FR 2024-30425

Summary of the Document

The Bureau of Industry and Security (BIS), a part of the U.S. Department of Commerce, has released a final rule that revises the Export Administration Regulations (EAR) to align with recent decisions from the Australia Group (AG), an international organization focused on preventing the spread of chemical and biological weapons. This rule introduces new controls on various substances and instruments, such as those for peptide synthesis, dipropylamine, and neosaxitoxin, while making adjustments to existing controls on substances like botulinum toxins and toxic gas monitors. These changes aim to enhance export controls and help prevent these items from being used in weapons programs. The rule is set to take effect on December 23, 2024.

Significant Issues and Concerns

The document addresses complex regulatory matters using technical language and terms, which may challenge readers who are not well-versed in regulatory jargon or chemical nomenclature. The specificity around changes like ECCNs (Export Control Classification Numbers) could confuse those unfamiliar with export control regulations.

There is noteworthy attention to how small businesses in the biotechnology sector might be affected by these regulatory changes. Although BIS anticipates no significant economic impact, the methodology to determine this relies on statistical estimations that may not capture the entire landscape of potentially affected businesses.

Additionally, some regulatory processes, such as the submission of reports and handling of license applications, are described in detailed, technical language. This could overwhelm readers who are new to these procedures, making the document seem complicated and inaccessible.

Impact on the Public

The public may generally support the intent of this document as it seeks to contribute to international efforts to prevent the misuse of dangerous substances. However, individuals and entities involved in the export of these substances and technologies might find compliance requirements challenging and time-consuming, particularly if they are not already familiar with existing regulations.

Impact on Specific Stakeholders

For those directly involved in the export of controlled chemical and biological technologies, including commercial entities and research institutions, the rule has concrete implications. Businesses involved in peptide synthesis and other areas specified in this rule may find their operations subject to stricter oversight and licensing requirements, potentially affecting how they conduct international business.

Small businesses, in particular, might feel the pinch of these new regulations. While a significant economic impact is not anticipated, the procedural hurdles for securing export licenses could require additional administrative resources, which can be a burden for smaller operations.

On the positive side, the rule reflects ongoing international cooperation, reassuring stakeholders that the U.S. is playing its part in global security. By aligning with the Australia Group's updates, the U.S. intends to contribute to a coordinated approach to preventing the proliferation of materials that could potentially be used in nuclear or biological weapons programs.

This commentary contextualizes the regulatory changes while highlighting areas where the BIS might improve clarity and accessibility for those impacted by the rule adjustments.

The document under review is a rule issued by the Bureau of Industry and Security (BIS) that involves updating export controls based on agreements made by Australia Group member countries. Financial references in this document focus on projected costs related to compliance with the new regulations.

Financial Impacts on Small Businesses

The document estimates a minimal increase in costs for small businesses resulting from the new regulations. This increase is projected to be just under $94 per year for each small business. This figure is calculated based on an estimated burden of 3 hours and 7 minutes per year, with a cost rate of $30 per hour. This calculation assumes that the required work is performed by export compliance specialists.

While this added cost is considered minimal, the document does not provide granular detail on the precise methodologies used to determine this figure. It uses general industry classifications and Census Bureau data to estimate the number of affected businesses. As discussed in the issues section, there is a potential for ambiguity because these methodologies may not fully capture the diversity and specific characteristics of the small businesses involved.

Consistency in Cost Estimation

The $30 per hour cost estimate is consistently applied to both the EAR-related information collections and the FTR-related information collections. This uniformity suggests an effort to streamline the understanding of compliance costs, but it raises questions about its applicability across potentially varied types of compliance tasks. Export compliance tasks might vary significantly in complexity, potentially requiring different skill sets and expertise.

Reflection on Financial Impact Assessment

The document concludes that the amendments will not have a significant economic impact on small businesses. This conclusion is based on the projected cost increase and the estimation of license applications expected per year. However, the methodology for these estimates relies on broad industry data and may not fully account for industry-specific variations or unforeseen administrative burdens that small entities might face.

In summary, the new regulations appear designed to impose a modest financial burden on affected businesses, specifically small businesses engaged in exporting. The application of a consistent hourly rate for estimating compliance costs aims for simplicity but could mask variations in actual costs experienced by different businesses. Furthermore, the potential ambiguities and the complexity of the rule may pose challenges to those not well-versed in regulatory language and processes.