FTC Federal Register notice, June 23, 1981, 46 FR 32430

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BILLING CODE 8025-01-M

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Federal Register / Yol. 46, No. 120 / Tuesday, June 23, 1981 / Rules and Regulations 32431 DEPARTMENT OF COMMERCE International Trade Administration 15 CFR Parts 371,377, and 399 Petroleum Products Under Short Supply Export Controls; Interim Regulations to Increase Efficiency of Controls and Administration of Exports AGENCY: Office of Export Administration, International Trade Administration, Commerce. ACTION: Interim rule with invitation to comment.

s u m m a r y: This rule amends the regulations governing exports of petroleum products under short supply export controls.

This rule expands and clarifies the provisions of several general license authorizations to permit more extensive exports without prior written authorization from the Office of Export Administration, and reduces certain reporting requirements. DATE: These rules are effective on publication, but may be revised after comments are received. Comments to be received by the Department by August 24,1981.

a d d r e s s : Written comments (five copies) should be sent to: Mr. Robert F. Kan, Special Assistant to the Director, Short Supply Division, Office of Export Administration, U.S. Department of Commerce, Washington, D.C. 20230. FOR FURTHER INFORMATION CONTACT: Mr. Robert F. Kan, Special Assistant to the Director, Short Supply Division, Office of Export Administration, U.S. Department of Commerce, Washington, D.C. 20230, (202) 377-3795. SUPPLEMENTARY INFORMATION: The Department has recently examined its petroleum short supply export licensing program with a view toward simplifying and streamlining its procedures wherever practicable, in compliance with section 12(e) of the Export Administration Act of 1979 (Pub. L. 96- 72, 50 U.S.C. App. 2401 et seq.) (“the Act”) and with the Administration’s policy of easing the regulatory burden. During this review it was noted that a large number of validated export licenses are being issued for quantities that do not significantly reduce domestic supplies of a particular commodity. While the purpose of short supply export control programs is “to protect the domestic economy from an excessive drain of scarce materials” through export, the Department does not believe that this goal is furthered or any other useful purpose served by the maintenance of controls that require validated licenses for the export o f. insignificant quantities of materials which, in the aggregate, are in short supply.

General License GLV. The GLV dollar value limit for three commodity control list entries is being raised from $250 to $1,000, in order to reduce industry and Government paperwork associated with export shipments of certain petroleum commodities under short supply export control. The Department believes that petroleum exports of such limited value will not significantly reduce domestic supplies. This change will permit general license shipments of many exports that previously required validated export licenses. General License G-NNR. After reviewing its petroleum licensing records, the Department believes a revision of General License G-NNR is warranted to accommodate the numerous small quantity drummed shipments of specialty petroleum products intended for non-fuel usage, and of petroleum reference fuels for use as reference standards in petroleum refineries shipped in quantities of 10,000 gallons or less. Because of the high purity of some of these products, they frequently sell for prices from five to twenty-five times the selling price of similar mass-marketed commercial grade fuels. Therefore, export shipments of as few as two or three barrels often exceed the new dollar value limit of $1,000. To avoid the continuation of case-by-case licensing of numerous small quantity shipments of these highvalue, low-volume specialty products, the Department has moved them to Petroleum Group Q. This addition will allow exports of these products under General License G-NNR.

Exporters are put on notice that the Office of Export Administration will, in appropriate cases, conduct audits of exporters’ files to determine that these rules pertaining to shipping quantities are complied with. This change in the regulations is not to be interpreted to represent a liberalization of petroleum export controls, as all these types of shipments have been licensed in the past without being subject to quantitative limitations as either an N-2 product or as a recognized exception. General License GPCC. The regulations concerning General License GPCC are amended to clarify that petroleum products exported to the Panama Canal Commission under that general license must be intended for use by the Commission and not for export resale.

General License Ship Stores. The regulations concerning this general license are revised to indicate that crude petroleum and blends of unrefined crude petroleum with a petroleum product may not be used to bunker a vessel under General License Ship Stores. Because many ports are not capable of servicing Super Tankers within the port itself General License Ship Stores is revised to authorize the bunkering of these large vessels in U.S. or international waters under limited circumstances. General License RCS. The regulations concerning General License RCS are revised to indicate that crude petroleum and blends of unrefined crude petroleum with a petroleum product may not be used to bunker a vessel under this general license. The regulations covering this general license are also revised to rescind authority to export unlimited quantities of aviation fuel to a U.S. or Canadian Airline’s installation or agent abroad, but continue to allow exports of ship’s bunker and aviation fuel for use of a specific vessel or aircraft of U.S. or Canadian registry, in unusual circumstances and in quantities necessary for a single onward voyage or flight.

Documentation for Special Exception. The special rule which permits applicants for petroleum export licenses to substitute an affidavit for an export order is clarified to ensure that all required information and affidavits are submitted when no formal contract exists.

Affidavit for non-Naval Petroleum Reserve-Origin. The affidavit in § 377.6(e)(l)(iv) certifying the non-Naval Petroleum Reserve-Origin of a petroleum product which is required to accompany each application for a license to export such product is revised by lengthening from 90 to 180 days the time periods used in calculating (a) the volume of products produced in a refinery utilizing any Naval Petroleum Reserves feedstock which are attributable to other feedstocks, and (b) the total volume of products attributed to such feedstock to be exported during the comparable future time period. This eliminates the need to restrict the validity of each license to 90 days from the date the affidavit was executed, and permits the issuance of licenses which will remain valid until 30 days following the end of the calendar quarter in which issued. The suggested affidavit is also revised to include alternative statements that may be used concerning the origin of the commodities.

Affidavit Identifying Refiner. As a result of the termination of the crude oil price control program of the Department of Energy, refiners are no longer required to take an adjustment of the volume of crude oil runs to stills. Because these adjustments are no longer

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32432 Federal Register / Vol. 46, No. 120 / Tuesday, June 23, 1981 / Rules and Regulations required, the affidavits required by §§ 371.7(b)(4) and 377.6(e)(2)(ii) are also unnecessary, and the sections are deleted.

Validity Period. Section 377.6(g) is revised to indicate that the Office of Export Administration may issue licenses to export petroleum products with validity periods longer than one calander quarter.

Rulemaking Procedure and Invitation to Comment Section 13(a) of the Act exempts regulations promulgated under it from the public participation in rulemaking procedures of the Administrative Procedure Act. It has been determined that this rule:

(1) Is not a major rule within the meaning of section 1(b) of Executive Order 12291 (46 F R 13193, February 19, 1981);

(2) Will not have a significant economic impact on a substantial number of small business entities because it does not impose any additional costs or other regulatory burden on them; and (3) Does not impose a burden under the Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq.

Because of the importance of the issues raised by these regulations and the intent of Congress set forth in section 13(b) of the Act, these regulations are issued in interim form and comments will be considered in developing Final regulations. The period for submission of comments will close August 24,1981. However, in order that comments may be given maximum consideration, persons wishing to comment are urged to submit their comments as soon as possible. Although comments received after the end of the comment period will be considered if possible, this consideration cannot be assured. Public comments which are accompanied by a request that part or all of the material be treated confidentially, because of its business proprietary nature or for any other reason, will not be accepted. Such comments and materials will be returned to the submittex1 and will not be considered in the development of the final regulations.

All public comments on these regulations will be a matter of public record and will be available for public inspection and copying. In the interest of accuracy and completeness, comments in written form are preferred. If oral comments are received, they must be followed by written memoranda (in five copies) which will also be a matter of public record and will be available for public review and copying. Communications from agencies of the United States Government or foreign governments will not be made available for public inspection.

The public record concerning these regulations will be maintained in the International Trade Administration Freedom of Information Records Inspection Facility, Room 3102, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230. Records in this facility, including written public comments and memoranda summarizing the substance of oral communications, may be inspected and copied in accordance with regulations published in Part 4 of Title 15 of the Code of Federal Regulations. Information about the inspection and copying of records at the facility may be obtained from Mrs. Patricia L. Mann, the International Trade Administration Freedom of Information Officer, at the above address or by calling (202) 377-3031. Accordingly, the Export Administration Regulations are amended as follows:

PART 371—GENERAL LICENSES 1. In § 371.7(b), paragraphs (2)(i) and (ii) are revised; paragraph (2){iii) is removed, and paragraph (4) is removed. § 371.7 General license G-FTZ: Exports of petroleum commodities from U.S. foreign* trade zones and from Guam. * * * * * (b ) * * * (2) * * * (i) Did not become available for export as a result of an exchange for commodities which would not qualify for export under General License G - FTZ, and will not be replaced within the exporter’s customary domestic marketing area by commodities which do not so qualify; and (ii) Were refined exclusively from foreign-origin crude petroleum in a Foreign-Trade Zone or Guam. (iii) (Removed).

* * * * * (4) (Removed).

* * * * * 2. Section 371.8(a) is revised to read as follows:

§ 371.8 General license GPCC; Export of petroleum products to the Panama Canal Commission.

(a) Scope. A general license designated GPCC is established subject to the provisions of this section authorizing the export to the Panama Canal Commission, under a Commission-issued contract or purchase order, of refined petroleum products listed in Supplement No. 2 to Part 377 for use by the Commission and not for export resale * * * * * 3.

Section 371.9 is revised to read as follows:

§ 371.9 General license ship stores. (a) Scope. A general license designated Ship Stores is established, subject to the provisions of §371.9, authorizing the export, under certain circumstances, of usual and reasonable kinds and quantities of the commodities indicated in paragraphs (a) (1) and (2) of this section, provided such commodities are not intended for unlading in a foreign country and are not exported under a bill of lading as cargo.1 Exports under this general license maybe made on vessels of any registry, except as provided for in paragraph (a)(3) of this section, departing from the United States. Additionally, exports under this general license may be made on lighters servicing vessels too large to enter a U.S. port to .allow for the refueling of super tankers, e.g., Ultra Large Crude Carriers (ULCC) and Very Large Crude Carriers (VLCC), provided such vessels are lading or unlading, in U.S. or international waters, cargo destined for or coming from a U.S. port. (1) Dunnage necessary and appropriate to stow or secure cargo on the outgoing and immediate return voyage of an exporting carrier, when exported solely for use as dunnage, may be exported to any destination under this General License Ship Stores. (2) The items listed below may be exported subject to the conditions set forth in (b) of this section for use or consumption on board a vessel of any registry during the outgoing and immediate return voyage— (i) Bunker fuel, except crude petroleum and blends of unrefined crude petroleum with a petroleum product, provided it is not of Naval Petroleum Reserve origin or derivation; (ii) Deck, engine, and steward department stores, provisions, and supplies for both port and voyage requirements, provided they are not of Naval Petroleum Reserves origin or derivation if listed in Supplement No: 3 to Part 377;

(iii) Medical and surgical supplies; (iv) Food stores;

(v) Slop chest articles; and (vi) Saloon stores or supplies. (3) Equipment and spare parts for permanent use on a vessel may be exported for use on board a vessel of any registry, when necessary for the Where a validated license is required, see §§ 372.4 and 370.9.

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Federal Register / Voi 46, No. 120 / Tuesday, June 23, 1981 / Rules and Regulations 32433 proper operation of such vessel, except a vessel registered in Country Group P, Q, W, Y, or Z, or owned or controlled by, or under charter or lease to any of these countries or their nationals. Notwithstanding the above, equipment and spare parts for permanent use on a vessel, when necessary for the proper operation of such vessel, may be exported on board a vessel registered in, owned or controlled by, or under charter or lease to a country in Country Group P, Q, W or Y, or a national of such country, if the equipment or spare parts are authorized to be exported to a destination in Country Group P, Q, W, or Y under General License G-DEST. In addition, other equipment and services for necessary repair to fishing and fishery support vessels of PQWY countries or Cuba may be exported for use on board such vessels when admitted into the United States under governing international fishery agreements.

(b) Restrictions on exports of petroleum and petroleum products. Crude petroleum and blends of unrefined crude petroleum with petroleum products may not be exported under this general license. Export of any petroleum product listed in Supplement No. 3 to Part 377 may be made under this general license provided the exporter, prior to the export of such commodity, has assembled documentary evidence establishing that the commodity was not produced or derived from a Naval Petroleum Reserve. Such documentary evidence may take the form of the affidavit prescribed in § 377.6(e)(l}(iv), or it may consist of other documentation establishing the factual data to be covered in such affìdavit. The exporter shall retain such documentary evidence in his files for the period prescribed in § 387.13(e), and is put on notice that the Office of Export Administration will, in appropriate cases, conduct audits of exporters’ files to determine that such documentary evidence is available covering each export of a commodity listed in Supplement No. 3 to Part 377 that was made under General License Ship Stores. Crude petroleum may be exported only under a validated license issued pursuant to § 377.6(d)(1). Any other petroleum commodity listed in Supplement No. 3 to Part 377 which does not meet the conditions for export under General License Ship Stores may be exported only under a validated license issued pursuant to §-377.6(d)(6). 4.

Section 371.12 is amended by revising paragraphs (b)(3), (b)(4), the introductory paragraph to (c), (c)(4), the introductory paragraph to (d), (d)(1) and (e) to read as follows:

§ 371.12 General license RCS: Shipments to U.S. or Canadian vessels, planes and airline installations or agents. * * * * * (b ) * * * (3) In usual and reasonable kinds and quantities during times of extreme need, except that usual and reasonable quantities of ship’s blinkers or aviation fuel are considered to be only that quantity necessary for a -single onward voyage or flight;

(4) Shipped as cargo for which a Shipper’s Export Declaration (SED) is filed with the carrier, except that an SED is not required when any of the commodities, other than fuel, is exported by U.S. airlines to their own aircraft abroad for their use. * * * * * (c) Exports to US. or Canadian Airline’s Installation or Agent. Exports of the commodities set forth in paragraph (d) of this section, except fuel, may be made to a U.S. or Canadian airline’s * installation or agent in any foreign destination except Country Group P, Y or Z (excluding Cuba) provided such commodities are— * * * * * (4) Shipped as cargo for which a Shipper’s Export Declaration (SED) is filed with the carrier, except that an SED is not required when any of these commodities is exported by U.S. airlines to their own installations and agents abroad for use in their aircraft operations.

* * * * * (d) Applicable Commodities. This general license applies to the commodities listed below, subject to the provision in paragraphs (b) and (c) of this section— (1) Fuel, except crude petroleum and blends of unrefined crude petroleum with petroleum products, which is of non-Naval Petroleum Reserves origin or derivation;

* * * * * (e) Crude Petroleum. Crude petroleum and blends of unrefined crude petroleum with petroleum products may not be exported under this general license. Export of any petroleum product listed in Supplement No. 3 to Part 377 may be made under this general license provided the exporter, prior to the export of such commodity, has assembled documentary evidence establishing that the commodity was not produced or derived from a Naval Petroleum Reserve. Such documentary See § 370.2 for definition of United States and Canadian airlines.

evidence may take the form of the affidavit prescribed in § 377.6(e)(l)(iv), or it may consist of other documentation establishing the factual data to be covered in such affidavit. The exporter shall retain such documentary evidence in his files for the period prescribed in § 387.13(e), and is put on notice that the Office of Export Administration will, in appropriate cases, conduct audits of exporters’ files to determine that such documentary evidence is available covering each export of a commodity listed in Supplement No. 3 to Part 377, that was made under General License RCS. Crude petroleum may be exported only under a validated license issued pursuant to § 377.6(d)(1). Any other petroleum commodity listed in Supplement No. 3 to Part 377, which does not meet the conditions for export / under General License RCS, may be exported only under a validated license issued pursuant to § 377.6(d)(6). PART 377— SHORT SUPPLY CONTROLS AND MONITORING 5. In § 377.6, paragraphs (e)(l)(iv), (2), (3), and (9), and paragraph (g) are revised to read as follows: § 377.6 Petroleum and petroleum products.

* * * * * (e) * * * (1) * * * (iv) A sworn affidavit, signed by an authorized representative of the exporter, reading as follows (insert paragraph a or b, as appropriate): Affidavit I (name)--------------—--------------------------- ------- (Title)............... ............. ............................................ of (company) -----------— ----------------------_ hereby certify that the (quantity)-----------------bbls. of (commodity) ——----------------------------- (a) I propose to export from the United States were not produced from a Naval Petroleum Reserve nor were they derived from any crude oil, gases of all kinds (including natural gas, hydrogen, carbon dioxide, helium, etc.), natural gasoline, and other related hydrocarbons (tar sands, asphalt, propane, butane, etc.) or oil shale produced from a Naval Petroleum Reserve. Gr­ ib) I propose to export from the United States, If they are the product of a refinery or petrochemical plant utilizing as raw material any resource produced from a Naval Petroleum Reserve, the quantity of the products from that refinery or petrochemical plant which are to be exported during the next 180 days, do not exceed that portion of the total products of that refinery or petrochemical plant attributable to the non- Naval Petroleum Reserve raw materials used in that plant during the preceding 180 days. The petroleum commodities that I propose to export did not become available for export

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32434 Federal Register / Vol. 46, No. 120 / Tuesday, June 23, 1981 / Rules and Regulations as a result of an exchange for a Naval Petroleum Reserves—produced resource or a product(s) derived therefrom. To the extent that I do not have personal knowledge of the foregoing, I have addressed appropriate inquiries to the refiner or producer of the commodity(ies) to be exported, and have been assured by him that these statements are correct. The Individual who made these representations to me is: I (name)------------------------------------------------ Of (Title) ------------------------------------------------- (company)--------------------------------------------” And he communicated these assurances to me on (date)--------------- (Signature) --------------- —-------------------“ (2) Groups B, C, D, E, F, G, K, L, M, N- 1, N-2, Q, and R. An application for a, validated license to export a commodity from Petroleum Commodity Group B, C, D, E, F, G, K, L, M, N-l, N-2, Q, or R, must be accompanied by the same documentation required by § 377.6(e)(1), except that the affidavit described in paragraph (e)(l)(iii) of this section is not required.

(3) Exception for established trade practices. A special rule is established for the documentation of export orders for which no contract is entered into pursuant to a well-established and consistently maintained trade practice. With respect to such orders, in lieu of the copy of the contract and the affidavit required by paragraph (e)(1) of this section as to the amount previously exported against such contract, the exporter may submit an affidavit describing his exporting arrangement and the shipments made under that arrangement.

* * * * * (9) Groups N -l and N-2. An application for a validated license to export a commodity from Petroleum Commodity Group N -l must be submitted with the same documentation required by § 377.6(e)(1), except the affidavit described in paragraph (e)(l)(iii) of this section is not required. An application for a validated license to export a commodity from Petroleum Commodity Group N-2 must be submitted with the same documentation required for Petroleum Commodity Group N-l, and:

(i) An end-use statement by the applicant in affidavit format indicating the name, location and type of business Export control commodity number and commodity description of the end-user, the nature of the enduse, and stating that, to the best of his knowledge and belief, the commodity will not be used as a fuel either alone or when blended with other petroleum products, nor will it be used as a refinery feedstock or for synthetic natural gas production, nor will it be substituted for a commodity which will be so used, and (ii) A published technical data sheet (unless one has previously been submitted) or independent inspector’s certificate of analysis of the product to be exported which clearly indicates that the commodity is properly classifiable under Petroleum Commodity Group N-2. * * * * * (g) Validity Period. Unless otherwise specified, a license issued pursuant to this section will expire no later than 30 days from the end of the calendar quarter in which it is issued. A longer validity period may be authorized if found to be consistent with the national interest and the purposes of this short supply control program. Requests for extension of the validity period of any license issued under this section will normally not be entertained. * * * * * 6.

Supplement No. 2 to Part 377 is amended by revising Group Q to read as follows:

Supplement No. 2 to Part 377— Petroleum and Petroleum Products Subject to Short Supply Licensing Controls Schedule B No.1 Commodity descriptions Unit of quantity3 Petroleum Products Subject to Provisions of Either § 371.16 or §377.6(d)(6) 401.0110 Benzene..—......................... ............. Gallon.

401.0120 Toluene............................................. Do.

401.0132 Ortho-xylene..................................... Do.

401.0134 Para-xylene...................................... Do.

401.0139 Other xylene.............. ..................... Do.

415.2400 Helium.............................................. Million cubic feet.

415.2900 Hydrogen......................................... . X. 417.2000 Ammonia, aqueous.................. — . Cnt. ton.

423.1010 Carbon dioxide and carbon mon­ oxide.

X.

431.0210 Butadiene........................................ . Pound. 431.0220 Butylene.......... ................................ Do.

431.0230 Ethylene.—....................................... Do.

431.0240 Isoprene.................................- ....... Do.

431.0250 Propylene........................................ Do.

431.0260 Tetrapropylene................................ Do.

Supplement No. 2 to Part 377— Petroleum and Petroleum Products Subject to Short Supply Licensing Controls— Continued Schedule B No.* Commodity-description3 Unit of quantity3 431.0290 Acetylene-.......... —.......................— Do.

431.0290 High purity hydrocarbons, and Do.

475.2520 475.2560 475.3500 blends of hydrocarbons used for engine calibration, fuel cer­ tification and other laboratory applications in quantities of 10,000 gallons or less.4. Specialty naphthas, mineral spir- Barrel.

475.4510 its, solvents and other finished light petroleum products, n.s.p.f., which are packaged and shipped in drums or con­ tainers not exceeding 55 U.S. gallons per container.

Aviation engine lubricating oil, Do.

475.4515 except jet engine lubricating oil.

Jet engine lubricating oil................ Do.

475.4520 Automotive, diesel, and marine Do.

475.4525 engine lubricating oil.

Turbine lubricating oil, including Do.

475.4530 marine.

Automotive gear oils........................ Do.

475.4550 Steam cylinder oils.......................... Do.

475.4555 Insulating or transformer oils......... Do.

475.4560 Quenching or cutting oils............ — Do.

475.4565 Other petroleum lubricating oils, Do.

475.5700 including red and pale oils, bright stock, black oils, white mineral oils, and lubricants, n.s.p.f.

Greases....... ............—..................... Pound.

475.6740 Petroleum jelly, and petrolatum, Do.

475.6760 all grades.

Hydraulic fluids, including auto- Barrel.

475.6781 mafic transmission fluids. Other non-lubricating and non- X.

480.6540 fuel petroleum oils, n.s.p.f. Ammonia, anhydrous............— — .. . Short ton. 492.5210 Paraffin wax, crystalline, fully re- Pound.

492.5220 fined.

Paraffin wax, crystalline, except Do.

492.5240 fully refined.

Paraffin wax, all others (including Do.

517.5120 microcrystalline wax).

Petroleum coke, calcined...... - ..... . Short ton. 521.3150 Petroleum coke, except calcined.. Do * • • * * * See Supplement No. 3 to Part 377 for correlation of old Schedule B Numbers. Schedule B Numbers are provided only as a guide to proper completion of the Shipper’s Export Declaration, Form No. 7525 V. 3 Commodity description determines the product under control.

. . .

.

3 Report commodities in units of quantity indicated. ♦Such as tor reference standards, certified iso-octane, certified normal heptane, or certified fuels used for emission control standard tests, and for comparative laboratory test­ ing.

PART 399— COMMODITY CONTROL LIST AND RELATED MATTERS 7.

The Commodity Control List, Supplement No. 1 to § 399.1, is amended by revising the following entries to read as follows:

4782B Utner petroleum products nsiwu in • '— ■ §§371.16 and 371.5(d) for special provisions regarding shipments under General Licenses G-NNR and GLV).

4783B Natural gas liquids and other natural gas derivatives listed in Supplement No. 2 to Part 377. (See §§371.16 and 371.5(d) for special provisions regarding shipments under General Licenses G-NNR and GLV.)*. 4784B Manufactured gas and synthetic natural gas (except when commingled with natural gas and thus subject to export authorization from the Department of Energy) listed in Supplement No. 2 to Part 377. (See §§371.16 and 371.5(d) for special provisions regarding shipments under General Licenses G-NNR and GLV.). Unit Validated license required GLV dollar value limits T&V Processing code 1 31,000 S S ................................................ Barrel......

2 1 000 S S ................................................ Mcf.......... .. PQSTVWYZ and Canada........ 3 1,000 S S ................................................ Reason for control * GLV $ value limit for exports to Canada and Country Group Q is $1,000. GLV $ value limit for petroleum asphalt and paving mixtures is $5,000.

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Federal Register / Vol. 46, No. 120 / Tuesday, June 23, 1981 / Rules and Regulations 32435 * * * * * * * Drafting Information: The principal author of these rules is Robert F. Kan, Special Assistant to the Director, Short Supply Division, Office of Export Administration. Authority: Sections. 7, 12, 13, 15, and 21, Pub. L. 96-72, 50 U.S.C. App. 2401 et seq:, E.O. 12214, (45 FR 29783, May 6, 1980); Department Organization Order 10-3, (45 FR 6141, January 25, 1980); International Trade Administration Organization and Function Order 41-1 (45 FR 11862, February 22,1980) and 41-4 (45 FR 65003, October 1,1980). Dated; June 1,1981.

William V. Skidmore, Director, O ffice o f Export Administration. [FR Doc. 81-18470 Filed 6-22-81; 8:45 ami BILLING CODE 3510-25-M FEDERAL TRADE COMMISSION 16 CFR Part 4 Ex Parte Communications in Adjudicative Proceedings a g e n c y : Federal Trade Commission. a c t io n : Final rule. s u m m a r y: The Federal Trade Commission amends Rule 4.7(e) to define when an order of remand by a U.S. court of appeals shall be deemed to become effective for purposes of applying the prohibitions of Rule 4.7(b), and to make clear that those prohibitions apply during the period within which a petition for reconsideration under Rule 3.55 may be filed.

EFFECTIVE DATE: The rule is effective on June 23,1981.

FOR FURTHER INFORMATION CONTACT: Jerome Tintle (202) 523-3487, Office of General Counsel, Federal Trade Commission, 6th Street & Pennsylvania Avenue, N.W., Washington, D.C. 20580. SUPPLEMENTARY INFORMATION: Cases on Remand from the Courts of Appeals Rule 4.7(b) prohibits ex parte communications by, among others, any employee or agent of the Commission who performs investigative or prosecuting functions in adjudicative proceedings while a proceeding is in adjudicative status within the Commission, excèpt to the extent required for the disposition of ex parte matters as authorized by law. Rule 4.7(e), among other things, extends these prohibitions to an adjudicative proceeding “from the time an order by a U.S. court of appeals remanding a Commission decision and order for further proceedings becomes effective, until the time the Commission votes to enter its decision in the proceeding.” Rule 4.7(e), however, does not define when a court of appeals’ order “becomes effective” for purposes of applying the restrictions imposed by Rule 4.7(b).

When a court of appeals remands a Commission decision and order for further proceedings, the Commission resumes jurisdiction over the case when the court’s remand is issued as its mandate pursuant to Rule 41 of the Federal Rules of Appellate Procedure, generally 21 days after entry of judgment. Regardless of when the mandate issues, the Commission may petition the Supreme Court for a writ of certiorari from a court of appeals’ adverse judgment within 90 days from the date the court of appeals enters its judgment or enters an order disposing of a timely filed petition for rehearing going to the substance of the judgment. 28 U.S.C. 2101(c).

Rule 4.7(e) as presently worded could be construed to mean that a court of appeals’ order of remand “becomes effective” from the date that the Commission resumes jurisdiction over the case, i.e., when the court’s mandate issues. This construction would, practically speaking, preclude the Commission from consulting ex parte with its prosecuting staff on whether Supreme Court review of the judgment should be sought. In adopting present Rule 4.7(e), the Commission did not intend this construction. On the contrary, before and since adoption of the Rule, the Commission has regularly received the views of its prosecuting staff on the question of certiorari without regard to whether the court of appeal’s mandate has been issued. A matter on remand is not returned to adjudicative status until the Commission has determined not to seek Supreme Court review, or until the time for seeking such review has expired without a petition for certiorari having been filed, or until such a petition has been denied. The Commission has, therefore, amended Rule 4.7(e) to reflect its regular practice. Hie amendment adds a provision defining when a court of appeals’ judgment “becomes effective” for purposes of the Rule. Prohibition of ex Parte Communications During the Period Within Which a Petition for Reconsideration May Be Filed Under present Rule 4.7(e) the ban on ex parte communications in an adjudicative proceeding ends when the Commission “votes to enter its decision in the proceeding.” The ban is not reinstated unless a petition for reconsideration under Rule 3.55 is filed, in which event Rule 4.7(e) provides that the ex parte restrictions shall apply “from the time the petition is filed * * *.” Thus, the Rule implicitly sanctions ex parte contacts in the interim between the Commission’s vote on a final decision and the deadline for filing a Rule 3.55 petition. It has not been the Commission’s policy to permit such contacts in the past, and the Rule is being amended so as to eliminate any possible ambiguity on the question. Accordingly, 16 CFR 4.7(e) is revised to read as follows:

§ 4.7 Ex parte communications. * * * * # * (e) The prohibitions of this section shall apply in an adjudicative proceeding from the time the Commission votes to issue a complaint pursuant to § 3.11, to conduct adjudicative hearings pursuant to § 3.13, or to issue an order to show cause pursuant to § 3.72(b), or from the time an order by a U.S. court of appeals remanding a Commission decision and order for further proceedings becomes effective, until the time the Commission votes to enter its decision in the proceeding and the time permitted by § 3.55 to seek rehearing of that decision has elapsed. For purposes of this section, an order of remand by a U.S. • court of appeals shall be deemed to become effective when the Commission determines not to file a petition for a writ of certiorari, or when the time for filing such a petition has expired without a petition having been filed, or when such a petition has been denied. If a petition for reconsideration of a

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32436 Federal Register / Vol. 46, No. 120 / Tuesday, June 23, 1981 / Rules and Regulations Commission decision is filed pursuant to § 3.55, the provisions of this section shall apply until the time the Commission votes to enter an order disposing of the petition. (Sec. 6(g), 38 Stat. 721 (15 U.S.C. 46); 80 Stat. 383, as amended (5 U.S.C. 552)) Carol M. Thomas, Secretary.

[FR Doc. 81-18546 Filed 6-22-81; 8:45 am]