an important element of the adoption services in the final rule,

including with respect to the adoption by relatives. Adoption services five and six include essential services related to monitoring the continued well-being of the child's placement and to ensuring that the prospective adoptive parents can care for the particular needs of a child. Unlike other services that may not be applicable or made redundant in the context of a pre-existing relationship, services 5 and 6 apply equally whether or not the child is related to the prospective adoptive parents.

The public comments also revealed disagreement regarding how the term “relative” should be defined and to which family relationships the alternative procedures for primary providers should apply. Some commenters preferred the relationships found in the regulations of the Department of Homeland Security (DHS) at 8 CFR 204.309(b)(2)(iii) which are exempt from the prohibition on prior contact with a child's parents or caregivers. Section 96.2 Definitions includes a definition of relative relationships that applies solely to determinations of when those alternative procedures for primary providers in § 96.100 may be used. Although the Department's and DHS's definitions overlap quite a bit, they differ enough in content and purpose that the Department retained its proposed definition of “relative” in the final rule. The definition of “relative,” and other public comments related to subpart R are further addressed in the section-by-section discussion in part III, below, and in appendix A at the end of this notice.

B. Compliance With All Applicable Laws

In the NPRM, the Department proposed a new section 96.29 in subpart F identifying conduct that does not conform to the regulatory framework of the IAA. Commenters found the new provisions to be duplicative and pointed out that agencies and persons were already required to operate in accordance with the Convention, the IAA, the UAA, and their implementing regulations. They suggested that restating the principle again as a new standard in subpart F was not necessary. The final rule does not include a new section 96.29. The Department instead retained the provisions on compliance with applicable laws in foreign countries in section 96.30 and renamed that section State Licensing and Compliance with All Applicable Laws. For a discussion of this and other provisions proposed in section 96.29, see the public comment discussion of § 96.29 in section III of this preamble.

C. Child Care Payments

The changes to sections 96.36(a) and 96.40(c)(4) in the NPRM would have prohibited ASPs from charging prospective adoptive parents for the care of a particular child prior to the completion of the intercountry adoption process. Payments for specific child welfare activities, if permitted by the country of origin, are controversial because of the potential risk of diverting payments to support illicit practices such as recruiting children into institutions or incentivizing institutions to retain children longer than necessary, and as such, have been prohibited by many countries. The Department recognizes, however, that prohibiting such payments that could pay for essential needs such as food, medical care, and other child welfare-related services may be detrimental to children, particularly for children awaiting adoption who have special needs.

Commenters pointed out that historically payments were allowed if permitted or required by the child's country of origin. Several commenters noted the regularity with which the health of a child with special needs deteriorates and medical needs increase during the time between the referral and the final adoption, and that preventing funding for such care, if permitted by the country of origin, would not be in the best interests of the child. As discussed in section III of this preamble, the Department did not retain in the final rule proposed changes to § 96.36(a). This final rule reinforces the standard in § 96.36(a) with changes to § 96.36(b) that augment recordkeeping requirements on the payment of fees in connection with intercountry adoption. Enhanced standards for recordkeeping will increase the oversight of any permitted or required payments for specific activities related to the adoption as outlined in § 96.36(a). The recordkeeping requirements will help decrease the risk that payments intended to benefit children will be diverted for illicit purposes. It will also assist agencies and persons to effectively monitor and oversee payments and fees paid by their employees and supervised providers in connection with an intercountry adoption. In no instance shall permitted or required contributions be remitted as payment or as an inducement to release a child for adoption.

D. Procedures and Requirements for Adverse Action by the Secretary, Including for Challenges to Such Adverse Action

The proposed changes to section 96.83 in subpart L impact provisions regarding adverse action by the Secretary leading to suspension or cancellation of an agency or person's accreditation or approval. The changes include procedural requirements for notifying agencies and persons of adverse actions taken by the Secretary and the reasons for such action. New sections 96.84(a) and (b) describe the administrative process by which an ASP may request withdrawal of the suspension or cancellation as unwarranted and the standards the Department will use to review such a request. The process mirrors provisions in §  96.76 in which an ASP may provide information to an accrediting entity to demonstrate that an adverse action was unwarranted. This process is independent of a petition for relief from the Secretary's suspension or cancellation and is based upon the ASP's correction of deficiencies. A petition for relief is now addressed in §  96.84(c) and is similar to provisions in § 96.78(a).

A number of commenters appreciated the introduction of due process features when the Secretary imposes adverse action of suspension or cancellation. Other commenters thought accrediting entities should adhere to such procedures when imposing adverse actions, particularly providing specific evidence relied on to support the adverse action. The discussion in the section-by-section analysis for section 96.83 explains that some due process provisions in § 96.83 go farther than those governing adverse action by accrediting entities in § 96.76. This is largely because of the emergent nature of the conduct triggering suspension or cancellation by the Secretary. Similarly, imposing adverse action before providing an opportunity to rebut the Department's conclusions is justified and often cannot wait when the imposition of adverse action relates to child safety or other serious or emergent compliance issues.

In 2016, the Department exercised its authority for the first time to debar an agency and determined based on that experience that it would be beneficial to propose relevant details in the regulations as to the notice, evidentiary, and procedural requirements relating to debarment proceedings. Section 96.88 sets forth the procedures, requirements, time frames, and standards of review that apply when the Department

undertakes a debarment proceeding when prior notice is given. In §  96.89, the Department sets forth the corresponding procedures, requirements, time frames, and standards of review for debarment effective immediately, without prior notice. Some commenters objected to short time frames to obtain and present information in the proceedings and the lack of common procedural features such as discovery. They asserted the lack of discovery, for example, might prejudice the agency's or person's ability to respond fully to claims against it. The Department considers these and other comments relating to debarment proceeding procedures and requirements in the section-by-section analysis in part III of this preamble, including appeal options in federal court and notification requirements when the Secretary debars an accredited agency or approved person.

E. Pausing on Revising Standards in Three Sections of Subpart F

The Department received public comments expressing concern or disagreement about parts of the proposed changes in sections 96.40, 96.50, and 96.54 in the proposed rule. The Department concluded that the issues raised in these comments warrant further consideration. This final rule does not include revisions to these three sections. A brief summary of the relevant comments and content of these sections follows:

§ 96.40: Fee Policies and Procedures

Comments submitted about standards relating to adoption fees and expenses uniformly expressed concern with the way the Department characterized fees relating to intercountry adoption practice and the burden on adoption service providers to revise, recalculate, and report fee schedules conforming to the proposed changes. Commenters indicated the proposed rubrics failed to reflect the way agencies and persons structure their work as well as the flexibility needed to adapt to dynamic conditions.

§ 96.50: Placement and Post-Placement Monitoring Until Final Adoption in Incoming Cases

The revisions to § 96.50 in the proposed rule would have expanded required efforts by ASPs for taking action in the event of a disruption and reporting to all relevant authorities about disruption cases. Commenters asserted the proposed changes would require significant resources to implement.

§ 96.54: Placement Standards in Outgoing Convention Cases

We received many comments relating to the proposed changes to this section. The comments were against making any of our proposed changes, arguing among other things that the provisions would have a negative impact on outgoing adoption practice.

Two Additional Sections in Subpart F Ready for Renewed Consultations

Several commenters expressed strong interest in making changes to two additional sections in subpart F, sections 96.46 and 96.48.

§ 96.46: Using Providers in Foreign Countries

Regarding foreign supervised providers, in the proposed rule the Department acknowledged there were areas of discord relating to oversight of foreign supervised providers. We stated our intention to undertake a consultative process on these issues that would consider the entire range of standards relating to foreign supervised providers. In addition to a few minor textual updates to § 96.46 in the NPRM and in the final rule, we made changes to § 96.46(b)(7) and (8) requiring all payments to foreign supervised providers be provided through the primary provider. The primary provider must also provide prospective adoptive parents with a written explanation about the return of unused funds within 60 days.

§ 96.48: Preparation and Training of Prospective Adoptive Parents in Incoming Cases

Several commenters were disappointed that the proposed rule did not amend the requirements for parent preparation and training. The commenters expressed a need to increase the number of hours required for parent preparation and welcomed an opportunity to collaborate on the parameters of such training. No such changes are reflected in the final rule but further consideration will be given to these suggestions.

F. Other Significant Changes

Changes to Elements in Subpart A, General Provisions

In the definitions section of the final rule, § 96.2, we did not retain the proposed definition of “authorization.” Commenters noted this feature of the Hague Adoption Convention, Article 12, is already incorporated into the regulations in the many references to compliance with the Convention and further definition would be repetitive.

In the final rule, we have kept several of the proposed changes to the definition of “best interests of the child” in § 96.2. The definition in the final rule clarifies how U.S. accredited and approved providers should consider the best interests of a child when the child is abroad and outside the jurisdiction of a U.S. State. The NPRM only included a reference to the Convention in the proposed revision to the definition of best interests of the child. Based on public comments, the definition in the final rule also includes a reference to the IAA, the UAA, and their implementing regulations.

We made a change from the NPRM to the definition of “supervised provider,” adding for clarity the term “domestic or” before the term “foreign entity.”

We did not retain a definition of “unregulated custody transfer” (UCT) in the NPRM, in response to comments noting that States have jurisdiction over child welfare and protection matters, including what constitutes UCT and any practice standards relating to it.

Changes to Elements in Subpart B, Selection, Designation, and Duties of Accrediting Entities

Section 96.7 of the final rule retains the proposed revision in the NPRM requiring accrediting entities to retain all records relating to accreditation decision making for a period of 10 years. In response to comments, this final rule provides for the Secretary to extend the time accrediting entities must retain documents, but not shorten it to less than 10 years.

Section 96.8 of the final rule incorporates the proposed provisions establishing a new process for reporting accrediting entity fee schedule changes in the
Federal Register
.

The Department retained the proposed change to § 96.10 permitting a finding that accrediting entities are out of compliance for approving or accrediting an agency or person when the Secretary had to intervene and itself impose suspension, cancellation, or debarment of an agency or person.

Section 96.12 of the final rule retains the minor edits in the NPRM, but it remains in subpart C.

Changes to Elements in Subpart E, Evaluation of Applicants for Accreditation and Approval

In tandem with changes in section 96.7 as noted above, we retained in the final rule the proposed change to § 96.26 requiring accrediting entities to retain an accurate record of accreditation and approval decision making for at least 10 years, or longer if the Secretary requires it.

In § 96.27(e) the final rule incorporates a proposed change requiring accrediting entities to take into account in evaluating an application for accreditation or approval the reasons underlying a previous denial of accreditation or approval.

Changes to Standards in Subpart F, Standards for Intercountry Adoption Accreditation and Approval

We did not retain proposed changes to § 96.32 requiring agencies and persons to retain records related to the monitoring and oversight of supervised providers for a period of not less than 25 years. Several commenters expressed concern with the cost of implementing these provisions. On balance, the cost of creating and retaining such records for 25 years and potentially even longer could not be justified by the potential benefits.

Concerning the requirements in § 96.33(e) relating to the cash reserve of two months operating expenses, in the final rule we did not retain the proposed deletion of “financial resources” in this standard. Based on several public comments, we removed the reference to liquid assets. To avoid possible confusion or ambiguity as to these terms, the Department retained the existing CFR language in § 96.33(e).

Section 96.34 of this final rule mandates that compensation must not be unreasonably high but does not retain the proposed changes meant to take into account what services “actually cost.” Commenters found the proposed formulation too vague for accrediting entities to implement.

The Department accepted the recommendation by a commenter that several additional training topics be added to the list of topics in § 96.38. They relate to trauma-informed parenting, the impact of adoption on children already in the home, and parental support for children who experience discrimination based on race, physical, cognitive, and other disabilities.

Addressing questions raised in comments, section 96.41 of the final rule establishes that a complaint may be submitted by email, must include the name of the complainant and must be dated.

The final rule incorporates practical steps in § 96.47 for withdrawal of a home study recommendation that a family be found suitable to adopt abroad, including timelines for notifying adoptive parents, primary providers, and USCIS. The final rule does not retain proposed changes to § 96.52(a)(1) requiring extensive additional agency and person reporting to the Secretary and the foreign Central Authority about “material facts” of intercountry adoption cases.

III. Section-by-Section Discussion of Comments

This section provides a detailed discussion of significant comments received and describes differences between the NPRM and this final rule.

Subpart A—General Provisions

Section 96.2 Definitions

1.
Comment:
Several commenters suggest edits to the proposed definition of “authorization” to clarify that such permission from a Central Authority is for the ability to provide adoption services generally and not just for one specific adoption. The commenters also recommend deleting the last sentence of the definition suggesting it goes beyond the scope of defining the term.

Response:
The final rule does not retain the proposed definition of “authorization.” It also does not establish a standard for foreign authorization. Where foreign countries require authorization to provide adoption services, agencies and persons are obliged to be in full compliance with the laws of that foreign country in accordance with the new section 96.30(e) in the final rule. For additional information, see the discussion relating to section 96.29, below.

2.
Comment:
One commenter expresses concern that the proposed revision to the definition of “best interests of the child” does not sufficiently reflect the provision of section 503(a) of the IAA (42 U.S.C. 14953(a)) that defers to State law unless such provisions are inconsistent with the Convention or the IAA. The commenter is concerned the phrase “without reference to the law of any particular State” is in direct conflict with the IAA's objective to defer to State law definitions whenever possible. The commenter recommends deleting this reference and if it is retained, that in addition to the Convention, a reference to the IAA should also be added. The commenter is also concerned that a reference to “the object and purpose of the Convention” could be interpreted to include provisions of other international conventions.

Response:
The Department revised the definition of “best interests of the child” in the final rule to include a reference to the IAA, the UAA, and their implementing regulations to clarify that the revision does not include reference to any other international conventions. We have also removed the reference to “without reference to the law of a particular State” because we believe the intent of the regulation is clear without this specific reference. The Department does not agree that the new definition is inconsistent with the IAA. The value of the revised definition is that it provides useful information to agencies and persons about how to approach making determinations of the best interests of a child when the child is outside of any State jurisdiction. The definition affirms the central concept that in cases in which a State has jurisdiction to decide whether a particular adoption or adoption-related action is in a child's best interests, “best interests of the child” shall have the meaning given to it by the law of the State.

3.
Comment:
Some commenters are concerned the definition of “best interests of the child” does not appropriately acknowledge the role played by central or competent authorities in making best interest determinations for children in countries of origin. The commenters note such determinations usually require judicial approval.

Response:
The revised definition does not impose duties on public foreign authorities, who are expected to act in accordance with their own laws, regulations, and practices. In this final rule, to the extent that accredited agencies and approved persons contribute to decisions or actions abroad regarding best interests of the child, the revised definition reinforces how the determination should be made. Section 96.2 of the regulations specifically defines one of the six adoption services as “making non-judicial determinations of the best interests of the child and the appropriateness of an adoptive placement for a child.” The Department recognizes the role played by the competent authority but does not agree this definition in the final rule conflicts with the role played by central or competent authorities in making a best interest determination for children. Rather, it clarifies the guiding documents an agency or person should use when providing this adoption service outside of a State jurisdiction.

4.
Comment:
One commenter proposes adding other people who could be party to a service agreement in accordance with § 96.44 to the definition of “client,” namely, birth parents in outgoing adoption cases. This commenter also recommends including the child who is being adopted in an outgoing adoption in the definition of “client” in § 96.2.

Response:
Based on the public comments, we have withdrawn the definition of “client.” We agree that

only referencing prospective adoptive parents in the definition of client with respect to a service agreement may be unnecessarily limiting, particularly with respect to outgoing adoptions. Given the possible different parties that could be included as clients for the services agreement with an agency or person, the Department is not including a definition of “client” in § 96.2 of the final rule.

5.
Comment:
Several commenters raise concerns about the addition of a new definition of “complaint” in § 96.2 and its impact on § 96.41, procedures for responding to complaints and improving service delivery.

Response:
The final rule does not add a definition of “complaint.” For comments and responses relating to the proposed definition of “complaint” together with a discussion of comments relating to responding to complaints and related procedures, see § 96.41, below.

6.
Comment:
Two commenters note the Department proposed changes to the definition of “public foreign authority” by adding “a court or regulatory” before “authority operated by a national or subnational government of a foreign country” but did not propose similar changes to the definition of “public domestic authority.” The commenters object to the difference and are concerned the differences could cause confusion, particularly the proposed changes to the definition of public foreign authority.

Response:
In response to these comments the Department is not including in the final rule the revisions to definitions of “public foreign authority” and “public domestic authority.” The Department does not want to create confusion between the definitions of “competent authority” and “public foreign authority” as used in sections 96.12 and 96.14 which could make it more difficult to determine which entities require supervision.

7.
Comment:
Several commenters recommend the Department revise its definition of “relative” by using instead the list of relative relationships found in 8 CFR 204.309(b)(2)(iii).

Response:
This final rule retains the NPRM definition of “relative” in § 96.2. The Department believes the § 96.2 definition of relative serves a purpose entirely different from the definition of relative found in DHS regulations at 8 CFR 204.309(b)(2)(iii). Although there is significant overlap in the two definitions, their differences are also significant. See Appendix A at the end of this notice showing how the two lists of relative relationships overlap and how they differ in approach.

The DHS regulation at 8 CFR defines which pre-existing familial relationships are exempt from the prohibition on prior contact between a prospective adoptive parent and the prospective adoptive child's parents, legal custodian, or other individual or entity who is responsible for the child's care. Additionally, the DHS regulation defines such relative relationships in terms of the prospective adoptive parent's relationship with the parent of the child to be adopted. In contrast, the Department's final rule definition of relative addresses relationships between the prospective adoptive parent(s) and the child to be adopted.

The relationships in the Department's definition of relative in § 96.2 include first- and second-degree relatives: parents and siblings and grandparents, aunts, uncles, nieces and nephews as well as analogous relationships through marriage and adoption. These are all familial relationships that a primary provider can more readily document to determine whether a prospective adoptive parent has a qualifying relationship for the alternative procedures for primary providers in § 96.100. Relatives beyond the second degree such as great-grandparents, great aunts, great uncles and first and second cousins may still adopt relatives. However, primary providers in these cases would be required to develop a service plan for all six adoption services and implement that plan in accordance with § 96.44.

8.
Comment:
Commenters raised the concern that adoptive parents who adopt a child could assert a relative relationship with that child on the basis of its adoption and thus avail themselves of the alternative procedures for adoption by relatives in § 96.100.

Response:
The relationships within the definition of “relative” in § 96.2 must exist between the prospective adoptive parent and the child prior to initiating an adoption to be able to take advantage of the provisions in § 96.100. For greater clarity, we revised the definition of “relative” as follows: “Relative . . . means
a prospective adoptive parent was already, before the adoption,
any of the following: parent, step-parent, etc. (emphasis added).”

9.
Comment:
One commenter is concerned that the addition of “person or” after “foreign” in the definition of “supervised provider” will cause ambiguity in the definition given that the phrase “person” is first referred to in the definition of supervised provider, without specific reference to “foreign.” The commenter suggests adding a reference to “domestic” in addition to “foreign” to clarify the definition.

Response:
The Department has modified the definition of “supervised provider” to provide clarity. We included “domestic or” before the word “foreign.”

10.
Comment:
Several commenters object to the phrase “intent on severing” in the proposed definition of “unregulated custody transfer” because it is ambiguous and does not explain how a parent's intention should be determined. Another commenter argues that the definition is unconstitutional because it treats parents by adoption differently from biological parents.

Response:
The final rule does not contain a definition of “unregulated custody transfer.” Given that the States have jurisdiction over child welfare and protection matters and that some States have already defined UCT, we defer to the States to determine what constitutes UCT rather than propose a definition in this rule.

Subpart B—Selection, Designation, and Duties of Accrediting Entities

Section 96.4 Designation of Accrediting Entities by the Secretary

1.
Comment:
Several commenters are concerned the proposed addition of “under § 96.5(b)” to § 96.4(c) will result in adoption service providers losing the choice to select the accrediting entity that conducts their accreditation or approval.

Response:
Section 96.4(b) is unchanged in the final rule and permits the Secretary's designation of an accrediting entity to include limitations on the accrediting entity's geographic jurisdiction or impose other limits on the entity's jurisdiction. For clarity, the final rule retains the minor proposed change in § 96.4(c), which connects the reference to a public entity in § 96.4(c) to the requirements relating to public entities in § 96.5(b).

Section 96.6 Performance Criteria for Designation as an Accrediting Entity

1.
Comment:
One commenter suggests the Department is revising § 96.6 to accommodate a specific accrediting entity.

Response:
The Department made no changes in response to this comment. Rather than addressing any one specific entity, the requirements in § 96.6 outline the performance criteria any accrediting entity must demonstrate to the Secretary when it is seeking designation as an accrediting entity. The changes to § 96.6(c) and (d) clarify that an accrediting entity must demonstrate that it has the capacity to monitor and take appropriate adverse actions against agencies and persons, even if did not initially accredit or approve them. This change expands the performance criteria

that must be demonstrated by an entity seeking designation by the Department.

Section 96.7 Authorities and Responsibilities of an Accrediting Entity

1.
Comment:
A commenter noted in § 96.7(a)(4) that the Department changed the function of the accrediting entities from “investigating” complaints to “reviewing” complaints and asked for clarification of what review means in this context.

Response:
The Department declines to further define “review” in the final rule. Clarification of the meaning of the term “review” is incorporated in the Memoranda of Agreement between the accrediting entities and the Department and figures prominently in the Department-approved accrediting entity policies and procedures relating to complaints.

2.
Comment:
Several commenters recommend the Department specify in the regulation that the Secretary could extend the time that an accrediting entity maintains all records related to its role as the accrediting entity.

Response:
In response to these comments, § 96.7(a)(9) and § 96.26(d) of the final rule include a reference to “longer if” to clarify that ten years is the minimum amount of time for an accrediting entity to maintain its records, but the Secretary can extend it.

Section 96.8 Fees Charged by Accrediting Entities

1.
Comment:
Several commenters expressed the belief that the Department should require more transparency of an accrediting entity's costs to perform functions authorized by the Secretary by requiring it to make available, upon request from the public, its demonstration of compliance with § 96.8(a).

Response:
The Department is not changing the rule to mandate that accrediting entities demonstrate to the public compliance with § 96.8 as this regulation addresses the factors the Department will consider, pursuant to Section 202(d) of the IAA, in deciding whether to approve an accrediting entity's proposed fee schedule. The language in the proposed rule for § 96.8(b) is the same in the final rule and requires the Department to publish proposed fee schedules in the
Federal Register
for public comment. The Department believes this will increase the transparency of an accrediting entity's fee schedules, particularly proposed changes, while also adhering to the requirements in the IAA.

2.
Comment:
Several commenters suggest that fees charged by accrediting entities should be refundable for services not rendered. Several commenters also recommend the Department add a provision prohibiting accrediting entities from charging additional fees for siblings.

Response:
Section 96.8(c)(1) requires that the fees for accreditation and approval not be refundable. The Department is not changing this provision because we believe it protects an accrediting entity's capacity to perform its roles and functions required by law and its agreement with the Department, while remaining consistent with Section 202(d) of the IAA. The Department does not agree that a new provision should be added to restrict the possible fee structure for an accrediting entity; however, we encourage interested persons to utilize the public comment process outlined in § 96.8(b).

Section 96.10 Suspension or Cancellation of the Designation of an Accrediting Entity by the Secretary

1.
Comment:
Several commenters propose adding the word “sufficient” in front of evidence in § 96.10(c)(1).

Response:
The Department is not making any changes in response to this comment because we do not agree “evidence” needs to be qualified in this standard. The procedures outlined in § 96.10(b) provide the accrediting entity with an opportunity to demonstrate that suspension or cancellation by the Secretary is unwarranted, in accordance with the agreement with the Department pursuant to § 96.9.

Subpart E—Evaluation of Applicants for Accreditation and Approval

Section 96.25 Access to Information and Documents Requested by the Accrediting Entity

1.
Comment:
One commenter is concerned the proposed change to § 96.25 is overly broad and should specify that the intent of “deliberate destruction of documentation” is to prevent an accrediting entity from accessing the documentation. Several commenters indicate support for the change but are concerned an accrediting entity could take adverse action against an agency or person for following its own document retention and disposition policy. These commenters recommend that an accrediting entity be required to provide notice specifying which documentation and information the agency or person must retain.

Response:
Section 96.25(c) permits an accrediting entity to take appropriate adverse action against an agency or person based solely on an agency or person failing to provide requested documents or information to an accrediting entity. The final provision in § 96.25(c) permits an accrediting entity to take appropriate adverse action if the agency or person “engages in deliberate destruction of documentation or provides false or misleading documents or information” to an accrediting entity. An accrediting entity requires access to an agency or person's information and documents to perform its functions authorized by the Secretary. Section 96.25(a) outlines the access and § 96.25(b) limits the accrediting entity's access to Convention adoption files and cases subject to the UAA, with the exception of first-time applicants for accreditation or approval. The requirements in this regulation, along with § 96.42 on the retention, preservation, and disclosure of adoption records, provide sufficient information for an agency or person about the disclosure requirements to an accrediting entity.

With regard to adverse action, section 96.76 outlines the procedures governing adverse action by an accrediting entity. These procedures would guide an accrediting entity's procedures for taking appropriate adverse action based on § 96.25(c).

The Department has modified § 96.25(c) in the final rule to clarify that the deliberate destruction of documentation relates to the documents or information requested by the accrediting entity that requires or requests the documentation to evaluate an agency or person for accreditation or approval and to perform its oversight, enforcement, renewal, data collection, and other functions.

Section 96.26 Protection of Information and Documents by the Accrediting Entity

1.
Comment:
Several commenters disagree with adding “foreign” to § 96.26(b) because they do not think an accrediting entity should make disclosures of information and documents to a foreign authority unless such disclosure falls into a circumstance outlined in § 96.26(b). The commenters suggest such disclosures to a foreign authority be coordinated through the Department of State.

Response:
We have made a change to § 96.26(b) by removing the term “foreign” as recommended. This change clarifies that documents and information may not be disclosed by an accrediting entity to a foreign authority unless the disclosure meets the circumstances outlined in § 96.26(b)(1) through (3).

2.
Comment:
Several commenters are concerned § 96.26(d) would limit the requirements for an accrediting entity to

maintain accurate records. The commenters suggest this could weaken the Department of State's oversight of an accredited entity.

Response:
Section 96.26(d), formerly the last sentence of § 96.26(c), clarifies the minimum period for an accrediting entity to maintain complete and accurate records of all information it receives related to an agency or person and the basis for accrediting entity decisions concerning the agency or person. The Department has made a change to clarify that the Secretary will only lengthen, not shorten, the requirement for an accrediting entity to maintain a complete and accurate record of all information it receives related to an agency or person, and the basis for an accrediting entity's decisions concerning the agency or person.

3.
Comment:
Several commenters suggest requiring an accrediting entity to disclose to an agency or person any information or records the accrediting entity uses as the basis of an adverse action.

Response:
We did not make any changes in response to this comment. The Department did not propose changes to subpart K, which includes procedures and responsibilities of an accrediting entity for decisions leading to the imposition of adverse action.

Section 96.27 Substantive Criteria for Evaluating Applicants for Accreditation or Approval

1.
Comment:
Several commenters are concerned that removing the word “only” from § 96.27(c) would allow an accrediting entity greater flexibility and discretion, outside the scope of subpart F, when evaluating applicants for accreditation or approval.

Response:
To avoid any confusion about how the standards are applied, we have not included the proposed changes to § 96.27(c) in the final rule.

Subpart F—Standards for Convention Accreditation and Approval

Section 96.29 Compliance With All Applicable Laws

1.
Comment:
Commenters object to the provisions in the proposed § 96.29(a) requiring that an agency or person has not provided any adoption service without accreditation or approval, or as an exempted or supervised provider. Commenters also object to the proposed requirement that an agency or person demonstrate it has not provided any adoption services in a foreign country without authorization. In addition, commenters point out that these prohibitions are not constrained in time, not limited in terms of pre- or post-IAA or Convention, nor do they contemplate how agencies and persons must document their compliance.

Response:
The Department is reorganizing the material in § 96.29 and has removed the proposed § 96.29(a) from subpart F. The provisions in the proposed § 96.29(b) are already included in § 96.25 where issues relating to an accrediting entity's access to information and documents are found. The parts of the proposed § 96.29(c) and (d) relating to compliance with the laws of jurisdictions where agencies and persons provide adoption services are now retained in § 96.30(e). For information about disposition of provisions in the proposed § 96.29 relating to foreign country authorization in line with Convention Article 12, see comment 4, below.

2.
Comment:
Several commenters are concerned with the provisions in the proposed § 96.29(d) concerning compliance with the laws of each jurisdiction in which an agency or person operates. They state that foreign laws are often vague or contradictory and compliance is difficult to achieve. Some also note that even when laws are clear, some countries of origin lack the infrastructure to act on them quickly enough to meet urgent needs of children waiting for intercountry adoption placements.

Response:
The requirement for agencies and persons to act in compliance with all applicable laws tracks closely with the minimum requirements of the accreditation regulations in the IAA found in Section 203(b)(1)(F) (42 U.S.C. 14923(b)(1)(F)): “The agency has established adequate measures to comply (and to ensure compliance of theirs and clients) with the Convention, this chapter, and any other applicable law.” To clarify the provisions relating to compliance with all applicable laws, the final rule includes the first sentence of the proposed language of § 96.29(d) as new section 96.30(e).

3.
Comment:
Several commenters note that even when laws in some countries of origin are known there may be different interpretations of laws as well as waivers or exceptions that may be informally permitted and unevenly administered. These factors make it difficult to determine compliance with applicable foreign laws. Commenters recommend that issues of compliance with foreign laws be referred to law enforcement, noting further their belief that it is not an accrediting entity role to unilaterally determine if an agency has violated a law. The commenters question the practicality of expecting accrediting entities to have and maintain expertise in domestic and foreign law.

Response:
The IAA gives accrediting entities the responsibility to assess agency and person substantial compliance with accreditation standards, which include requirements to comply with applicable foreign laws. Law enforcement concerns may emerge in the context of an accrediting entity's accreditation, approval, or monitoring and oversight of an agency or person and, where appropriate, the agency's or person's conduct may be referred to law enforcement entities for investigation and possible prosecution. The role of law enforcement is separate from that of an accrediting entity, which is to provide monitoring and oversight of an agency's or person's compliance with standards for accreditation and approval.

4.
Comment:
Several commenters observe that the proposed rule introduces a new standard in the proposed §§ 96.29(a), (c), and (d) requiring foreign country authorization to provide adoption services in countries requiring such authorization. They note that determining country of origin authorization requirements can be difficult.

Response:
The Department removed the specific references to foreign country authorization in the final rule. However, if a country of origin requires authorization in the context of obligations under Article 12, an agency or person must obtain such authorization to comply fully with the laws of the foreign country where they or it operates.

Licensing, Compliance With Applicable Laws, and Corporate Governance

Section 96.30 State Licensing and Compliance With All Applicable Laws

The Department is revising the heading associated with this Section and adding § 96.30(e), formerly the first half of the proposed § 96.29(d).

Section 96.32 Internal Structure and Oversight

1.
Comment:
Many commenters oppose the proposed retention requirements for records relating to the selection, monitoring, and oversight of foreign supervised providers, financial transactions to and from foreign countries, and records relating to complaints. The commenters are concerned this new requirement will significantly increase the costs to an agency or person to comply with the new standard for document retention. Several commenters note § 96.42

includes the requirements for the retention, preservation, and disclosure of adoption records. The commenters note the retention requirement in § 96.42 for adoption records defers to applicable State law, which may require adoption records be retained permanently. Several commenters are also concerned that the change to the standard could violate State laws in some jurisdictions.

Response:
In response to public comments, the final rule does not include the provision in § 96.32(c) of the NPRM. The final rule continues to require the agency or person to keep permanent records of the meetings and deliberations of its governing body and of its major decisions affecting the delivery of adoption services.

Financial and Risk Management

Section 96.33 Budget, Audit, Insurance, and Risk Assessment Requirements

1.
Comment:
Commenters want the term “liquid assets” removed from the proposed changes to § 96.33(e) because “liquid assets” are already included in the standard, as “liquid assets” are a type of asset. The commenters suggest using the term “or other assets,” which is inclusive of liquid assets. Commenters are also concerned that emphasizing liquid assets will make it more difficult for smaller agencies and persons to keep sufficient assets liquid and in reserve.

Response:
The final rule does not include the proposed reference to liquid assets. Also, the final rule does not retain the proposed deletion of “financial resources.” To avoid possible confusion or ambiguity as to these terms, the Department retained the existing CFR language in § 96.33(e).

2.
Comment:
Several commenters recommend the reserve requirement should apply only to an agency or person's intercountry adoption work. These commenters note that it is more challenging for agencies and persons that operate non-adoption programs to meet the reserve requirement of the standard.

Response:
We have not included limiting the cash and other asset reserves solely to an agency or person's intercountry adoption programs. The reserve provisions are meant to protect prospective adoptive families by considering the financial viability of the entire organization, including where the agency or person engages in other work beyond intercountry adoption.

3.
Comment:
One commenter requests the Department clarify why it is moving the last sentences of § 96.33(e) to a new section, § 96.33(f). The commenter notes if an agency or person ceases to provide or is no longer permitted to provide adoption services in intercountry adoption cases, the transfer plan required by the standard is not enforceable. The commenter notes agencies and persons are increasingly unwilling to accept transfer cases due to concerns that the agency or person may be found out of substantial compliance with the regulations. The commenter suggests the Department should play a greater role helping agencies and persons to transfer adoption cases and records.

Response:
Section 96.33(f) remains unchanged from its formulation in the proposed rule. The standard requires an agency or person to have a plan to transfer its intercountry adoption cases if it ceases to provide or is no longer able to provide adoption services in intercountry adoption cases. Making a transfer plan benefits adoptive families in the process of adopting because it includes provisions for reimbursement to them of funds paid for services not yet rendered. For purposes of clarity, we have included this standard in its own section. The Department's role when an agency or person is unable to transfer its intercountry adoption cases consistent with its plan is outlined in §§ 96.7 and 96.77.

Section 96.34 Compensation

1.
Comment:
Several commenters request clarification about the meaning of a “plan to compensate” in § 96.34(a). These commenters recommend that the Department use the phrase “or offers to compensate” to clarify the requirement of the standard.

Response:
We have modified § 96.34(a) to clarify that any payment or offer of payment that includes an incentive fee or contingent fee for a child placed for adoption is not in compliance with this standard. The final rule broadens the requirement to ensure that any individual or entity involved in an intercountry adoption is not compensated with an incentive fee or contingent fee for a child located or placed for adoption. The final rule addresses known practices to circumvent this limitation on the payment of incentive and contingent fees.

2.
Comment:
In several sections of the proposed rule commenters expressed uncertainty of our meaning when we inserted the term “or entity” after the word “individual.”

Response:
The Department made no change in response to the comments regarding use of the terms “individual” or “entity.” In their common usage, the terms differentiate between a single person—an individual—and a group of individuals such as a corporation or agency—an entity. This distinction helps to clarify that the compensation limits in § 96.34 have broad application.

3.
Comment:
In § 96.34(d), commenters oppose the proposed formulation “what such services actually cost” in the country for lack of clarity, particularly regarding who determines what services actually cost in every country program. The commenters also point out that what a service costs is influenced by many factors, and that it will be difficult for an accrediting entity to determine actual costs given the variables involved.

Response:
The standard in § 96.34(d) relates to avoiding unreasonably high fees, wages or salaries paid to directors, officers, employees, and supervised providers along with any other individual, or entity involved on behalf of an agency or person. The Department has not retained the proposed phrase “what services actually cost,” including instead “taking into account the country in which the services are provided and norms for compensation within the intercountry adoption community in that country, to the extent that such norms are known to the accrediting entity.” This standard provides several factors to consider in making such a determination including, the country, the location, number, and qualifications of staff, workload requirements, budget, and the size of the agency or person (such as a for-profit organization).

Ethical Practices and Responsibilities

Section 96.35 Suitability of Agencies and Persons To Provide Adoption Services Consistent With the Convention

1.
Comment:
A commenter requests clarification as to whether the new disclosure requirement in § 96.35(b)(6) relates to investigations by foreign authorities that are known to an agency or person.

Response:
Section 96.35(b)(6) adds a new element to the disclosure requirement relating to any known past or pending investigations by foreign authorities.

2.
Comment:
A commenter raised a concern about a disclosure requirement in § 96.35(b)(7) that an agency of person must disclose “any instances where the agency or person has been found guilty of any crime under Federal, State, or foreign law . . .” The commenter pointed out that in some criminal cases a defendant may be permitted by the court to enter a plea of
nolo contendere
resulting in a conviction, but without

admission or finding of guilt. The commenter was concerned that an agency or person may have been convicted of illicit activity without being found guilty and would not be under obligation to disclose the conviction.

Response:
The Department made no changes to this section. We decline to look behind the court's acceptance of the nolo contendere plea. Only those convictions in which an agency or person is found guilty of a crime requires disclosure under § 96.35(b)(7). We note that other parts of § 96.35,
i.e.,
paragraphs (b)(9) and (c)(1), may require disclosure of conduct of concern that leads to a conviction even without specifying guilt, or that is inconsistent with the principles of the Convention.

3.
Comment:
One commenter is concerned the proposed change in § 96.35(b)(9) from activities that “are” inconsistent with the principles of the Convention to activities that “may be” inconsistent could create ambiguity for an agency or person about the disclosures required by this standard.

Response:
The Department removed the proposed changes to “may be” in §§ 96.35(b)(9) and 96.35(c)(4) replacing them with “are.”

4.
Comment:
Commenters are concerned in § 96.35(c)(2) that the broader language requiring disclosure of employees with formal disciplinary actions or known investigations might be too broad because it would include employees who are not involved in the adoption process. One commenter suggests the new standard would require an agency or person to disclose to an accrediting entity any disciplinary actions, such as reporting late to work.

Response:
The Department has revised the standard to revert to the language limiting the section to senior management positions but has retained the language adding formal disciplinary actions. Disciplinary action taken against employees at any level relating to lateness for work would fall outside the scope of these changes because they are not related to financial irregularities. Furthermore, the scope of these changes in this section is likely to reassure prospective adoptive parents that agencies and persons do due diligence across their entire organization to detect and address financial irregularities by senior management.

Section 96.36 Prohibition on Child Buying and Inducement

1.
Comment:
Some commenters are concerned the proposed changes to § 96.36(a) would restrict agencies and persons from remitting reasonable payments for activities related to the adoption as outlined in the current § 96.36(a) as long as such payments are permitted by the child's country of origin and are not remitted as a payment or inducement to release the child. One commenter states that this change would prohibit an agency or person from making reasonable payments to address often severe medical needs for a child who had already been matched with prospective adoptive parents. The commenter notes that prohibiting such payment could be harmful to the best interests of a child.

Response:
In response to these comments, the Department has revised § 96.36(a), reintroducing the deleted portion relating to “reasonable payments.” We have also retained language in § 96.36(a) clearly prohibiting agencies and persons from “giving money or other consideration, directly or indirectly, to a child's parent(s), other individual(s), or an entity as payment for the child or as an inducement to release the child.” As we noted in 71 FR 8063, February 15, 2006, “This standard, derived from the current, longstanding DHS regulations at 8 CFR 204.3, protects birth parents, children, and adoptive parents. Regardless of how adoption services fees are described, characterized, or classified, if the fee is remitted as payment for the child, or as an inducement to release the child, then the standard is violated and appropriate action may be taken against an agency or person.” This standard is also consistent with DHS regulations at 8 CFR 204.304, which prohibit in Convention cases the improper inducement or influence of any decision concerning the placement of a child for adoption, consent to the adoption of a child, relinquishment of a child for purposes of adoption, or performance of any act by the child's parents that make the child eligible for classification as a Convention adoptee.

2.
Comment:
Commenters point out that the term “inducement” (found in both the current and proposed regulations at § 96.36(a)) is not defined in these regulations and suggests that the Department include a definition for this term that makes clear it would only be prohibiting “illicit” inducement.

Response:
The Department made no changes in response to these comments. Inducement in the context of this rule and in the DHS regulations governing the intercountry adoption of children from non-Convention countries under section 101(b)(1)(F) of the Immigration and Nationality Act (INA) (8 CFR 204.3(i)) and governing Convention adoptions under INA 101(b)(1)(G) (8 CFR 204.304(a)) refer to “the act of influencing an act or decision” and clearly encompasses the illicit conduct that the IAA and the Convention seek to eradicate. Whatever other benign meanings the term may have clearly do not apply here. The heading to § 96.36 already unambiguously employs the term “inducement,” associating it with the term “child buying,” leaving no question that “inducement” here refers to illicit conduct.

3.
Comment:
A commenter is concerned that the term “agent” has been too broadly interpreted and recommended we provide additional clarification.

Response:
To refine the standard in § 96.36(b), the Department added the term “supervised” and removed the term “and agents” from the section. These changes are consistent with the definition of “supervised provider” in § 96.2, which makes clear that “agents” are encompassed in the meaning of supervised provider.

Professional Qualifications and Training for Employees

Section 96.37 Education and Experience Requirements for Social Service Personnel

1.
Comment:
One commenter is concerned with the reference to “counseling” in § 96.37(a) and recommends changing it to “assessment” to more accurately reflect the services provided by agencies and persons.

Response:
Apart from adding a heading to § 96.37(a), the Department did not propose a substantive change to this standard. Section 96.37(a) applies to employees of an agency or person with appropriate qualifications and credentials to perform work requiring application of clinical skills and judgment. This standard does not require that an agency or person have employees that provide all of the adoption-related social service functions outlined in § 96.37(a), but it does require that if an agency or person uses employees for such functions, that any such employee have the appropriate qualifications and credentials to perform functions requiring clinical skills and judgment, counseling among them.

2.
Comment:
A commenter suggests that the proposed change to § 96.37 adding “training” to the standard is duplicative of the training requirements for social service personnel in § 96.38 and should be deleted.

Response:
The Department has retained the proposed change to § 96.37(c) thus expanding the existing standard to include training in the

professional delivery of intercountry adoption services for the agency or person's executive director, the supervisor overseeing a case, or the social service employee providing adoption-related social services that require the application of clinical skills and judgment. This aspect of the standard is not addressed in other areas of the regulations.

3.
Comment:
One commenter requests clarification about why the Department proposes to include headings for § 96.37(a), (b), and (c) and if the headings provide a change to the meaning of the standard.

Response:
Section 96.37 has four paragraphs with headings. The Department added headings to the other parts of the standard to enhance clarity, not to change the underlying meaning of the existing regulation.

Section 96.38 Training Requirements for Social Service Personnel

1.
Comment:
One commenter seeks clarification as to whether in accordance with § 96.38(d) an agency or person has the discretion to exempt newly hired employees as it relates to § 96.38(b). Also, the commenter thinks the use of the term “exemption
”
in the context of this section needs clarification.

Response:
We have modified § 96.38(d) to make it clear that an agency or person may, but is not required to, exempt newly hired employees from elements of the orientation and initial training required in paragraphs (a) and (b) of this section. Such an exemption is only permitted if the newly hired employee was employed by an agency or person within the last two years and received the training requirements outlined in §§ 96.38, 96.39, and 96.40. Note that any exemption under § 96.38(d) is made solely by the employing agency or person, who have no need to seek such exemptions from another entity. We use this term “to exempt” or “exemption from” to mean “relieved from requirements
”
elsewhere in this or other training sections of the rule.

2.
Comment:
A commenter suggests adding in § 96.38(b) several new areas for training social service personnel and recommends adding several additional topics to the standard.

Response:
The Department revised the list of topics to include additional training requirements for social service personnel.

3.
Comment:
A commenter asks why the Department employed the term “
sociological . . .
problems” in § 96.38(b)(7) and asked for clarification, particularly related to the proposed language related to the possibility that such problems may not be reflected in the medical reports transmitted to prospective adoptive parents.

Response:
The Department revised the final rule by removing the term
“sociological”
from § 96.38(b)(7), relying on the remaining elements of this section to inform training relating to medical and psychological problems experienced by children and the possibility that such problems may not be reflected in the medical reports transmitted to prospective adoptive parents.

Information Disclosure, Fee Practices, and Quality Control Policies and Practices

Section 96.39 Information Disclosure and Quality Control Practices

1.
Comment:
Some commenters think the new provisions in § 96.39(a)(1) are unduly burdensome for agencies and persons to disclose detailed fee information about supervised and exempted providers to prospective adoptive parent(s) on initial contact.

Response:
In response to these comments, the Department has made several revisions to § 96.39 in the final rule. The final rule requires an agency or person to fully disclose to the general public and prospective client(s) the supervised providers in the United States and in the child's country of origin with whom they can expect to work and the usual costs associated with their services.

Responding to Complaints and Records and Report Management

Section 96.41 Procedures for Responding to Complaints and Improving Service Delivery

1.
Comment:
Several commenters raise concerns that the new definition of “complaint” and the changes in § 96.41(b) will increase the number of complaints and require significantly more disclosures to the Department pursuant to § 96.41(f). Commenters also state that the proposed changes expand the scope of complaints and would require agencies and persons to accept complaints from any individual or entity, even about matters unrelated to their intercountry adoption practice.

Response:
The Department withdraws the proposed definition of “complaint” and the proposed changes to § 96.41(b), retaining a reference to written or electronic and dated complaint submissions (by email or facsimile) in which the complainant is clearly identified. These changes recognize the validity of electronic forms of complaint and the value of complaints from birth parents, prospective adoptive parents, adoptive parents, or adoptees. Tracking and summarizing the complaints received pursuant to § 96.41(b) provides useful information regarding trends to agencies and persons, accrediting entities, and the Department.

2.
Comment:
Several commenters object to removing the language in § 96.41(b) that agencies and persons accept complaints from a complainant “that he or she believes raise an issue of compliance with the Convention, the IAA, the UAA, or the regulations implementing the IAA or UAA.” The commenters also raise concerns about the proposed definition of complaint in § 96.2, noting that its formulation used “
may raise
an issue of non-compliance with the Convention, the IAA, the UAA, or the regulations implementing the IAA and the UAA,” was different from the reference in § 96.41(b) of “
he or she believes
raise an issue of compliance.” The commenters are concerned that the use of “may raise” in the definition along with the perception that individuals and entities could submit complaints directly to the Department would sidestep the process for filing complaints outlined in §§ 96.69-71.

Response:
To improve clarity, the final rule does not include a definition of complaint in § 96.2. The final rule includes the reference to and most of the revisions to § 96.41(b) (as noted in its response to comment 1, above) returning to the formulation “he or she believes raise an issue of. . . .”

3.
Comment:
One commenter expresses concern that the changes to § 96.41(b) and to the new definition of complaint would permit complaints filed by anyone electronically without identifying the complainant. As written, this commenter thinks the changes would encourage anonymous complaints and that agencies and persons would be required to, but unable to, respond to such complaints.

Response:
In the final rule, the Department provides for electronic submission of complaints without a written signature to facilitate use of electronic means of communication while at the same time adding clear requirements to the standard in § 96.41(b) that each complaint must be dated and identify the complainant.

4.
Comment:
A commenter believes provisions in the proposed complaint definition allow for filing complaints directly with an accrediting entity, the Department, and even the Complaint Registry, which would create a direct contradiction to §§ 96.69(b) and 96.71(b)(1). Section 96.69(b) requires complainants who are parties to a specific intercountry adoption case to first file a complaint and attempt to seek

resolution with an agency or person before filing with the Complaint Registry.

Response:
We have withdrawn the new definition of complaint from the final rule, which removes the changes noted above that the commenter found suggestive of being contrary to the complaint procedures found in §§ 96.69 and 96.71.

Section 96.42 Retention, Preservation, and Disclosure of Adoption Records

1.
Comment:
One commenter, while not opposed to the revision, asked why it was necessary to include a reference to State law in § 96.42(b).

Response:
The Department added a reference to State law because the proposed rule broadens the disclosure requirements by deleting “non-identifying” from “information.” Section 401(c) of the IAA mandates that applicable State law govern the disclosure of adoption records and State law may limit the information an agency or person may make available to an adoptee or adoptive parent(s) of minor children.

Section 96.43 Case Tracking, Data Management, and Reporting

1.
Comment:
Several commenters request the Department add “whenever possible . . .” for information and reports on disruptions in § 96.43(b)(3) as it is in the rule for dissolutions in § 96.43(b)(4). The commenters maintain obtaining the requested information is difficult, particularly when adoptive parents are unwilling to provide the information to the agency or person.

Response:
In response to public comments, the final rule reflects the removal of all proposed changes to § 96.43. Cooperation between the Department, the accrediting entities, and agencies and persons in recent years with regard to adoption instability matters, including reporting on disruption cases, has proven to be robust and effective. The proposed expanded reporting for disrupted placements includes information that is often already provided by agencies and persons reporting on disrupted placements.

2.
Comment:
Several commenters note that removing the phrase “set forth in the country of origin,” in § 96.43(b)(6) significantly broadens the scope of information agencies and persons will be required to provide the Department. The commenters also note agencies and persons would need time to comply with the reporting requirement due to the proposed significant changes to § 96.40.

Response:
The final rule reflects the removal of all proposed changes to § 96.43 and continues to reflect the annual reporting requirement in section 104(b)(7) of the IAA. (42 U.S.C. Ch 143 § 14914 (b)(7)).

Service Planning and Delivery

Section 96.45 Using Supervised Providers in the United States

1.
Comment:
Several commenters are concerned with the proposed changes in § 96.45(a)(2) requiring supervised provider compliance with the Convention, the IAA, the UAA, and their implementing regulations. One commenter thinks the proposed regulation is overly broad and tantamount to requiring supervised providers to become accredited to comply with the standard. The commenter recommends limiting the provision as follows: “In providing any adoption service, complies with the relevant section of the Convention, the IAA, the UAA, and regulations implementing the IAA and UAA for the adoption service being provided.”

Response:
The Department modified the final rule to reflect this suggested language.

2.
Comment:
One commenter, pointing to proposed changes to § 96.45(b)(9), is concerned the changes would expose a supervised provider in the United States to requests for information from accrediting entities with no jurisdiction over the accreditation or approval of the primary provider. Such inquiries would be burdensome and lack authority.

Response:
In response to this comment, the Department is adding clarifying information about a requesting accrediting entity's jurisdiction. With more than one accrediting entity, an accrediting entity could be responsible for monitoring and oversight of a primary provider, even though it was not the accrediting entity to issue the primary provider's accreditation or approval. The final rule reflects this requirement for supervised providers to respond to an accrediting entity's request for information. However, we have modified the rule to add “. . .
or an accrediting entity with jurisdiction over the primary provider”
to § 96.45(b)(9) to clarify that the requesting accrediting entity must have jurisdiction over the primary provider.

Section 96.46 Using Providers in Foreign Countries

1.
Comment:
Commenters remarked that the proposed rule stated the Department would not propose changes to the regulations relating to foreign supervised providers but in fact made a few changes to § 96.46.

Response:
The Department noted in its preamble to the proposed rule
3

that it was not addressing regulatory changes to accreditation standards relating to foreign supervised providers. Instead, the preamble pointed to a consultative process with stakeholders to address a wide range of related standards. Most of the changes introduced in the proposed rule in § 96.46 were minor corrections or clarifications. The one substantive change in this section, found in § 96.46(b)(7) and (8), requires the primary provider to include in the agreement with foreign supervised providers that the foreign supervised provider's fees and expenses will be billed to and paid by the client(s) through the primary provider. This change prohibits foreign supervised providers from requiring direct payments for adoption services abroad from prospective adoptive parents, which would expose them to potential abuses such as overcharging.

3
85 FR 74497, November 20, 2020.

2.
Comment:
A commenter points out the benefit of requiring all foreign fees to be paid through the primary provider to mitigate the potential for fraud and illicit financial practices, but also notes the need to preserve provisions lost to the removal of § 96.46(b)(8), provisions for refundability of fees paid overseas.

Response:
The Department included in the final rule a provision in § 96.46(b)(7) requiring the primary provider to provide a written explanation of how and when such fees and expenses will be refunded if the service is not provided or completed and will return any funds collected to which the client(s) may be entitled within sixty days of the completion of the delivery of services.

3.
Comment:
Several commenters recommend removing the new provisions in § 96.46(b)(7). They think requiring primary providers to bill prospective adoptive parents for and pay fees directly to foreign supervised providers is inefficient and would unnecessarily add administrative costs to prospective adoptive parents for making wire transfers on their behalf. The commenters observe this would limit families using other payment options open to them such as domestic wire transfers or domestic checking. These commenters recommend allowing prospective adoptive families to take care of their own wire transfers to pay for fees in country, including those due to foreign supervised providers. Other commenters question the stated premise on which the change was based, namely

that it was meant to protect adoptive families from transporting large sums of cash to countries of origin. These commenters argue that transporting cash to is no longer standard practice and that adoptive families typically use bank wire transfers instead.

Response:
The Department retained the changes in § 96.46(b)(7) in the final rule. This standard applies only to fees and expenses related to providing adoption services. These services are enumerated in the supervisory agreement between the primary provider and the foreign supervisor, pursuant to § 96.46(b)(1). Fees and expenses for other services in the country of origin may be paid for directly by prospective adoptive parents. The elements in this standard reinforce in an important way the supervisory relationship between primary providers and foreign supervised providers as they require active primary provider oversight of the receipt and expenditure of funds relating to adoption services provided abroad.

Standards for Cases in Which a Child Is Immigrating to the United States (Incoming Cases)

Section 96.47 Preparation of Home Studies in Incoming Cases

1.
Comment:
A commenter recommends deleting “counseling” from § 96.47(a)(3). The commenter thinks this change would bring § 96.47(a)(3) into closer alignment with 8 CFR 204.311(c)(5), (c)(8), (c)(9), and (g)(4).

Response:
In response to this comment, the Department revised § 96.47(a)(3) to include the language “preparation” in addition to “counseling” and “training.” Counseling, where indicated, may inform the home study, whether provided by a home study preparer licensed to provided formal counseling, or when the family is referred to a different professional licensed to provide it. Preparation would include a wide variety of work provided by the home study preparer short of formal counseling for which a separate license would be required.

2.
Comment:
Several commenters are concerned about the requirement in § 96.47(e)(1) to inform the prospective adoptive parent(s) prior to USCIS if the agency or person withdraws its recommendation of the prospective adoptive parent(s) for adoption. In their view, to provide for the child's safety, it may be in the best interests of the child to notify USCIS first.

Response:
The Department made no revisions to the order in which agencies and persons must notify prospective adoptive families and USCIS of their withdrawal of a recommendation in favor of the family adopting. We did add the primary provider as an additional entity to notify, if appropriate. The notification requirements in § 96.47(b)(1) and (2) allow expeditious notification of prospective adoptive parents and USCIS. An agency or person is not required to wait five business days to provide adoptive families with written notice of the withdrawal, just that it do so within five business days of its decision to withdraw. Likewise, the regulation does not insist that an agency or person wait five days before notifying USCIS. In practical terms, once the agency or person decides to withdraw its recommendation of the family to adopt, it can notify the family in writing immediately following the decision and can notify USCIS in writing immediately thereafter, causing no delay that would be contrary to the best interests of the child.

3.
Comment:
A commenter is concerned that § 96.47(e) is unclear as to what involvement and responsibilities a primary provider would have if it was not the entity that conducted or approved the home study.

Response:
The Department is revising § 96.47(e) to include notification of the primary provider in the case. Because the primary provider as identified in § 96.14 is responsible for ensuring the six adoption services are provided in an intercountry adoption case as provided in § 96.44, notification is essential to its ability to perform its overarching function in the case. We also revised § 96.47(e)(1) in the final rule to require the agency or person, if applicable, to make reasonable efforts to also notify the primary provider of its withdrawal of any approval of the home study.

4.
Comment:
Many commenters recommend the Department remove “good cause” from § 96.47(e)(3).

Response:
The Department removed the reference to “good cause” from the final rule and revised § 96.47(e)(3) to require that an agency or person maintain written records of the withdrawal of its recommendation and/or approval, the step(s) taken prior to reaching such a decision, and the reasons for the withdrawal.

5.
Comment:
Several commenters believe the proposed language in the proposed § 96.47(e)(4) and (5) is repetitive of other provisions applicable to home studies and should be omitted.

Response:
The Department removed § 96.47(e)(4) and (5) from the final rule in response to these comments.

Section 96.49 Provision of Medical and Social Information in Incoming Cases

1.
Comment:
A commenter requests the Department revise the reference to videotape and photograph to video and photo to make it clear the standard also includes digital videos and photographs.

Response:
The Department replaced all references to the term “videotape” with the term “video” in § 96.49 in the final rule but did not revise the term “photographs.” The Department believes the term “photographs” is inclusive of photographs taken with film or digitally.

§ 96.51 Post-Adoption Services in Incoming Cases

1.
Comment:
Several commenters are concerned that a dissolution could occur years after the adoption is finalized and any cost schedule would be obsolete. In addition, there are concerns this regulation would force ASPs to be experts in the laws of all 50 states where a dissolution could take place.

Response:
The Department did not retain a requirement to provide the cost for post-adoption services for all agencies and persons. The rule requires agencies and persons to inform prospective adoptive parents whether post-adoption services will be provided. Section 96.40 requires agencies and persons, before providing any adoption services, to provide expected total fees and expenses for post-placement and post-adoption reports. The Department encourages agencies and approved providers to assist adoptive families by providing post-adoption services where possible. Section 96.51(c) requires agencies and persons to provide post-adoption reporting in the adoption services contract if such reporting is required by a child's country of origin.

Section 96.52 Performance of Communication and Coordination Functions in Incoming Cases

1.
Comment:
Several commenters note the proposed changes in § 96.52(a)(1) would significantly increase reporting requirements for agencies and persons and that the new reporting requirements to U.S. and foreign Central Authorities are either already part of other reporting standards or not required by foreign authorities.

Response:
In response to the comments about the proposed changes to § 96.52(a)(1), the final rule reflects removal of the proposed new requirements in § 96.52(a)(1).

2.
Comment:
One commenter notes the addition of “including any updates

and amendments” to § 96.52(b)(1) should be further clarified by adding “when requested or required” by the relevant Central Authority. The commenter is concerned that if the Central Authority does not require such updates, the additional information could overwhelm Central Authorities and add costs for clients if the updates or amendments require translation.

Response:
In response to this comment, the Department revised § 96.52(b)(1) to include “any updates required by such competent authorities in the child's country of origin.” Agencies and persons must provide Central Authorities with the most up-to-date suitability information on the prospective adoptive parent(s).

3.
Comment:
One commenter notes the requirements under § 96.52(b)(4) is an action performed by the Department, not the agency or person, and should be deleted.

Response:
The Department did not delete this section. Section 96.52(b) retains the flexibility of the phrase “the agency or person takes all appropriate measures, consistent with the procedures of the U.S. Central Authority and the foreign country.” The Department has revised the final rule to clarify that this action could be to “confirm that this information has been transmitted to the foreign country's Central Authority or other competent authority by the U.S. Central Authority.” Providing this communication and coordination is important to ensuring that the Convention process is followed and to avoid unnecessary delays in the process.

4.
Comment:
One commenter observes that the requirement of § 96.52(d) is about an outdated practice related to the cost of replacing hard copies of home studies. The commenter notes this requirement of returning an original home study and/or the original child background study to the authorities that forwarded them is unnecessary.

Response:
The Department revised this standard in the final rule relying on agencies and persons to determine the appropriate course of action for disposition of case documents in the event the transfer of the child does not take place. Factors to consider include but are not limited to, the specific requirements, if any, of competent authorities in either the State or in the receiving country and the preference of prospective adoptive parent(s) to continue pursuing an adoption.

5.
Comment:
One commenter notes § 96.52(e) is overly broad and that a violation of any standard in Subpart F would also include a violation of § 96.52(e).

Response:
We have made no changes in the final rule in response to this comment about section 96.52(e). This final rule clarifies that the obligation in § 96.52(e) only applies to requirements that the Secretary has identified under existing authorities and made known (directly or via an accrediting entity) to agencies and persons.

Standards for Cases in Which a Child is Emigrating From the United States

Section 96.55 Performance of Convention Communication and Coordination Functions on Outgoing Convention Cases

1.
Comment:
One commenter is concerned that in § 96.55(c) the use of the word “original” in this context is outdated and asks why this standard only applies to the home study and child study and not other documents.

Response:
The requirement in § 96.55(c) derives from Article 19(3) of the Convention, which provides that: “If the transfer of the child does not take place, the reports referred to in Articles 15 (home study of prospective adoptive parents) and 16 (child background study) are to be sent back to the authorities who forwarded them.” The final rule allows accredited agencies and approved persons to meet this Convention obligation by considering the specific requirements, if any, of competent authorities in either the U.S. State or in the receiving country and the preference of prospective adoptive parent(s).

Subpart L—Oversight of Accredited Agencies and Approved Persons by the Secretary

Section 96.83 Suspension or Cancellation of Accreditation or Approval by the Secretary

1.
Comment:
Several commenters note their support of the due process elements of the revisions in § 96.83(b) governing suspension and cancellation of accreditation by the Secretary and requested the same due process be given to agencies and persons when an accrediting entity imposes adverse action.

Response:
The Department made no changes to the regulations in response to these comments. The circumstances associated with suspensions and cancellations by the Secretary under § 96.83 are more likely to involve complex fact patterns and emergent situations than the broader range of adverse actions imposed by an accrediting entity pursuant to subpart K. The revisions to § 96.83(b) include more detailed notice provisions warranted by the circumstances in such cases.

2.
Comment:
Commenters point out as written, § 96.83(c) mandates notification to entities including the Hague Permanent Bureau, State licensing authorities, Central Authorities where the agency or person operates, and other authorities as appropriate, of the Secretary's decision to suspend or cancel accreditation, seemingly before that decision has become final. Commenters request that the § 96.83(c) notifications occur only after the disclosures made to the agency or person at the time of the Secretary's written notice of its decision to suspend or cancel and after the process in § 96.84(a) and (b) permitting rebuttal of the decision on the facts.

Response:
The Department made no changes to § 96.83(a) requiring the Secretary to suspend or cancel the accreditation or approval when s/he finds the agency or person is substantially out of compliance with the standards in subpart F, nor to notification of suspension or cancellation pursuant to § 96.83(c). There is no expectation of delay of the effect of suspension or cancellation and no provision similar to § 96.77(a) by which the Secretary could delay the effect of suspension or cancellation. Furthermore, the provisions in § 96.84 allowing for withdrawal of suspension or cancellation by the Secretary assume the suspension or cancellation has already been notified pursuant to § 96.83(c) and provides for notification to the same authorities of the withdrawal.

Section 96.88 Procedures for Debarment With Prior Notice

1.
Comment:
Commenters request that in the proposed § 96.88(a), the Department provide additional information on the rationale for standard-specific non-compliance determinations.

Response:
The Department made no changes in response to these comments. The rationale for standard-specific non-compliance is demonstrated through conduct-specific information provided pursuant to § 96.88(a)(2). The two sections 96.88(a)(2) and 96.88(a)(3), in conjunction, will provide sufficient notice to agencies and persons to provide transparency and clarity to the adverse action notification process.

2.
Comment:
Several commenters are concerned the time allotted for the Department to respond to an agency's response to a notice of debarment hearing in the proposed § 96.88(b) and (c) precludes the agency or person from a meaningful response and allows the Department to gather additional or different evidence than was originally

relied upon without the agency having a similar opportunity. Similarly, commenters wonder why agencies and persons would not be entitled to conduct discovery.

Response:
The Department made no changes in response to this comment. As noted in the proposed § 96.88(c)(5), the procedures for debarment in § 96.88 are informal and permissive; the hearing officer may accommodate reasonable variations in the process. Information developed from all sources becomes part of the record and is available to all parties. Although there is no right to subpoena witnesses or conduct discovery, the agency or person may testify in person, offer evidence on its own behalf, present witnesses, and make arguments at the hearing. Taken together, these features offer a sound basis for an effective and fair proceeding.

3.
Comment:
One commenter is concerned that the Department, while permitting agencies to provide witnesses, may undermine that right by denying a visa to a foreign citizen willing to testify.

Response:
The Department has included the option for testifying via teleconference or to accept an affidavit or sworn deposition testimony at the discretion of the hearing officer if any witness is unable to appear. Obtaining a visa to appear in person should not prevent a witness in a foreign country from providing testimony in a debarment hearing. All testimony becomes part of the written record, the only record to be reviewed by the Secretary to make a debarment decision.

4.
Comment:
Citing the intent of Congress as stated in Senate Report 106-276 that the Secretary may take enforcement actions only after the established avenue of enforcement by the accrediting entity has been found wanting, one commenter recommends that any written notice of a debarment hearing explain why the accrediting entity with jurisdiction is not taking action in the case.

Response:
The Department made no change to the regulation in response to this comment and notes that the cited Senate Report comments on the Secretary's authority in IAA Section 204(b) to suspend or cancel accreditation decisions by accrediting entities. The procedures in § 96.88 relate to IAA Section 204(c) Debarment. Debarment is an exceptional proceeding outside of other enforcement actions established by the IAA, justified by circumstances that warrant exceptional action,
i.e.,
when “there has been a pattern of serious, willful, or grossly negligent failures to comply or other aggravating circumstances indicating that continued accreditation or approval would not be in the best interests of the children and families concerned.” IAA Section 204(c)(1)(B), (42 U.S.C. 14924(c)(1)(B)). In this situation, the Congress provided authority for the Secretary to institute debarment proceedings on the Secretary's own initiative and independent of action by an accrediting entity, though an accrediting entity may request or recommend the Secretary debar an agency or person.

Section 96.90 Review of Suspension, Cancellation, or Debarment by the Secretary

1.
Technical Correction:
The Department addresses in § 96.90(b) judicial review of final decisions by the Secretary pursuant to IAA Section 204(d) (42 U.S.C. 14924(d)). We erroneously stated in our proposed rule that if the petition to Federal Court raises an issue “whether the deficiencies necessitating a suspension or cancellation have been corrected,” the agency or person must first exhaust the procedures pursuant to § 96.84(b). The referenced procedures are found instead in § 96.84(c). We made this correction in the final rule.

2.
Comment:
Several commenters are concerned with the provisions in § 96.90(b) requiring, under certain conditions, that agencies and persons exhaust the process in § 96.84(c) before seeking judicial review. The commenters think this requirement exceeds the Department's authority to limit judicial review.

Response:
The Department has made no changes to the provisions in § 96.90(b). IAA Section 204(b) (42 U.S.C. 14924(b)) provides for agencies or persons to petition a Federal Court to set aside the Secretary's final suspension, cancellation, and debarment decisions. Section 96.84(a)-(b) and § 96.84(c) provide two distinct processes to seek the Secretary's review of their suspension and cancellation decisions: Section 96.84(a)-(b) provides for a time-limited basis for filing with the Secretary a statement along with supporting materials as to why the decision was unwarranted and an internal review on the merits. Section 96.90(b) also denotes at what point a decision becomes final and thus reviewable in Federal Court. Section 96.84(c) is different in character from and operates independently of questions of “unwarrantedness.” Section 96.84(c) executes the Secretary's authority in IAA Section 204(b)(2) (42 U.S.C. 14924(b)(2)) to terminate a suspension or permit reapplication in the case of cancellation, “at any time when the Secretary is satisfied that the deficiencies on the basis of which adverse action is taken under paragraph 1 have been corrected. . . .” Petitions under this section may be made regardless of whether the Secretary has made a final decision of suspension or cancellation pursuant to § 96.84(a) and (b) and IAA Section 204(d) (42 U.S.C. 14924(d)). Far from limiting an agency or person's right to judicial review in such instances, § 96.90(b) streamlines that review process by allowing the Secretary to resolve first the issue the IAA assigns her/him to resolve. The decision to terminate suspension or cancellation pursuant to § 96.84(c) is not a final decision subject to judicial review pursuant to IAA Section 204(d).

Subpart M—Disseminating and Reporting of Information by the Accrediting Entities

Section 96.92 Dissemination of Information to the Public About Accreditation and Approval Status

1.
Comment:
One commenter thinks the proposed deletion of § 96.92(b) will weaken the requirement for an accrediting entity to make information available to the public about an agency or person's accreditation and approval status. However, the commenter also notes the revision to § 96.92(a) will require an accrediting entity to make information available more regularly than the current quarterly requirement.

Response:
Subpart M is intended to help prospective adoptive parent(s) make informed decisions about accredited agencies and approved persons. The final rule requires an accrediting entity to provide information about agency and person activities in § 96.92(a) more frequently, at least monthly rather than quarterly. The final rule retains § 96.92(b), formerly § 96.91(b), in order to maintain the requirement for an accrediting entity to provide such information upon specific request to individual members of the public. The final rule retains the addition of “including, where relevant, the identity and conduct of any foreign supervised provider” to assist prospective adoptive parents to make more informed decisions about the selection of an agency or person.

Subpart R—Alternative Procedures for Primary Providers in Intercountry Adoption by Relatives

§ 96.100 Alternative Procedures for Primary Providers in Intercountry Adoption by Relatives

1.
Comment:
Several commenters welcome the effort to provide

regulations relating to adoption by relatives. Others expressed reservations that the proposed regulation will not produce the anticipated result of streamlining the process.

Response:
The Department made no changes to the proposed regulations in Subpart R except for withdrawing § 96.100(d) and renumbering Section 96.100(e) to become the new § 96.100(d). We agree with one commenter's statement that the relative adoption regulations balance services provided by close family members and services for which the primary provider is responsible. By limiting the required number of adoption services the primary provider must provide, the agencies or person's time commitment to such cases may be reduced, which is likely to reduce the cost of the services they provide in such cases.

2.
Comment:
Some commenters are concerned the new provisions are not sufficient to overcome the perceived risks to families and to agencies and persons for providing limited adoption services in relative cases. These commenters noted that providing adoption services 5 (post-placement monitoring) and 6 (disruption before final adoption) from the United States is difficult and it is unrealistic to expect an agency or person would have the capacity, knowledge, or relationships to effectively monitor a placement or be able to support the parties involved in a disrupted placement.

Response:
As envisioned by the IAA, adoption services 5 and 6 are important pieces of the regulatory process to protect the interests of children, birth parents, and prospective adoptive parents in intercountry adoption cases. Protecting those interests is no less a feature in the alternative procedures for intercountry adoption by relatives, and the final rule reflects this reality. Circumstances in each adoption case may vary and demand the primary provider's judgment and expertise with post-placement monitoring and transfer of the child to the custody of the adoptive family.

3.
Comment:
Several commenters point out the importance of training for prospective adoptive parent(s) in relative adoption cases but note the training elements in § 96.48 were not tailored to prepare adoptive families for adoption by relatives.

Response:
The Department made no changes to § 96.48 (preparation and training for prospective adoptive parents) in the final rule with respect to adoption by relatives. We agree prospective adoptive parent(s) adopting relatives will benefit from pre-adoptive training and preparation and that some parts of the training outlined in § 96.48 may be more relevant to the relative adoption context than others. See the plans for review of § 96.48 in paragraph II.E. of this preamble.

IV. Timeline for Implementing Changes in the Final Rule

All changes in the final rule, including those related to the new alternative procedures for adoption by relatives abroad in subpart R, become effective 180 days after publication of the final rule in the
Federal Register
.

V. Regulatory Analysis

Administrative Procedure Act (APA)

Consistent with the requirements in Section 203 of the Intercountry Adoption Act, as amended, the Department is issuing this final rule after having provided a period of public notice and comment on the rule in an NPRM published November 20, 2020.

Regulatory Flexibility Act/Executive Order 13272: Small Business

This section considers the cost to small business entities of the changes to the accreditation regulations in this final rule as required by the Regulatory Flexibility Act (RFA, 5 U.S.C.
et seq.,
Pub. L. 96-354) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under 5 U.S.C. 553(b). The IAA in section 203(a)(3) (42 U.S.C. 14923(a)(3)) provides that subsections (b), (c), and (d) of 5 U.S.C. 553 apply to this rulemaking. Consistent with the Regulatory Flexibility Act, we prepared a final regulatory flexibility analysis, which requires the following elements:

(1) A Statement About the Need for and Objectives of the Rule

We refer the reader to the supplemental information on the final rule at the top of this preamble, which summarizes what we set out to accomplish in this final rule.

(2) A Statement of the Significant Issues Raised by the Public Comments in Response to the Initial Regulatory Flexibility Analysis (IRFA), a Statement of the Assessment of the Agency of Such Issues, and a Statement of any Changes Made in the Proposed Rule as a Result of Such Comments

The public comments addressed the content of our IRFA, both in general terms and in comments directed to specific proposed changes. Some commenters were concerned that the cumulative impact of the proposed changes to our accreditation rule would result in increased costs to agencies and to fees charged to families. This was the most consistent concern. Some commenters thought that our estimated costs of implementation were low or did not consider some of the tasks they felt were essential to implementing the proposed changes. Of the Department's roughly 170 proposed edits and substantive changes to the accreditation rule, nearly half received no public comments. For the most part, these were minor edits or corrections to the regulation text, with no impact on the cost of implementation. We incorporated these changes into the final rule.

For the proposed changes about which stakeholders provided comments, we evaluated them first on the basis of substance,
i.e.,
what was the commenter trying to communicate about the proposed rule, and how did that align with our underlying statute, the IAA, and the Convention? Did the commenter propose a change we had not previously considered? How did the proposed change impact other parts of the regulations?

Subsequent to these considerations on substance we considered the cost to agencies and persons of implementing the commenter-proposed regulatory changes: If a proposed change was incremental, was the cost to implement also small? Or would a proposed change increase implementation costs but significantly enhance the regulation's ability to promote the child and family protection objectives of the IAA and the Convention? These inquiries helped us balance the impact of commenter-proposed changes on substance and costs in our final rule. The section-by-section discussion of significant comments in preamble section III demonstrates this analytical approach.

Significant Comments:
Here are a few examples of significant public comments by commenters seeking relief from changes to the accreditation regulations they found too costly, too burdensome to implement.

(a) Standards Related to Adoption Placement Disruption Reporting

In section 96.50, which deals with agency and person responsibilities when a placement disrupts prior to the final adoption, our proposed changes strengthened standards for agency or person action when a disruption occurs.

Commenters recommended reducing or eliminating many of the changes, which they found overly burdensome to implement. Our policy priority remains to enhance protection of children who

are the most vulnerable when a disruption occurs. We believe it may be possible to develop a more streamlined standard on disruption reporting that minimizes costs while enhancing protection for children in these cases. We withdrew proposed changes to § 96.50 to gain a better understanding of stakeholder perspectives through consultation before proposing changes relating to disruption reporting.

(b) Standards Relating to Making Direct Payments to Orphanages or Other Entities for Children Pending Adoption

In the proposed rule in section 96.36 (a), we prohibited direct payments to birth parents, individuals, orphanages, or other institutions for the benefit of specific children and birth parents. Direct support payments by adoption service providers, their employees, and agents for specific child welfare activities, if permitted by the country of origin, has long been the subject of deep controversy among international child welfare and adoption experts. Our challenge is to sufficiently regulate the financial aspects of intercountry adoption to best mitigate the risk of these payments being diverted to support illicit practices directly or indirectly. Illicit practices we seek to avoid include, among others, recruiting children into institutions or child buying for purposes of intercountry adoption, or incentivizing institutions to retain children longer than necessary. Commenters argued strongly that this approach would be prejudicial to the best interests and wellbeing of children and noted in particular the importance of supporting children with medical conditions that require immediate attention that might not otherwise be possible without direct financial support. We found these arguments to be persuasive but remain deeply concerned about the possible diversion of these funds to illicit practices, which threaten the viability of intercountry adoption as a whole in addition to putting at risk the best interests and wellbeing of children. Our solution was to withdraw the prohibitions against making payments for child welfare and child protective services, while at the same time enhancing the standards for recordkeeping to increase oversight of the use of those funds. On balance, we wanted to respect the views of commenters about the value of providing targeted funds for child welfare and protective services in the period between matching and adoption, while imposing effective controls tracking the use of those funds.

(c) Standards Relating to Disclosure of Fees To Be Paid by Prospective Adoptive Parents

We decided to withdraw, pending further stakeholder consultation, proposed changes in section 96.40 that would broadly restructure the way adoption service providers report fees to the public. The public comments argued strongly not to implement these changes because of the high cost associated with implementation. Many commenters thought the new structure did not adequately represent the way adoption service providers categorize fees and estimated expenses for prospective adoptive parent(s), nor did it address practical barriers to implementing the new structure. We believe strongly in achieving greater transparency in adoption service provider fees while taking seriously concerns that the cost of implementation would be higher than we had assessed. This is another area in which we believe additional stakeholder consultations are required to identify viable solutions before moving forward with any changes to the regulations.

(3) A Description of the Comments Filed by SBA

The Chief Counsel for Advocacy of the Small Business Administration did not provide comments to our proposed rule.

(4) A Description and Estimate of the Number of Small Entities to Which the Rule Will Apply

Table 1 summarizes the number of adoption service providers accredited or approved to provide adoption services in intercountry adoption cases. As of July 2022, there were 84 accredited or approved firms. Of those firms, 72 are small business entities according to the definition of the North American Industry Classification System (NAICS), which the SBA relies on to define small business firms. Different industries define small business firms differently. NAICS Code 624110 is the industry code for Child and Youth Services and includes establishments such as adoption agencies or entities that provide child adoption services. NAICS code 624110 defines small firms as those with gross revenues of up to $15.5 million. We established agency and person annual gross revenues or receipts from their public filings of IRS form 990. Six firms are not small business entities because their annual gross receipts exceeded $15.5 million. For six adoption service providers we have no gross receipts data (a small number of firms are not required to file form 990). Table 1 shows the distribution of gross receipts for the remaining 72 small firms.

Table 1—U.S. Accredited and Approved Adoption Service Provider Firms Grouped by Annual Gross Receipts, NAICS Industry Code 624110

Firms grouped by self-reported gross receipts

Number of adoption
service
providers

Percentage of small firms

Other Firms:

Firms with Gross Receipts over $15.5M
6
N/A

All Small Firms:

Small Firms with Gross Receipts up to $15.5M
72
100%

Firms with Gross Receipts over $5M and up to $15.5M
7
10%

Firms with Gross Receiptsover $2M and up to $5M
12
17%

Firms with Gross Receiptsover $1M and up to $2M
11
15%

Firms with Gross Receiptsover $500K and up to $1M
14
19%

Firms with Gross Receiptsover $0 and up to $500K
28
39%

Firms for Which We Have No Financial Data
6
N/A

Total Number of U.S.Accredited and Approved Adoption Service Providers
84
N/A

(5) A Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Rule, Including Estimation of the Classes of Small Business Entities That Will Be Subject to the Requirements and the Types of Skills Necessary for Preparation of the Report or Record

Several of the new provisions in the final rule require additional record-keeping or reporting. The skills needed to perform the recordkeeping and reporting aspects of these changes to the regulation include planning for the form such recordkeeping will take, tracking of funds possibly provided using Excel or similar spreadsheet software, collecting information in a word processing document in some cases, and planning for receipt and review of reporting. Examples of increased recordkeeping and reporting:

• Proposed changes to section 96.32 include a new requirement for agencies and persons to disclose to the accrediting entities business relationships with organizations having interlocking leadership or whose leaders share family relationships. This requirement will apply to all agencies or persons, regardless of size. The standard will require ASPs to maintain lists and to report them to the accrediting entities. It will also require keeping the lists updated, which will result in some, though modest, ongoing implementation costs, after the first year.

• Section 96.36 concerns the prohibition on child buying and inducement. As discussed above, this final rule does not contain the prohibition on certain reasonable payments proposed in the NPRM. At the same time, we introduced greater accountability for all payments through record-keeping requirements for payments made or fees paid in connection with an intercountry adoption. Accounting for such payments will help decrease the risk of payments intended to benefit children being diverted to support illicit practices. The record-keeping requirements mentioned here apply to agency and person employees and supervised providers who must retain a record of all payments provided in connection with an intercountry adoption and the purposes for which they were paid.

• Changes to section 96.46 provide that fees and expenses paid to foreign supervised providers for adoption services abroad will be billed to and paid by adoptive families through the primary provider. This new requirement will mean agencies and persons will transfer some funds to foreign supervised providers that families may have been providing themselves. Agencies and persons already have strong oversight responsibilities and supervision requirements with respect to foreign supervised providers, which are reinforced by these changes. The primary provider in the case is obliged under these changes to provide a written explanation of how and when such fees and expenses will be refunded if not used for the purpose intended. This process will require greater awareness and accountability on the part of the primary provider regarding how funds provided for use abroad are dispersed and accounted for.

• In some cases, an agency or person becomes aware of new information related to suitability and may withdraw its recommendation of the prospective adoptive parents in the home study or approval of a home study. When this occurs, the new provisions in section 96.47(e) require the agency or person to notify appropriate parties, including USCIS, the primary provider, and the prospective adoptive parents. These disclosure requirements must be accomplished in a timely fashion. All disclosures can be made electronically to facilitate the urgency of the decision-making in the case and to limit the cost of disclosures.

• Finally, in section 96.51, which addresses post-adoption services, including dissolution of an adoption, we included a new requirement that agencies and persons that do not provide post-adoption services provide clients information about potential sources of post-adoption support services where they live.

(6) Description of the Steps the Agency Took To Minimize the Significant Adverse Economic Impact on Small Entities, Organizations, or Small Government Jurisdictions

As noted, the Department diligently considered the concerns of agencies and persons about the cost of these changes to the regulations. The Department's primary concern was to meet the obligations of the statute on which the regulations are based and the treaty obligations under the Convention. We undertook to balance those interests with the practical realities of implementing changes to the regulations by the regulated entities. Part of this process was to try to determine what the cost of implementation would be. In our proposed rule, we provided the calculations we used to determine these costs, including the sources of information relating to national wage averages for the various categories of work with appropriate skill sets. The Department relied on the extensive public record of regional and national wage earner salaries found in Department of Labor publications. These data offered the most thoroughgoing estimates of what workers such as social workers, trainers, bookkeeping clerks, and auditors earn on average nationally, along with descriptions of what kinds of work they perform.

In Table 2, we summarize the implementation costs associated with significant changes found in the final rule. As noted before, we withdrew some proposed changes and accepted some recommendations from public commenters to alter other proposed changes, all of which had the result of significantly reducing projected implementation costs of this final rule. We estimated average cost of implementing the proposed changes in the
proposed rule
was over $14,000 for each small firm in the first year. The current estimate for implementing the changes in the final rule is just over $4,000 for a single firm in the first year.

Table 2—Projected Costs To Implement Changes in the Final Rule

Projected Implementation Costs for Small Firms

A. Estimated Average First Year Costs for each Small Firm
$4,164.50

* For subsequent year average costs, see the bottom of this table.

Projected Implementation Costs for the Total Costs for all Small Firms and the Total of all Firms—all Sizes

B. Total Estimated Average First Year Costs for all Small Firms
$299,844

= A. × 72 small firms

C. Total Estimated Average First Year Costs for all Firms—all Sizes
$349,818

= A. × 84 firms of all sizes

New regulatory elements and computation of estimated average first year costs

A.
Estimated
average 1st
year $ costs
per small
firm

B.
Estimated
average 1st
year $ costs
—all small
firms

C.
Estimated
average 1st
year $ costs
—all firms

1.
§
96.32(e)(4):
ASP discloses to the AE any orgs that share with it any leadership, officers, boards, or f

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2024-14628. Public record. Not legal advice.