[Federal Register Volume 61, Number 27 (Thursday, February 8, 1996)]
[Proposed Rules]
[Pages 4826-4848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2697]
[[Page 4825]]
_______________________________________________________________________
Part IV
Department of Commerce
_______________________________________________________________________
International Trade Administration
_______________________________________________________________________
19 CFR Part 351, et al.
Antidumping and Countervailing Duty Proceedings: Procedures for
Imposing Sanctions for Violation of a Protective Order; Proposed Rule
Federal Register / Vol. 61, No. 27 / Thursday, February 8, 1996 /
Proposed Rules
[[Page 4826]]
DEPARTMENT OF COMMERCE
International Trade Administration
19 CFR Parts 351, 353, 354, and 355
[Docket No. 960123011-6011-01]
RIN 0625-AA43
Antidumping and Countervailing Duty Proceedings: Administrative
Protective Order Procedures; Procedures for Imposing Sanctions for
Violation of a Protective Order
AGENCY: International Trade Administration, Commerce.
ACTION: Proposed rule; request for comments.
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SUMMARY: The Department of Commerce (``the Department'') proposes to
amend its regulations on administrative protective order (``APO'')
procedures in antidumping and countervailing duty proceedings to
simplify and streamline the APO administrative process and reduce the
administrative burdens on the Department and trade practitioners. The
Department also proposes to amend the regulations to simplify the
procedures for investigating alleged violations of APOs and the
imposition of sanctions. These changes are proposed in response to and
in cooperation with the trade practitioners that are subject to these
rules.
DATES: Written comments will be due March 11, 1996.
ADDRESSES: Address written comments (three copies) to Stephen J.
Powell, Chief Counsel for Import Administration, Room B-099, U.S.
Department of Commerce, Pennsylvania Avenue and 14th Street, NW.,
Washington, DC 20230. Comments should be addressed: Attention: Proposed
Regulations/APO Procedures & APO Sanctions. Each person submitting a
comment is requested to include his or her name and address, and the
reasons for any recommendation.
FOR FURTHER INFORMATION CONTACT: Joan L. MacKenzie, Senior Attorney,
Office of the Chief Counsel for Import Administration, (202) 482-1310.
SUPPLEMENTARY INFORMATION:
General Background
APO Procedures
Since the enactment of the Trade Agreements Act of 1979, the APO
has been an important procedure in U.S. antidumping (``AD'') and
countervailing duty (``CVD'') proceedings. By providing representatives
of parties to antidumping and countervailing duty proceedings access to
business proprietary information submitted to the Department by other
parties, the APO has helped to make the U.S. system the most
transparent in the world.
In administering its APO procedures, the Department balances two
principal objectives. On the one hand, the Department has sought to
ensure that information is disclosed under APO in a timely manner to
permit parties to defend adequately their interests. At the same time,
the Department must ensure that its procedures protect against
unauthorized disclosure of business proprietary information.
Our procedures for the protection of business proprietary
information were last revised in 1989. After five years experience with
these procedures, and after consultation with the practitioners
affected by these procedures, we determined it was time to revise the
procedures.
The Department began a dialogue on APO procedures with AD/CVD
practitioners, who are the ones most directly affected by these
procedures. Specifically, Department staff consulted with
representatives of the International Law Section of the District of
Columbia Bar, the International Trade Committee of the Section of
International Law and Practice of the American Bar Association, the ITC
Trial Lawyers Association, and the Customs and International Trade Bar
Association. The purpose of these consultations was to explore ways in
which the APO process could be simplified and streamlined for all
concerned, including the Department, while at the same time providing
protection of business proprietary information.
Based on these discussions, the Department published Notice and
Request for Comment on Proposed Changes to Administrative Protective
Order (APO) Procedures in Antidumping and Countervailing Duty
Proceedings, APO Application Form and APO, 59 FR 51559 (October 12,
1994) (``October Notice''). In this notice, the Department set forth
its initial reform ideas regarding APO procedures, and requested
further comments from the public on its ideas. In addition, the
Department requested comments on APO procedures, as well as on other
matters, in its Advance Notice of Proposed Rulemaking and Request for
Comments (Antidumping Duties; Countervailing Duties; Article 1904 of
the North American Free Trade Agreement), 60 FR 80 (Jan. 3, 1995)
(``Advance Notice'').
The Department received comments in response to both the October
Notice and the Advance Notice. After analyzing these comments, the
Department has drafted regulations that streamline the APO process
significantly and, at the same time, protect business proprietary
information from unauthorized disclosure. However, as part of the
ongoing dialogue with the private sector on this subject, the
Department is requesting public comment on these regulations. As with
the October Notice, we are also publishing for comment the APO.
APO Sanctions
The Department also proposes to amend its regulations concerning
sanctions for violations of APOs. The regulations governing the
imposition of sanctions for APO violations are set forth at 19 CFR part
354. In the six years since part 354 was introduced, the Department has
investigated and resolved numerous allegations of violations of APOs.
Most charges have been settled, and none has resulted in a hearing
before a presiding official or a decision by the APO Sanctions Board.
Experience also has proven that, even if an individual has technically
violated the terms of an APO, it is not always appropriate to impose a
sanction. Rather, a warning may be appropriate in many instances. The
Department also has found that situations arise in which the
investigation can be shortened without limiting procedural rights.
Additionally, under current regulations, it is unduly cumbersome to
withdraw charges when the Department determines that they are not
warranted. Finally, the Department recognizes that an individual with
prior violations deserves to have his or her record cleared after a
period of time without further violations. Therefore, the Department is
proposing to amend part 354 of its regulations to articulate a standard
for issuance of a warning of an APO violation and to address the other
situations described above.
The Department proposes to amend the regulations to simplify the
procedures for investigating alleged violations and the imposition of
sanctions, establish criteria for abbreviating the investigation of an
alleged violation, include private letters of reprimand among the
sanctions available, and set a policy for determining when the
Department issues warnings instead of sanctions. Further, the
Department proposes to revise the provisions dealing with settlement to
make them consistent with practice. The Department also proposed to
simplify the procedures for withdrawing charging letters. Finally, the
proposed amendment adds a sunset provision that codifies existing
practice
[[Page 4827]]
regarding the rescission of charging letters.
The outstanding issues concerning these regulations are described
in the following analysis of the relevant sections of the proposed
regulations.
Explanation of Particular Provisions
APO Procedures
The Department's AD regulations are contained in 19 CFR part 353,
and its CVD regulations are contained in 19 CFR part 355. Parts 353 and
355 each contain separate provisions dealing with the treatment of
business proprietary information and APO procedures. As part of a
separate rulemaking, the Department intends to consolidate the AD and
CVD regulations and repeal existing parts 353 and 355. We have drafted
the regulations dealing with APO procedures in light of this planned
consolidation. Accordingly, these regulations will be contained in 19
CFR part 351, subpart C. More specifically, with the exception of
definitional provisions, the relevant regulations will be contained in
19 CFR 351.304, 305, and 306.
Definitions
Section 351.102 will be a definitional section, based on existing
19 CFR 353.2 and 355.2. It will be published separately with the
proposed rules for 19 CFR part 351, subpart C. Insofar as APO
procedures are concerned, two new terms will be defined, now contained
in the administrative protective order.
The first term, ``applicant,'' is defined as an individual
representative of an interested party that has applied for access to
business proprietary information under an APO. The second term,
``authorized applicant,'' is defined as an applicant that the Secretary
has authorized to receive business proprietary information under an
APO, and is a term borrowed from the practice of the U.S. International
Trade Commission (``ITC'').
Section 351.304 Establishing Business Proprietary Treatment of
Information
Section 351.304 sets forth rules concerning the treatment of
business proprietary information in general. Paragraph (a) is a general
provision, paragraph (a)(1) of which provides persons with the right to
request (i) that certain information be considered business
proprietary; and (ii) that certain business proprietary information be
exempt from disclosure under APO. Consistent with section 777(c)(1)(A)
of the Tariff Act of 1930 (``the Act''), paragraph (a)(2) provides
that, as a general matter, the Secretary will require that all business
proprietary information be disclosed to authorized applicants, with the
exception of (i) customer names in an investigation, (ii) information
for which the Secretary finds there is a clear and compelling need to
withhold from disclosure, and (iii) classified or privileged
information.
Paragraph (b) of Sec. 351.304 addresses the identification of
business proprietary information in submissions to the Department.
Paragraph (b)(1) deals with the bracketing and labeling of business
proprietary information in general, and is consistent with existing
practice. Paragraph (b)(1) also retains the requirements under existing
practice that: (i) A person claiming business proprietary status for
information must explain why the information in question is entitled to
that status; and (ii) a request for business proprietary treatment must
include an agreement to permit disclosure under an APO, unless the
submitter claims that there is a clear and compelling need to withhold
the information from disclosure under an APO. Paragraph (b)(2) is new,
and provides for the double bracketing of business proprietary
information that the submitting person claims should be exempt from
disclosure under APO, and customer names submitted in an investigation.
Public Versions
Paragraph (c) of Sec. 351.304 deals with the public version of a
business proprietary submission. Paragraph (c)(1) follows existing
practice by permitting parties to file a public version of a document
containing business proprietary information one business day after the
due date of the business proprietary version of the document. This
practice is known as the ``one-day lag'' rule. Under current practice,
submitting persons may correct the bracketing of information in the
business proprietary version up to the deadline for submission of the
public version (i.e., they have one day in which to correct
bracketing). The Department has slightly modified the one-day lag rule
to require a party to file the final business proprietary version of
the document at the same time as the submitting party files the public
version of the document. The specific filing requirements will be
contained in Sec. 351.303 of subpart C of the proposed regulations that
the Department will publish separately. The purpose of this requirement
is to ensure that the Department is reviewing the correct business
proprietary version. Absent this requirement, Department analysts would
have to engage in a page-by-page comparison of the original and
corrected business proprietary versions, a time-consuming exercise
which benefits neither the parties nor the Department.
Paragraph (c)(1) continues to permit a party to claim that
summarization is not possible. However, the Secretary will vigorously
enforce the requirement for public summaries, and will grant claims
that summarization is impossible only in exceptional circumstances.
Nonconforming Submissions
Paragraph (d) of Sec. 351.304 deals with nonconforming submissions,
i.e., submissions that do not conform to the requirements of section
777(b) of the Act and paragraphs (a), (b), and (c) of Sec. 351.304.
Paragraph (d)(1) is generally consistent with existing 19 CFR 353.32(d)
and 355.32(d), although it is more precise as to the options available
to a submitting person when the Secretary returns a nonconforming
submission. Paragraph (d)(2) is based on existing 19 CFR 353.32(e) and
355.32(e), and provides that the Secretary normally will determine the
status of information within 30 days after the day on which the
information was submitted, as provided by section 777(c)(1)(C).
Section 351.305 Access to Business Proprietary Information
Section 351.305 deals with procedures for obtaining business
proprietary information under APO. These procedures are based on the
ideas set forth in the October Notice, and reflect suggestions made in
response to the Department's request for comments.
The Revised APO
Paragraph (a) of Sec. 351.305 sets forth a new procedure based on
the use of a single APO. Instead of issuing a separate APO to each
applicant that requests disclosure, under paragraph (a) the Secretary
will place a single APO on the record for each segment of an AD or CVD
duty proceeding. The Secretary will place the APO on the record within
one day after a petition is filed or an investigation is self-
initiated, or one day after the initiation of any other segment.
(``Segment of the proceeding'' will be defined in Sec. 351.102 as a
portion of the proceeding that is reviewable under section 516A of the
Act.) All authorized applicants will be subject to the terms of this
single APO. This new procedure, which mirrors the practice of the ITC
and which is described in more detail in the October Notice, should
streamline the APO process dramatically, and should expedite the
issuance of APOs and the disclosure of information to authorized
applicants.
[[Page 4828]]
Paragraph (a) also sets forth the requirements that are to be
included in the single APO and to which all authorized applicants must
adhere. In this regard, in response to the suggestions of
practitioners, the Department proposed in its October Notice to
eliminate from the APO detailed internal procedures that firms were
required to follow to protect APO information from unauthorized
disclosure. Instead, the Department proposed to permit each applicant
to establish its own internal procedures. All commentators agreed with
this proposal. Therefore, paragraph (a)(1) simply requires that the
applicant establish and follow procedures to ensure that there is no
unauthorized disclosure of APO information.
In its October Notice, the Department proposed to continue to place
two restrictions on the use of business proprietary information
contained in electronic form: (1) Such information could be resident on
a computer only when the computer was being run; and (2) the
information could not be accessible by a network or a modem.
The commentators differed as to whether it is appropriate to
require different protection depending upon whether business
proprietary information is entered into a computer for data
manipulation purposes or for word-processing purposes. Four
commentators opposed any specific restrictions, because they believe
that there are sufficient technical protections available to protect
such information from unauthorized disclosure. They asserted that
attempts to prescribe specific, mandatory procedures are futile,
because the handling of information on electronic media is subject to
rapid technological change. Procedures may become outdated by the time
they are established. On the other hand, four commentators asserted
that although electronic information may be left resident in a computer
subject to adequate safeguards, the Department should require that such
information be used on a stand-alone computer to ensure that the
information is not accessible by modem.
The Department recognizes the sensitivity of issues involving the
handling of electronic information. Because there is no unanimity
regarding the use of electronic information on computers that are
accessible by modem, we continue to support restricting access of
electronic information by modem. However, restricting access by modem
does not necessarily require the physical separation of a computer and
a modem. The use of technical restrictions, such as passwords or
encryption, also would constitute an adequate method of protecting the
information. Therefore, we are not proposing any specific technical
restrictions, but instead are leaving the method to be used to the
individual authorized applicant. Moreover, we are not limiting access
to networks, because software is provided on many computer systems
through the network. In summary, we have proposed procedures that, in
our view, are sufficiently flexible so as to allow applicants to take
advantage of technological advances as they occur, but that also ensure
the protection of APO information.
On a different matter, five commentators suggested that the
Department reconsider its requirement that support personnel be
employees of the firm. They suggested that the Department permit the
use of independent contractors to perform photocopying and other
production tasks involving APO information, provided that: (1) The
independent contractors perform their work on the premises of the
authorized applicant (e.g., at the firm); and (2) the independent
contractors work under the supervision of an authorized applicant. The
commentators stated that, for APO purposes, firms are able to exercise
essentially the same oversight over subcontracted individuals as they
are over their own employees.
The Department agrees that so long as support staff is operating on
the premises of the authorized applicant, support staff could be either
employees or independent subcontractors. In addition, the Department
also will allow parties to use employees or subcontracted individuals
(e.g., courier services) to pick up APO information released by the
Department. In order to guard against unauthorized disclosure, however,
the Department will continue its current practice of releasing APO
information only if the employee or subcontractor presents a picture ID
and a letter of identification from the firm of the authorized
applicant that authorizes the Department to release the APO information
to that particular individual.
Also regarding support staff, one commentator suggested that
instead of requiring support staff to sign the APO application and
acknowledge the APO terms and conditions, the Department should leave
this up to the authorized applicant as a matter of its internal
procedures. The Department has not adopted this suggestion, because it
would appear that the Department is permitting access to business
proprietary information by staff that has not agreed to protect such
information. Instead, we have retained the requirement in the APO that
support personnel must agree to an acknowledgment of the APO terms and
conditions.
Several commentators raised issues regarding the Department's
current requirement that individual representatives of parties notify
the Department when their status under an APO changes (e.g., when they
are reassigned to a different matter within a firm or leave the firm),
and to certify that they have complied with the terms of the APO. Two
firms commented that it is important for the Department to retain its
current practice of requiring notification of any changed circumstances
that may affect the participation of a representative under an APO.
However, one firm requested that the Department either eliminate the
requirement altogether or let the lead signatory for each firm make the
necessary certification. This firm pointed out that individual
certifications are not required by the U.S. Court of International
Trade (``CIT'') with respect to a judicial protective order (``JPO'').
The Department has decided to retain the requirements in question.
APO access is granted in response to individual requests for such
access. The certification provided at the conclusion of a segment of
the proceeding, upon the departure of an individual from a firm, or
when an individual no longer will have access to APO information
attests to the individual's compliance with the terms under which such
access is granted. The Department and the persons whose business
proprietary information is disclosed under APO have a legitimate need
to be assured that individuals who have had access to that information
have abided by the terms of the APO. Therefore, the regulations
(specifically, Sec. 351.305(a)(2)) continue to require notification and
appropriate certification when changed circumstances affect the
participation of a representative under an APO.
Although, as noted above, these regulations provide authorized
applicants with greater flexibility regarding internal procedures, the
Department proposed in its October Notice to maintain model guidelines
on procedures that applicants could implement to protect APO
information. Six commentators addressed this proposal. Two commentators
stated that it would be useful for the Department to maintain
guidelines and to hold training sessions for APO applicants. They
cautioned, however, that such guidelines should represent suggestions
[[Page 4829]]
only, and that they should not be transformed into de facto
requirements. Otherwise, the objective of simplifying the APO process
would be defeated, and the Department once again would find itself in
the position of micro-managing the internal procedures of applicants.
The commentators requested that the Department clearly set forth the
standards by which an applicant's internal procedures will be judged,
and that it expressly acknowledge that a departure from any suggestion
in the guidelines will not be regarded as a per se violation of an APO.
The commentators also urged the Department to make any guidelines
available at the time a party applies for an APO, and that the
Department not implement new APO procedures until trade practitioners
are provided with the opportunity to comment on the guidelines. Also,
with respect to the requirement in the APO application that parties
refrain from asking the Department for assistance in handling
electronic submissions of another party, commentators requested that
any such requests for assistance not be construed as an APO violation.
In light of these comments, the Department intends to issue APO
guidelines, and expects that they will be particularly useful to firms
that do not have an established practice before the Department. The
Department, however, will consider the APO guidelines as just that;
guidelines rather than actual terms and conditions of the APO. In
addition, we will provide an opportunity to comment on such guidelines
before we issue them in final form. As for APO violations, although the
Department would take into account the quality of an applicant's
internal procedures in considering sanctions for an APO violation, a
failure to follow the guidelines certainly would not be considered an
APO violation. In addition, we agree that a request for the
Department's assistance in handling another party's electronic
submissions would not constitute an APO violation.
One commentator suggested that payment for electronic information
should be required only where requested. Apparently, a number of law
firms do not charge for electronic submissions. We agree that payment
for the cost of electronic submissions should be required only if
payment is requested, and have incorporated the suggestion in the
general regulations that will be published separately.
Certification and Destruction of Business Proprietary Information
Paragraph (a)(4) of Sec. 351.305 requires the destruction of
business proprietary information when a party is no longer entitled to
it, as well as certification that destruction has been completed. As
discussed below, parties now may retain business proprietary
information after the completion of the segment of the proceeding in
which the information was submitted. The certification requirements
would then be triggered at a much later date, at the end of the last
segment of the proceeding for which information may be used. Because
this may vary from case to case, the specific time at which a party
must destroy business proprietary information will be described in the
APO.
In its October Notice, the Department addressed the present
requirement that, at the end of a segment of a proceeding, an
authorized applicant certify to the destruction of APO information
within two business days of the expiration of the time for filing for
judicial or binational panel review. Of the nine commentators that
addressed this issue, all supported extending the deadline to 30 days.
These commentators noted that because the CIT sends out JPOs by mail,
it may take up to a week for a party to receive a copy of the JPO.
Although this may no longer be an issue with respect to most segments
of a proceeding, we agree that if this situation does occur, parties
should be given more time in which to determine their involvement, if
any, in litigation arising out of a particular segment of a proceeding.
Thirty days should cover most contingencies, but the Department will be
willing to grant extensions for good cause shown.
Another commentator pointed out that if the Department arranged
with the CIT to have a single protective order that covered the entire
duration of both the Department's and the Court's proceedings, this
requirement would not be necessary. Under existing practice, parties
obtain an APO for the Department's administrative proceeding, another
one for the ITC proceeding, negotiate a third for a judicial
proceeding, and then obtain another APO in any remand proceeding where
new business proprietary information may be placed on the record. Five
commentators proposed streamlining these procedures. Some suggested
that the JPO cover any remand proceeding. Others suggested a protective
order that covers proceedings of both the Department and the CIT. A
third suggested a model JPO.
We agree that it would be beneficial for all parties to craft
either an APO or JPO that would remain in effect through court appeals
and remands. We believe that any simplification in this regard would
result in a significant savings in time and resources to the parties
and the agencies, particularly if parties retain business proprietary
information for more than a single segment of proceeding. However, this
will require discussions between the Department and the CIT. We will
enter into discussions with the relevant entities toward this end. In
the meantime, the APO will permit access to new business proprietary
information submitted in the course of a remand during litigation
involving the segment of the proceeding in which the initial APO was
issued. Parties no longer will have to apply separately for access
under an APO during a remand proceeding.
One commentator opposed having to send the Department a copy of the
JPO, arguing that the Department of Justice should provide the
Department with the JPO. In our view, the Department needs to know at
the end of a proceeding whether an authorized applicant is or is not
authorized to retain APO information of other parties, and whether the
authorized applicant has taken the correct steps in this regard. Only
the authorized applicant, not the Department of Justice, is in a
position to know this information.
The requirements concerning an authorized applicant's
responsibilities at the end of a segment of a proceeding are contained
in the APO.
APO Applications
Paragraph (b) of Sec. 351.305 deals with the APO application
process itself. Paragraph (b)(1) addresses the issue of multiple
authorized applicants. Under current practice, the Department generally
allows only one representative of a party to have access to business
proprietary information under an APO. In response to suggestions from
practitioners, in its October Notice the Department proposed that two
independent representatives of a party be allowed APO access, with one
representative being designated as the lead representative. We also
proposed granting APOs separately to non-legal representatives only if
they had a significant practice before the Department. The purpose of
this proposal was to ensure that effective sanctions could be imposed
to deter APO violations.
Five commentators addressed this issue. One firm opposed granting
APOs to independent non-legal representatives, arguing that such a
practice would disperse responsibility for protecting APO information
and that the sanction of disbarment from practice before the Department
might be inadequate. This commentator also noted that, unlike the legal
profession,
[[Page 4830]]
there are no independent ethical standards for the other professions
typically involved in AD or CVD proceedings.
Two commentators endorsed the proposal to permit two independent
representatives to apply for an APO, and another commentator supported
an unlimited number. However, all of the commentators that supported
giving independent APO access to multiple representatives added the
caveat that one representative must not be held accountable for any APO
violation of another representative operating under separate APO
authorization.
Under current procedures, the Department has allowed access to non-
attorney applicants for many years, both as ``other representatives''
retained by attorneys and as the sole representative of a party. We are
not proposing to change this practice. Instead, we are proposing that a
party be able to have two independent representatives with independent
and separate access to information under the APO. Moreover, the
Department's experience has demonstrated that non-lawyer applicants are
no more likely to violate the terms of an APO than lawyer applicants,
and that disclosure to non-lawyer applicants does not increase the risk
of an APO violation. In determining whether a non-lawyer representative
is a qualified applicant for APO access under Sec. 351.305(c), the
Department will consider the extent of that representative's practice
before the Department.
As set forth in paragraph (b)(1), generally no more than two
independent authorized applicants for one party may apply for
disclosure under an APO. In addition, the party must designate a lead
authorized applicant if the party has more than one independent
representative. With respect to requests that more than two independent
representatives be designated as authorized applicants, the Department
will consider such requests on a case-by-case basis.
Application for an APO
Paragraph (b)(2) of Sec. 351.305 establishes a ``short form''
application procedure. For some time, parties to AD or CVD proceedings
have requested that they be allowed to reproduce the Department's APO
application on their own word processing equipment. In the October
Notice, the Department proposed two alternatives that would have
permitted such reproduction, but that also would prevent the
unauthorized alteration of the requirements of the APO itself. Four
commentators proposed as an alternative a ``short form'' application
that would contain only the information that varies from party to party
and case to case. The terms and conditions for access would be in the
APO placed on the record of each segment of the proceeding.
The Department agrees that the suggested ``short form'' application
would address the concerns of both the Department and the applicants,
and we have adopted the suggestion in paragraph (b)(2). However, an
important qualification is that an applicant must acknowledge that any
discrepancies between the application and the Department's APO placed
on the record will be interpreted in a manner consistent with the
Department's APO. With this qualification, the new procedure will
enable applicants to reproduce the entire application form on their
word processing equipment, thereby facilitating the application
process.
In addition to the incorporation of the ``short form'' application,
paragraph (b)(2) also provides that an applicant must apply to receive
all business proprietary information on the record of the particular
segment of the proceeding in question. A party no longer may apply to
receive only selected parties' business proprietary information. The
purpose of this requirement is to eliminate the need for parties to
prepare separate APO versions of submissions for each of the different
parties involved in a proceeding, and to reduce the number of APO
violations that occur through the inadvertent service of a document
containing business proprietary information to parties not authorized
to receive it. However, in order to avoid forcing parties to receive a
submission in which they have no interest, a party may waive service of
business proprietary information it does not wish to have served on it
by another party. Thus, for example, Respondent A may waive its right
to be served with a copy of the business proprietary version of
Respondent B's questionnaire response. Nonetheless, if Respondent A
receives a copy by mistake, no APO violation will have occurred.
Deadline for Application for APO Access
Paragraph (b)(3) of Sec. 351.305 deals with the deadline for
applying for access to business proprietary information under APO.
Because the Department has received and denied about six late APO
applications per year, in the October Notice we requested comments on
whether there might be a better procedure to ensure that parties file
timely applications.
Nine commentators addressed this issue, and they unanimously
pointed out that it does not always make sense to require that APO
applications be submitted early in the segment of a proceeding.
Requiring early applications may result in forcing parties to file
protective APO applications that subsequently turn out to be
unnecessary, thereby adding to the burden on the Department and the
parties. In addition, the commentators also were unanimous that expert
representation and access to business proprietary data are so important
to the effective defense of a party's interests that the Department
should provide access liberally by one means or another. With respect
to specific deadlines, the commentators offered different suggestions,
ranging from the status quo (with extensions available) to no deadline
at all.
In dealing with the question of APO application deadlines, the
Department balances the need to provide maximum access by parties to
APO information with the need to minimize the burden on the Department
in processing APO applications, as well as the burden on parties that
have to serve late applicants with APO information placed on the record
before a late APO is granted. Based on our experience, parties that
retain representatives in AD or CVD proceedings typically apply for an
APO early in each segment of a proceeding. In light of this fact, and
in light of the new procedure for a single APO, we believe that the
Department and the parties will not be unduly burdened if APO
applications are received throughout the course of a segment of the
proceeding. The Department will not have to issue an amended or new
APO, but instead need only update the APO service list. Therefore,
while paragraph (b)(3) encourages parties to submit APO applications
sooner rather than later, it permits parties to submit applications up
to the date on which case briefs are due. By adopting this deadline,
however, the Department does not intend to allow a late APO application
to serve as the basis for extending any administrative deadline, such
as a briefing or hearing schedule.
We also have taken into account the burden imposed on parties by
late APO applications. Under current rules, parties have only two days
in which to serve late applicants with APO information that already has
been placed on the record. Under the deadline set forth in paragraph
(b)(3), the burden on parties may increase. In recognition of this, all
commentators requested that parties have five days in which to serve
late APO applicants. In
[[Page 4831]]
addition, one commentator suggested that late applicants be required to
pay the costs associated with the additional production and service of
business proprietary submissions that were served on other parties
earlier in the proceeding. We agree with these suggestions, and are
incorporating them into Sec. 351.301, which will be published
separately.
Approval of the APO Application and the APO Service List
Paragraph (c) of Sec. 351.305 deals with the approval of an APO
application. Under paragraph (c), the Department normally will approve
an application within two days of its receipt in an Investigation and
within five days in other AD and CVD proceedings, unless there is a
question concerning the eligibility of an applicant to receive access
under APO. In that case, the Secretary will decide whether to grant the
application within 30 days of receipt of the application.
If an application is approved, the Secretary will include the name
of the authorized applicant on an APO service list that the Department
will maintain for each segment of a proceeding. In this regard, in the
October Notice the Department raised the issue as to how the Department
should provide parties with the APO service list. Several commentators
suggested that the Department directly notify each party by the most
expeditious means available each time the APO service list changes. One
commentator suggested that the Department make the APO service list
available daily through electronic means. Two commentators noted that
if copies of the list were available only in the Department's Central
Records Unit, this would be unduly burdensome for D.C.-based
representatives and impractical for out-of-town representatives.
The Department believes that the use of an APO service list will
improve and streamline the APO process only if it is readily available
to all parties, and we agree that the Department must provide parties
with notice as to which representatives of other parties are authorized
applicants. In our view, there are three options: notification through
the Internet, by direct facsimile from the computer of the Department's
APO specialist, or by mail. Paragraph (c) provides that the Secretary
will use the most expeditious means available to provide parties with
the APO service list on the day the list is issued or amended.
With respect to the approval of APO applications, several
commentators emphasized the need for expedited approval in order to
ensure timely access. They suggested alternative methods, such as: (1)
The creation of a pre-approved roster of members of a representative's
firm, or (2) permitting a lead signatory in a firm to grant access to
the other professionals within the firm. Four commentators addressed
this issue. Three commentators supported the idea of a roster. However,
one commentator opposed both suggestions, arguing that they would
deprive parties of the opportunity to object, for good cause, to the
suitability of particular applicants, and that a party never could be
certain as to exactly who had access to its business proprietary
information.
In the Department's view, neither of the suggested alternatives is
acceptable. With respect to the pre-approved roster approach, there may
be facts peculiar to a particular AD or CVD proceeding or a segment of
a proceeding that render an otherwise eligible applicant ineligible,
and the roster approach would preclude a party from raising legitimate
objections to the approval of an APO application. Likewise, the lead
signatory approach would preclude parties from exercising their right
to object, for good cause, to the disclosure of APO information to a
particular individual.
Section 351.306 Use of Business Proprietary Information
Section 351.306 deals with how business proprietary information may
be used.
Use of Business Proprietary Information by the Secretary
Paragraph (a) deals with the use of business proprietary
information by the Secretary, and is based on existing 19 CFR 353.32(f)
and 355.32(f). One change is the reference in paragraph (a)(4) to the
disclosure of information to the U.S. Trade Representative under 19
U.S.C. 3571(i). Section 3571(i) (section 281(i) of the URAA) deals with
the enforcement of U.S. rights under the WTO Agreement on Subsidies and
Countervailing Measures. Also, although the regulation itself is little
changed, we note that the URAA amended section 777(b)(1)(A)(i) of the
Act to clarify that the Department may use business proprietary
information for the duration of an entire proceeding (from initiation
to termination or revocation), as opposed to merely the particular
segment of a proceeding for which information was submitted.
Use of Business Proprietary Information by Parties
Paragraph (b) of Sec. 351.306 deals with the use of business
proprietary information by parties from one segment of a proceeding to
another. Paragraph (b) provides that an authorized applicant normally
may retain business proprietary information obtained in one segment of
a proceeding for two subsequent consecutive segments. However,
paragraph (b) also provides that normally an authorized applicant may
use such information only in the particular segment of the proceeding
in which the information was obtained. An authorized applicant may
place business proprietary information received in one segment of a
proceeding on the record of either of two subsequent consecutive
segments only if the information is relevant to an issue in one of the
subsequent segments.
The ability to use information in different segments of a
proceeding raises three related issues: (1) Whether authorized
applicants should be able to retain business proprietary information
after the conclusion of the particular segment in which the information
is obtained, or whether they should rely on an index of business
proprietary information in identifying and selecting information to be
placed on the record of a subsequent segment; (2) whether there are
instances other than those discussed above in which an authorized
applicant should be able to use business proprietary information in a
subsequent segment; and (3) whether the Secretary should reserve the
authority to approve what is placed on the record from prior segments.
One commentator argued that for purposes of five-year reviews under
section 751(c) of the Act, authorized applicants should be allowed to
retain business proprietary information obtained under APO in the
course of prior segments. This commentator argued that the information
would continue to be subject to APO, and that any harm from the
unauthorized disclosure of information after the conclusion of a
segment of a proceeding (or the entire proceeding) would be reduced
because of the passage of time. Another commentator argued that only
the Department, not the parties, may have access to business
proprietary information obtained in the course of a changed
circumstances or five-year review that leads to revocation or
termination, and that parties should not have access for purposes of
preparing new petitions.
It has been suggested that certain cost data should carry over from
segment to segment for the life of a proceeding by placing all relevant
data from the record of one segment on the record of the next segment.
Cost information thus would cumulate from one segment to the next. One
commentator suggested that the
[[Page 4832]]
Department permit APO information from prior segments of a proceeding
to be placed on the record of a subsequent segment where it is relevant
or the submitted information is inconsistent. This commentator noted
that because the Department does not always verify information
submitted in reviews, and because the Department does not have subpoena
power, the Department could use this device to ensure the accuracy of
information submitted to it. Another commentator would require that
authorized applicants destroy all information at the end of each
segment of a proceeding, and that parties could rely on recollection
where they suspect an inconsistency between segments. For this approach
to work, a party would have to have access to the Department's business
proprietary record from prior segments. A fourth commentator proposed
to permit parties to retain all information from any segment of a
proceeding for the duration of the proceeding.
As discussed above, we propose to allow authorized applicants to
retain business proprietary information obtained under APO for two
subsequent consecutive segments of a proceeding. Thus, authorized
applicants would be able to use the information to address
inconsistencies between the records for up to three different segments
of a proceeding. We have limited the retention of business proprietary
information to three consecutive segments, because we are concerned
with the undue proliferation of sensitive proprietary data, and
because, with the exception of situations such as five-year or changed
circumstances reviews, data more than two years old generally is not
probative. For five-year reviews, parties could rely on the index of
business proprietary information for records of segments older than the
ones for which they have retained information. Although authorized
applicants generally will be able to retain information only for three
consecutive segments, the Department will tailor APOs for subsequent
segments to the particular needs of that segment. Thus, for example, an
APO for a five-year review would allow parties to obtain and use
business proprietary information obtained in segments earlier than the
third consecutive preceding segment.
With respect to the question of the Secretary's retention of
authority to approve the use of information from prior segments, there
are advantages and disadvantages. The Department does not want the
record of current segments to become crowded with information that is
extraneous and irrelevant. Therefore, we have included a requirement
that information from a prior segment must be relevant to an issue in
the subsequent segment. However, we have not included a requirement
that the Secretary approve parties' submissions of information on the
record of a subsequent segment. Ultimately, of course, it is the
Secretary who must decide the relevance and weight to be accorded to
this information, at least at the administrative level. Thus, parties
who place irrelevant information on the record of a subsequent segment
gain no advantage, and only waste the time of the Department and other
parties.
Identifying Parties Business Proprietary Information
Paragraph (c) of Sec. 351.306 addresses identification in
submissions of business proprietary information from multiple persons.
The background of this issue was discussed in the October Notice. In
the October Notice, the Department proposed that APO applicants be
required to request access to all business proprietary information
submitted in a particular segment of a proceeding, a proposal that, as
discussed above, has been incorporated into these regulations. In
addition, we also proposed that in the case of submissions, such as
briefs, that include business proprietary information of different
parties, the submission must identify each piece of business
proprietary information included and the party to which the information
pertains. (For example, Information Item #1 came from Respondent A,
Information Item #2 came from Respondent B, etc.) The purpose of this
proposal is to enable parties to submit a single APO version of a
submission that may be served on all parties represented by authorized
applicants, instead of forcing parties to submit and serve different
APO versions for each of the parties involved in a proceeding. In the
case of a submission served on a party not represented by an authorized
applicant (a relatively rare event), the submitter still would have to
prepare and serve a separate submission containing only that party's
business proprietary information.
All commentators addressed this proposal, and, with one exception,
endorsed it. The supporting commentators agreed that this proposal, if
adopted, would expedite the production and service of documents, reduce
the costs of participants, and would lead to a significant reduction in
the number of inadvertent APO violations. These commentators also
supported the Department's proposal to allow authorized applicants the
choice of being served with hard copy or electronic information, as
well as the ability to waive the receipt of submissions of certain
parties. They also agreed that the identification of the source of
business proprietary information is essential in reducing the
possibility of inadvertent disclosures when a party prepares and serves
submissions that contain information of multiple parties, and in
preventing the possibility of one party frustrating the effective
representation of an opposing party.
One commentator strongly opposed these proposals, asserting that
the requirement that an applicant request access to all business
proprietary information from all persons was inconsistent with the
requirement in section 777 of the Act that an application describe in
general terms the information requested and the reasons for the
request. This commentator argued that under section 777, a party cannot
be compelled to request access to information for which the party has
no interest. In this commentator's view, the ability to waive service
would not correct this defect, because parties still would be compelled
to accept business proprietary information in which they have no
interest in a submission containing business proprietary information of
multiple parties. For example, Respondent A would be forced to accept a
submission from Petitioner that might contain information of Respondent
A, as well as of Respondents B, C, and D. This commentator believed
that more, rather than fewer, APO violations would result from parties
having to expurgate such submissions, and that multiple parties, rather
than the original submitter, would be expurgating documents, with no
party knowing whether the other parties had expurgated information
correctly. This commentator also argued that the proposals would
unnecessarily shift the burden of complying with APO procedures from
petitioners to respondents, because respondents' representatives would
be forced to expurgate multi-party documents that they did not prepare
on their own word processing equipment.
Three commentators filed rebuttal comments. One argued that section
777 only requires a party to give a reason why it should have access to
business proprietary information, but that it does not preclude the
Department from adopting procedures that best protect the information.
Another commentator stated that it is more burdensome for parties to
prepare multiple party-specific submissions under a deadline
[[Page 4833]]
than it is for the receiving party to expurgate other party's data from
a document containing multiple-party data, where there may be no
deadline. A third commentator took the position that no authorized
applicant should be expurgating a business proprietary document to show
its client in the first place, and that this is the reason for public
summaries of submissions. The client should be familiar enough with its
own data to be able to discuss the case with the authorized applicant.
Given the overwhelming support for the Department's proposals, we
have incorporated them into these regulations. These proposed
procedures simply formalize what has been the Department's practice
since 1992. Moreover, we believe that these proposals balance the
different interests of petitioners and respondents. Although there are
risks of inadvertent APO violations associated with any option, we
believe that the fact that all authorized applicants will have access
to the business proprietary information of all parties (whether or not
service is waived) should reduce significantly the number of
inadvertent disclosures. In this regard, the inadvertent service on an
authorized applicant of a submission containing information of a party
for which the applicant has waived service would not constitute an APO
violation.
Disclosures to Parties Not Authorized To Receive Business Proprietary
Information
Paragraph (d) of Sec. 351.306 clarifies that no person, including
an authorized applicant, may disclose the business proprietary
information of another party to any other person except another
authorized applicant or a Department official described in
Sec. 351.306(a)(2). Any person who is not an authorized applicant and
who is served with business proprietary information of another party
must return that information immediately to the sender, without reading
it if possible, and must notify the Department so that the Department
can investigate the disclosure under 19 CFR part 354. The purpose of
this requirement is to minimize the damage caused by the unauthorized
disclosure of business proprietary information, disclosures that
typically are inadvertent.
APO Sanction Procedures
Section 354.1 Scope
The proposed amendment to Sec. 354.1 would revise cross-reference
citations to take into account changes in parts 353 and 355 that have
occurred since that section was promulgated in 1988.
Section 354.3 Sanctions
The proposed amendment to Sec. 354.3 concerns the private letter of
reprimand, which currently is a sanction commonly applied as part of a
settlement agreement reached under Sec. 354.7(b). The proposed
amendment would allow the Department to issue a private reprimand as a
sanction in the first instance, and not solely as part of a settlement
of the charges. A private reprimand is a relatively mild sanction that
is appropriate whenever a violation is minor and technical in nature,
the person who committed the violation took prompt action to prevent
harm to the submitter of the proprietary information, the violator
cooperated fully with the investigation, and there is no apparent harm
to the submitter of the information.
The Department proposes that the private letter of reprimand would
accompany the charging letter as a statement of proposed sanction,
described in Sec. 354.7(a)(2). The charging letter would indicate that
if the charged party does not take the steps described in paragraphs
(a)(3)-(a)(6) within 30 days after the date of service of the charging
letter, the proposed sanction (i.e., the private letter of reprimand)
automatically would become final. This procedure would differ from
those pertaining to other proposed sanctions. Other proposed sanctions
are enclosed with the charging letter unsigned and undated, and include
a caption indicating that they are proposed. Only after the charged or
affected party accepts the proposed sanction is it sent in final form.
In contrast, if the proposed sanction is a private reprimand, it would
be enclosed with the charging letter in its final form, without a
caption and signed and dated by the Deputy Under Secretary. Unless
contested within 30 days, it would become effective. The charging
letter would clearly explain this procedure.
Section 354.5 Report of Violation and Investigation
Paragraph (c)(1) introduces an expedited investigation procedure.
Frequently, an individual contacts the Department to report his or her
own APO violation, and provides all or most of the relevant details
over the telephone or by letter. If the violation is relatively minor
and the business proprietary information clearly has not been disclosed
to anyone who is not entitled to access, the investigation may be
substantially abbreviated. The expedited system would apply in cases in
which little further inquiry is necessary. This proposed amendment
pertains only to the investigation and does not affect any sanction
that might be imposed as a result of a charging letter issued on the
basis of the investigation. Paragraph (c)(2) contains the text of
current paragraph (c).
The amendment to paragraph (d)(2) reflects proposed changes in the
terms of the APO, as discussed above. (See also the October Notice).
The Department's standard forms no longer will contain detailed
procedures for safeguarding business proprietary information. Instead,
it will be the responsibility of the individual subject to an APO to
take appropriate measures to protect business proprietary information
received under an APO. Accordingly, the list of examples of APO
violations simply refers to the procedures described in the APO.
Section 354.6 Initiation of Proceedings
Experience in administering APO sanctions has made it clear that
there are certain circumstances that do not warrant the imposition of a
sanction, even though a person subject to an APO technically has
violated the terms of the APO. Consequently, the Department has
developed a policy regarding the instances when it issues a warning,
rather than imposing a sanction. The amendment to Sec. 354.6(b)
codifies this policy, and enunciates a four-pronged standard for
issuing a warning.
The first criterion in paragraph (c)(1) is that the person has
taken due care. Due care is an objective standard meaning that the
person had taken all the steps that a careful individual would take to
establish, maintain, and observe adequate procedures to safeguard
business proprietary information. The standard recognizes that, despite
appropriate precautions, errors occur. The due care requirement avoids
subjective appraisal of the intent of the individual involved. Because
people rarely intend to violate an APO, whether a violation was
intentional or inadvertent is not a relevant inquiry.
The second prong of the warning standard, contained in paragraph
(c)(2), is that the Department cannot previously have found the person
to have violated an APO. The Department will not take into account any
other on-going APO violation investigation involving that person, even
if the other alleged violation occurred first.
Third, as reflected in the first clause of paragraph (c)(3), a
warning is never appropriate if the business proprietary information
actually has been disclosed to an unauthorized person. Many technical
violations, such as the failure to return or destroy documents
containing proprietary information at
[[Page 4834]]
the specified time, do not result in any disclosure. In other
instances, nondisclosure is fortuitous. To cite a common example, a
person subject to an APO is able to retrieve, unopened, a document
containing business proprietary information that the person sent to
someone who was not authorized to have access. In this situation,
either the person who sent the document realized the error and
immediately retrieved the document, or the recipient realized that he
or she should not have the document and promptly notified the sender or
the Department. Under either scenario, the nondisclosure depends on
timing, and, especially in the latter case, on the good faith of the
recipient in returning the document without opening, reading, copying
or transmitting it. To this extent, then, whether a first-time violator
receives a warning or a sanction may depend on factors not entirely
within the person's control. Nondisclosure remains a valid criterion
for issuing a warning, however, because disclosure markedly increases
the potential for harm to the submitter of the information.
The second clause of paragraph (c)(3) takes into account the fact
that sometimes the submitter claims that it has been harmed by an APO
violation, but the Department determines otherwise. For example, a
submitter may claim that there could be substantial harm because the
public version of a document contained business proprietary
information, yet the Department's investigation shows that no
unauthorized person saw the public version before all copies were
retrieved. Therefore, although there may have been a technical APO
violation, the Department follows a limited ``no harm, no foul'' rule.
Finally, paragraph (c)(4) takes into account the cooperation, or
lack thereof, of the person alleged to have committed an APO violation.
Section 354.7 Charging letter
The amendment to Sec. 354.7(b) moves the text providing for
settlement from the end to the beginning of the paragraph, because in
practice charges are often settled. Charged or affected parties seeking
a settlement often request a hearing, but in their requests ask that a
hearing officer not be appointed while settlement talks are pending. In
this way, they preserve their rights to a hearing while effectively
staying the complicated hearing process and stopping the period for
proceeding without a hearing, which is provided for in Sec. 354.13.
Amended paragraph (b) codifies this practice.
Less frequently, however, the Department amends, supplements, or
withdraws charging letters. Revised paragraph (b) would provide
alternate methods of withdrawing charges. The existing regulation
requires that a presiding official be appointed to approve the
withdrawal. The amendment establishes a three-tiered approach. First,
under paragraph (b)(1), if no hearing has been requested (or, under the
provision for proceeding without a hearing, no supporting information
is presented), the Department could withdraw a charging letter without
prejudice to future action based on the same violation. However, if a
hearing has been requested but no presiding official has been
appointed, under paragraph (b)(2) the Department could withdraw the
charging letter, but the Deputy Under Secretary would be precluded from
subsequently seeking sanctions for the same alleged violation. Finally,
under paragraph (b)(3), where a hearing has been requested and a
presiding official appointed, the presiding official would have to
approve any withdrawal and also determine whether or not the withdrawal
would bar the Department from taking future action based on the same
violation.
Section 354.9 Request for a hearing
The amendment to Sec. 354.9 is intended to conform with and
reinforce the amendment to Sec. 354.7 that enables a party to request a
hearing to preserve its rights pending settlement discussions.
Section 354.15 Sanctions by agreement
The amendment to Sec. 354.15 moves the substance of paragraph (e)
to a new Sec. 345.18, which deals with sanctions taken by agreement
between the Deputy Under Secretary and a party, as well as sanctions
imposed by a final decision under Sec. 354.15.
Section 354.18 Public Notice of Sanctions
Section 354.18 is a new section that contains the substance of
current Sec. 354.15(e), and that pertains to publication in the Federal
Register of sanctions imposed under a final decision. In addition,
Sec. 354.18 provides for the publication of notice of settlement
agreements. The amendment codifies the Department's current practice of
publishing notices that violations have occurred, even if the sanction
is a private reprimand. The Department does not publish notices of
warning letters, because no charging letter is issued and no sanctions
are imposed.
Section 354.19 Sunset
For years, the Department has included in settlement agreements a
sunset provision that provides for the rescission of the charging
letter. New Sec. 354.19 codifies this practice with respect to
settlements, and also extends the possible availability of sunset to
all cases. Expunging an individual's record after a period of time if
that person has not mishandled proprietary information in the meantime
is fair and reasonable.
Classification
E.O. 12866
This proposed rule has been determined to be not significant for
purposes of Executive Order 12866.
Paperwork Reduction Act
This proposed rule would impose no new reporting or record keeping
requirements for purposes of the Paperwork Reduction Act of 1980 (44
U.S.C. 3501 et seq.).
Regulatory Flexibility Act
The Assistant General Counsel for Legislation and Regulation of the
Department of Commerce has certified to the Chief Counsel for Advocacy
of the Small Business Administration that these amendments would not
have a significant economic impact on a substantial number of small
business entities because the rule that they would amend does not have
such an impact and, furthermore, the amendments would tend to simplify
the procedures pertaining to administration of APO sanctions. The
Deputy Under Secretary for International Trade is responsible for
regulations governing sanctions for violations of administrative
protective orders. The Assistant Secretary for Import Administration is
responsible for the regulations governing issuance and use of
administrative protective orders.
List of Subjects in 19 CFR Parts 351, 353, 354, and 355
Business and industry, Foreign trade, Imports, Trade practices.
Dated: January 20, 1996.
Timothy J. Hauser,
Deputy Under Secretary for International Trade.
Dated: December 15, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administrations.
For the reasons stated, it is proposed that 19 CFR Ch. III be
amended as follows:
1. Part 351 is added to read as follows:
[[Page 4835]]
PART 351--ANTIDUMPING AND COUNTERVAILING DUTIES
Subpart A--[Reserved]
Subpart B--[Reserved]
Subpart C--Information and Argument
Sec.
351.304 Establishing business proprietary treatment of information.
351.305 Access to business proprietary information.
351.306 Use of business proprietary information.
Authority: 5 U.S.C. 301 and 19 U.S.C. 1667f.
Subpart A--[Reserved]
Subpart B--[Reserved]
Subpart C--[Information and Argument]
Sec. 351.304 Establishing business proprietary treatment of
information.
(a) Claim for business proprietary treatment. (1) Any person that
submits factual information to the Secretary in connection with a
proceeding may:
(i) Request that the Secretary treat any part of the submission as
business proprietary information that is subject to disclosure only
under an administrative protective order,
(ii) Claim that there is a clear and compelling need to withhold
certain business proprietary information from disclosure under an
administrative protective order, or
(iii) In an investigation, identify customer names that are exempt
from disclosure under administrative protective order under section
777(c)(1)(A) of the Act.
(2) The Secretary will require that all business proprietary
information presented to, or obtained or generated by, the Secretary
during a segment of a proceeding be disclosed to authorized applicants,
except for:
(i) Customer names submitted in an investigation,
(ii) Information for which the Secretary finds that there is a
clear and compelling need to withhold from disclosure, and
(iii) Privileged or classified information.
(b) Identification of business proprietary information--(1) In
general. A person submitting information must identify the information
for which it claims business proprietary treatment by enclosing the
information within single brackets. The submitting person must provide
with the information an explanation of why each item of bracketed
information is entitled to business proprietary treatment. All persons
submitting a request for business proprietary treatment also must
include an agreement to permit disclosure under an administrative
protective order, unless the submitting party claims that there is a
clear and compelling need to withhold the information from disclosure
under an administrative protective order.
(2) Information claimed to be exempt from disclosure under
administrative protective order. (i) If the submitting person claims
that there is a clear and compelling need to withhold certain
information from disclosure under an administrative protective order
(see paragraph (a)(1)(ii) of this section), the submitting person must
identify the information by enclosing the information within double
brackets, and must include a full explanation of the reasons for the
claim.
(ii) In an investigation, the submitting person may enclose non-
public customer names within double brackets (see paragraph (a)(1)(iii)
of this section).
(iii) The submitting person may exclude the information in double
brackets from the business proprietary information version of the
submission served on authorized applicants. See Sec. 351.303 for filing
and service requirements.
(c) Public version. (1) A person filing a submission that contains
information for which business proprietary treatment is claimed must
file a public version of the submission. The public version must be
filed on the first business day after the filing deadline for the
business proprietary version of the submission (see Sec. 351.303(b)).
The public version must contain a summary of the bracketed information
in sufficient detail to permit a reasonable understanding of the
substance of the information. If the submitting person claims that
summarization is not possible, the claim must be accompanied by a full
explanation of the reasons supporting that claim.
(2) If a submitting party discovers that it has failed to bracket
information correctly, the submitter may file a complete, corrected
business proprietary version of the submission along with the public
version (see Sec. 351.303(b)). However, at the close of business on the
day on which the public version of a submission is due under paragraph
(c)(1) of this section, the bracketing of business proprietary
information will become final. Once bracketing has become final, the
Secretary will not accept any further corrections to the bracketing of
information in a submission, and the Secretary will treat non-bracketed
information as public information.
(d) Nonconforming submissions--(1) In general. The Secretary will
return a submission that does not meet the requirements of section
777(b) of the Act and this section with a written explanation. The
submitting person may take any of the following actions within two
business days after receiving the Secretary's explanation:
(i) Correct the problems and resubmit the information;
(ii) if the Secretary denied a request for business proprietary
treatment, agree to have the information in question treated as public
information;
(iii) if the Secretary granted business proprietary treatment but
denied a claim that there was a clear and compelling need to withhold
information under an administrative protective order, agree to the
disclosure of the information in question under an administrative
protective order; or
(iv) submit other material concerning the subject matter of the
returned information. If the submitting person does not take any of
these actions, the Secretary will not consider the returned submission.
(2) Timing. The Secretary normally will determine the status of
information within 30 days after the day on which the information was
submitted. If the business proprietary status of information is in
dispute, the Secretary will treat the relevant portion of the
submission as business proprietary information until the Secretary
decides the matter.
Sec. 351.305 Access to business proprietary information.
(a) The administrative protective order. The Secretary will place
an administrative protective order on the record within one day after
the day on which a petition is filed or an investigation is self-
initiated, or one day after initiating any other segment of a
proceeding. The administrative protective order will require the
authorized applicant to:
(1) Establish and follow procedures to ensure that no employee of
the authorized applicant's firm releases business proprietary
information to any person other than the submitting party, an
authorized applicant, or an appropriate Department official identified
in section 777(b) of the Act.
(2) Notify the Secretary of any changes in the facts asserted by
the authorized applicant in its administrative protective order
application;
(3) Take the necessary steps to protect business proprietary
information during judicial proceedings or binational panel
[[Page 4836]]
proceedings under section 516A of the Act.
(4) Destroy business proprietary information by the time required
under the terms of the administrative protective order;
(5) Immediately report to the Secretary any apparent violation of
the administrative protective order; and
(6) Acknowledge that any unauthorized disclosure may subject the
authorized applicant, a partner, associate, or employee, and any
partner, associate, employer, or employee of the authorized applicant's
firm to sanctions listed in part 354 of this chapter (19 CFR part 354).
(b) Application for access under administrative protective order.
(1) Generally, no more than two independent representatives of a party
to the proceeding may have access to business proprietary information
under an administrative protective order. A party must designate a lead
firm if the party has more than one independent authorized applicant
firm.
(2) A representative of a party to the proceeding may apply for
access to business proprietary information under the administrative
protective order by submitting Form ITA-367 to the Secretary. Form ITA-
367 must identify the segment of the proceeding involved, the identity
and eligibility for disclosure of the applicant, and the agreement of
the applicant to be bound by the administrative protective order. Form
ITA-367 may be prepared on the applicant's own word processing system,
accompanied by a certification that the application is consistent with
Form ITA-367 and an acknowledgment that any discrepancies will be
interpreted in a manner consistent with Form ITA-367. An applicant must
apply to receive all business proprietary information on the record of
the segment of a proceeding in question, but may waive service of
business proprietary information it does not wish to have served on it
by other parties to the proceeding.
(3) To minimize the disruption caused by late applications, an
application should be filed before the first questionnaire response has
been submitted. Where justified, however, applications may be filed up
to the date on which the case briefs are due, but any applicant filing
after the first questionnaire response is submitted will be liable for
costs associated with the additional production and service of business
proprietary information already on the record.
(c) Approval of access under administrative protective order;
administrative protective order service list. The Secretary will grant
access to a qualified applicant by including the name of the applicant
on an administrative protective order service list. Access normally
will be granted within two days of receipt of the application in an
Investigation and within five days in other AD and CVD proceedings
unless there is a question regarding the eligibility of the applicant
to receive access. In that case, the Secretary will decide whether to
grant the applicant access within 30 days of receipt of the
application. The Secretary will provide by the most expeditious means
available the administrative protective order service list to parties
to the proceeding on the day the service list is issued or amended.
Sec. 351.306 Use of business proprietary information.
(a) By the Secretary. The Secretary may disclose business
proprietary information submitted to the Secretary only to:
(1) An authorized applicant;
(2) An employee of the Department of Commerce or the International
Trade Commission directly involved in the proceeding in which the
information is submitted;
(3) An employee of the Customs Service directly involved in
conducting a fraud investigation relating to an antidumping or
countervailing duty proceeding;
(4) The U.S. Trade Representative as provided by 19 U.S.C. 3571(i);
(5) Any person to whom the submitting person specifically
authorizes disclosure in writing; and
(6) A charged party or counsel for the charged party under 19 CFR
part 354.
(b) By an authorized applicant. An authorized applicant may retain
business proprietary information for the time authorized by the terms
of the administrative protective order, which normally will permit an
authorized applicant to retain business proprietary information
obtained in one segment of a proceeding for two subsequent consecutive
segments. Normally, an authorized applicant may use business
proprietary information only for purposes of the segment of a
proceeding in which the information was submitted. If business
proprietary information that was submitted in an earlier segment of the
proceeding is relevant to an issue in either of two subsequent
consecutive segments of a proceeding, or in any scope or
anticircumvention inquiry, an authorized applicant may place such
information on the record of the subsequent segment or scope or
circumvention inquiry.
(c) Source of business proprietary information. (1) If a party
submits a document containing business proprietary information, the
submitting party must identify contiguously with each item of business
proprietary information the interested party that originally submitted
the item (e.g., Petitioner, Respondent A, Respondent B).
(2) If a party to a proceeding is not represented by an authorized
applicant, a party submitting a document containing business
proprietary information must serve the unrepresented party with a
version of the document that contains only the unrepresented party's
business proprietary information, but not the business proprietary
information of other parties.
(d) Disclosure to parties not authorized to receive business
proprietary information. No person, including an authorized applicant,
may disclose the business proprietary information of another person to
any other person except another authorized applicant or a Department
official described in paragraph (a)(2) of this section. Any person that
is not an authorized applicant and that is served with business
proprietary information must return it to the sender immediately,
without reading it to the extent possible, and must notify the
Department. An allegation of an unauthorized disclosure will subject
the person that made the alleged unauthorized disclosure to an
investigation and possible sanctions under 19 CFR part 354.
PART 353--[AMENDED]
2. The authority citation for part 353 continues to read as
follows:
Authority: 5 U.S.C. 301 and 19 U.S.C. 1677f.
3. Part 353 is proposed to be amended by removing Secs. 353.32
through 355.34, and redesignating Secs. 353.35 through 353.38 as 353.32
through 353.35 respectively.
PART 354--[AMENDED]
4-5. The authority citation for part 354 is revised to read as
follows:
Authority: 5 U.S.C. 301, and 19 U.S.C. 1677.
6. Section 354.1 is revised to read as follows:
Sec. 354.1 Scope.
This part sets forth the procedures for imposing sanctions for
violation of an administrative protective order issued under 19 CFR
353.34 or 355.34, or
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successor regulations, as authorized by 19 U.S.C. 1677f(c).
7. Section 354.3 is amended by revising paragraph (a)(3) and
(a)(4), and by adding a new paragraph (a)(5), as follows:
Sec. 354.3 Sanctions
(a) * * *
(3) Other appropriate administrative sanctions, including striking
from the record any information or argument submitted by, or on behalf
of the violating party or the party represented by the violating party;
terminating any proceeding then in progress; or revoking any order then
in effect;
(4) Requiring the person to return material previously provided by
the Department and all other materials containing the business
proprietary information, such as briefs, notes, or charts based on any
such information received under an administrative protective order; and
(5) Issuing a private letter of reprimand.
* * * * *
8. Section 354.5 is amended by revising paragraphs (c) and (d)(2),
as follows:
Sec. 354.5 Report of violation and investigation.
* * * * *
(c)(1) The appropriate Director will provide a report of the
investigation to the Deputy Under Secretary, after review by the Chief
Counsel, no later than 90 days after receiving information concerning a
violation if:
(i) The person alleged to have violated a protective order
personally notified the Department and reported the particulars
surrounding the incident; and
(ii) the alleged violation did not result in any actual disclosure
of business proprietary information. Upon the appropriate Director's
request, and if extraordinary circumstances exist, the Deputy Under
Secretary may grant the appropriate Director up to an additional 90
days to conduct the investigation and submit the report.
(2) In all other cases, the appropriate Director will provide a
report of the investigation to the Deputy Under Secretary, after review
by the Chief Counsel, no later than 180 days after receiving
information concerning a violation. Upon the appropriate Director's
request, and if extraordinary circumstances exist, the Deputy Under
Secretary may grant the appropriate Director up to an additional 180
days to conduct the investigation and submit the report.
(d) * * *
(2) Failure to follow the procedures outlined in the protective
order for safeguarding proprietary information.
* * * * *
9. Section 354.6 is revised as follows:
Sec. 354.6 Initiation of proceedings.
(a) In general. After an investigation and report by the
appropriate Director under Sec. 354.5(c) and consultation with the
Chief Counsel, the Deputy Under Secretary will determine whether there
is reasonable cause to believe that a person has violated a protective
order. If the Deputy Under Secretary determines that there is
reasonable cause, the Deputy Under Secretary also will determine
whether sanctions or a warning is appropriate for the violation.
(b) Sanctions. In determining under paragraph (a) of this section
whether sanctions are appropriate, and, if so, what sanctions to
impose, the Deputy Under Secretary will consider the nature of the
violation, the resulting harm, and other relevant circumstances of the
case. If the Deputy Under Secretary determines that sanctions are
appropriate, the Deputy Under Secretary will initiate a proceeding
under this part by issuing a charging letter under Sec. 354.7. The
Deputy Under Secretary will determine whether to initiate a proceeding
no later than 60 days after receiving a report of the investigation.
(c) Warning. If the Deputy Under Secretary determines under
paragraph (a) of this section that a warning is appropriate, the Deputy
Under Secretary will issue a warning letter to the person believed to
have violated a protective order. Sanctions are not appropriate and a
warning is appropriate if:
(1) The person took due care;
(2) The Department has not previously found the person to have
violated a protective order;
(3) The violation did not result in any disclosure of the business
proprietary information or the Department is otherwise able to
determine that the violation caused no harm to the submitter of the
information; and
(4) The person cooperated fully in the investigation.
10. Section 354.7 is amended by revising paragraph (b), as follows:
Sec. 354.7 Charging letter.
* * * * *
(b) Settlement and amending the charging letter. The Deputy Under
Secretary and a charged or affected party may settle a charge brought
under this part by mutual agreement at any time after service of the
charging letter; approval of the presiding official or the
administrative protective order Sanctions Board is not necessary. The
charged or affected party may request a hearing but at the same time
request that a presiding official not be appointed pending settlement
discussions. Settlement agreements may include sanctions for purposes
of Sec. 354.18. The Deputy Under Secretary may amend, supplement, or
withdraw the charging letter as follows:
(1) If there has been no request for a hearing, or if supporting
information has not been submitted under Sec. 354.13, the withdrawal
will not preclude future actions on the same alleged violation.
(2) If a hearing has been requested but no presiding official has
been appointed, withdrawal of the charging letter will preclude the
Deputy Under Secretary from seeking sanctions at a later date for the
same alleged violation.
(3) The Deputy Under Secretary may amend, supplement or withdraw
the charging letter at any time after the appointment of a presiding
official, if the presiding official determines that the interests of
justice would thereby be served. If the presiding official so
determines, the presiding official will also determine whether the
withdrawal will preclude the Deputy Under Secretary from seeking
sanctions at a later date for the same alleged violation.
* * * * *
11. Section 354.9 is amended by revising paragraph (b), as follows:
Sec. 354.9 Request for a hearing.
(a) * * *
(b) Upon timely receipt of a request for a hearing, and unless the
party requesting a hearing requests that the Under Secretary not
appoint a presiding official, the Under Secretary will appoint a
presiding official to conduct the hearing and render an initial
decision.
Sec. 354.15 [Amended]
12. Section 354.15 is amended by removing paragraph (e).
Sec. 354.17 [Amended]
13. Section 354.17(b) is amended to change the citation of 19 CFR
353.30 and Sec. 355.20 to 19 CFR 351.205.
14. Section 354.18 is added to part 354, to read as follows:
Sec. 354.18 Public notice of sanctions.
If there is a final decision under Sec. 354.15 to impose sanctions,
or if a charging letter is settled under Sec. 354.7(b), notice of the
Department's decision or of the existence of a settlement will be
published in the Federal Register. If a final decision is reached, such
publication will be no sooner than 30 days after issuance of a final
decision or after a motion to
[[Page 4838]]
reconsider has been denied, if such a motion was filed. In addition,
whenever the Deputy Under Secretary subjects a charged or affected
party to a sanction under Sec. 354.3(a)(1), the Deputy Under Secretary
also will provide such information to the ethics panel or other
disciplinary body of the appropriate bar associations or other
professional associations and to any Federal agency likely to have an
interest in the matter. The Deputy Under Secretary will cooperate in
any disciplinary actions by any association or agency. Whenever the
Deputy Under Secretary subjects a charged or affected party to a
private letter of reprimand under Sec. 354.3(a)(5), the Department will
not make public the identity of the violator, nor will the Department
make public the specifics of the violation in a manner that would
reveal indirectly the identity of the violator.
15. Section 354.19 is added to part 354, to read as follows:
Sec. 354.19 Sunset.
(a) If, after a period of three years from the date of a final
decision or settlement in which sanctions were imposed, the charged or
affected party has fully complied with the terms of the sanctions and
has not been found to have violated another protective order, the party
may request in writing that the Deputy Under Secretary rescind the
charging letter. A request for rescission must include:
(1) A description of the actions taken during the preceding three
years in compliance with the terms of the sanctions; and
(2) A letter certifying that: the charged or affected party
complied with the terms of the sanctions; the charged or affected party
has not received another administrative protective order sanction
during the three-year period; and the charged or affected party is not
the subject of another investigation for a possible violation of a
protective order.
(b) Subject to the Chief Counsel's confirmation that the charged or
affected party has complied with the terms set forth in paragraph (a)
of this section, the Deputy Under Secretary will rescind the charging
letter within 30 days after receiving the written request.
PART 355--[AMENDED]
16. The authority citation for part 355 continues to read as
follows:
Authority: 5 U.S.C. 301 and 19 U.S.C. 1677f.
17. Part 355 is amended by removing Secs. 355.32 through 355.34,
and redesignating Secs. 355.35 through 355.39 as 355.32 through 353.36
respectively.
* * * * *
Note: The following appendix will not appear in the Code of
Federal Regulations: Appendix to 19 CFR Part 351, Subpart C--
Application for Administrative Protective Order in Antidumping or
Countervailing Duty Proceeding, and Administrative Protective Order.
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