Notice2022-06272
Reporting for Calendar Year 2021 on Offsets Agreements Related to Sales of Defense Articles or Defense Services to Foreign Countries or Foreign Firms
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 28, 2022
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Abstract
This notice is to remind the public that U.S. firms are required to report annually to the Department of Commerce (Commerce) information on contracts for the sale of defense articles or defense services to foreign countries or foreign firms that are subject to offsets agreements exceeding $5,000,000 in value. U.S. firms are also required to report annually to Commerce information on offsets transactions completed in performance of existing offsets commitments for which offsets credit of $250,000 or more has been claimed from the foreign representative. This year, such reports must include relevant information from calendar year 2021 and must be submitted to Commerce no later than June 15, 2022.
Full Text
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<title>Federal Register, Volume 87 Issue 59 (Monday, March 28, 2022)</title>
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[Federal Register Volume 87, Number 59 (Monday, March 28, 2022)]
[Notices]
[Pages 17269-17270]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-06272]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
Reporting for Calendar Year 2021 on Offsets Agreements Related to
Sales of Defense Articles or Defense Services to Foreign Countries or
Foreign Firms
AGENCY: Bureau of Industry and Security, Department of Commerce.
ACTION: Notice; annual reporting requirements.
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SUMMARY: This notice is to remind the public that U.S. firms are
required to report annually to the Department of Commerce (Commerce)
information on contracts for the sale of defense articles or defense
services to foreign countries or foreign firms that are subject to
offsets agreements exceeding $5,000,000 in value. U.S. firms are also
required to report annually to Commerce information on offsets
transactions completed in performance of existing offsets commitments
for which offsets credit of $250,000 or more has been claimed from the
foreign representative. This year, such reports must include relevant
information from calendar year 2021 and must be submitted to Commerce
no later than June 15, 2022.
ADDRESSES: Submit reports in both hard copy and electronically. Address
the hard copy to ``Offsets Program Manager, U.S. Department of
Commerce, Office of Strategic Industries and Economic Security, Bureau
of Industry and Security (BIS), Room 3876, Washington, DC 20230.''
Submit electronic copies to <a href="/cdn-cgi/l/email-protection#e9a68f8f9a8c9dbb8c99869b9da98b809ac78d868ac78e869f"><span class="__cf_email__" data-cfemail="e9a68f8f9a8c9dbb8c99869b9da98b809ac78d868ac78e869f">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Emily Noel and Marina Youssef, Office
of Strategic Industries and Economic Security, Bureau of Industry and
Security, U.S. Department of Commerce, telephone: 202-482-4506; email:
<a href="/cdn-cgi/l/email-protection#327d54544157466057425d404672505b411c565d511c555d44"><span class="__cf_email__" data-cfemail="fbb49d9d889e8fa99e8b94898fbb999288d59f9498d59c948d">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Background
Section 723(a)(1) of the Defense Production Act of 1950, as amended
(DPA) (50 U.S.C. 4568 (2022)) requires the President to submit an
annual report to Congress on the impact of offsets on the U.S. defense
industrial base. Section 723(a)(2) directs the Secretary of Commerce
(Secretary) to prepare the President's report and to develop and
administer the regulations necessary to collect offsets data from U.S.
defense exporters.
The authorities of the Secretary regarding offsets have been
delegated to the Under Secretary of Commerce for Industry and Security.
The regulations associated with offsets reporting are set forth in part
701 of title 15 of the Code of Federal Regulations (Offsets
Regulations). Offsets are compensation practices required as a
condition of purchase in either government-to-government or commercial
sales of defense articles and/or defense services, as defined by the
Arms Export Control Act (22 U.S.C. 2778) and the International Traffic
in Arms Regulations (22 CFR 120-130). Offsets are also applicable to
certain items controlled on the Commerce Control list (CCL) and with an
Export Control Classification Number (ECCN) including the numeral ``6''
as its third character. The CCL is found in supplement no. 1 to part
774 of the Export Administration Regulations.
An example of an offset is as follows: A company that is selling a
fleet of military aircraft to a foreign government may agree to offset
the cost of the aircraft by providing training assistance to plant
managers in the purchasing country. Although this distorts the true
price of the aircraft, the foreign government may require this sort of
extra compensation as a condition of awarding the contract to purchase
the aircraft. As described in the Offsets Regulations, U.S. firms are
required to report information on contracts for the sale of defense
articles or defense services to foreign countries or foreign firms that
are subject to offsets agreements exceeding $5,000,000 in value. U.S.
firms are also required to report annually information on offsets
transactions completed in performance of existing offsets commitments
for which offsets credit of $250,000 or more has been claimed from the
foreign representative.
Commerce's annual report to Congress includes an aggregated summary
of the data reported by industry in accordance with the offsets
regulation and the DPA (50 U.S.C. 4568 (2022)). As provided by section
723(c) of the DPA, BIS will not
[[Page 17270]]
publicly disclose individual firm information it receives through
offsets reporting unless the firm furnishing the information
specifically authorizes public disclosure. The information collected is
sorted and organized into an aggregate report of national offsets data,
and therefore does not identify company-specific information.
To enable BIS to prepare the next annual offset report reflecting
calendar year 2021 data, affected U.S. firms must submit required
information on offsets agreements and offsets transactions from
calendar year 2022 to BIS no later than June 15, 2022.
Thea D. Rozman Kendler,
Assistant Secretary for Export Administration.
[FR Doc. 2022-06272 Filed 3-25-22; 8:45 am]
BILLING CODE 3510-JT-P
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