80 FR 41426 - U.S. Industrial Base Surveys Pursuant to the Defense Production Act of 1950

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 80, Issue 135 (July 15, 2015)

Page Range		41426-41432
FR Document		2015-17388
This rule sets forth the policies and procedures of the Bureau of Industry and Security (BIS) for conducting surveys to obtain information in order to perform industry studies assessing the U.S. industrial base to support the national defense pursuant to the Defense Production Act of 1950, as amended. Specifically, this rule provides a description of BIS's authority to issue surveys; the purpose for the surveys and the manner in which such surveys are developed; the confidential treatment of submitted information; and the penalties for non-compliance with surveys. This rule is intended to facilitate compliance with surveys, thereby resulting in stronger and more complete assessments of the U.S. industrial base.
Federal Register, Volume 80 Issue 135 (Wednesday, July 15, 2015)
[Federal Register Volume 80, Number 135 (Wednesday, July 15, 2015)]
[Rules and Regulations]
[Pages 41426-41432]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-17388]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 702

[Docket No. 140501396-5463-02]
RIN 0694-AG17


U.S. Industrial Base Surveys Pursuant to the Defense Production 
Act of 1950

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule sets forth the policies and procedures of the Bureau 
of Industry and Security (BIS) for conducting surveys to obtain 
information in order to perform industry studies assessing the U.S. 
industrial base to support the national defense pursuant to the Defense 
Production Act of 1950, as amended. Specifically, this rule provides a 
description of BIS's authority to issue surveys; the purpose for the 
surveys and the manner in which such surveys are developed; the 
confidential treatment of submitted information; and the penalties for 
non-compliance with surveys. This rule is intended to facilitate 
compliance with surveys, thereby resulting in stronger and more 
complete assessments of the U.S. industrial base.

DATES: This rule is effective August 14, 2015.

[[Page 41427]]


FOR FURTHER INFORMATION CONTACT: Jason Bolton, Trade and Industry 
Analyst, Office of Technology Evaluation, phone: 202-482-5936 email: 
[email protected] or Brad Botwin, Director, Industrial Base 
Studies, Office of Technology Evaluation, phone: 202-482-4060 email: 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    Pursuant to authorities under section 705 of the Defense Production 
Act of 1950 as amended (DPA) (50 U.S.C. app. 2155) and Sec.  104 of 
Executive Order 13603 of March 16, 2012 (National Defense Resources 
Preparedness, 77 FR 16651, 3 CFR, 2012 Comp., p. 225), the Bureau of 
Industry and Security (BIS) conducts studies that assess the 
capabilities of the U.S. industrial base to support the national 
defense. To produce these studies, BIS may issue surveys to collect 
detailed information related to the health and competitiveness of the 
U.S. industrial base from government sources and private individuals or 
organizations.
    BIS published a proposed rule addressing its authority to conduct 
the studies, the authority to issue surveys to gather data in support 
of the studies, the purpose of the surveys and the manner in which such 
surveys are developed, the confidential treatment of submitted 
information, and the penalties for non-compliance with surveys (see 80 
FR 11350, March 3, 2015). BIS received two comments on the proposed 
rule and is not making any changes to the final rule text in response 
to those comments. This final rule makes no substantive change to the 
proposed rule.

Public Comments and BIS's Response

    BIS received two comments on the proposed rule. They are reproduced 
in their entireties along with BIS's responses below.

    Comment 1.

    ``The Defense Production Act of 1950 was enacted so that [the] 
[P]resident could (1) require business[es] to sign contracts deemed 
necessary for defense, (2) allow the [P]resident to create 
mechanisms that would allow the allocation of goods and services to 
support defense and (3) allow the [P]resident to control civilian 
economy so that scare resource are available for defense. This Act 
was used during for the Cold War, and could be labeled as outdated 
and unnecessary. Under this act, the [P]resident and his staff is 
given a lot of power over the economy. I disagree with the BIS that 
there should be some sort of supervision over this act. From what I 
have researched I have found one use of the Act in 2011, where the 
Government seized equipment from telecommunications companies for 
criminal charges. One incident should not raise alarm of possible 
fraud or misuse. Although I wish that all sections of the government 
could be monitored more, I know that the money spent on the 
oversight of this Act could be spent more effectively elsewhere.''

    Response: Section 705 of the Defense Production Act of 1950 (50 
U.S.C. app. 2155), authorizes the President to, among other things, 
``require such reports and the keeping of such records by, make such 
inspection of the books, records, and other writings, premises or 
property of, and take the sworn testimony of, and administer oaths and 
affirmations to, any person as may be necessary or appropriate, in his 
discretion, to the enforcement or the administration of this Act and 
the regulations or orders issued thereunder.'' In 2003, an amendment to 
that Act made clear that such ``authority . . . includes the authority 
to obtain information in order to perform industry studies assessing 
the capabilities of the United States industrial base to support the 
national defense.'' This rule is designed to set forth policies and 
procedures to facilitate the accurate and timely completion of surveys 
issued by BIS to collect data for these studies. Whether or not the Act 
is outdated and unnecessary is a decision for Congress, and is not 
something to be addressed in this regulation. This regulation is solely 
intended to clearly implement the provisions of Section 705 of the DPA.
    Additionally, BIS does not engage in ``supervision over this act.'' 
The studies that BIS conducts under the DPA are for the purpose of 
assessing the capabilities of the United States industrial base to 
support the national defense. BIS does not seize property under the DPA 
in connection with criminal charges and the proposed rule makes no 
mention of seizure authority.
    Accordingly, BIS is making no changes to the proposed rule in 
response to this comment.

    Comment 2.

    ``The corporation does not posses [sic] the rights of 
citizenship within U.S. borders, privileges or immunity clause 
ensures this within The Constitution of the United States of 
America. Societal roles force us to consider the implications 
surrounding predictive analytics based in Logic while the National 
Identity is a consensus being manufactured through a rational theory 
exercise in speculative risk. Insurers effectively are prohibited 
from utilizing coercion due to the McCarran Ferguson Act, however 
significant concerns exist with regard to the applicability of 
industry influence with-out the force of Anti-trust regulations to 
secure American values toward equality. A proposal to reduce the 
unnecessary burdens establishing this future of regulation, suggests 
the McCarran Ferguson Act may be applied to the Gramm Leech Bliley 
Act as a measured and proportionate Logic introduced to the 
irrational manufacture of consent.

    Response: The proposed rule and this final rule are entirely 
unrelated to the rights of citizenship as they may or may not apply to 
corporations, the privileges and immunities clause of the Constitution 
of the United States, the regulation of insurers, anti-trust law, the 
Gramm Leech Bliley Act, or the McCarran Ferguson Act. The proposed rule 
and this final rule address surveys issued by BIS to collect data for 
studies assessing the capabilities of the United States industrial base 
to support the national defense, consistent with the authorities set 
forth in section 705 of the Defense Production Act of 1950.
    As this comment is unrelated to the BIS activities this rule 
addresses, BIS is making no changes to the final rule in response to 
this comment.

General Description of the Rule

    This rule sets forth procedures intended to facilitate the accurate 
and timely completion of surveys issued by BIS to collect data for 
these studies. This rule sets forth in a single part of the Code of 
Federal Regulations the information about BIS's authority to conduct 
the studies, the authority to issue surveys to gather data in support 
of the studies, the purpose of the surveys and the manner in which such 
surveys are developed, the confidential treatment of submitted 
information, and the penalties for non-compliance with surveys.
    Additionally, this rule explains BIS's procedures for verifying 
that the scope and purpose of the surveys are well defined, and assures 
that the surveys do not solicit data that duplicates adequate and 
authoritative data that is available to BIS from any federal or other 
responsible agency. A survey may require the submission of information 
similar or identical to information possessed by another federal agency 
but that is not available to BIS.
    Based on requests it receives from U.S. Government agencies, BIS 
produces studies to develop findings and policy recommendations for the 
purpose of improving the competitiveness of specific domestic 
industries and technologies critical to meeting national defense and 
essential civilian requirements. These studies may require surveys to 
collect relevant data and assessments of that data and other 
information available to BIS.
    BIS, in cooperation with the requesting agency, selects the persons 
to be surveyed based on the likelihood that they will have information 
relevant to a

[[Page 41428]]

study. That likelihood is related to the person's association with the 
industry sector, material, product, service or technology that is the 
subject of the study. That association may be based on factors such as 
the person's role in directly or indirectly providing, producing, 
distributing, utilizing, procuring, researching, developing, consulting 
or advising on, the industry sector, material, product, service or 
technology that is the subject of the study.
    Whether a person's association with the industry sector, material, 
product, service or technology being assessed is proximate or remote 
does not determine whether that person's association is sufficient for 
inclusion in the survey. For example, information about a supplier of 
raw materials or components that is several transactions removed from 
the production of the product that is the subject of a study may be 
relevant to assessing the capabilities of the U.S. industrial base to 
supply the product to support the national defense. In such a 
situation, the supplier would be included in the survey. The nature of 
the person from whom the information is sought also does not determine 
whether that person's association with the industry sector, material, 
product, service or technology at issue is sufficient for inclusion in 
the survey. Surveys may require information from businesses organized 
for profit, non-profit organizations, academic institutions and 
government agencies.
    To be useful, a study must be comprehensive, accurate and focused 
on the relevant industry sector, material, product, service or 
technology. Therefore, surveys may require information about 
employment, research and development, sources of supply, manufacturing 
processes, customers, business strategy, finances and other factors 
affecting the industry's health and competitiveness. To properly focus 
the survey on the industry sector, material, product, service or 
technology being assessed, BIS may request information about a 
corporation as a whole or information about one or more specified units 
or individual activities of that corporation. The DPA provides both a 
civil remedy and criminal penalties that may be used when recipients of 
surveys do not supply the information sought.
    BIS deems the information supplied in response to survey requests 
to be confidential and is prohibited by law from publishing or 
disclosing such information unless the Under Secretary for Industry and 
Security determines that withholding the information is contrary to the 
interest of the national defense. The authority to make this 
determination, which section 705(d) of the DPA gives to the President, 
has been delegated to relevant agencies, including the Secretary of 
Commerce, by Sec.  802 of Executive Order 13603. The Secretary of 
Commerce re -delegated this authority to the Under Secretary for 
Industry and Security. The DPA provides criminal penalties for any 
person who willfully violates its prohibition on publication or 
disclosure.

Section by Section Description of the Rule

    This rule creates a new part in Title 15, Chapter VII, Subchapter A 
of the Code of Federal Regulations to be designated as 15 CFR part 702. 
This new part is devoted exclusively to BIS's collection of information 
under section 705 of the DPA (50 U.S.C. app. 2155). Placing the new 
part in Subchapter A promotes an orderly and logical regulatory 
structure because all other regulations implementing BIS authorities 
related to the DPA are contained in that subchapter.

Section 702.1

    Section 702.1 sets forth a general description of BIS's authority 
to collect information needed to complete the surveys. The survey 
responses assist BIS in determining the capabilities of the industrial 
base to support the national defense and to develop policy 
recommendations to improve both the international competitiveness of 
specific domestic industries and their ability to meet national defense 
needs.

Section 702.2

    Section 702.2 implements the requirement found in section 705 of 
the DPA (50 U.S.C. app. 2155(a)) to publish regulations by requiring 
BIS personnel of appropriate competence and authority to ensure that 
before a survey is sent to any person for completion; 1) the scope and 
purpose of a survey have been established, 2) the scope and purpose are 
consistent with BIS's authorities under the DPA, and 3) the data 
requested by the survey does not duplicate adequate and authoritative 
data available to BIS from a federal or other authoritative source. A 
survey may require information that is similar or identical to 
information possessed by other federal agencies but not available to 
BIS. The section does not limit the factors that may be considered in 
deciding whether to conduct a survey nor does it modify or replace the 
requirements of the Paperwork Reduction Act. In addition, all surveys 
are reviewed by BIS and by the Office of Management and Budget (OMB) 
pursuant to the Paperwork Reduction Act before they are distributed. 
The OMB review process provides additional assurance that surveys are 
designed to collect only information deemed necessary to meet the scope 
and purpose of a study.

Section 702.3

    Section 702.3 addresses the confidentiality requirements imposed by 
section 705(d) of the DPA (50 U.S.C. app. 2155(d)) and, in accordance 
with that section, provides two procedures by which the restrictions on 
disclosure in section 705(d) would be invoked. First, consistent with 
its current practice, BIS would deem all information submitted in 
response to a survey to be confidential. Second, a person submitting a 
response to a survey may request confidential treatment of the 
information submitted. Although the second procedure is likely to be 
redundant of the first, the statute prohibits disclosure if either the 
government deems the information to be confidential or if the person 
furnishing the information requests confidential treatment. BIS 
concludes that both procedures should be included in the regulations to 
be consistent with the statute. Additionally, Sec.  702.3 notes that 
confidential information shall not be published or disclosed unless the 
Under Secretary for Industry and Security determines that withholding 
the information is contrary to the interest of the national defense. 
The statutory authority of the President to make this determination has 
been delegated to the Under Secretary for Industry and Security. This 
section also repeats the penalties that the statute authorizes for 
persons convicted of willfully violating the prohibition on disclosure.

Section 702.4

    Section 702.4 requires timely, complete and adequate responses to 
surveys. Specifically, the section requires that survey responses be 
returned to BIS within the time frame stated on the initial 
distribution letter or other request for information. The section 
treats a response as ``inadequate'' if it provides information that is 
not responsive to the questions asked or if it provides aggregated 
information when specific information was requested.
    Section 702.4 sets forth the criteria by which BIS may grant either 
an exemption from complying with the survey requirement or an extension 
of time to comply. The grounds for granting an exemption or an 
extension are limited and generally result when

[[Page 41429]]

BIS concludes that the survey recipient lacks information deemed 
relevant to the survey or when compliance with the requirement would be 
unduly burdensome.
    Section 702.4 makes clear that the deadline for complying with a 
survey is not suspended by submitting a request for an exemption or 
extension of time to comply.
    Finally, Sec.  702.4 provides that BIS may return responses that 
are incomplete or inadequate and specify a due date for a complete and 
adequate response.

Section 702.5

    Section 702.5 sets forth the consequences of failure to comply with 
a survey or other request for information. These consequences are 
established by section 705(a) and (c) of the DPA (50 U.S.C. app. 
2155(a) and (c)). If a person does not comply with a survey, BIS may 
serve a subpoena upon that person to compel compliance. If the person 
still does not comply, the government may apply to the U.S. district 
court in any district in which the person is found, resides or 
transacts business for an order requiring such person to comply. The 
district court has authority to punish any failure to comply with the 
order as contempt of court. Persons who are convicted of willfully 
failing to comply with a survey or other request for information may be 
fined not more than $10,000 or imprisoned for not more than one year, 
or both.

Section 702.6

    Section 702.6 defines certain terms used in part 702.
    The word ``confidential'' is defined in terms of section 705(d) of 
the DPA, thereby distinguishing its use in this rule from its use in 
connection with the classification of information for national security 
purposes as set forth in Executive Order 13526 of December 29, 2009, 
Classified National Security Information (75 FR 707; 3 CFR, 2010 Comp., 
p. 298).
    The definition of the term ``person'' is based on the definition of 
``person'' in section 702 of the DPA (50 U.S.C. app. 2152) with some 
additions. The DPA definition reads: ``The term `person' includes an 
individual, corporation, partnership, association, or any other 
organized group of persons, or legal successor or representative 
thereof, or any State or local government or agency thereof.'' Use of 
the word ``includes'' in the statutory definition implies that the list 
following that word is not exhaustive. BIS concludes that the use of 
``includes'' indicates that Congress recognized that the agency 
implementing the DPA would need discretion to identify the types of 
entities that would likely possess information relevant to the subject 
of each industrial base assessment to ensure a comprehensive collection 
of information.
    This rule adds ``The Government of the United States, of the 
District of Columbia, of any commonwealth, territory or possession of 
the United States, or any department, agency or commission thereof.'' 
BIS has concluded that inclusion of the additional entities is within 
its authority under the DPA because the DPA definition prefaces the 
list of entities with the word ``includes,'' and because inclusion of 
the additional entities is necessary to achieve the purpose of the 
statute.
    Based on prior studies, BIS has observed that the U.S. Government 
makes a significant contribution to the industrial base, whether in 
research, technology development, testing, manufacturing, repair and 
overhaul, or trade development. As a result, the U.S. Government is a 
significant source of information regarding the industrial base. 
Similarly, it is plausible that the District of Columbia, commonwealths 
of the United States and other territories and agencies can be survey 
respondents, and therefore have been included to ensure the 
completeness of a survey sample and corresponding assessment.
    The regulatory definition also makes clear that the term 
``corporation, partnership, association, or any other organized group 
of persons'' is not limited to commercial, for-profit enterprises or 
publicly traded corporations.
    The definitions of the terms ``initial distribution letter'' and 
``survey'' each describe a document used in the data collection 
process. The definitions describe those documents based on the way they 
are used in current BIS practice.

Supplement No. 1 to Part 702

    Supplement No. 1 to part 702 provides information that BIS believes 
would be helpful to persons who receive a survey. This information 
includes both a description of the survey and a glossary of terms.

Differences Between This Final Rule and the Proposed Rule

    The definition of ``initial distribution letter'' in Sec.  702.6 in 
the proposed rule contained a sentence that read ``[t]he letter also 
provides BIS contact information.'' In this final rule, the word 
``provides'' has been replaced with the word ``includes'' for 
precision. This final rule also corrects a typographical error that 
appeared in Supplement No.1 to Part 702, introductory text, second 
sentence in the proposed rule. The phrase that read: ``. . . is purely 
in example . . .'' has been corrected to read ``. . . is purely an 
example . . . .'' There are no other differences in regulatory text 
between this final rule and the proposed rule.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety, and other advantages; distributive impacts; and 
equity). Executive Order 13563 emphasizes the importance of quantifying 
both costs and benefits, of reducing costs, of harmonizing rules, and 
of promoting flexibility. This final rule has been determined not to be 
a ``significant regulatory action,'' significant, as that term is 
defined in Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection of information subject to the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et. seq.) unless that 
collection of information displays a currently valid OMB control 
number. This rule does not contain a collection of information that is 
subject to the Paperwork Reduction Act. This rule sets forth procedures 
related to BIS's administration of surveys pursuant to Sec.  705 of the 
DPA (50 U.S.C. app. 2155). Individual surveys that are subject to the 
Paperwork Reduction Act will display a currently valid OMB control 
number.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 13132.
    4. The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 
601 et seq., generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to the notice and comment 
rulemaking requirements under the Administrative Procedure Act (5 
U.S.C. 553) or any other statute. However, under Sec.  605(b) of the 
RFA, if the head of an agency certifies that a rule will not have a 
significant impact on a substantial number of small entities, the RFA 
does not require the agency to prepare a regulatory flexibility

[[Page 41430]]

analysis. Pursuant to Sec.  605(b), the Chief Counsel for Regulation, 
Department of Commerce, submitted a memorandum to the Chief Counsel for 
Advocacy, Small Business Administration, certifying that the proposed 
rule, if promulgated, will not have a significant impact on a 
substantial number of small entities. The proposed rule set forth the 
rationale for that certification. BIS received no comments on that 
rationale and is making no substantive changes to it. The rationale for 
that certification is as follows.

Impact

    This rule sets forth, in a single part of the Code of Federal 
Regulations, the Department of Commerce's authority under Sec.  705 of 
the DPA ``to obtain information in order to perform industry studies 
assessing the capabilities of the United States industrial base to 
support the national defense.'' Since the mid-1980s, BIS and its 
predecessor organizations within the Department of Commerce have 
conducted such studies and required survey responses based on the 
statute. Section 705 of the DPA authorizes the collection of the 
information. The statute also authorizes the issuance of subpoenas for 
the information and authorizes the United States district courts to 
issue orders compelling compliance with such subpoenas. It also 
provides criminal penalties for failure to comply with the government's 
requests for information. This final rule will not require any person 
to supply information that the person would not be required to provide 
pursuant to the statute.
    This final rule requires that surveys issued by BIS pursuant to 
Sec.  705 be responded to by the deadline set forth in the survey. The 
rule incorporates BIS's existing internal policies and standards for 
the granting of both an extension of time to comply with the 
requirement and exemptions from compliance. To the extent that 
publication of these policies and standards in the Code of Federal 
Regulations could be construed as a change in the burden on small 
entities or any other entities, the publication would have to be deemed 
as a reduction in burden because it facilitates access to the standards 
by all parties.
    This final rule also sets forth the statutory standards for 
treating information submitted in response to a survey as confidential. 
It reiterates the statutory penalties for failure to comply with a 
survey and for unauthorized release of information that Sec.  705 
requires to be treated as confidential.
    This rule adopts the statutory definition of ``person'' but also 
adds ``[t]he Government of the United States, of the District of 
Columbia, of any commonwealth, territory or possession of the United 
States, or any department, agency or commission thereof'' to the 
definition. The term ``person'' is used in the statute and in this 
final rule to represent those to whom the requirements of the statute 
and this final rule apply. BIS has historically interpreted the statute 
to apply to units of the U.S. Government (including the District of 
Columbia Government and the governments of the territories and 
possessions) and does not view this as a substantive change. For 
purposes of this certification, the addition is immaterial because the 
government bodies that will be added to the statutory definition by 
this final rule are not small entities under the definition provided in 
the Small Business Regulatory Enforcement Fairness Act of 1996.

Number of Small Entities

    Surveys are one-time exercises used to assess the state and/or 
capabilities of a particular industry sector or technology. Entities 
are selected for participation based on their role in, or relationship 
to, the industry sector or technology being assessed. Information 
obtained during the course of any one assessment may be relevant to 
determining whether the current entity supplying that information is a 
small entity. However, the composition of survey respondents varies 
dramatically between industry studies due to the complexity of each 
industry sector or technology being assessed. Consequently, BIS is 
unable to draw from existing data to estimate the number of small 
businesses participating in future collections. Accordingly, BIS is 
unable to determine the number of small entities that may be affected 
by this final rule.

Conclusion

    Although BIS cannot predict the exact number of small entities that 
will be participating in any one survey, this rule will not impose a 
significant burden on any such small entities because it will not 
require any impacted entity to perform any action that it is not 
already required to perform pursuant to section 705 of the DPA.

List of Subjects in Part 702

    Business and industry, Confidential business information, 
Employment, Penalties, National defense, Research, Science and 
technology.
    Accordingly, the National Security Industrial Base Regulations (15 
CFR Chapter VII, Subchapter A) are amended by adding Part 702 to read 
as follows:

Subchapter A--National Security Industrial Base Regulations

PART 702--INDUSTRIAL BASE SURVEYS--DATA COLLECTIONS

Sec.
702.1 Introduction.
702.2 Scope and purpose of surveys--avoiding duplicative requests 
for information.
702.3 Confidential information.
702.4 Requirement to comply with surveys or other requests for 
information.
702.5 Consequences of failure to comply.
702.6 Definitions.

Supplement No. 1 to Part 702--General Survey Information

    Authority: 50 U.S.C. app. 2061 et seq.; E.O. 13603, 77 FR 16651, 
3 CFR, 2012 Comp., p. 225.


Sec.  702.1  Introduction.

    In accordance with 50 U.S.C. app. 2155, the Bureau of Industry and 
Security (BIS) may obtain such information from, require such reports 
and the keeping of such records by, make an inspection of the books, 
records, and other writings, premises or property of, take the sworn 
testimony of and administer oaths and affirmations to, any person as 
may be necessary or appropriate, in its discretion, to the enforcement 
or the administration of its authorities and responsibilities under the 
Defense Production Act of 1950 as amended (DPA) and any regulations or 
orders issued thereunder. BIS's authorities under the DPA (50 U.S.C. 
app. 2061 et seq.) include authority to collect data via surveys to 
perform industry studies assessing the capabilities of the United 
States industrial base to support the national defense and develop 
policy recommendations to improve both the international 
competitiveness of specific domestic industries and their ability to 
meet national defense program needs.


Sec.  702.2  Scope and purpose of surveys--avoiding duplicative 
requests for information.

    (a) BIS will not send any survey to any person for completion 
unless the scope and purpose of the survey have been established, that 
scope and purpose are consistent with BIS's authorities under the DPA, 
and the data requested by the survey does not duplicate adequate and 
authoritative data already available to BIS from a Federal or other 
authoritative source.
    (b) BIS personnel of appropriate competence and authority will 
ensure that the requirements of paragraph (a) of this section are met.

[[Page 41431]]

    (c) This section shall not be construed as limiting the criteria 
that BIS may consider in determining whether to proceed with a survey. 
This paragraph shall not be construed as replacing or in any way 
modifying the requirements of the Paperwork Reduction Act (44 U.S.C. 
3501 et seq.).


Sec.  702.3  Confidential information.

    This section implements section 705(d) of the DPA.
    (a) BIS deems all information submitted in response to a survey 
issued pursuant to this part to be confidential.
    (b) Any person submitting information in response to a survey 
issued pursuant to this part may request confidential treatment of that 
information.
    (c) The President's authority under the DPA to protect confidential 
information has been delegated to the Under Secretary for Industry and 
Security. The information described in paragraphs (a) and (b) of this 
section shall not be published or disclosed unless the Under Secretary 
for Industry and Security determines that the withholding thereof is 
contrary to the interest of the national defense.
    (d) Any person convicted of willfully violating the prohibition in 
paragraph (c) of this section may be fined not more than $10,000 or 
imprisoned for not more than one year, or both.


Sec.  702.4  Requirement to comply with surveys or other requests for 
information.

    (a) Requirement to comply. Every person who receives a survey or 
other request for information issued pursuant to this part must submit 
a complete and adequate response to BIS within the time frame stated on 
the initial distribution letter or other request for information. 
Survey response information that does not adhere to the survey question 
criteria or that contains only aggregate information in place of 
specified information will be treated as inadequate and therefore 
noncompliant. BIS may exempt persons from this requirement for the 
reasons in paragraph (b) of this section, or grant extensions of time 
to comply as set forth in paragraph (c) of this section. Submitting a 
request to BIS for an exemption or an extension of time for completion 
does not suspend the initial deadline required by BIS (or any extended 
deadline subsequently granted by BIS). Thus, persons who request an 
exemption or extension of time are advised to proceed as if the 
response is required by the deadline until advised otherwise by BIS.
    (b) Grounds for exemption. (1) An exemption from the requirements 
of this section may be granted if the person receiving the survey or 
other request for information:
    (i) Has no physical presence in the United States of any kind;
    (ii) Does not provide, produce, distribute, utilize, procure, 
research, develop, consult or advise on, or have any other direct or 
indirect association with the materials, products, services or 
technology that are within the scope of the survey;
    (iii) Has ceased business operations more than 12 months prior to 
receipt of the survey;
    (iv) Has been in business for less than one year; or
    (v) BIS determines that extenuating circumstances exist that make 
responding impractical.
    (2) BIS may also grant an exemption if, based on the totality of 
the circumstances, it concludes that compliance would be impractical 
and/or that requiring compliance would be unduly time intensive.
    (3) Existence of a pre-existing private non-disclosure agreement or 
information sharing agreement between a person and another party (e.g., 
customers, suppliers, etc.), does not exempt a person from the 
obligation to comply with and complete a survey. The authority to 
conduct the survey and comply with the survey is derived from the DPA, 
and that statutory obligation to comply supersedes any private 
agreement.
    (c) Extensions of time to complete. A person who receives a survey 
or other request for information may request an extension of time to 
submit the complete response to BIS. BIS may grant such an extension of 
time, if, in its judgment, circumstances are such that additional time 
reasonably is needed, the extension would not jeopardize timely 
completion of BIS's overall analysis, and the person is making 
reasonable progress towards completing the survey or response to the 
other request for information. Generally, extensions will be for no 
more than two weeks. A person who receives a survey or other request 
for information may request successive extensions if the person 
believes that it continues to have a legitimate need for additional 
time to complete the survey. BIS will not grant extensions that would 
jeopardize the performance and timely completion of its industrial base 
assessments.
    (d) Procedure for requesting exemptions or extensions of time. 
Requests for exemptions or extensions of time must be made to BIS at 
the telephone number, email address or BIS physical address provided in 
the initial distribution letter for a survey or in the other request 
for information. A request for an exemption must provide factual 
information and documentation that are adequate for BIS to determine 
that one or more of the criteria stated in paragraph (b) or (c) of this 
section are met.
    (e) Responses that are incomplete or inadequate. BIS may return 
responses that are incomplete or inadequate to the person for prompt 
completion. BIS will specify the required period of time permitted for 
completion and submission of the revised survey.


Sec.  702.5  Consequences of failure to comply.

    (a) Civil. If any person fails to comply with the requirements of 
Sec.  702.4, BIS may issue a subpoena requiring that person to submit 
the information called for in the survey. In the case of contumacy or 
refusal to obey such a subpoena, the U.S. Government may apply for an 
order by the United States district court in a district where that 
person resides or transacts business that would compel the person to 
submit the completed survey.
    (b) Criminal. In accordance with 50 U.S.C. app. 2155, any person 
who willfully fails to comply with Sec.  702.4, may, upon conviction, 
be fined not more than $10,000 or imprisoned not more than one year, or 
both.


Sec.  702.6  Definitions.

    The definitions in this section apply throughout this part.
    Confidential. A description of information that is subject to the 
disclosure prohibitions of the DPA (50 U.S.C. app. 2155(d)).
    Initial distribution letter. A letter that BIS sends to a person 
that has been identified by the U.S. Government as a supplier or 
customer of materials, products or services used for activities of the 
industry that is the focus of a survey. The letter describes the 
survey's primary objectives, how survey results will assist the U.S. 
Government, and the confidential treatment of the information 
submitted. The letter also includes BIS contact information.
    Person. The term ``person'' includes:
    (1) An individual, corporation, partnership, association, or any 
other organized group of persons, or legal successor or representative 
thereof;
    (2) Any State or local government or agency thereof;
    (3) The Government of the United States, of the District of 
Columbia, of any commonwealth, territory or possession of the United 
States, or any department, agency or commission thereof.
    Note to the definition of ``person.'' Paragraph (1) of this 
definition is not

[[Page 41432]]

limited to commercial or for-profit organizations. For example, the 
term ``any other organized group of persons'' may encompass labor 
unions, academic institutions, charitable organizations or any group of 
persons who are organized in some manner. The term corporation is not 
limited to publicly traded corporations or corporations that exist for 
the purpose of making a profit.
    Survey. A questionnaire or other request for information that 
collects detailed information and data to support both the assessment 
of a particular industrial sector or technology and the development of 
a corresponding study.

Supplement No. 1 to Part 702--General Survey Information

    This supplement provides general information about surveys and the 
content of the typical survey. The content of this supplement is purely 
an example of a typical survey, and in no way limits the content that 
may appear in a specific Bureau of Industry and Security (BIS)-issued 
survey. Procedures and content vary from survey to survey, and as such, 
there is no set template to follow. Nonetheless, BIS is offering this 
information as a basic guide to some elements of a survey.

Survey Structure

    Most surveys include the following sections: Cover Page; Table of 
Contents; General Instructions; Glossary of Terms; Organizational 
Information, and sector-specific sections.
    --The cover page typically includes the title of the survey, its 
scope, an explanation of the legal requirement to comply, the burden 
estimate for compliance with the survey, the Office of Management and 
Budget (OMB) control number, and the survey date of expiration.
    --The General Instructions section normally includes process steps 
necessary for a person's survey submittal. These include but are not 
limited to instructions for survey completion, survey support staff 
point-of-contact information, the name and address of the presiding BIS 
official, and instructions for both survey certification and submittal.
    --The Glossary of Terms section explains terms contained in the 
survey. Terms contained in the survey may be unique to the subject 
matter of the industry assessment, and therefore may change in meaning 
from survey to survey. Therefore, it is important to follow the 
specific instructions and defined terms contained in the specific 
survey you receive, regardless of any previous survey you might have 
completed.
    --The Organization Information section requests information related 
to the person in receipt of the survey, including address information, 
the source level of response (e.g., facility, business unit, division, 
corporate consolidated, etc.), point of contact details, and other 
pertinent contact information.
    The survey is generally organized in a question and answer format 
and is presented on an electronic survey system. Each survey is 
specially tailored to collect the specific information requested. 
Therefore, specific detailed information is what should be submitted in 
response to a survey requesting such information.
    --For example, if we ask for a listing of your customers that order 
widget A, your response should not be a listing of your entire customer 
base. Only the information pertaining to customers' ordering widget A 
is responsive to that kind of question.
    Also note that your reply to a survey request is compulsory, unless 
you meet the criteria for exemption set forth in the body of the 
regulation. Therefore, any non-disclosure agreements or similar 
agreements you may have with your customers or clients are not 
applicable to a survey's request for information. Compliance with the 
survey is required by the DPA. Accordingly, compliance with that 
statutory requirement is paramount to any private agreement you have 
with your customers or other parties.
    In addition to the aforementioned sections, each survey contains 
sections tailored to the specific scope of the study, including but not 
limited to Facility Locations, Products and Services, Inventories, 
Suppliers and Customers, Challenges and Organizational Outlook, 
Employment, Operations, Financial Statements, Sales, Research and 
Development, and Capital Expenditures.
    Examples of survey terms.
    Certification: A section of the survey in which a person (an 
authorizing official) certifies that the information supplied in 
response to the survey is complete and correct, to the best of the 
person's knowledge.
    Facility: A building or the minimum complex of buildings or parts 
of buildings in which a person operates to serve a particular function, 
producing revenue and incurring costs for the person. A facility may 
produce an item of tangible or intangible property or may perform a 
service. It may encompass a floor or group of floors within a building, 
a single building, or a group of buildings or structures. Often, a 
facility is a group of related locations at which employees work, 
together constituting a profit-and-loss center for the person, and it 
may be identified by a unique Dun and Bradstreet number.
    Sole source: An organization that is the only source for the supply 
of parts, components, materials, or services. No alternative U.S. or 
non-U.S. based supplier exists other than the current supplier.
    Survey template: The data collection instrument supplied by BIS to 
persons by which survey information is recorded and submitted to BIS. 
The survey is generally organized in a question and answer format and 
is presented on an electronic survey system.
    Supplier: An entity from which your organization obtains inputs. A 
supplier may be another firm with which you have a contractual 
relationship, or it may be another facility owned by the same parent 
organization. The inputs may be materials, products or services.

    Dated: July 10, 2015.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2015-17388 Filed 7-14-15; 8:45 am]
 BILLING CODE 3510-33-P
Federal Register / Vol. 80, No. 135 / Wednesday, July 15, 2015 / Rules and Regulations 41427

FOR FURTHER INFORMATION CONTACT: should not raise alarm of possible fraud or Ferguson Act may be applied to the Gramm
Jason Bolton, Trade and Industry misuse. Although I wish that all sections of Leech Bliley Act as a measured and
Analyst, Office of Technology the government could be monitored more, I proportionate Logic introduced to the
know that the money spent on the oversight irrational manufacture of consent.
Evaluation, phone: 202–482–5936
of this Act could be spent more effectively Response: The proposed rule and this
email: jason.bolton@bis.doc.gov or Brad elsewhere.’’
Botwin, Director, Industrial Base final rule are entirely unrelated to the
Studies, Office of Technology Response: Section 705 of the Defense rights of citizenship as they may or may
Evaluation, phone: 202–482–4060 Production Act of 1950 (50 U.S.C. app. not apply to corporations, the privileges
email: brad.botwin@bis.doc.gov. 2155), authorizes the President to, and immunities clause of the
SUPPLEMENTARY INFORMATION: among other things, ‘‘require such Constitution of the United States, the
reports and the keeping of such records regulation of insurers, anti-trust law, the
Background by, make such inspection of the books, Gramm Leech Bliley Act, or the
Pursuant to authorities under section records, and other writings, premises or McCarran Ferguson Act. The proposed
705 of the Defense Production Act of property of, and take the sworn rule and this final rule address surveys
1950 as amended (DPA) (50 U.S.C. app. testimony of, and administer oaths and issued by BIS to collect data for studies
2155) and § 104 of Executive Order affirmations to, any person as may be assessing the capabilities of the United
13603 of March 16, 2012 (National necessary or appropriate, in his States industrial base to support the
Defense Resources Preparedness, 77 FR discretion, to the enforcement or the national defense, consistent with the
16651, 3 CFR, 2012 Comp., p. 225), the administration of this Act and the authorities set forth in section 705 of the
Bureau of Industry and Security (BIS) regulations or orders issued Defense Production Act of 1950.
conducts studies that assess the thereunder.’’ In 2003, an amendment to As this comment is unrelated to the
capabilities of the U.S. industrial base to that Act made clear that such ‘‘authority BIS activities this rule addresses, BIS is
support the national defense. To . . . includes the authority to obtain making no changes to the final rule in
produce these studies, BIS may issue information in order to perform industry response to this comment.
surveys to collect detailed information studies assessing the capabilities of the General Description of the Rule
related to the health and United States industrial base to support
the national defense.’’ This rule is This rule sets forth procedures
competitiveness of the U.S. industrial
designed to set forth policies and intended to facilitate the accurate and
base from government sources and
procedures to facilitate the accurate and timely completion of surveys issued by
private individuals or organizations.
timely completion of surveys issued by BIS to collect data for these studies.
BIS published a proposed rule
BIS to collect data for these studies. This rule sets forth in a single part of the
addressing its authority to conduct the
Whether or not the Act is outdated and Code of Federal Regulations the
studies, the authority to issue surveys to
unnecessary is a decision for Congress, information about BIS’s authority to
gather data in support of the studies, the
and is not something to be addressed in conduct the studies, the authority to
purpose of the surveys and the manner
this regulation. This regulation is solely issue surveys to gather data in support
in which such surveys are developed,
intended to clearly implement the of the studies, the purpose of the
the confidential treatment of submitted
provisions of Section 705 of the DPA. surveys and the manner in which such
information, and the penalties for non-
Additionally, BIS does not engage in surveys are developed, the confidential
compliance with surveys (see 80 FR
‘‘supervision over this act.’’ The studies treatment of submitted information, and
11350, March 3, 2015). BIS received two
that BIS conducts under the DPA are for the penalties for non-compliance with
comments on the proposed rule and is
the purpose of assessing the capabilities surveys.
not making any changes to the final rule Additionally, this rule explains BIS’s
text in response to those comments. of the United States industrial base to
support the national defense. BIS does procedures for verifying that the scope
This final rule makes no substantive and purpose of the surveys are well
change to the proposed rule. not seize property under the DPA in
connection with criminal charges and defined, and assures that the surveys do
Public Comments and BIS’s Response the proposed rule makes no mention of not solicit data that duplicates adequate
BIS received two comments on the seizure authority. and authoritative data that is available
proposed rule. They are reproduced in Accordingly, BIS is making no to BIS from any federal or other
their entireties along with BIS’s changes to the proposed rule in responsible agency. A survey may
responses below. response to this comment. require the submission of information
similar or identical to information
Comment 1. Comment 2.
possessed by another federal agency but
‘‘The Defense Production Act of 1950 was ‘‘The corporation does not posses [sic] the that is not available to BIS.
enacted so that [the] [P]resident could (1) rights of citizenship within U.S. borders, Based on requests it receives from
require business[es] to sign contracts deemed privileges or immunity clause ensures this
necessary for defense, (2) allow the within The Constitution of the United States
U.S. Government agencies, BIS
[P]resident to create mechanisms that would of America. Societal roles force us to produces studies to develop findings
allow the allocation of goods and services to consider the implications surrounding and policy recommendations for the
support defense and (3) allow the [P]resident predictive analytics based in Logic while the purpose of improving the
to control civilian economy so that scare National Identity is a consensus being competitiveness of specific domestic
resource are available for defense. This Act manufactured through a rational theory industries and technologies critical to
was used during for the Cold War, and could exercise in speculative risk. Insurers meeting national defense and essential
be labeled as outdated and unnecessary. effectively are prohibited from utilizing civilian requirements. These studies
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Under this act, the [P]resident and his staff coercion due to the McCarran Ferguson Act, may require surveys to collect relevant
is given a lot of power over the economy. I however significant concerns exist with
disagree with the BIS that there should be regard to the applicability of industry
data and assessments of that data and
some sort of supervision over this act. From influence with-out the force of Anti-trust other information available to BIS.
what I have researched I have found one use regulations to secure American values toward BIS, in cooperation with the
of the Act in 2011, where the Government equality. A proposal to reduce the requesting agency, selects the persons to
seized equipment from telecommunications unnecessary burdens establishing this future be surveyed based on the likelihood that
companies for criminal charges. One incident of regulation, suggests the McCarran they will have information relevant to a

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41428 Federal Register / Vol. 80, No. 135 / Wednesday, July 15, 2015 / Rules and Regulations

study. That likelihood is related to the defense. The authority to make this of Management and Budget (OMB)
person’s association with the industry determination, which section 705(d) of pursuant to the Paperwork Reduction
sector, material, product, service or the DPA gives to the President, has been Act before they are distributed. The
technology that is the subject of the delegated to relevant agencies, OMB review process provides
study. That association may be based on including the Secretary of Commerce, additional assurance that surveys are
factors such as the person’s role in by § 802 of Executive Order 13603. The designed to collect only information
directly or indirectly providing, Secretary of Commerce re -delegated deemed necessary to meet the scope and
producing, distributing, utilizing, this authority to the Under Secretary for purpose of a study.
procuring, researching, developing, Industry and Security. The DPA
Section 702.3
consulting or advising on, the industry provides criminal penalties for any
sector, material, product, service or person who willfully violates its Section 702.3 addresses the
technology that is the subject of the prohibition on publication or confidentiality requirements imposed
study. disclosure. by section 705(d) of the DPA (50 U.S.C.
Whether a person’s association with app. 2155(d)) and, in accordance with
the industry sector, material, product, Section by Section Description of the that section, provides two procedures by
service or technology being assessed is Rule which the restrictions on disclosure in
proximate or remote does not determine This rule creates a new part in Title section 705(d) would be invoked. First,
whether that person’s association is 15, Chapter VII, Subchapter A of the consistent with its current practice, BIS
sufficient for inclusion in the survey. Code of Federal Regulations to be would deem all information submitted
For example, information about a designated as 15 CFR part 702. This new in response to a survey to be
supplier of raw materials or components part is devoted exclusively to BIS’s confidential. Second, a person
that is several transactions removed collection of information under section submitting a response to a survey may
from the production of the product that 705 of the DPA (50 U.S.C. app. 2155). request confidential treatment of the
is the subject of a study may be relevant Placing the new part in Subchapter A information submitted. Although the
to assessing the capabilities of the U.S. promotes an orderly and logical second procedure is likely to be
industrial base to supply the product to regulatory structure because all other redundant of the first, the statute
support the national defense. In such a regulations implementing BIS prohibits disclosure if either the
situation, the supplier would be authorities related to the DPA are government deems the information to be
included in the survey. The nature of contained in that subchapter. confidential or if the person furnishing
the person from whom the information the information requests confidential
Section 702.1 treatment. BIS concludes that both
is sought also does not determine
whether that person’s association with Section 702.1 sets forth a general procedures should be included in the
the industry sector, material, product, description of BIS’s authority to collect regulations to be consistent with the
service or technology at issue is information needed to complete the statute. Additionally, § 702.3 notes that
sufficient for inclusion in the survey. surveys. The survey responses assist BIS confidential information shall not be
Surveys may require information from in determining the capabilities of the published or disclosed unless the Under
businesses organized for profit, non- industrial base to support the national Secretary for Industry and Security
profit organizations, academic defense and to develop policy determines that withholding the
institutions and government agencies. recommendations to improve both the information is contrary to the interest of
To be useful, a study must be international competitiveness of specific the national defense. The statutory
comprehensive, accurate and focused on domestic industries and their ability to authority of the President to make this
the relevant industry sector, material, meet national defense needs. determination has been delegated to the
product, service or technology. Section 702.2 Under Secretary for Industry and
Therefore, surveys may require Security. This section also repeats the
information about employment, Section 702.2 implements the penalties that the statute authorizes for
research and development, sources of requirement found in section 705 of the persons convicted of willfully violating
supply, manufacturing processes, DPA (50 U.S.C. app. 2155(a)) to publish the prohibition on disclosure.
customers, business strategy, finances regulations by requiring BIS personnel
and other factors affecting the industry’s of appropriate competence and Section 702.4
health and competitiveness. To properly authority to ensure that before a survey Section 702.4 requires timely,
focus the survey on the industry sector, is sent to any person for completion; 1) complete and adequate responses to
material, product, service or technology the scope and purpose of a survey have surveys. Specifically, the section
being assessed, BIS may request been established, 2) the scope and requires that survey responses be
information about a corporation as a purpose are consistent with BIS’s returned to BIS within the time frame
whole or information about one or more authorities under the DPA, and 3) the stated on the initial distribution letter or
specified units or individual activities data requested by the survey does not other request for information. The
of that corporation. The DPA provides duplicate adequate and authoritative section treats a response as
both a civil remedy and criminal data available to BIS from a federal or ‘‘inadequate’’ if it provides information
penalties that may be used when other authoritative source. A survey that is not responsive to the questions
recipients of surveys do not supply the may require information that is similar asked or if it provides aggregated
information sought. or identical to information possessed by information when specific information
BIS deems the information supplied other federal agencies but not available was requested.
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in response to survey requests to be to BIS. The section does not limit the Section 702.4 sets forth the criteria by
confidential and is prohibited by law factors that may be considered in which BIS may grant either an
from publishing or disclosing such deciding whether to conduct a survey exemption from complying with the
information unless the Under Secretary nor does it modify or replace the survey requirement or an extension of
for Industry and Security determines requirements of the Paperwork time to comply. The grounds for
that withholding the information is Reduction Act. In addition, all surveys granting an exemption or an extension
contrary to the interest of the national are reviewed by BIS and by the Office are limited and generally result when

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BIS concludes that the survey recipient implementing the DPA would need final rule also corrects a typographical
lacks information deemed relevant to discretion to identify the types of error that appeared in Supplement No.1
the survey or when compliance with the entities that would likely possess to Part 702, introductory text, second
requirement would be unduly information relevant to the subject of sentence in the proposed rule. The
burdensome. each industrial base assessment to phrase that read: ‘‘. . . is purely in
Section 702.4 makes clear that the ensure a comprehensive collection of example . . .’’ has been corrected to
deadline for complying with a survey is information. read ‘‘. . . is purely an example . . . .’’
not suspended by submitting a request This rule adds ‘‘The Government of There are no other differences in
for an exemption or extension of time to the United States, of the District of regulatory text between this final rule
comply. Columbia, of any commonwealth, and the proposed rule.
Finally, § 702.4 provides that BIS may territory or possession of the United
return responses that are incomplete or Rulemaking Requirements
States, or any department, agency or
inadequate and specify a due date for a commission thereof.’’ BIS has 1. Executive Orders 13563 and 12866
complete and adequate response. concluded that inclusion of the direct agencies to assess all costs and
additional entities is within its authority benefits of available regulatory
Section 702.5 alternatives and, if regulation is
under the DPA because the DPA
Section 702.5 sets forth the definition prefaces the list of entities necessary, to select regulatory
consequences of failure to comply with with the word ‘‘includes,’’ and because approaches that maximize net benefits
a survey or other request for inclusion of the additional entities is (including potential economic,
information. These consequences are necessary to achieve the purpose of the environmental, public health and safety,
established by section 705(a) and (c) of statute. and other advantages; distributive
the DPA (50 U.S.C. app. 2155(a) and Based on prior studies, BIS has impacts; and equity). Executive Order
(c)). If a person does not comply with a observed that the U.S. Government 13563 emphasizes the importance of
survey, BIS may serve a subpoena upon makes a significant contribution to the quantifying both costs and benefits, of
that person to compel compliance. If the industrial base, whether in research, reducing costs, of harmonizing rules,
person still does not comply, the technology development, testing, and of promoting flexibility. This final
government may apply to the U.S. manufacturing, repair and overhaul, or rule has been determined not to be a
district court in any district in which trade development. As a result, the U.S. ‘‘significant regulatory action,’’
the person is found, resides or transacts Government is a significant source of significant, as that term is defined in
business for an order requiring such information regarding the industrial Executive Order 12866.
person to comply. The district court has base. Similarly, it is plausible that the 2. Notwithstanding any other
authority to punish any failure to District of Columbia, commonwealths of provision of law, no person is required
comply with the order as contempt of the United States and other territories to respond to, nor shall any person be
court. Persons who are convicted of and agencies can be survey respondents, subject to a penalty for failure to comply
willfully failing to comply with a survey and therefore have been included to with a collection of information subject
or other request for information may be ensure the completeness of a survey to the Paperwork Reduction Act of 1995
fined not more than $10,000 or sample and corresponding assessment. (44 U.S.C. 3501 et. seq.) unless that
imprisoned for not more than one year, The regulatory definition also makes collection of information displays a
or both. clear that the term ‘‘corporation, currently valid OMB control number.
partnership, association, or any other This rule does not contain a collection
Section 702.6 of information that is subject to the
organized group of persons’’ is not
Section 702.6 defines certain terms limited to commercial, for-profit Paperwork Reduction Act. This rule sets
used in part 702. enterprises or publicly traded forth procedures related to BIS’s
The word ‘‘confidential’’ is defined in corporations. administration of surveys pursuant to
terms of section 705(d) of the DPA, The definitions of the terms ‘‘initial § 705 of the DPA (50 U.S.C. app. 2155).
thereby distinguishing its use in this distribution letter’’ and ‘‘survey’’ each Individual surveys that are subject to
rule from its use in connection with the describe a document used in the data the Paperwork Reduction Act will
classification of information for national collection process. The definitions display a currently valid OMB control
security purposes as set forth in describe those documents based on the number.
Executive Order 13526 of December 29, way they are used in current BIS 3. This rule does not contain policies
2009, Classified National Security practice. with Federalism implications as that
Information (75 FR 707; 3 CFR, 2010 term is defined in Executive Order
Comp., p. 298). Supplement No. 1 to Part 702 13132.
The definition of the term ‘‘person’’ is Supplement No. 1 to part 702 4. The Regulatory Flexibility Act
based on the definition of ‘‘person’’ in provides information that BIS believes (RFA), as amended by the Small
section 702 of the DPA (50 U.S.C. app. would be helpful to persons who Business Regulatory Enforcement
2152) with some additions. The DPA receive a survey. This information Fairness Act of 1996 (SBREFA), 5 U.S.C.
definition reads: ‘‘The term ‘person’ includes both a description of the 601 et seq., generally requires an agency
includes an individual, corporation, survey and a glossary of terms. to prepare a regulatory flexibility
partnership, association, or any other analysis of any rule subject to the notice
organized group of persons, or legal Differences Between This Final Rule and comment rulemaking requirements
successor or representative thereof, or and the Proposed Rule under the Administrative Procedure Act
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any State or local government or agency The definition of ‘‘initial distribution (5 U.S.C. 553) or any other statute.
thereof.’’ Use of the word ‘‘includes’’ in letter’’ in § 702.6 in the proposed rule However, under § 605(b) of the RFA, if
the statutory definition implies that the contained a sentence that read ‘‘[t]he the head of an agency certifies that a
list following that word is not letter also provides BIS contact rule will not have a significant impact
exhaustive. BIS concludes that the use information.’’ In this final rule, the word on a substantial number of small
of ‘‘includes’’ indicates that Congress ‘‘provides’’ has been replaced with the entities, the RFA does not require the
recognized that the agency word ‘‘includes’’ for precision. This agency to prepare a regulatory flexibility

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analysis. Pursuant to § 605(b), the Chief ‘‘[t]he Government of the United States, Chapter VII, Subchapter A) are amended
Counsel for Regulation, Department of of the District of Columbia, of any by adding Part 702 to read as follows:
Commerce, submitted a memorandum commonwealth, territory or possession Subchapter A—National Security Industrial
to the Chief Counsel for Advocacy, of the United States, or any department, Base Regulations
Small Business Administration, agency or commission thereof’’ to the
certifying that the proposed rule, if definition. The term ‘‘person’’ is used in PART 702—INDUSTRIAL BASE
promulgated, will not have a significant the statute and in this final rule to SURVEYS—DATA COLLECTIONS
impact on a substantial number of small represent those to whom the
entities. The proposed rule set forth the requirements of the statute and this final Sec.
702.1 Introduction.
rationale for that certification. BIS rule apply. BIS has historically 702.2 Scope and purpose of surveys—
received no comments on that rationale interpreted the statute to apply to units avoiding duplicative requests for
and is making no substantive changes to of the U.S. Government (including the information.
it. The rationale for that certification is District of Columbia Government and 702.3 Confidential information.
as follows. the governments of the territories and 702.4 Requirement to comply with surveys
possessions) and does not view this as or other requests for information.
Impact 702.5 Consequences of failure to comply.
a substantive change. For purposes of
This rule sets forth, in a single part of 702.6 Definitions.
this certification, the addition is
the Code of Federal Regulations, the immaterial because the government Supplement No. 1 to Part 702—General
Department of Commerce’s authority bodies that will be added to the Survey Information
under § 705 of the DPA ‘‘to obtain statutory definition by this final rule are
information in order to perform industry Authority: 50 U.S.C. app. 2061 et seq.; E.O.
not small entities under the definition 13603, 77 FR 16651, 3 CFR, 2012 Comp., p.
studies assessing the capabilities of the provided in the Small Business 225.
United States industrial base to support Regulatory Enforcement Fairness Act of
the national defense.’’ Since the mid- 1996. § 702.1 Introduction.
1980s, BIS and its predecessor In accordance with 50 U.S.C. app.
organizations within the Department of Number of Small Entities 2155, the Bureau of Industry and
Commerce have conducted such studies Security (BIS) may obtain such
Surveys are one-time exercises used
and required survey responses based on information from, require such reports
to assess the state and/or capabilities of
the statute. Section 705 of the DPA and the keeping of such records by,
a particular industry sector or
authorizes the collection of the make an inspection of the books,
technology. Entities are selected for
information. The statute also authorizes records, and other writings, premises or
participation based on their role in, or
the issuance of subpoenas for the property of, take the sworn testimony of
relationship to, the industry sector or
information and authorizes the United and administer oaths and affirmations
technology being assessed. Information
States district courts to issue orders to, any person as may be necessary or
obtained during the course of any one
compelling compliance with such appropriate, in its discretion, to the
assessment may be relevant to
subpoenas. It also provides criminal enforcement or the administration of its
penalties for failure to comply with the determining whether the current entity
supplying that information is a small authorities and responsibilities under
government’s requests for information. the Defense Production Act of 1950 as
This final rule will not require any entity. However, the composition of
survey respondents varies dramatically amended (DPA) and any regulations or
person to supply information that the orders issued thereunder. BIS’s
person would not be required to provide between industry studies due to the
complexity of each industry sector or authorities under the DPA (50 U.S.C.
pursuant to the statute. app. 2061 et seq.) include authority to
This final rule requires that surveys technology being assessed.
Consequently, BIS is unable to draw collect data via surveys to perform
issued by BIS pursuant to § 705 be industry studies assessing the
responded to by the deadline set forth from existing data to estimate the
number of small businesses capabilities of the United States
in the survey. The rule incorporates industrial base to support the national
BIS’s existing internal policies and participating in future collections.
Accordingly, BIS is unable to determine defense and develop policy
standards for the granting of both an recommendations to improve both the
extension of time to comply with the the number of small entities that may be
affected by this final rule. international competitiveness of specific
requirement and exemptions from domestic industries and their ability to
compliance. To the extent that Conclusion meet national defense program needs.
publication of these policies and
standards in the Code of Federal Although BIS cannot predict the exact § 702.2 Scope and purpose of surveys—
Regulations could be construed as a number of small entities that will be avoiding duplicative requests for
change in the burden on small entities participating in any one survey, this information.
or any other entities, the publication rule will not impose a significant (a) BIS will not send any survey to
would have to be deemed as a reduction burden on any such small entities any person for completion unless the
in burden because it facilitates access to because it will not require any impacted scope and purpose of the survey have
the standards by all parties. entity to perform any action that it is not been established, that scope and
This final rule also sets forth the already required to perform pursuant to purpose are consistent with BIS’s
statutory standards for treating section 705 of the DPA. authorities under the DPA, and the data
information submitted in response to a List of Subjects in Part 702 requested by the survey does not
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survey as confidential. It reiterates the duplicate adequate and authoritative
statutory penalties for failure to comply Business and industry, Confidential data already available to BIS from a
with a survey and for unauthorized business information, Employment, Federal or other authoritative source.
release of information that § 705 Penalties, National defense, Research, (b) BIS personnel of appropriate
requires to be treated as confidential. Science and technology. competence and authority will ensure
This rule adopts the statutory Accordingly, the National Security that the requirements of paragraph (a) of
definition of ‘‘person’’ but also adds Industrial Base Regulations (15 CFR this section are met.

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Federal Register / Vol. 80, No. 135 / Wednesday, July 15, 2015 / Rules and Regulations 41431

(c) This section shall not be construed section may be granted if the person other request for information. A request
as limiting the criteria that BIS may receiving the survey or other request for for an exemption must provide factual
consider in determining whether to information: information and documentation that are
proceed with a survey. This paragraph (i) Has no physical presence in the adequate for BIS to determine that one
shall not be construed as replacing or in United States of any kind; or more of the criteria stated in
any way modifying the requirements of (ii) Does not provide, produce, paragraph (b) or (c) of this section are
the Paperwork Reduction Act (44 U.S.C. distribute, utilize, procure, research, met.
3501 et seq.). develop, consult or advise on, or have (e) Responses that are incomplete or
any other direct or indirect association inadequate. BIS may return responses
§ 702.3 Confidential information. with the materials, products, services or that are incomplete or inadequate to the
This section implements section technology that are within the scope of person for prompt completion. BIS will
705(d) of the DPA. the survey; specify the required period of time
(a) BIS deems all information (iii) Has ceased business operations permitted for completion and
submitted in response to a survey issued more than 12 months prior to receipt of submission of the revised survey.
pursuant to this part to be confidential. the survey;
(b) Any person submitting (iv) Has been in business for less than § 702.5 Consequences of failure to
information in response to a survey one year; or comply.
issued pursuant to this part may request (v) BIS determines that extenuating (a) Civil. If any person fails to comply
confidential treatment of that circumstances exist that make with the requirements of § 702.4, BIS
information. responding impractical. may issue a subpoena requiring that
(c) The President’s authority under (2) BIS may also grant an exemption person to submit the information called
the DPA to protect confidential if, based on the totality of the for in the survey. In the case of
information has been delegated to the circumstances, it concludes that contumacy or refusal to obey such a
Under Secretary for Industry and compliance would be impractical and/ subpoena, the U.S. Government may
Security. The information described in or that requiring compliance would be apply for an order by the United States
paragraphs (a) and (b) of this section unduly time intensive. district court in a district where that
shall not be published or disclosed (3) Existence of a pre-existing private person resides or transacts business that
unless the Under Secretary for Industry non-disclosure agreement or would compel the person to submit the
and Security determines that the information sharing agreement between completed survey.
withholding thereof is contrary to the a person and another party (e.g., (b) Criminal. In accordance with 50
interest of the national defense. customers, suppliers, etc.), does not U.S.C. app. 2155, any person who
(d) Any person convicted of willfully exempt a person from the obligation to willfully fails to comply with § 702.4,
violating the prohibition in paragraph comply with and complete a survey. may, upon conviction, be fined not
(c) of this section may be fined not more The authority to conduct the survey and more than $10,000 or imprisoned not
than $10,000 or imprisoned for not more comply with the survey is derived from more than one year, or both.
than one year, or both. the DPA, and that statutory obligation to § 702.6 Definitions.
comply supersedes any private
§ 702.4 Requirement to comply with The definitions in this section apply
agreement.
surveys or other requests for information. (c) Extensions of time to complete. A throughout this part.
Confidential. A description of
(a) Requirement to comply. Every person who receives a survey or other
information that is subject to the
person who receives a survey or other request for information may request an
disclosure prohibitions of the DPA (50
request for information issued pursuant extension of time to submit the
U.S.C. app. 2155(d)).
to this part must submit a complete and complete response to BIS. BIS may grant Initial distribution letter. A letter that
adequate response to BIS within the such an extension of time, if, in its BIS sends to a person that has been
time frame stated on the initial judgment, circumstances are such that identified by the U.S. Government as a
distribution letter or other request for additional time reasonably is needed, supplier or customer of materials,
information. Survey response the extension would not jeopardize products or services used for activities
information that does not adhere to the timely completion of BIS’s overall of the industry that is the focus of a
survey question criteria or that contains analysis, and the person is making survey. The letter describes the survey’s
only aggregate information in place of reasonable progress towards completing primary objectives, how survey results
specified information will be treated as the survey or response to the other will assist the U.S. Government, and the
inadequate and therefore noncompliant. request for information. Generally, confidential treatment of the
BIS may exempt persons from this extensions will be for no more than two information submitted. The letter also
requirement for the reasons in weeks. A person who receives a survey includes BIS contact information.
paragraph (b) of this section, or grant or other request for information may Person. The term ‘‘person’’ includes:
extensions of time to comply as set forth request successive extensions if the (1) An individual, corporation,
in paragraph (c) of this section. person believes that it continues to have partnership, association, or any other
Submitting a request to BIS for an a legitimate need for additional time to organized group of persons, or legal
exemption or an extension of time for complete the survey. BIS will not grant successor or representative thereof;
completion does not suspend the initial extensions that would jeopardize the (2) Any State or local government or
deadline required by BIS (or any performance and timely completion of agency thereof;
extended deadline subsequently granted its industrial base assessments. (3) The Government of the United
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by BIS). Thus, persons who request an (d) Procedure for requesting States, of the District of Columbia, of
exemption or extension of time are exemptions or extensions of time. any commonwealth, territory or
advised to proceed as if the response is Requests for exemptions or extensions possession of the United States, or any
required by the deadline until advised of time must be made to BIS at the department, agency or commission
otherwise by BIS. telephone number, email address or BIS thereof.
(b) Grounds for exemption. (1) An physical address provided in the initial Note to the definition of ‘‘person.’’
exemption from the requirements of this distribution letter for a survey or in the Paragraph (1) of this definition is not

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Document Created: 2015-12-15 13:32:39
Document Modified: 2015-12-15 13:32:39
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		This rule is effective August 14, 2015.
Contact		Jason Bolton, Trade and Industry Analyst, Office of Technology Evaluation, phone: 202-482-5936 email: [email protected] or Brad Botwin, Director, Industrial Base Studies, Office of Technology Evaluation, phone: 202-482-4060 email: [email protected]
FR Citation		80 FR 41426
RIN Number		0694-AG17
80 FR 41426 - U.S. Industrial Base Surveys Pursuant to the Defense Production Act of 1950

DEPARTMENT OF COMMERCEBureau of Industry and Security

Federal Register Volume 80, Issue 135 (July 15, 2015)

DEPARTMENT OF COMMERCE
Bureau of Industry and Security
