Rule2023-18772
Revisions of Temporary Denial Order Provisions To Allow for Extended Renewals in Certain Circumstances
Primary source
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Published
August 30, 2023
Effective
August 29, 2023
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Abstract
In this final rule, the Bureau of Industry and Security (BIS) amends the Export Administration Regulations (EAR) to create an additional option for the renewal of temporary denial orders (TDOs) by allowing BIS, under certain circumstances, to request that the Assistant Secretary for Export Enforcement renew an existing TDO for a period of no more than one year, rather than the current renewal period of no more than 180 days. This final rule also makes some conforming changes to remove references to the "EAA," the Export Administration Act (EAA), and add in their place references to "ECRA," the Export Control Reform Act (ECRA), to reflect the EAR's current statutory authority.
Full Text
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<title>Federal Register, Volume 88 Issue 167 (Wednesday, August 30, 2023)</title>
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[Federal Register Volume 88, Number 167 (Wednesday, August 30, 2023)]
[Rules and Regulations]
[Pages 59791-59793]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-18772]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Part 766
[Docket No. 230824-0204]
RIN 0694-AJ36
Revisions of Temporary Denial Order Provisions To Allow for
Extended Renewals in Certain Circumstances
AGENCY: Bureau of Industry and Security, Department of Commerce.
ACTION: Final rule.
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SUMMARY: In this final rule, the Bureau of Industry and Security (BIS)
amends the Export Administration Regulations (EAR) to create an
additional option for the renewal of temporary denial orders (TDOs) by
allowing BIS, under certain circumstances, to request that the
Assistant Secretary for Export Enforcement renew an existing TDO for a
period of no more than one year, rather than the current renewal period
of no more than 180 days. This final rule also makes some conforming
changes to remove references to the ``EAA,'' the Export Administration
Act (EAA), and add in their place references to ``ECRA,'' the Export
Control Reform Act (ECRA), to reflect the EAR's current statutory
authority.
DATES: This rule is effective on August 29, 2023.
FOR FURTHER INFORMATION CONTACT: John Sonderman, Director, Office of
Export Enforcement, Bureau of Industry and Security, Phone: (202) 482-
5079, Email: <a href="/cdn-cgi/l/email-protection#e0a5a5898e9195899299a0828993ce848f83ce878f96"><span class="__cf_email__" data-cfemail="3772725e5946425e454e77555e441953585419505841">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Background
A. Amendment of Temporary Denial Order Provisions To Allow for Extended
Renewals in Certain Circumstances
This final rule amends Sec. 766.24 of the EAR (15 CFR parts 730
through 774) by adding an additional sentence after the first sentence
of paragraph (d)(1). Specifically, this final rule creates an
additional option for the renewal of temporary denial orders (TDOs) by
allowing BIS, under certain circumstances, to request that the
Assistant Secretary for Export Enforcement renew an existing TDO for a
period of no more than one year, rather than the current renewal period
of no more than 180 days.
This final rule does not change the current language set forth in
the first sentence of paragraph (d)(1), which allows BIS to request the
renewal of a TDO for a period of 180 days by demonstrating that such a
renewal is necessary in the public interest to prevent an imminent
violation of the EAR. Rather, this final rule allows BIS to request the
renewal of a TDO for an extended period by demonstrating that a party
that is subject to an existing TDO has engaged in a pattern of
repeated, ongoing and/or continuous apparent violations of the EAR.
Under the current standard set forth in Sec. 766.24(d)(1), a
``violation may be `imminent' either in time or degree of likelihood''
(15 CFR 766.24(b)(3)), and BIS may show ``either that a violation is
about to occur, or that the general circumstances of the matter under
investigation or case under criminal or administrative charges
demonstrate a likelihood of future violations.'' Id. As to the
likelihood of future violations, BIS may show that the violation under
investigation or charge ``is significant, deliberate, covert and/or
likely to occur
[[Page 59792]]
again, rather than technical or negligent[.]'' Id. A ``lack of
information establishing the precise time a violation may occur does
not preclude a finding that a violation is imminent, so long as there
is sufficient reason to believe the likelihood of a violation.'' Id.
By contrast, this new standard requires BIS to show that since the
issuance of a TDO, the respondent has engaged in a pattern of repeated,
ongoing and/or continuous apparent violations of the EAR, including the
terms of the TDO, and that renewal of the TDO for an extended period is
appropriate to address such continued apparent violations. Such a
showing should demonstrate not just the likelihood of future imminent
violations of the EAR but should include specific facts demonstrating
past apparent violations of the EAR.
An extended renewal is appropriate, for instance, in cases where a
respondent has acted in apparent blatant disregard of the EAR, where a
respondent has attempted to circumvent or has otherwise appeared to
violate the restrictions of a TDO or the EAR, or has otherwise acted in
a manner demonstrating a pattern of apparent noncompliance with the
requirements of the EAR.
This final rule also makes conforming changes to paragraphs (a),
(b)(1) and (e)(5) of Sec. 766.24 to remove references to the `EAA' and
add in their place references to `ECRA' to reflect the EAR's current
statutory authority.
B. Importance of TDOs To Address Entities That Have Engaged in a
Pattern of Repeated, Ongoing, and/or Continuous Apparent Violations of
the Russia- or Iran-Related Restrictions
Since the imposition of sanctions on Russia in response to its
further invasion of Ukraine in February 2022, and the imposition of
similar sanctions on Belarus for its substantial enablement of Russia's
invasion, BIS has imposed a number of TDOs on entities that have
engaged in a pattern of repeated, ongoing, and/or continuous apparent
violations of these Russia-related restrictions, most notably on a
number of Russian and Belarusian airlines. Beginning with the issuance
of a TDO against PJSC Aeroflot (``Aeroflot'') on April 7, 2022 (87 FR
21611, Apr. 12, 2022), which was subsequently renewed on October 3,
2022 (87 FR 60985, Oct. 7, 2022) and on March 29, 2023 (88 FR 19609,
Apr. 3, 2023), BIS has issued a number of TDOs targeting Russian and
Belarusian airlines that have repeatedly and deliberately continued to
operate international and/or domestic flights involving aircraft
subject to the EAR in apparent violation of the EAR and the applicable
TDOs.
Similarly, on March 17, 2008, BIS imposed a TDO (73 FR 15130) which
has been repeatedly renewed, most recently on May 5, 2023 (88 FR 30078,
May 10, 2023), against Mahan Airways in connection with its numerous
ongoing apparent violations of the EAR. The most recent renewal of this
TDO stated that according to publicly available information, Aeroflot
has begun sending its aircraft to Mahan Airways for repairs and/or
maintenance. Id. at 30085.
Cases such as these, which involve an existing TDO combined with a
pattern of repeated, ongoing, and/or continuous conduct that appears to
violate a TDO or the EAR, leading to the need to repeatedly renew the
applicable TDOs, are emblematic of the type of conduct which this
extended renewal option is intended to address.
Such extended renewals will serve as an enhanced deterrent for such
actors who are engaging in such apparent violative conduct and others
who may be inclined to engage in behavior to facilitate such
activities. Moreover, such extended renewals will provide enhanced
notice to companies and individuals in the United States and abroad
that they should avoid dealing with such actors of concern in
connection with export, reexport, and transfer (in-country)
transactions involving items subject to the EAR and in connection with
any other activity subject to the EAR, e.g., the provision of services
in connection with an aircraft subject to the EAR that is operated by a
denied person, or with respect to an aircraft that has been exported in
violation of the EAR (see 15 CFR 736.2(b)(10)). BIS maintains a non-
exhaustive list of aircraft that have potentially been exported to
Russia or Belarus in violation of the EAR, including aircraft operated
by certain denied persons, which can be found on the BIS website:
<a href="https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/russia-belarus">https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/russia-belarus</a>.
In the event that the Assistant Secretary determines that a request
for renewal of a TDO does not satisfy this new standard for an extended
renewal as described above under section A, it may nonetheless be
extended for a period not exceeding 180 days, provided that BIS has
demonstrated that such renewal is necessary in the public interest to
prevent an imminent violation.
Export Control Reform Act of 2018
On August 13, 2018, the President signed into law the John S.
McCain National Defense Authorization Act for Fiscal Year 2019, which
included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-
4852). ECRA provides the legal basis for BIS's principal authorities
and serves as the authority under which BIS issues this rule.
Rulemaking Requirements
1. This rule has been determined to be not significant for purposes
of Executive Order 12866.
2. Notwithstanding any other provision of law, no person is
required to respond to or be subject to a penalty for failure to comply
with a collection of information, subject to the requirements of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless
that collection of information displays a currently valid Office of
Management and Budget (OMB) Control Number. This regulation involves an
information collection approved by OMB under control number 0694-0088,
Simplified Network Application Processing System. BIS does not
anticipate a change to the burden hours associated with this collection
as a result of this rule. Information regarding the collection,
including all supporting materials, can be accessed at <a href="https://www.reginfo.gov/public/do/PRAMain">https://www.reginfo.gov/public/do/PRAMain</a>.
3. This rule does not contain policies with federalism implications
as that term is defined in Executive Order 13132.
4. Pursuant to section 1762 of the Export Control Reform Act of
2018, this action is exempt from the Administrative Procedure Act (5
U.S.C. 553) requirements for notice of proposed rulemaking, opportunity
for public participation, and delay in effective date.
5. Because a notice of proposed rulemaking and an opportunity for
public comment are not required to be given for this rule by 5 U.S.C.
553, or by any other law, the analytical requirements of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., are not applicable.
Accordingly, no regulatory flexibility analysis is required, and none
has been prepared.
List of Subjects in 15 CFR Part 766
Administrative practice and procedure, Confidential business
information, Exports, Law enforcement, Penalties.
Accordingly, part 766 of the Export Administration Regulations (15
CFR
[[Page 59793]]
parts 730 through 774) is amended as follows:
PART 766--ADMINISTRATIVE ENFORCEMENT PROCEEDINGS
0
1. The authority citation for 15 CFR part 766 continues to read as
follows:
Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50
U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783.
0
2. Section 766.24 is amended by revising the third sentence of
paragraph (a), paragraphs (b)(1), (d)(1), and the last sentence of
paragraph (e)(5), to read as follows:
Sec. 766.24 Temporary denials.
(a) * * * Without limiting any other action BIS may take under the
EAR with respect to any application, order, license or authorization
issued under ECRA, BIS may ask the Assistant Secretary to issue a
temporary denial order on an ex parte basis to prevent an imminent
violation, as defined in this section, of the ECRA, the EAR, or any
order, license or authorization issued thereunder. * * *
(b) * * * (1) The Assistant Secretary may issue an order
temporarily denying to a person any or all of the export privileges
described in part 764 of the EAR upon a showing by BIS that the order
is necessary in the public interest to prevent an imminent violation of
ECRA, the EAR, or any order, license or authorization issued
thereunder.
* * * * *
(d) * * * (1) If, no later than 20 days before the expiration date
of a temporary denial order, BIS believes that renewal of the denial
order is necessary in the public interest to prevent an imminent
violation, BIS may file a written request setting forth the basis for
its belief, including any additional or changed circumstances, asking
that the Assistant Secretary renew the temporary denial order, with
modifications, if any are appropriate, for an additional period not
exceeding 180 days. In cases demonstrating a pattern of repeated,
ongoing and/or continuous apparent violations, BIS may request the
renewal of a temporary denial order for an additional period not
exceeding one year. BIS's request shall be delivered to the respondent,
or any agent designated for this purpose, in accordance with Sec.
766.5(b) of this part unless exceptional circumstances exist, which
will constitute notice of the renewal application.
* * * * *
(e) * * *
(5) * * * The issuance or renewal of the temporary denial order
shall be affirmed only if there is reason to believe that the temporary
denial order is required in the public interest to prevent an imminent
violation of ECRA, the EAR, or any order, license or other
authorization issued under ECRA.
* * * * *
Thea D. Rozman Kendler,
Assistant Secretary for Export Administration.
[FR Doc. 2023-18772 Filed 8-29-23; 8:45 am]
BILLING CODE 3510-33-P
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