0694-0096 Supporting Statement 2023

SUPPORTING STATEMENT

U.S. Department of Commerce

Bureau of Industry and Security

Five-Year Records Retention Requirement

for Export Transactions and Boycott Actions

OMB CONTROL NO. 0694-0096

A. JUSTIFICATION

1. Explain the circumstances that make the collection of information necessary.

The collection is necessary under Sections 760 and 762.6(a) of the Export Administration Regulations (EAR). The five-year retention requirement corresponds with the statute of limitations for violations and is necessary to preserve potential evidence for investigations.

Sections 4812(b)(7) and 4814(b)(1)(B) of the Export Control Reform Act (ECRA) authorizes the President and the Secretary of Commerce to issue regulations to implement the ECRA including those provisions authorizing the control of exports of U.S. goods and technology to all foreign destinations, as necessary for the purpose of national security, foreign policy and short supply, and the provision prohibiting U.S. persons from participating in certain foreign boycotts. Export control authority has been assigned directly to the Secretary of Commerce by the ECRA and delegated by the President to the Secretary of Commerce. This authority is administered by the Bureau of Industry and Security through the Export Administration Regulations (EAR).

2. Explain how, by whom, how frequently, and for what purpose the information will be used. If the information collected will be disseminated to the public or used to support information that will be disseminated to the public, then explain how the collection complies with all applicable Information Quality Guidelines.

Parts 760 and 762.6(a) of the EAR codifies the how, who, frequency and purpose of this collection. These sections of the EAR have been uploaded into ROCIS. All parties involved in the export, reexport, transshipment or diversion of items subject to the EAR (hereinafter “export transaction”) and the U.S. party involved in the export transaction involving a reportable boycott request are required to maintain records of these activities for a period of five years. The frequency depends upon how often each entity is involved in an export transaction or one involving a reportable boycott request.

This five-year retention period for export documents to be retained corresponds with the five year statute of limitations for criminal actions brought under the ECRA predecessor acts (18 U.S.C. 3282) and the five year statute for administrative compliance proceedings (28 U.S.C. 2462).

All antiboycott enforcement actions depend entirely on a documentary record. Violations of the antiboycott provisions of ECRA involve a request by a boycotting country requiring a U.S. person to comply with an unsanctioned foreign boycott. These requests are contained in commercial documents (e.g., letters of credit, contracts, tenders, invoices, and bills of lading).

Most export transaction enforcement actions also depend on a documentary record. For example, if an exporter states on a shipping document that the shipment is destined for Switzerland and the exporter sends it or diverts it to Iraq, the exporter’s false statement on that document, as well as on other documents such as letters, faxes, and notes, can provide the evidentiary basis to demonstrate criminal intent.

The Section 515 Information Quality Guidelines apply to this information collection and comply with all applicable information quality guidelines, i.e., OMB, Department of Commerce, and specific operating unit guidelines.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological techniques or other forms of information technology.

Most firms use electronic systems for record-keeping and retrieval. The additional storage burden of retaining records for five years in automated systems is negligible. Small firms who continue to retain hard copy files are likely to have fewer transactions and consequently fewer records to retain. Hence, the burden of keeping hard copy files for five years for smaller firms should be negligible as well.

4. Describe efforts to identify duplication.

For the vast majority of records retained there is no duplication. Approximately 95% of all exports subject to the EAR are shipped under a License Exception (EAR Section 740) or under the "No License Required" provisions (Section 732.5 of the EAR. These exports do not require prior approval by the government. The only copies of the records associated with these shipments are those maintained by exporters, reexporters or transshippers.

With respect to the information contained on the forms filed with the Office of Antiboycott Compliance (OAC), there is no duplication because this information is not reported to, or collected by, any other agency in the United States Government. Each U.S. person receiving a boycott request must report receipt of that request to OAC either on form BIS 621P, titled “Report of Restrictive Trade Practice- Single Transaction” or form BIS 6051P, titled “Report of Restrictive Trade Practice - Multiple Transaction (0694-0012)” and this avoids duplication because each experience is exclusive to the respondent.

5. If the collection of information involves small businesses or other small entities, describe the methods used to minimize burden.

BIS is sensitive to the needs of small businesses; however this collection must be conducted by all affected entities to ensure full compliance with the EAR.

(See also Response to question 3 concerning the negligible additional storage burden of maintaining electronic and hard copy files for five years.)

6. Describe the consequences to the Federal program or policy activities if the collection is not conducted or is conducted less frequently.

The current records retention requirement for all documents is five years to correspond with the five-year statute of limitations. BIS enforcement experience has demonstrated the need for a five-year mandatory requirement. The record retention provisions require persons involved in export transactions or in receipt of a boycott request to retain documents that may be needed at a later date to investigate potential violations of the EAR.

It would be more difficult to enforce violations of the EAR if this five-year records retention requirement was no longer in place.

7. Explain any special circumstances that require the collection to be conducted in a manner inconsistent with OMB guidelines.

There are no special circumstances that require the collection to be conducted in a manner inconsistent with OMB guidelines.

8. Provide the information of the PRA Federal Register notice that solicited public comments on the information collection prior to this submission. Summarize the public comments received in response to that notice and describe the actions taken by the agency in response to those comments. Describe the efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.

The notice requesting public comment was published in the Federal Register on April 5, 2023 (88 FR 20119). No public comments were received.

BIS consults with Technical Advisory Committees (TACs) consisting of members outside the agency, who are leaders in the industry, to discuss with BIS current policies and standards both with the government and the public. ECRA states that the TACs advise the Under Secretary of Commerce for Industry and Security on controls under the Export Administration Regulations.

9. Explain any decisions to provide payments or gifts to respondents, other than remuneration of contractors or grantees.

There are no plans to provide payments or gifts to respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for assurance in statute, regulation, or agency policy.

Not applicable. The records which are the subject of this collection are maintained by the exporters and other parties themselves.

Any export licensing information obtained by BIS for license and/or enforcement purposes, is protected from release to the public under article 1761(h) of the ECRA.

11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.

There are no questions of a sensitive nature.

12. Provide an estimate in hours of the burden of the collection of information.

For exports, the number of U.S. and foreign parties required to keep records is estimated at 100,000. There were an estimated 10.5 million U.S. exports subject to the EAR recordkeeping requirement and correspondingly, 10.5 million foreign imports subject to the regulations (21 million transactions total). There are typically four documents or records for each shipment (Census forms--Shipper's Export Declaration, Automated Export System record, bill of lading or Customs Form 7512, or similar documents). This results in an estimated 84 million documents annually.

For antiboycott transactions, there are an estimated 1,520 reports filed annually.

Activity	Respondents	Total Annual Records	Average Burden per Record	Total Annual Recordkeeping Burden Hours
Export Transactions	100,000	84,000,000	.01 Second	23,333
Antiboycott Actions	1,520	1,520	1 Minute	25
Totals				23,358

13. Provide an estimate of the total annual cost burden to the respondents or record-keepers resulting from the collection (excluding the value of the burden hours in #12 above).

"There are no capital/start-up or ongoing operation/maintenance costs associated with this information collection."

14. Provide estimates of annualized cost to the Federal government.

This collection is only a requirement for respondents to maintain records for a 5 year period. No filing or processing actions of any kind are completed by the federal government. Two hours annually are needed by an SES to review and evaluate this information collection and the legal authority which governs it. (2 hours X $70.00 = $140.00)

15. Explain the reasons for any program changes or adjustments.

A slight cost increase for an SES is needed to reflect current salary.

16. For collections whose results will be published, outline the plans for tabulation and publication.

Not applicable.

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons why display would be inappropriate.

Not applicable.

18. Explain each exception to the certification statement identified in Item 19 of the

OMB 83-I.

Not applicable.

B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS

This collection does not utilize statistical methods.

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