Increasing Transparency of 232 Investigations by Requiring a Public Submission for an Application for an Investigation

AGENCY:

Bureau of Industry and Security, U.S. Department of Commerce.

ACTION:

Final rule.

SUMMARY:

This final rule revises the regulations governing a request or application for an investigation under Section 232 of the Trade Expansion Act of 1962, as amended (“Section 232”). The changes in this final rule will increase the transparency of Section 232 investigations by requiring the submission of a public version of an application for an investigation from an interested party. The changes made in this final rule still allow an interested party to submit classified national security information and/or business confidential information when submitting an application for an investigation.

DATES:

This final rule is effective September 24, 2021.

FOR FURTHER INFORMATION CONTACT:

For questions regarding this final rule, contact Erika Maynard at 202-482-5572 or via email Erika.Maynard@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

This final rule revises the requirements in §§ 705.5 (Request or application for an investigation) and 705.6 (Confidential information) of the National Security Industrial Base Regulations (“NSIBR”) (15 CFR parts 700 through 709) to increase the transparency of Section 232 investigations by requiring an application for an investigation by an interested party be submitted publicly. Section 705.5 specifies the procedures for submitting a request or application for an investigation under Section 232. Section 705.6 specifies the requirements for the submission of confidential information (classified national security information or business confidential information) to the Bureau of Industry and Security (BIS) at any stage of a Section 232 investigation and as part of an application for an investigation from an interested party. In order to enhance transparency and aid public understanding of applications for Section 232 investigations submitted by interested parties, as well as, when warranted, allowing public comments on such applications (for example, when a Federal Register notice is published soliciting comments on an investigation), the Department of Commerce has determined that interested parties applying for a Section 232 investigation that include business confidential information or classified national security information in their submission must simultaneously submit a public version of their application to BIS.

In order to implement this change in the Section 232 investigation process, this final rule makes the following changes to part 705 of the NSIBR:

In § 705.5, this final rule revises paragraph (a) by adding a sentence to require that an application for an investigation from an interested party containing business confidential information include a public version of the entire application in writing accompanying their submission. This final rule also adds a sentence to paragraph (a) to specify that the application, if it includes business confidential information submitted in confidence pursuant to § 705.6, must contain a public summary of the business confidential information providing sufficient detail to permit a reasonable understanding of the substance of the information, and, if summarization is not possible, the application must make that claim and accompany it by a full explanation of its basis. The revisions to paragraph (a) also include guidance on how to summarize the information in sufficient detail to meet these additional requirements. This final rule adds a new cross reference to § 705.6 to alert the public that in order to submit business confidential information that is not for public release, the applicant must follow the procedures in § 705.6, including by making a separate submission to the Department of Commerce for the public and confidential versions. Lastly, this final rule also adds a new note to paragraph (a), explaining that United States Government agencies shall be excluded from the requirement to include public versions of submissions. This rule also codifies the existing practice that an electronic copy of the application be submitted with the printed application.

In § 705.6 (Confidential information), this final rule adds three new paragraphs: (a)(1) ( Classified national security information ), (2) ( Business confidential information ) and (3) ( United States Government communication ). The revised paragraph (a) specifies the requirements for submissions and treatment of these three types of confidential information, including how submissions by the public should be marked and submitted when they include confidential information.

The classified national security information described under paragraph (a)(1) of § 705.6 will not be made publicly available and therefore does not require a public version. As a conforming change, this final rule revises existing text previously found in paragraph (a) of § 705.6, which is now being moved to paragraph (a)(1) of § 705.6, regarding the identification and marking standards for national security information. Inadvertently, this text was not previously updated to reflect identification and marking standards set forth in 32 CFR part 2001, even though BIS has been complying with the requirements in 32 CFR part 2001 and requiring submitters to comply with those requirements, as applicable, since at least 2010. These revisions explicitly align paragraph (a)(1) of § 705.6 with the requirements set forth in 32 CFR part 2001. These changes will also improve public understanding of these provisions and clarify the requirements for submitting classified national security information pursuant to § 705.6. If an applicant or other party submits business confidential information as described in paragraph (a)(2) of § 705.6, it will now be required to submit a public version of that information based on the changes this rule makes to §§ 705.5 and 705.6. This final rule also adds a sentence at the end of paragraph (a)(2) of § 705.6 to specify that the public summary required under § 705.5 must be clearly marked “PUBLIC” as part of the submission described under paragraph (a)(1) of § 705.6. The classified national security information described under paragraph (a)(1) of § 705.6 and the United States Government communications described under paragraph (a)(3) of § 705.6 will not be made publicly available and therefore do not require a public version. Lastly, this final rule also adds a new paragraph (a)(3) to clarify the treatment of communication from the United States Government involving Section 232 investigations, including requests for the initiation of investigations received from U.S. Government agencies. This paragraph clarifies for the public that communication from agencies of the United States Government will generally not be made available to the public.

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 purposes of Executive Order 12866.

2. The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA) provides that an agency generally cannot conduct or sponsor a collection of information, and no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, unless that collection has obtained Office of Management and Budget (OMB) approval and displays a currently valid OMB Control Number.

This final regulation involves one collection currently approved by OMB with the following control number “Request for Investigation under section 232 of the Trade Expansion Act” (control number 0694-0120).

This rule is not expected to increase the burden hours for any of the collections associated with this rule as minimal changes are anticipated. Any comments regarding this collection of information, including suggestions for reducing the burden, may be submitted online at https://www.reginfo.gov/public/do/PRAMain. Find the particular information collection by using the search function and entering either the title of the collection or the OMB Control Number.

3. This rule does not contain policies with federalism implications as that term is defined in Executive Order 13132.

4. The provisions of the Administrative Procedure Act (APA) (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public comment, and a delay in effective date are inapplicable because this regulation involves a military or foreign affairs function of the United States. ( See 5 U.S.C. 553(a)(1)). The Section 232 investigation process is important for identifying areas where the United States' defense industrial base is undermined to the detriment of national security. Improving efficiency and transparency of this process is important for those regulatory provisions to achieve their stated purpose.

In addition, the Department finds that there is good cause under 5 U.S.C. 553(b)(B) to waive the provisions of the APA requiring prior notice and the opportunity for public comment and under 5 U.S.C. 553(d)(3) to waive the delay in effective date because such delays would be contrary to the public interest. The changes in this rule will increase transparency of Section 232 investigations by requiring a public submission for an application for an investigation from an interested party. These changes will improve public transparency of the Section 232 investigation process, while imposing only a minimal burden on those submitting an application for an investigation to the Department. Based on BIS's past experience, including in the recent Section 232 investigations into imports of uranium, titanium sponge, and mobile cranes, most of the applicants each published their own public versions of their applications for an investigation with business confidential information redacted/removed (roughly contemporaneously with their submission of their applications to the Department of Commerce). Therefore, complying with the requirement to include a public version should not be burdensome for the clear majority of applicants because they have already taken the initiative to share a public version. For any other applicant who does not prepare public versions of their submissions as a matter of course, the new requirements is minimal; the information required to generate the public version is already contained within the confidential version, and applicants need only redact/remove confidential information that meets the criteria in 15 CFR 705.6 and that the applicants wish to not disclose.

Because a notice of proposed rulemaking and an opportunity for prior public comment are not required for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., are not applicable. Accordingly, no regulatory flexibility analysis is required and none has been prepared.

List of Subjects in 15 CFR Part 705

• Administrative practice and procedure
• Business and industry
• Classified information
• Confidential business information
• Imports
• Investigations
• National security

For the reasons set forth in the preamble, part 705 of subchapter A of 15 CFR chapter VII is amended as follows:

PART 705—[AMENDED]

1. The authority citation for part 705 continues to read as follows:

Authority: Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862) and Reorg. Plan No. 3 of 1979 (44 FR 69273, December 3, 1979).

2. Section 705.5 is amended by revising paragraph (a) to read as follows:

3. Section 705.6 is amended by revising paragraph (a) to read as follows: