[Federal Register Volume 81, Number 231 (Thursday, December 1, 2016)]
[Rules and Regulations]
[Pages 86571-86573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28893]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Part 740
[160519443-6999-02]
RIN 0694-AG97
Temporary Exports to Mexico Under License Exception TMP
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
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SUMMARY: This final rule aligns the time limit of License Exception
Temporary Imports, Exports, Reexports, and Transfers (in-country)
(TMP), which authorizes, among other things, certain temporary exports
to Mexico, with the time limit of Mexico's Decree for the Promotion of
Manufacturing, Maquiladora and Export Services (IMMEX) program.
Currently, TMP allows for the temporary export and reexport of various
items subject to the Export Administration Regulations (EAR), as long
as the items are returned no later than one year after export,
reexport, or transfer if not consumed or destroyed during the period of
authorized use. Other than a four-year period for certain personal
protective equipment, the one-year limit extends to all items shipped
under license exception TMP. However, the one-year period does not
align with the time constraints of Mexico's IMMEX program, which allows
imports of items for manufacturing operations on a time limit that may
exceed 18 months. This rule amends TMP to complement the timeline of
the IMMEX program. Under this amendment, items temporarily exported or
reexported under license exception TMP and imported under the
provisions of the IMMEX program would be authorized to remain in Mexico
for up to four years from the date of export or reexport.
DATES: Effective: January 3, 2017.
FOR FURTHER INFORMATION CONTACT: Regulatory Policy Division, Office of
Exporter Services, Bureau of Industry and Security, by telephone (202)
482-2440 or email: [email protected].
SUPPLEMENTARY INFORMATION:
Overview
Mexico's Decree for the Promotion of Manufacturing, Maquiladora and
Export Services, known as IMMEX, is a platform used by U.S. and foreign
manufacturers to lower production costs by temporarily importing
production materials into Mexico. Created in 2006, IMMEX is the product
of the merger of
[[Page 86572]]
two previous Mexican economic policies: The Maquiladora program, which
was designed to attract foreign investment by exempting temporary
imports from taxes, and the Temporary Import Program to Promote Exports
(PITEX), which incentivized Mexican companies to grow and compete in
foreign markets by providing temporary import benefits. Under IMMEX,
companies located in Mexico are not subject to quotas and do not have
to pay taxes on items temporarily imported and manufactured,
transformed, or repaired before reexport.
Under IMMEX, the length of time that imports may remain in Mexico
is commodity dependent, with some items allowed to remain in-country
for 18 months or more. These time allotments are greater than the time
limits for License Exception Temporary Imports, Exports, Reexports, and
Transfers (in-country) (TMP) allowed under Sec. 740.9(a)(14) of the
EAR. With few exceptions, items exported under TMP, if not consumed or
destroyed during the authorized use abroad, must be returned to the
United States one year after the date of export. The discrepancy
between the time periods of IMMEX and TMP reduces the efficacy of both
policies, thereby hindering the shipment of items subject to the EAR to
and from Mexico.
U.S. companies that produce items subject to the EAR and ship those
items to Mexico under IMMEX have notified the Bureau of Industry and
Security of this discrepancy and have requested that BIS amend the EAR
to increase compatibility with IMMEX. Considering the strength of
Mexico's export control regime, as exemplified by its accession as a
member to the Wassenaar Arrangement, the Australia Group, and the
Nuclear Suppliers Group, BIS published the proposed rule 81 FR 57505 on
August 23, 2016 (known hereafter as the August 23 rule) proposing to
amend Sec. 740.9(a) to account for IMMEX's time limit. For the purpose
of simplicity, BIS did not propose to match the various time periods
instituted by IMMEX. Instead, the rule proposed to revise Sec.
740.9(a)(8) to allow temporary exports and reexports to remain in
Mexico for up to four years, which accommodates the maximum available
time that temporarily imported items may remain in Mexico under IMMEX
and is in parallel with the validity period of BIS's licenses.
Additionally, the August 23 rule proposed to revise introductory
paragraph Sec. 740.9(a)(14) to include a reference to Sec.
740.9(a)(8) as an exception to the one-year time limit of TMP. BIS
received only one comment regarding the rule, in which the user
expressed support for the potential change in the regulations. Because
BIS received only one comment, which was positive, regarding the August
23 rule, this final rule implements the proposed rule without change.
Export Administration Act
Although the Export Administration Act of 1979, as amended, expired
on August 20, 2001, the President, through Executive Order 13222 of
August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by
Executive Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013),
and as extended by the Notice of August 4, 2016, 81 FR 52585 (August 4,
2016), has continued the EAR in effect under the International
Emergency Economic Powers Act. BIS continues to carry out the
provisions of the Export Administration Act, as appropriate and to the
extent permitted by law, pursuant to Executive Order 13222.
Rulemaking Requirements
1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been determined to be not significant for
the purposes of Executive Order 12866.
2. Notwithstanding any other provision of law, no person is
required to respond to, nor is subject to a penalty for failure to
comply with, a collection of information, subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid Office
of Management and Budget (OMB) Control Number. This rule does not
contain any collections of information.
3. This rule does not contain policies with Federalism implications
as that term is defined in Executive Order 13132.
4. The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C.
601 et seq., generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to the notice and comment
rulemaking requirements under the Administrative Procedure Act (5
U.S.C. 553) or any other statute. Under section 605(b) of the RFA,
however, if the head of an agency certifies that a rule will not have a
significant economic impact on a substantial number of small entities,
the statute does not require the agency to prepare a regulatory
flexibility analysis. Pursuant to section 605(b), the Chief Counsel for
Regulation, Department of Commerce, certified to the Chief Counsel for
Advocacy, Small Business Administration at the proposed rule stage that
this rule would not have a significant economic impact on a substantial
number of small entities.
Number of Small Entities
The Bureau of Industry and Security (BIS) does not collect data on
the size of entities that apply for and are issued export licenses.
Although BIS is unable to estimate the exact number of small entities
that would be affected by this rule, it acknowledges that this rule
would affect some unknown number.
Economic Impact
BIS believes that this final rule will not have a significant
economic impact because exporters are already using other provisions of
the EAR to participate in IMMEX. Currently, exporters participating in
IMMEX are using TMP for exports of a one-year duration. If the item is
to remain in Mexico longer than one year, exporters are required to
either use another license exception or apply for a license that will
address a specific time limit. This final rule merely extends the
eligibility period for TMP to four years to complement the lengthy
IMMEX time limit which could be 18 months or more, depending on
circumstances. Extending the time limit of TMP to four years provides
exporters flexibility in complying with the EAR and allows them to take
fuller advantage of the privileges granted by IMMEX. While such a
provision should reduce the paperwork burden to exporters, BIS does not
believe increasing the time limit will lead to a significant increase
in exports to Mexico. Rather, this final rule is consistent with the
principle of the EAR in easing the unnecessary regulatory burden to
exporters.
List of Subjects in 15 CFR Part 740
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
Accordingly, 15 CFR part 740 of the EAR (15 CFR parts 730-774) is
amended as follows:
[[Page 86573]]
PART 740--[AMENDED]
0
1. The authority citation for part 740 continues to read as follows:
Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22
U.S.C. 7201 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of
August 4, 2016, 81 FR 52587 (August 8, 2016).
0
2. Section 740.9 is amended by revising paragraph (a)(8) and the
introductory text of paragraph (a)(14) to read as follows:
Sec. 740.9 Temporary imports, exports, reexports, and transfers (in-
country) (TMP).
* * * * *
(a) * * *
(8) Assembly in Mexico. Commodities may be exported to Mexico under
Customs entries that require return to the United States after
processing, assembly, or incorporation into end products by companies,
factories, or facilities participating in Mexico's in-bond
industrialization program (IMMEX) under this paragraph (a)(8), provided
that all resulting end-products (or the commodities themselves) are
returned to the United States as soon as practicable but no later than
four years after the date of export or reexport.
* * * * *
(14) Return or disposal of items. With the exception of items
described in paragraphs (a)(8) and (11) of this section, all items
exported, reexported, or transferred (in-country) under this section
must, if not consumed or destroyed in the normal course of authorized
temporary use abroad, be returned to the United States or other country
from which the items were so transferred as soon as practicable but no
later than one year after the date of export, reexport, or transfer
(in-country). Items not returned shall be disposed of or retained in
one of the following ways:
* * * * *
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2016-28893 Filed 11-30-16; 8:45 am]
BILLING CODE 3510-33-P