Effect of Imported Articles on the National Security

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Part 705

[Docket No. 980508121-8121-01]

RIN 0694-AB58

Effect of Imported Articles on the National Security

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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SUMMARY: The Department of Commerce is revising its regulation on the

``Effect of Imported Articles on the National Security'' (47 FR 14693,

April 6, 1982; redesignated at 54 FR 601, January 6, 1989; and amended

at 54 FR 19355, May 5, 1989 (15 C.F.R. Part 705)) to reflect amendments

to Section 232 of the Trade Expansion Act of 1962. These amendments

include requirements for additional action to be taken by the Secretary

of Commerce upon commencing, conducting, and completing an

investigation, and reporting the disposition of an investigation to the

Congress. The amendments also specify action to be taken by the

President in making a determination to take action to adjust the

imports of the article which is the subject of the investigation.

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

FOR FURTHER INFORMATION CONTACT: Brian H. Nilsson, Section 232

Investigations Program Manager, Office of Strategic Industries and

Economic Security, Room 3876, U.S. Department of Commerce, 14th Street

and Constitution Avenue, Washington, D.C. 20230; telephone: (202) 482-

3795, FAX: (202) 482-5650, and E-Mail: [email protected].

SUPPLEMENTARY INFORMATION:

Background

Section 232 of the Trade Expansion Act of 1962, as amended (19

U.S.C. 1862) (the Act) authorizes investigations to determine the

effects on the national security of imports of articles which are the

subject of a request for an investigation. The implementing regulation,

``Effect of Imported Articles on the National Security'' (47 FR 14693,

April 6, 1982; redesignated at 54 FR 601, January 6, 1989; and amended

at 54 FR 19355, May 5, 1989 (15 C.F.R. Part 705)), prescribes

procedures to be followed by the Department of Commerce (the

Department) to commence and conduct such investigations. Because of

amendments in 1988 to Section 232 of the Act, this regulation must be

revised to set forth requirements for additional action to be taken by

the Secretary of Commerce upon commencing, conducting, and completing

an investigation, and reporting the disposition of the investigations

to the Congress. The amendments also specify action to be taken by the

President in making determinations to take action to adjust the imports

of the article which is the subject of the investigation.

Changes to the regulation with reference to the applicable sections

of the Act include the following:

1. Section 705.3 (Commencing an investigation) is revised to

require the Secretary of Commerce to provide immediate notice to the

Secretary of Defense of any investigation initiated under the

regulation [Section 232(b)(1)(B) of the Act; 19 U.S.C. 1862(b)(1)(B)].

2. Section 705.7(d) (Conduct of an investigation) is revised to

require consultation by the Secretary of Commerce with the Secretary of

Defense regarding the methodology and policy questions raised in an

investigation, and, upon the request of the Secretary of Commerce, to

require the Secretary of Defense to provide an assessment of the

defense requirements of the article being investigated [Section

232(b)(2) of the Act; 19 U.S.C. 1862(b)(2)].

3. Section 705.10 (Report of an investigation and recommendation)

is revised to simplify the organization of the report of an

investigation, to reduce the time from one year to 270 days for the

Department to conduct an investigation and report to the President, and

to provide for publication in the Federal Register of an Executive

Summary of the report and availability to the public of the full report

[Section 232(b)(3); 19 U.S.C. 1862(b)(3)].

4. A new section 705.11 (Determination by the President and

adjustment of imports) is added to include in the regulation the

requirements imposed upon the President under Section 232(c) of the Act

[19 U.S.C. 1862(c)]. Upon submission of the report of an investigation

by the Secretary of Commerce in which the Department has found that an

article is being imported into the U.S. in such quantities or under

such circumstances as to threaten to impair the national security, the

President must take certain action within a specified period of time as

set forth in the Act.

5. A new section 705.12 (Disposition of an investigation and report

to the Congress) is also added to require reports to the Congress

pertaining to the disposition of each request, application, or motion

for an investigation and the operation of the Act's provisions [Section

232(e); 19 U.S.C. 1862(e)].

6. Finally, in sections 705.5(a) (Request or application for an

investigation), 705.7(b) (Conduct of an investigation), and 705.8(b)(6)

(Public hearings), technical revisions are made to update the

references to the Office of Industrial Resource Administration and the

room number of the Bureau of Export Administration Freedom of

Information Records Inspection Facility.

Rulemaking Requirements

The Department has made certain determinations with respect to the

following rulemaking requirements:

1. Classification under E.O. 12866: The revision of this regulation

(15 CFR Part 705) has been determined to be ``not significant'' for

purposes of Executive Order 12866.

2. Administrative Procedure Act and Regulatory Flexibility Act:

Because this rule pertains to agency procedures and the rulemaking

procedures of the Administrative Procedure Act (5 U.S.C. 553(b)(A)) or

any other are not applicable, this rule is not subject to the

analytical requirements of Section 3(a) of the Regulatory Flexibility

Act (5 U.S.C. 601-612).

3. Paperwork Reduction Act: This rule does not contain a collection

of information for purposes of the Paperwork Reduction Act of 1980 (44

U.S.C. 3501-3520).

4. Executive Order 12612: This proposed rule does not contain

policies with Federalism implications sufficient to warrant preparation

of a Federalism assessment under E.O. 12612.

[[Page 31623]]

List of Subjects in 15 CFR Part 705

Administrative practice and procedure, Business and industry,

Classified information, Confidential business information, Imports,

Investigations, National Security.

For the reasons set forth in the preamble, part 705 of Subchapter

A, National Security Industrial Base Regulations is amended as follows:

PART 705--[AMENDED]

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

follows:

Authority: Section 232 of the Trade Expansion Act of 1962, as

amended (19 U.S.C. 1862) and Reorg. Plan No. 3 of 1979 (44 FR 69273,

December 3, 1979).

2. Section 705.3 is amended by designating the existing text as

paragraph (a) and by adding a new paragraph (b), as follows:

Sec. 705.3 Commencing an investigation.

(a) * * *

(b) The Secretary shall immediately provide notice to the Secretary

of Defense of any investigation initiated under this part.

Sec. 705.5 [Amended]

3. In Sec. 705.5(a), the reference to ``Office of Industrial

Resource Administration'' is revised to read ``Office of Strategic

Industries and Economic Security.''

4. Section 705.7 is amended by revising paragraph (d) to read as

follows:

Sec. 705.7 Conduct of an investigation.

* * * * *

(d) The Department shall, as part of an investigation, seek

information and advice from, and consult with, appropriate officers of

the United States or their designees, as shall be determined. The

Department shall also consult with the Secretary of Defense regarding

the methodological and policy questions raised in the investigation.

Upon the request of the Secretary, the Secretary of Defense shall

provide the Secretary with an assessment of the defense requirements of

the article in question. Communications received from agencies of the

U.S. government or foreign governments will not be made available for

public inspection.

* * * * *

Secs. 705.7 and 705.8 [Amended]

5. In Secs. 705.7(b) and 705.8(b)(6), the references to room number

``H-4886'' are revised to read ``H-4525''.

6. Section 705.10 is revised to read as follows:

Sec. 705.10 Report of an investigation and recommendation.

(a) When an investigation conducted pursuant to this part is

completed, a report of the investigation shall be promptly prepared.

(b) The Secretary shall report to the President the findings of the

investigation and a recommendation for action or inaction within 270

days after beginning an investigation under this part.

(c) An Executive Summary of the Secretary's report to the President

of an investigation, excluding any classified or proprietary

information, shall be published in the Federal Register. Copies of the

full report, excluding any classified or proprietary information, will

be available for public inspection and copying in the Bureau of Export

Administration Freedom of Information Records Inspection Facility, Room

H-4525, U.S. Department of Commerce, 14th Street, N.W., Washington,

D.C. 20230; tel. (202) 482-5653.

7. A new section 705.11 is added to read as follows:

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

(a) Upon the submission of a report to the President by the

Secretary under Sec. 705.10(b) of this part, in which the Department

has found that an article is being imported into the United States in

such quantities or under such circumstances as to threaten to impair

the national security, the President is required by Section 232(c) of

the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862(c)) to take

the following action

(1) Within 90 days after receiving the report from the Secretary,

the President shall determine:

(i) Whether the President concurs with the Department's finding;

and

(ii) If the President concurs, the nature and duration of the

action that must be taken to adjust the imports of the article and its

derivatives so that the such imports will not threaten to impair the

national security.

(2) If the President determines to take action under this section,

such action must be taken no later than fifteen (15) days after making

the determination.

(3) By no later than thirty (30) days after making the

determinations under paragraph (a)(1) of this section, the President

shall submit to the Congress a written statement of the reasons why the

President has decided to take action, or refused to take action.

(b) If the action taken by the President under this section is the

negotiation of an agreement to limit or restrict the importation into

the United States of the article in question, and either no such

agreement is entered into within 180 days after making the

determination to take action, or an executed agreement is not being

carried out or is ineffective in eliminating the threat to the national

security, the President shall either:

(1) Take such other action as deemed necessary to adjust the

imports of the article so that such imports will not threaten to impair

the national security. Notice of any such additional action taken shall

be published in the Federal Register; or

(2) Not take any additional action. This determination and the

reasons on which it is based, shall be published in the Federal

Register.

8. A new section 705.12 is added to read as follows:

Sec. 705.12 Disposition of an investigation and report to the

Congress.

(a) Upon the disposition of each request, application, or motion

made under this part, a report of such disposition shall be submitted

by the Secretary to the Congress and published in the Federal Register.

(b) As required by Section 232(e) of the Trade Expansion Act of

1962, as amended (19 U.S.C. 1862(c)), the President shall submit to the

Congress an annual report on the operation of this part.

Dated: June 5, 1998.

Iain S. Baird,

Deputy Assistant Secretary for Export Administration.

[FR Doc. 98-15411 Filed 6-9-98; 8:45 am]

BILLING CODE 3510-JT-P