[Federal Register Volume 60, Number 67 (Friday, April 7, 1995)]
[Rules and Regulations]
[Pages 17625-17628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8593]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules
and Regulations
[[Page 17625]]
EXPORT-IMPORT BANK OF THE UNITED STATES
5 CFR Chapter LII
12 CFR Part 400
RIN 3209-AA15
Supplemental Standards of Ethical Conduct for Employees of the
Export-Import Bank of the United States
AGENCY: Export-Import Bank of the United States (Eximbank).
ACTION: Interim rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The Export-Import Bank of the United States, with the
concurrence of the Office of Government Ethics (OGE), is issuing
regulations for employees of Eximbank that supplement the Standards of
Ethical Conduct for Employees of the Executive Branch issued by OGE.
The supplemental rules prohibit certain Eximbank employees and their
spouses and minor children from owning securities in any of the
entities designated as having the most substantial dealings with
Eximbank and require Eximbank employees, other than special Government
employees, to obtain prior approval to engage in outside employment.
Eximbank is also repealing its existing regulations setting forth
agency standards of ethical conduct which have been substantially
superseded by the executive branch-wide Standards of Ethical Conduct
and by the executive branch-wide financial disclosure regulations
issued by OGE. In place of the existing Eximbank regulations in 12 CFR
part 400, Eximbank is substituting a cross-reference to the new
executive branch-wide regulations and to these supplemental
regulations.
DATES: Interim rule effective April 7, 1995. Comments are invited and
must be received on or before May 22, 1995.
ADDRESSES: Send comments to the Export-Import Bank of the United
States, 811 Vermont Avenue NW., Washington, DC 20571, Attention: Mr.
Paul W. Boyer.
FOR FURTHER INFORMATION CONTACT: Mr. Robert J. McKinsey, Export-Import
Bank of the United States, Office of The General Counsel, telephone
(202) 565-3452.
SUPPLEMENTARY INFORMATION:
I. Background
On August 7, 1992, OGE published a final rule entitled ``Standards
of Ethical Conduct for Employees of the Executive Branch'' (Standards).
See 57 FR 35006-35067, as corrected at 57 FR 48557 and 57 FR 52583,
with additional grace period extensions at 59 FR 4779-4780 and 60 FR
6390-6391. The Standards, codified at 5 CFR part 2635 and effective
February 3, 1993, establish uniform standards of ethical conduct that
are applicable to all executive branch personnel.
5 CFR 2635.105 authorizes an executive branch agency to issue, with
OGE's concurrence, agency-specific supplemental regulations that are
necessary to implement effectively its ethics program. Eximbank, with
OGE's concurrence, has determined that the following supplemental
rules, being codified in new 5 CFR chapter LII, are necessary for the
successful implementation of Eximbank's ethics program, in light of
Eximbank's operations.
II. Analysis of the Regulations
Section 6201.101 General
Section 6201.101 explains that the regulations contained in the
interim rule apply to employees of Eximbank and are supplemental to the
executive branch standards.
Section 6201.102 Prohibited Financial Interests
The Standards, at 5 CFR 2635.403(a), specifically recognize that an
individual agency may find it necessary or desirable to issue a
supplemental regulation prohibiting or restricting the acquisition or
holding of a financial interest or a class of financial interests by
its employees, or any category of its employees, and the spouses and
minor children of those employees, based on the agency's determination
that the acquisition or holding of such financial interests would cause
a reasonable person to question the impartiality and objectivity with
which agency programs are administered. Eximbank has made such a
determination with respect to certain holdings by those employees,
other than special Government employees, who are required to file
public or confidential disclosure statements. With respect to the
spouses and minor children of these Eximbank employees, Eximbank has
made an additional determination that there is a direct and appropriate
nexus between the prohibition on holding certain financial interests as
applied to spouses and minor children and the efficiency of the service
provided by Eximbank. To help ensure public confidence in the integrity
of Eximbank's programs and operations, this interim rule, for
codification at 5 CFR 6201.102, will prohibit covered employees of
Eximbank and their spouses and minor children from owning securities of
any of the entities designated by Eximbank as having the most
substantial dealings with Eximbank.
Section 6201.103 Prior Approval of Outside Employment
The Standards, at 5 CFR 2635.803, also specifically recognize that
an agency may find it necessary or desirable to issue a supplemental
regulation requiring its employees to obtain approval before engaging
in outside employment or activities. The Eximbank standards of conduct
regulations have long required employees to obtain written permission
prior to engaging in outside employment. Eximbank has found this
requirement useful in ensuring that the outside employment activities
of employees conform with all applicable laws and regulations. In
accordance with 5 CFR 2635.803, Eximbank has determined that it is
necessary to the administration of its ethics program to continue to
require such prior approval. This interim rule, for codification at 5
CFR 6201.103, will require employees of Eximbank, other than special
Government employees, who desire to engage in outside employment to
obtain prior approval of such employment from their immediate
supervisor and from Eximbank's Designated Agency Ethics Official.
[[Page 17626]]
Repeal of Eximbank Standards of Conduct
Eximbank is repealing its existing standards of ethical conduct
regulations codified at 12 CFR part 400 which have been largely
superseded by the executive branch-wide Standards at 5 CFR part 2635 or
the executive branch financial disclosure regulations at 5 CFR part
2634. In place of its old standards at 12 CFR part 400, Eximbank is
issuing a residual cross-reference provision at new 12 CFR 400.101 to
refer both to the executive branch-wide Standards and financial
disclosure regulations and to Eximbank's new supplemental standards
regulations.
II. Matters of Regulatory Procedure
Administrative Procedure Act
As General Counsel of Eximbank, I have found good cause pursuant to
5 U.S.C. 553(b) and (d)(3) for waiving, as unnecessary and contrary to
the public interest, the general notice of proposed rulemaking and the
30-day delay in effectiveness as to these interim rules and repeals.
The reason for this determination is that it is important to a smooth
transition from Eximbank's prior ethics rules to the new executive
branch-wide Standards and financial disclosure regulations that these
rulemaking actions become effective as soon as possible. Furthermore,
this rulemaking is related to Eximbank organization, procedure and
practice. Nonetheless, this is an interim rulemaking, with provision
for a 45-day public comment period. The Export-Import Bank of the
United States will review all comments received during the comment
period and will consider any modifications that appear appropriate in
adopting these rules as final, with the concurrence of the Office of
Government Ethics.
Regulatory Flexibility Act
As General Counsel of Eximbank, I have determined under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) that these regulations
will not have a significant impact on small business entities because
they affect only Eximbank employees and their immediate families.
Paperwork Reduction Act
As General Counsel of Eximbank, I have determined that the
Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply because
these regulations do not contain any information collection
requirements that require the approval of the Office of Management and
Budget.
List of Subjects
5 CFR Part 6201
Conflict of interests, Government employees.
12 CFR Part 400
Conflict of interests, Government employees.
Dated: March 1, 1995.
Carol F. Lee,
General Counsel, Export-Import Bank of the United States.
Approved: March 15, 1995.
Stephen D. Potts,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the Export-Import Bank
of the United States, in concurrence with the Office of Government
Ethics, is amending title 5 of the Code of Federal Regulations and
title 12, chapter IV, of the Code of Federal Regulations as follows:
1. A new Chapter LII, consisting of part 6201, is added to title 5
of the Code of Federal Regulations to read as follows:
5 CFR CHAPTER LII--EXPORT-IMPORT BANK OF THE UNITED STATES
PART 6201--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE EXPORT-IMPORT BANK OF THE UNITED STATES
Sec.
6201.101 General.
6201.102 Prohibited financial interests.
6201.103 Prior approval for outside employment.
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government
Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5
CFR 2635.105, 2635.403(a), 2635.803.
Sec. 6201.101 General.
In accordance with 5 CFR 2635.105, the regulations in this part
apply to employees of the Export-Import Bank of the United States
(Bank) and supplement the Standards of Ethical Conduct for Employees of
the Executive Branch contained in 5 CFR part 2635. In addition to the
standards in 5 CFR part 2635 and this part, employees of the Bank are
subject to the executive branch financial disclosure regulations
contained in 5 CFR part 2634.
Sec. 6201.102 Prohibited financial interests.
(a) Prohibition. Except as provided in paragraph (f) of this
section, no covered employee or covered family member shall own
securities issued by an exporter or lending institution appearing on
the List of Designated Entities under paragraph (b) of this section.
(b) List of Designated Entities--(1) Compilation of list of
designated entities. Once each fiscal year, the designated agency
ethics official (DAEO) shall compile a List of Designated Entities
based upon the following criteria:
(i) All exporters that, during the preceding two fiscal years,
exported an aggregate dollar volume of goods and services supported by
the Bank in excess of four hundred million dollars ($400,000,000);
(ii) All exporters that, during the preceding two fiscal years, had
seven (7) or more aggregate export transactions supported by the Bank;
(iii) All lending institutions that, during the preceding two
fiscal years, financed an aggregate dollar volume of export
transactions supported by the Bank in excess of one hundred fifty
million dollars ($150,000,000); and
(iv) All lending institutions that, during the preceding two fiscal
years, financed twenty (20) or more aggregate export transactions
supported by the Bank.
(2) Distribution of list of designated entities. The DAEO shall
distribute the List of Designated Entities to all covered employees
promptly after it is compiled, and shall ensure that each new covered
employee receives a copy of the current List of Designated Entities
promptly after becoming a covered employee.
(c) Definitions. For purposes of this section:
(1) Covered employee means an employee of the Bank, other than a
special Government employee, who is required to file a public or a
confidential financial disclosure report (Form SF 278 or SF 450) under
5 CFR part 2634.
(2) Covered family member means the spouse or minor child of a
covered employee.
(3) Securities means all financial interests evidenced by debt or
equity instruments. The term includes, without limitation, bonds,
debentures, notes, securitized assets and commercial paper, as well as
all types of preferred and common stock. The term encompasses both
present and contingent ownership interests, including any beneficial or
legal interest derived from a trust. It extends to any right to acquire
or dispose of any long or short position in such securities and
includes, without limitation, interests convertible into such
securities, as well as options, rights, warrants, puts, calls, and
straddles with respect thereto. It does not include: [[Page 17627]]
(i) An investment in a publicly traded or publicly available mutual
fund or other collective investment fund or in a widely held pension or
similar fund, provided that the fund does not invest more than ten
percent (10%) of the value of its portfolio in securities of any one
entity on the List of Designated Entities and the covered employee or
covered family member neither exercises control over nor has the
ability to exercise control over the financial interests held in the
fund; or
(ii) Certificates of deposit, checking accounts, savings accounts
and other deposit accounts.
(4) Support by the Bank means:
(i) Direct loans made by the Bank;
(ii) Guarantees by the Bank of loans from lending institutions; or
(iii) Insurance policies issued by the Bank under any of its
insurance programs.
(d) Restrictions arising from third party relationships. If a
covered employee has knowledge that any of the entities described in
paragraphs (d)(1) through (d)(6) of this section own any security that
a covered employee or covered family member would be prohibited from
owning by paragraph (a) of this section, the covered employee shall
promptly report such interests to the DAEO. The DAEO may require the
covered employee to terminate the third party relationship, undertake
an appropriate disqualification, or take other appropriate action
necessary, under the particular circumstances, to avoid a statutory
violation or a violation of part 2635 of this title or of this part,
including an appearance of misuse of position or loss of impartiality.
This paragraph applies to any:
(1) Partnership in which the covered employee or covered family
member is a general partner;
(2) Partnership in which the covered employee and/or covered family
member(s) in the aggregate holds more than a ten percent limited
partnership interest;
(3) Closely held corporation in which the covered employee and/or
covered family member(s) in the aggregate holds more than a ten percent
(10%) equity interest;
(4) Trust in which the covered employee or covered family member
has a legal or beneficial interest;
(5) Investment club or similar informal investment arrangement
between the covered employee or covered family member and others; or
(6) Other entity if the covered employee and/or covered family
member(s) in the aggregate holds more than a ten percent (10%) equity
interest.
(e) Period to Divest. Unless a waiver is granted pursuant to
paragraph (f) of this section, a covered employee or covered family
member who owns securities of a designated entity as of the date that
the initial List of Designated Entities is circulated to covered
employees, the date that a revised List of Designated Entities is
circulated to covered employees, or the first day that an individual
becomes a covered employee, shall divest the securities within six (6)
months of such date. The DAEO may, in certain cases of unusual
hardship, grant a written extension of up to an additional six (6)
months within which a covered employee or covered family member must
divest securities of a designated entity. Notwithstanding the grant of
an extension, a covered employee remains subject to the
disqualification requirements of 5 CFR 2635.402 and 2635.502. A covered
employee or covered family member who must divest securities pursuant
to this section should refer to section 1043 of the Internal Revenue
Code and to the regulations of subpart J of 5 CFR part 2634 under which
the covered employee or covered family member may be eligible to defer
the recognition of taxable gain on the sale or other divestiture.
(f) Waivers. The DAEO may grant a written waiver from the
securities prohibition contained in this section based on a
determination that the waiver is not inconsistent with 5 CFR part 2635
or otherwise prohibited by law and that, under the particular
circumstances, application of the prohibition is not necessary to avoid
the appearance of misuse of position or loss of impartiality, or
otherwise to ensure confidence in the impartiality and objectivity with
which Bank programs are administered. A waiver under this paragraph may
be accompanied by appropriate conditions, such as requiring execution
of a written statement of disqualification. Notwithstanding the grant
of any waiver, a covered employee remains subject to the
disqualification requirements of 5 CFR 2635.402 and 2635.502.
(g) Agency determinations of substantial conflict. Nothing in this
section prevents the Bank from prohibiting or restricting an individual
Bank employee from acquiring or holding a financial interest or a class
of financial interests based upon the Bank's determination of
substantial conflict pursuant to 5 CFR 2635.403(b).
Sec. 6201.103 Prior approval for outside employment.
(a) Prior approval requirement. Before engaging in any outside
employment, whether or not for compensation, an employee, other than a
special Government employee, must obtain the written approval of the
employee's immediate supervisor and the DAEO. Requests for approval
shall be forwarded through normal supervisory channels to the DAEO and
shall include the name of the person, group, or organization for whom
the work is to be performed; the type of work to be performed; and the
proposed hours of work and approximate dates of employment.
(b) Standard for approval. Approval shall be granted only upon a
determination that the outside employment is not expected to involve
conduct prohibited by statute or Federal regulation (including 5 CFR
part 2635). In the case of an employee who wishes to practice a
profession involving a fiduciary relationship, as defined in 5 CFR
2636.305(b), approval will be granted only for each individual matter
in the course of practicing such profession.
(c) Definition of employment. For purposes of this section,
``employment'' means any form of non-Federal employment or business
relationship involving the provision of personal services by the
employee. It includes but is not limited to personal services as an
officer, director, employee, agent, attorney, consultant, contractor,
general partner, trustee or teacher. It also includes writing when done
under an arrangement with another person for production or publication
of the written product. It does not, however, include participation in
the activities of a nonprofit charitable, religious, professional,
social, fraternal, educational, recreational, public service or civic
organization, unless such activities involve the provision of
professional services or advice or are for compensation other than
reimbursement of expenses.
12 CFR CHAPTER IV--EXPORT-IMPORT BANK OF THE UNITED STATES
2. Part 400 of 12 CFR chapter IV is revised to read as follows:
[[Page 17628]]
PART 400--EMPLOYEE FINANCIAL DISCLOSURE AND ETHICAL CONDUCT
STANDARDS REGULATIONS
Sec. 400.101 Cross-reference to employee financial disclosure and
ethical conduct standards regulations.
Employees of the Export-Import Bank of the United States (Bank)
should refer to:
(a) The executive branch-wide financial disclosure regulations at 5
CFR part 2634;
(b) The executive branch-wide Standards of Ethical Conduct at 5 CFR
part 2635; and
(c) The Bank regulations at 5 CFR part 6201 which supplement the
executive branch-wide standards.
Authority: 5 U.S.C. 7301.
[FR Doc. 95-8593 Filed 4-6-95; 8:45 am]
BILLING CODE 6690-01-P
