Mandatory Use of Simplified Network Application Processing System

Summary:

The Bureau of Industry and Security (BIS) is withdrawing a proposed rule that would have made use of the Simplified Network Application Process (SNAP) mandatory and that would have comprehensively revised the provisions of the Export Administration Regulations (EAR) that govern electronic filing. BIS is continuing to work on improvements to its on-line application system and will issue new rules as needed to implement those improvements.

Dates:

The proposed rule is withdrawn as of July 13, 2006.

For further information contact:

William Arvin, Office of Exporter Services, Regulatory Policy Division: e-mail warvin@bis.doc.gov, telephone (202) 482-2440.

Supplementary information:

Background

On November 12, 2003 (68 FR 64009), the Bureau of Industry and Security published a proposed rule that would have required that all applications for export licenses, reexport licenses, license exception AGR submissions, classification requests and encryption review requests be submitted via a to-be-instituted revised Simplified Network Application Process unless certain enumerated exceptions applied, and that would have extensively revised the requirements for electronic filing of certain applications (the November 2003 proposed rule). The November 2003 proposed rule would also have allowed organizations that use the system, once registered, to add, remove and adjust the authority level of individual users authorized to file applications and notices on behalf of that organization. The November 2003 proposed rule would have permitted the electronic filing of attachments, and required that all attachments to applications and notices be in text searchable pdf format.

The original comment period expired on January 12, 2004, but was extended to February 12, 2004 (69 FR 1685, January 12, 2004). BIS received 16 comments on the proposed rule. Although a number of commenters generally favored expanded electronic filing in principle, many were opposed to the requirement that attachments be in text searchable pdf format, generally citing the cost of producing such documents, particularly if the source documents had to be scanned from poor quality, oversized or bound originals. Other commenters opposed making electronic filing mandatory, and still others, although not opposed to mandatory electronic filing in principle, stated that no mandatory filing rule should be imposed until after the improved system had been deployed and was operating reliably.

Since the publication of the November 2003 proposed rule, BIS has reassessed its efforts to improve electronic filing of license applications and as a result of that reassessment, determined to release improvements and modifications to its electronic filing system in small installments rather than in the single complete restructuring that the November 2003 proposed rule contemplated. BIS may at times find it necessary to amend the Export Administration Regulations to conform with some of those installments. However, BIS has concluded that a single rule comprehensively rewriting the EAR provisions relating to electronic filing as it proposed in the November 2003 proposed rule no longer is consistent with the manner in which it plans to modernize its electronic filling process. In addition, BIS agrees with the commenters to the November 2003 proposed rule who stated that any revised electronic system should be put into place and be operating reliably before any rule making its use mandatory is published.

Accordingly, BIS is withdrawing the November 2003 proposed rule. BIS is continuing to work on improvements to its on-line application system and will issue new rules as needed to implement those improvements.

Dated: June 30, 2006. Matthew S. Borman,

Deputy Assistant Secretary for Export Administration.

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