2010-25152. Request for Public Comments Regarding Small and Medium Enterprises' Understanding of and Compliance With the Export Administration Regulations

AGENCY:

Bureau of Industry and Security, Commerce.

ACTION:

Notice of Inquiry.

SUMMARY:

The Bureau of Industry and Security (BIS) is publishing a notice of inquiry to solicit comments from the public regarding small and medium enterprises' (SMEs) understanding of and compliance with export controls maintained pursuant to the Export Administration Regulations (EAR). BIS anticipates that input from the public will help it administer and enforce export controls in a manner consistent with U.S. national security while facilitating and even increasing legitimate trade involving SMEs and the exporting community in general.

DATES:

Comments must be received by December 6, 2010.

ADDRESSES:

You may submit comments on this notice of inquiry, identified by “Notice of Inquiry—SME”, by any of the following methods:

E-mail: [e-mail]. Include “Notice of Inquiry—SME” in the subject line of the message.

Fax: [phone]. Please alert the Regulatory Policy Division, by calling [phone], if you are faxing comments.

Mail or Hand Delivery/Courier: Sheila Quarterman, U.S. Department of Commerce, Bureau of Industry and Security, Office of Exporter Services, Regulatory Policy Division, 14th Street & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230, Attn: “Notice of Inquiry—SME”.

FOR FURTHER INFORMATION CONTACT:

Sheila Quarterman, U.S. Department of Commerce, Bureau of Industry and Security, Office of Exporter Services, Regulatory Policy Division, Telephone [phone], E-mail [e-mail].

SUPPLEMENTARY INFORMATION:

Background

President Obama's August 2009 call for broad-based review and modernization of U.S. export controls presented the Bureau of Industry and Security (BIS) a strategic opportunity to reach out to regulated groups such as small and medium enterprises (SMEs) regarding their experience with the Export Administration Regulations (EAR). More recently, the President's National Export Initiative (NEI) announced in January 2010 focuses on expanding trade advocacy and opportunities, particularly for SMEs. Pursuant to the NEI, the Commerce Department's International Trade Administration will seek to increase the number of SMEs exporting over the next five years. BIS continues to develop the agency's commitment to addressing SMEs' concerns through its outreach efforts. At its October 2009 annual Update Conference on Export Controls, BIS led a roundtable discussion on SMEs' export compliance concerns.

In this notice of inquiry (NOI), BIS is soliciting information regarding SMEs' understanding of and compliance with the EAR. BIS intends to use the information to evaluate the need for innovations and revisions that will enhance SMEs' understanding of and compliance with the EAR. Given SMEs' strategic position in export trade, the EAR must continue to address SMEs' concerns in a manner that promotes compliance without adversely affecting competitiveness. Ultimately, the agency seeks to administer and enforce export controls in a manner that protects U.S. national security while facilitating and even increasing legitimate trade involving SMEs and the exporting community in general.

It is important to BIS to identify and address issues that impact a range of SMEs' understanding of and compliance with the EAR. BIS intends that this NOI will yield useful input not only from and about enterprises with extensive experience in export trade but also from and about enterprises less familiar and less experienced in export trade.

Unlike for small businesses or enterprises, there is no widely accepted or agreed upon definition of medium enterprises. However, industry and government entities have made progress in incorporating the consideration of medium enterprises in matters of global trade.

In formulating an appropriate definition of SMEs for purposes of this NOI, BIS reviewed relevant data from U.S. Government, industry, and international sources, including the U.S. International Trade Commission (USITC), the U.S. Small Business Administration (SBA), the U.S. Department of Agriculture, the U.S. Department of Commerce's Bureau of the Census, and the European Commission. In particular, a recent USITC report, Small and Medium-Sized Enterprises: Overview of Participation in U.S. Exports (USITC Publication 4125, January 2010), and the SBA Office of Advocacy's analysis on which it draws offer helpful guidance in defining SMEs. Based on the USITC report, the related analysis from the SBA's Office of Advocacy, and the SBA's definition of “business concern” (13 CFR 121.105), BIS defines SMEs for purposes of this NOI as enterprises with fewer than 500 employees, organized for profit, and independently operated and established within the United States. Given the range of sectors that participate in dual-use exports, BIS does not believe that a revenue threshold is appropriate. BIS welcomes comments regarding this definition.

Comments that identify issues and make recommendations regarding SMEs' awareness and understanding of the EAR, as well as their experiences complying with the EAR, will be instructive. BIS invites the public also to submit comments on the following:

(1) The principal challenges SMEs face in trying to comply with the EAR, including any challenges that SMEs uniquely face and approaches to overcoming these challenges;

(2) The value of current BIS outreach, education and counseling to SMEs in understanding and complying with the EAR;

(3) Ways to improve or expand SMEs' awareness, knowledge and understanding of the EAR and increase their capacity to comply with them; and

(4) Data, including comparative international data, that support comments and recommendations related to items (1) through (3) above; and that provide examples of effective methods of administering and enforcing export controls with special attention to SMEs.

Comments should be submitted to BIS as described in the ADDRESSES section of this notice by December 6, 2010. BIS will consider all comments submitted in response to this NOI that are received before the close of the comment period. Comments received after the end of the comment period will be considered if possible, but their consideration cannot be assured. BIS will not accept public comments accompanied by a request that a part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. BIS will return such comments and materials to the persons submitting the comments and will not consider them. All public comments in response to this NOI must be in writing (including fax or email) and will be a matter of public record, and will be available for public inspection and copying on the BIS Freedom of Information Act (FOIA) Reading Room Web site at http://bis.doc.gov/​foia/​default.htm.

Dated: September 27, 2010.

Kevin J. Wolf,

Assistant Secretary for Export Administration.