[Federal Register Volume 77, Number 129 (Thursday, July 5, 2012)]
[Pages 39679-39680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-16401]



Bureau of Industry and Security

[Docket No. 120620179-2179-01]

Request for Public Comments on Shipping Tolerances for Export 
Licenses Issued by the Bureau of Industry and Security

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Notice of inquiry.


SUMMARY: Numerous exporters have expressed interest in establishing an 
automatic calculation through the Automated Export System (AES) of the 
shipping tolerance for licenses issued by the Bureau of Industry and 
Security (BIS) to enhance exporter compliance with the Export 
Administration Regulations (EAR). In addition, automatic calculation 
would assist in achieving the goals of the President's Export Control 
Reform (ECR) initiative to harmonize the control lists of the 
Departments of Commerce and State, and with the transfer of militarily 
less significant defense articles from the United States Munitions List 
(USML) to the Commerce Control List (CCL), by making the transfer 
smoother for exporters since automatic calculation of shipping 
tolerances is already in place for the primary licenses issued by the 
Department of State (DSP-5 licenses). BIS seeks public comment to help 
it ascertain if changes should be made to its shipping tolerance 
regulations in

[[Page 39680]]

order to make automatic calculation in AES feasible. BIS is 
particularly interested in whether a flat percentage should be applied 
to the dollar value of all controlled items to calculate shipping 
tolerance or whether another method of calculation should be employed.

DATES: Comments must be received no later than August 20, 2012.

ADDRESSES: Comments may be submitted via email to 
teresa.telesco@bis.doc.gov. Please refer to ``Shipping Tolerance of 
Export Licenses'' in the subject line. Comments may also be sent to 
Shipping Tolerance Study, Office of Technology Evaluation, Room 1093, 
U.S Department of Commerce, 14th Street and Pennsylvania Avenue NW., 
Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT: Teresa Telesco, Office of Technology 
Evaluation, Bureau of Industry and Security, telephone: 202-482-4959; 
fax: 202-482-5361; email: teresa.telesco@bis.doc.gov.



    BIS, among its other activities, issues licenses for the export of 
items that are subject to the Export Administration Regulations (EAR). 
Under some circumstances defined in the EAR, exporters are allowed to 
export more than the quantity or dollar value shown on an export 
license. This additional amount is called a shipping tolerance. 
Currently, the allowable shipping tolerance is calculated based on the 
``unit'' specified in the Export Control Classification Number (ECCN); 
the three basic ``units'' are ``dollar value,'' ``number,'' or ``area, 
weight or measure'' (see Sec.  750.11). Depending on the applicable 
``unit,'' BIS allows either no shipping tolerance on dollar value, or 
up to 25 percent shipping tolerance on dollar value. The Department of 
State, which issues licenses for commodities identified on the USML, 
measures shipping tolerances based on dollar value. The Department of 
State applies a flat 10 percent shipping tolerance on dollar value to 
all defense articles.
    The President's Export Control Reform (ECR) initiative aims to 
harmonize, to the maximum extent possible, the control lists of the 
United States Munitions List (USML) and Commerce Control List (CCL). 
With the anticipated transfer of items determined to no longer warrant 
control under the USML to the CCL, which are largely generic parts and 
components, harmonization of the two agencies' shipping tolerance 
regulations and the ability to automatically calculate available 
shipping tolerance in the Automated Export System (AES) may be 
beneficial, because they could make the transfer easier and less 
confusing for exporters.
    BIS is looking into the feasibility of adding to the Automated 
Export System (AES) a feature that automatically calculates the 
shipping tolerance of the dollar value on an export license, 
communicates the dollar value remaining on the license back to the AES 
filer, and notifies the AES filer when the license has been fully 
utilized. This feature is also known as electronic decrementation of a 
license, and is already in place on AES for the primary licenses issued 
by the Department of State (DSP-5 licenses). This feature would enhance 
compliance with licenses and increase transparency of export licensing 
by providing precise and timely information to exporters on what they 
are allowed to export under the license in the future. In addition, 
electronic decrementation would assist with the ECR harmonization goal, 
as well as the anticipated control of some munitions items under the 
CCL, by providing exporters of CCL items with the same functionality in 
AES already available to exporters of USML items.
    BIS is seeking information that would help it determine:
     If the current EAR shipping tolerance rules should be 
maintained or if changes should be made that facilitate automatic 
     If the EAR shipping tolerance rules were changed, (i) 
should BIS continue to exclude certain ECCNs from having an allowable 
shipping tolerance, (ii) should the dollar value-based shipping 
tolerance be set at 10 percent to match the Department of State rules; 
     Whether an automatic calculation of the dollar value-based 
shipping tolerance in AES (electronic decremention) would assist 
exporters in maintaining compliance with the allowable shipping dollar 
value of the license.
    The following kinds of information would be useful to BIS's 
     Detailed information on your company's experiences with 
both the Department of State's and BIS's shipping tolerance 
     Detailed information on how dollar value-based shipping 
tolerances are beneficial and practical, or detrimental and burdensome 
to your company or organization;
     Detailed information on your company's experience with 
automatic calculation of a dollar value-based shipping tolerance 
(decrementation) against State Department licenses in AES;
     If you believe that BIS's dollar value-based shipping 
tolerances should be changed, detailed information on how the 
tolerances should be changed; and
     Detailed information on what benefits, if any, industry 
would receive through electronic decrementation of a dollar value-based 
shipping tolerance in AES.

How To Comment

    All comments must be in writing and submitted to one of the 
addresses indicated above. Comments must be received by BIS no later 
than August 20, 2012. All comments (including any personal identifiable 
information) will be available for public inspection and copying. Those 
wishing to comment anonymously may do so by submitting their comment 
via regulations.gov and leaving the fields for identifying information 

    Dated: June 27, 2012.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2012-16401 Filed 7-3-12; 8:45 am]