ÿWPCF ÿ$öh.¶ xPY’š¡B63P„Ħ+PÀ®^qœ/ä?lP&*õYŸñ€ë”?®ÙF‘ex›:›žê ¿:’Fš2¨nŸUïÔwþ¿›WÆÁ‡NpµAÏk &±ÌüPªzƒ¹»¦ûJq”‘ÄjÔ14gi|ÍRÀ;SÁt‹D3QY¹R=!º,Öã·+ò@š[±R§áð^òÜpFi;r+rjr³Æ/úše0®ó†TVì]<|^™Š}ªªÙìKÇŸGüÏ2t·ýœòšõ½ 4RåT¯B}ÑdîsÔ® àyËrÒ^Øøn¦.âÀšW´Ng™PÃÄGÚ±H"Kœ ¨#Á¸UNy %Ç 0:ÍN^ w4- m/#|x˜HP LaserJet 4200 PCL 6ÈÈÈÈ0(ÖÃ9 Z‹6Times New Roman RegularX(üœ$¡¡ÔUSUS.,Ô8iR5s kˆ5ê:i¢×+00ÿU‹ÿÀÀÀÝ ƒüœ!ÝÔUSUS.,ÔÝ  ÝÔ_ÔÑ8€±¼XXdìdÈ8ÑÓÓà€¨¨5(#àà€@¨¨5(#àBilling€Code€3510-33-PˆÐ ° ÐÌò òDEPARTMENT€OF€COMMERCEó óÐ `° ÐÌò òBureau€of€Industry€and€Securityó óÐ  ` ÐÌò ò15€Ô_ÔCFRÔ_Ô€Parts€732,€736,€740,€744,€752,€764,€and€772ó óÐ À  ÐÌò ò[Docket€No.€040915266„6239„03€]ó óÐ pÀ ÐÌò òÔ_ÔRINÔ_Ô:€0694-AC94ó óÐ  p Ðà  àà ` àà ¸ àà  àà h àÌRevised€ð ðKnowledgeðð€Definition,€Revision€of€ð ðRed€Flagsðð€Guidance€and€Safe€HarborÐ Ð  ÐÌò òAGENCY:ó ó€€Bureau€of€Industry€and€Security,€Commerce.Ð €Ð ÐÌò òACTION:€ó ó€€Proposed€rule;€withdrawal.Ð 8"ˆ  ÐÌò òSUMMARY:ó ó€€€BIS€is€withdrawing€a€proposed€rule€published€October€2004.€€That€rule€wouldÐ ð%@!$ Ðhave€revised€the€definition€of€€ð ðknowledgeðð€in€the€Export€Administration€Regulations.€€It€alsoÐ Ð' #& Ðwould€have€updated€the€ð ðred€flagsðð€guidance€and€would€have€provided€a€safe€harbor€fromÐ ¨)ø$( Ðliability€arising€from€knowledge€under€the€definition€of€that€term.€€In€light€of€the€publicÐ €+Ð&* Ðcomments€received€on€the€proposed€rule€and€BISððs€review€of€relevant€€provisions€of€the€existingÐ ° Ðregulations,€this€proposed€rule€is€being€withdrawn.Ð ˆØ ÐÌò òDATES:ó ó€The€proposed€rule€is€withdrawn€Ô_ÔonÔ_Ô€October€18,€Ô_Ô2006Ô_ÔÐ 8 ˆ Ðà  àà ` àà ¸ àà  àà h àà À àà  àà p àà È àÌò òFOR€FURTHER€INFORMATION€CONTACT:ó ó€William€Ô_ÔArvinÔ_Ô,€Office€of€Exporter€Services,Ð ð @  Ðat€warvin@bis.doc.gov,€fax€202-482-3355€or€telephone€202-482-2440Ð Ð  ÐÌò òSUPPLEMENTARY€INFORMATION:ó óÐ €Ð Ðà  àÌBackgroundÐ 0€ Ðà  àÌà  àOn€October€13,€2004,€BIS€published€a€proposed€rule€to€amend€the€EAR€by€revising€theÐ à0 Ðdefinition€of€"knowledge"€that€applies€throughout€most€of€the€regulations,€to€revise€its€"red€flag"Ð ¸ Ðguidance€and€to€create€a€safe€harbor€with€respect€to€certain€violations€that€have€"knowledge"€asÐ à Ðone€of€the€elements€of€the€offense€€(69€FR€60829,€October€13,€2004;€Comment€period€reopenedÐ h ¸ Ð69€FR€65555,€November€15,€2004).€Ð @"  ÐÌà  àThe€proposed€rule€would€have€revised€the€definition€of€knowledge€in€ðð772.1€of€the€EARÐ ð%@!$ Ðin€four€ways.€€It€would€have€incorporated€a€"reasonable€person"€standard,€replaced€the€phraseÐ È'#& Ð"high€probability"€with€the€phrase€"more€likely€than€not,"€added€the€phrase€"inter€alia"€to€theÐ  )ð$( Ðdescription€of€the€facts€and€circumstances€that€could€make€a€person€aware€of€the€existence€orÐ x+È&* Ðfuture€occurrence€of€a€fact,€and€eliminated€the€phrase€"known€to€a€person"€from€the€sentence€inÐ ° Ðthe€knowledge€definition€that€states€that€knowledge€may€be€inferred€from€"conscious€disregard€ofÐ ˆØ Ðfacts€known€to€a€person."€€The€proposed€rule€also€would€have€limited€the€applicability€of€theÐ `° Ðdefinition€to€certain€actors€in€transactions€subject€to€the€Export€Administration€RegulationsÐ 8 ˆ Ð(EAR)€and€excluded€certain€usages€from€the€definition.€Ð  ` ÐÌà  àThe€proposed€rule€would€have€increased€from12€to€23€the€number€of€circumstancesÐ À  Ðexplicitly€set€forth€as€"red€flags"€in€Supplement€No.€3€to€part€732€of€the€EAR.Ð ˜è  Ðà  àà ` àà ¸ àÌà  àThe€proposed€rule€would€have€created€a€"safe€harbor"€from€knowledge€based€violations.€Ð H˜ ÐTo€take€advantage€of€the€safe€harbor,€a€party€would€have€to€commit€no€violations€of€the€EAR,€inÐ  p Ðconnection€with€the€transaction,€identify€and€resolve€any€"red€flags"€present€in€the€transactionÐ øH Ðand€report€the€red€flags€found€and€the€resolution€to€BIS.€€BIS€would€have€been€required€toÐ Ð  Ðacknowledge€receipt€of€all€such€reports.€€Thereafter,€if€BIS€responded€to€the€party's€report€byÐ ¨ø Ðstating€that€it€concurred€that€the€party€had€adequately€addressed€red€flags€or€by€advising€the€partyÐ €Ð Ðthat€BIS€would€not€be€responding€to€the€report,€the€party€would€have€been€able€to€take€advantageÐ X ¨ Ðof€the€safe€harbor,€assuming€the€party€had€accurately€disclosed€all€relevant€information€to€BIS.€Ð 0"€  ÐThe€proposed€rule€stated€BIS's€intention€to€respond€to€most€reports€within€45€days.€€However,€theÐ $X" Ðresponse€might€consist€of€a€notice€that€BIS€needed€more€time€to€evaluate€the€party's€report.€€IfÐ à%0!$ ÐBIS€did€not€respond€to€the€party's€report€by€the€date€stated€in€the€acknowledgment€provided€to€theÐ ¸'#& Ðparty,€the€party€could€have€contacted€BIS€to€inquire€about€the€status€of€the€report.€€Ð )à$( ÐÐ h+¸&* ÐÔ_Ôà  àBIS€received€18€comments€on€this€proposed€rule.€€Nine€of€these€comments€were€filed€byÐ ° Ðassociations€that€have€multiple€members.€€€Ð ˆØ ÐÌà  àWith€regard€to€revising€the€definition€of€knowledge,€the€most€frequently€expressedÐ 8 ˆ Ðopinion€was€that€the€revisions€were,€in€fact,€substantive€changes€to€the€definition€rather€thanÐ  ` Ðmere€clarifications.€€Ô_ÔCommentersÔ_Ô€also€stated€that€BIS€had€not€offered€any€reason€as€to€why€anyÐ è 8  Ðchange€in€the€knowledge€definition€was€necessary.€€Ð À  ÐÌà  àAlthough€the€revisions€to€the€"red€flags"€were€criticized€less€than€other€proposed€changes,Ð pÀ ÐÔ_ÔcommentersÔ_Ô€made€suggestions€for€revisions€or€elimination€of€12€specific€"red€flags."€€In€addition,Ð H˜ Ðsome€Ô_ÔcommentersÔ_Ô€asserted€that€the€proposal€increased€the€number€of€circumstances€that€could€beÐ  p Ðred€flags€without€providing€adequate€guidance€as€to€the€circumstances€when€any€particular€"redÐ øH Ðflag"€would€be€applicable.€€The€notice€did€state€(as€does€current€Supplement€No.€3€to€part€732€ofÐ Ð  Ðthe€EAR)€that€not€all€red€flags€are€applicable€in€all€circumstances.Ð ¨ø ÐÌà  àA€number€of€Ô_ÔcommentersÔ_Ô€criticized€the€safe€harbor€proposal,€stating€that€it€was€tooÐ X ¨ Ðcomplex€and€lengthy.€€Several€predicted€that€few,€if€any,€firms€would€be€inclined€to€use€it.€€SomeÐ 0"€  Ðsuggested€that€submitting€a€license€application€for€the€transaction€would€be€simpler€and€probablyÐ $X" Ðfaster€than€waiting€to€see€if€BIS€approved€of€the€manner€in€which€the€party€resolved€the€"redÐ à%0!$ Ðflags."Ð ¸'#& ÐÌWithdrawal€of€Proposal:Ð h+¸&* Їà  àBIS€has€considered€the€comments€on€the€proposed€rule.€€BIS€has€also€reviewed€theÐ ° Ðproposed€rule€as€compared€to€the€corresponding€existing€provisions€of€the€EAR€and€hasÐ ˆØ Ðconsidered€several€possible€modifications€of€the€proposed€rule.€€As€a€result€of€this€consideration,Ð `° ÐBIS€has€concluded€that€utilizing€this€proposed€rule€as€a€basis€for€amending€the€EAR€wouldÐ 8 ˆ Ðneither€clarify€the€public's€responsibilities€under€the€EAR€nor€make€the€regulations€moreÐ  ` Ðeffective.€€Accordingly,€BIS€is€withdrawing€this€proposal.Ð è 8  ÐÌÌDated:€October€11,€2006Ð pÀ ÐÌÌChristopher€A.€Ô_ÔPadillaÔ_ÔÐ øH ÐAssistant€Ô_ÔSecretaryÔ_Ô€€for€Export€Administration