05-11892. Amendments to the International Traffic in Arms Regulations: Various

AGENCY:

Department of State.

ACTION:

Final rule.

SUMMARY:

The Department of State is amending and/or clarifying the content of a number of provisions of the International Traffic in Arms Regulations (ITAR). The affected parts of the ITAR are: Part 120—Purpose and Definitions; Part 123—Licenses for the Export of Defense Articles; Part 124—Agreements, Off-Shore Procurement and Other Defense Services; Part 126—General Policies and Provisions; and Part 127—Violations and Penalties. See SUPPLEMENTARY INFORMATION for a description of the changes and clarifications for each respective part.

DATES:

Effective June 15, 2005.

ADDRESSES:

Interested parties are invited to submit written comments to the Department of State, Directorate of Defense Trade Controls, Office of Defense Trade Controls Policy, ATTN: Regulatory Change, 12th Floor, SA-1, Washington, DC 20522-0112. E-mail comments may be sent to [e-mail] with an appropriate subject line. Persons with access to the Internet may also view this notice by going to the regulations.gov Web site at: http://www.regulations.gov. Comments will be accepted at any time.

FOR FURTHER INFORMATION CONTACT:

Mr. Stephen Tomchik, Office of Defense Trade Controls Policy, Department of State, Telephone [phone] or FAX [phone]. ATTN: Regulatory Change, USML Parts 120.1, 123.15, 124.11, 126.5 and 127.12.

SUPPLEMENTARY INFORMATION:

22 CFR 120.1 describes inter alia the responsibilities of the several offices comprising the Directorate of Defense Trade Controls (DDTC). The textual changes to Sec. 120.1 reflect the transfer of responsibility for the commodity jurisdiction procedure from the Office of Defense Trade Controls Licensing to the Office of Defense Trade Controls Policy.

22 CFR 123.15 describes inter alia the monetary thresholds for export of major defense equipment, and the export of defense articles and services sold under contract that may take place only after DDTC notifies an exporter through the issuance of a license or other approval that Congress has not enacted a joint resolution prohibiting the export. Similarly, 22 CFR 124.11 describes the monetary thresholds for any technical assistance agreement or manufacturing license agreement providing for the manufacture abroad of significant military equipment on the United States Munitions List (USML), for the export of major defense equipment, and the export of defense articles and services sold under contract that shall be certified to Congress. Pursuant to Public Law 107-228, the Foreign Relations Authorization Act, Fiscal Year 2003, the threshold amounts for Congressional notice were adjusted in the following manner: (1) The threshold levels for member countries of the North Atlantic Treaty Organization (NATO), Australia, Japan and New Zealand are established at $25 million for the export of major defense equipment sold under a contract and $100 million for the export of defense articles and services sold under contract; and (2) a threshold level of $1 million is established for proposed exports to all countries involving firearms controlled under Category I of the USML.

22 CFR 126.5 describes inter alia the modalities by which exporters, without a license issued by DDTC, may carry out permanent and temporary exports of defense articles to Canada, and temporary imports from Canada. The textual additions to 22 CFR 126.5 are designed to clarify for exporters the range of defense articles, related technical data, and defense services that will continue to require a license issued by the DDTC for export to or temporary import from Canada.

The list of items excluded from the provisions of Section 126.5 are outlined in paragraph (b). That list is amended in the following ways:

(1) The text of 126.5(b)(6) amended to reflect a change in the title of Category I of the USML.

(2) The text of 126.5(b)(10) is amended to clarify that all types of aircraft covered by Category VIII(a) of the USML require an export license.

(3) The text of 126.5(b)(13) is amended to reflect the fact that nuclear radiation measuring devices manufactured to military specifications are now controlled in Category XVI vice Category XIV of the USML.

(4) The text of 126.5(b)(18) is amended to reflect a change in the title of Category XVI of the USML.

(5) A new entry is made to the text of 126.5(b) to clarify that the exclusion from the exemption also embraces man-portable air defense systems, and their parts and components, and technical data for such systems that are controlled in Category IV of the USML. Other Category IV items already are captured by the provisions 126.5(b)(2) which covers all Missile Technology Control Regime (MTCR) Annex Items.

22 CFR 127.12 describes inter alia procedures concerning voluntary disclosures by persons, firms, or organizations of violations of the Arms Export Control Act (AECA). The textual changes made to this section deal with the address to which such voluntary disclosures should be sent.

Regulatory Analysis and Notices: This amendment involves a foreign affairs function of the United States and, therefore, is not subject to the procedures required by 5 U.S.C. 553 and 554. It is exempt from review under Executive Order 12866; but has been reviewed internally by the Department of State to ensure consistency with the purposes thereof. This rule does not require analysis under the Regulatory Flexibility Act or the Unfunded Mandates Reform Act. This amendment has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996. It will not have substantial direct effects on the States, the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this rule does not have sufficient federalism implications to warrant application of the consultation provisions of Executive Orders 12372 and 13132. This rule does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. chapter 35.

List of Subjects

22 CFR Part 120

• Arms and munitions
• Classified information
• Exports

22 CFR Part 123

• Arms and munitions
• Exports

22 CFR Part 124

• Arms and munitions
• Exports
• Technical assistance

22 CFR Part 126

• Arms and munitions
• Exports

22 CFR Part 127

• Arms and munitions
• Crime
• Exports
• Penalties
• Seizures and forfeitures

Accordingly, for the reasons set forth above, title 22, chapter I, subchapter M, parts 120, 123, 124, 126, and 127 are amended as follows:

PART 120—PURPOSE AND DEFINITIONS

1. The authority citation for part 120 is revised to read as follows:

Authority: Secs. 2, 38, and 71, Pub.L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2794; E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp, p. 79; 22 U.S.C. 2651a; Pub. L. 105-261, 112 Stat. 1920.

2. Section 120.1 is amended by revising paragraphs (b)(2)(i)(B) and (D) to read as follows:

§ 120.1

General authorities and eligibility.

* * * * *

(b) * * *

(2) * * *

(i) * * *

(B) The Office of Defense Trade Controls Licensing and the Director, Office of Defense Trade Controls Licensing, respectively, insofar as such references relate to licensing or other authorization of defense trade, including references under parts 120, 123, 124, 125, 126, 129 and 130 of this subchapter;

* * * * *

(D) The Office of Defense Trade Controls Policy and the Director, Office of Defense Trade Controls Policy, respectively, insofar as such references relate to the general policies of defense trade, including references under this part 120 and part 126 of this subchapter, and the commodity jurisdiction procedure under this part 120.

* * * * *

PART 123—LICENSES FOR THE EXPORT OF DEFENSE ARTICLES

3. The authority citation for part 123 is revised to read as follows:

Authority: Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2753; E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 2776; Pub. L. 105-261, 112 Stat. 1920; Sec 1205(a), Pub. L. 107-228.

4. Section 123.15 is revised to read as follows:

§ 123.15

Congressional certification pursuant to Section 36(c) of the Arms Export Control Act.

(a) The Arms Export Control Act requires that a certification be provided to the Congress prior to the granting of any license or other approval for transactions, in the amounts described below, involving exports of any defense articles and defense services and for exports of major defense equipment, as defined in §120.8 of this subchapter. Approvals may not be granted when the Congress has enacted a joint resolution prohibiting the export. Certification is required for any transaction involving:

(1) A license for the export of major defense equipment sold under a contract in the amount of $14,000,000 or more, or for defense articles and defense services sold under a contract in the amount of $50,000,000 or more to any country that is not a member country of the North Atlantic Treaty Organization (NATO), or Australia, Japan or New Zealand that does not authorize a new sales territory; or

(2) A license for export to a country that is a member country of the North Atlantic Treaty Organization (NATO), or Australia, Japan or New Zealand of major defense equipment sold under a contract in the amount of $25,000,000 or more, or for defense articles and defense services sold under a contract in the amount of $100,000,000 or more and provided the transfer does not include any other countries; or

(3) A license for export of a firearm controlled under Category I of the United States Munitions List, of this subchapter, in an amount of $1,000,000 or more.

(b) Unless an emergency exists which requires the proposed export in the national security interests of the United States, approval may not be granted for any transaction until at least 15 calendar days have elapsed after receipt by the Congress of the certification required by 22 U.S.C. 2776(c)(1) involving the North Atlantic Treaty Organization, any member country of the Organization, or Australia, Japan or New Zealand or at least 30 calendar days have elapsed for any other country; in the case of a license for an export of a commercial communications satellite for launch from, and by nationals of, the Russian Federation, Ukraine, or Kazakhstan, until at least 15 calendar days after the Congress receives such certification.

(c) Persons who intend to export defense articles and defense services pursuant to any exemption in this subchapter under the circumstances described in this section must provide written notification to the Directorate of Defense Trade Controls and include a signed contract and a DSP-83 signed by the applicant, the foreign consignee and the end-user.

PART 124—AGREEMENTS, OFF-SHORE PROCUREMENT AND OTHER DEFENSE SERVICES

5. The authority citation for part 124 is revised to read as follows:

Authority: Sec. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); E.O. 11958, 42 FR 4311; 3 CFR 1977 Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 2776; Pub. L. 105-261.

6. Section 124.11 is revised to read as follows:

§ 124.11

Congressional certification pursuant to Section 36(d) of the Arms Export Control Act.

(a) The Arms Export Control Act requires that a certification be provided to the Congress prior to the granting of any approval of a manufacturing license agreement or technical assistance agreement as defined in Sections 120.21 and 120.22 respectively for the manufacturing abroad of any item of significant military equipment (see § 120.7 of this subchapter) that is entered into with any country regardless of dollar value. Additionally, any manufacturing license agreement or technical assistance agreement providing for the export of major defense equipment, as defined in §120.8 of this subchapter shall also require a certification when meeting the requirements of § 123.15 of this subchapter.

(b) Unless an emergency exists which requires the immediate approval of the agreement in the national security interests of the United States, approval may not be granted until at least 15 calendar days have elapsed after receipt by the Congress of the certification required by 22 U.S.C. 2776(d)(1) involving the North Atlantic Treaty Organization, any member country of that Organization, or Australia, Japan or New Zealand or at least 30 calendar days have elapsed for any other country. Approvals may not be granted when the Congress has enacted a joint resolution prohibiting the export.

(c) Persons who intend to export defense articles and defense services pursuant to any exemption in this subchapter under the circumstances described in this section and section 123.15 must provide written notification to the Directorate of Defense Trade Controls and include a signed contract and a DSP-83 signed by the applicant, the foreign consignee and the end-user.

PART 126—GENERAL POLICIES AND PROVISIONS

7. The authority citation for part 126 is revised to read as follows:

Authority: Secs. 2, 38, 40, 42, and 71, Pub.L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2780, 2791, and 2797); E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 287c; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp. p. 899.

8. Section 126.5 is amended by revising paragraphs (b) introductory text, (6), (10), (13), and (18), (c)(1), and note 2, and by adding paragraph (b)(21) to read as follows:

§ 126.5

Canadian exemptions.

* * * * *

(b) Permanent and temporary export of defense articles. Except as provided below, District Director of Customs and postmasters shall permit, when for end-use in Canada by Canadian Federal or Provincial governmental authorities acting in an official capacity or by a Canadian-registered person or for return to the United States, the permanent and temporary export to Canada without a license of defense articles and related technical data identified in 22 CFR 121.1. The above exemption is subject to the following limitations: Defense articles and related technical data, and defense services identified in paragraphs (b)(1) through (b)(21) of this section and exports that transit third countries. Such limitations also are subject to meeting the requirements of this subchapter, (to include 22 CFR 120.1(c) and (d), parts 122 and 123 (except insofar as exemption from licensing requirements is herein authorized) and Section 126.1, and the requirement to obtain non-transfer and use assurances for all significant military equipment. For purposes of this section, “Canadian-registered person” is any Canadian national (including Canadian business entities organized under the laws of Canada), dual citizen of Canada and a third country (subject to section 126.1), and permanent resident registered in Canada in accordance with the Canadian Defense Production Act, and such other Canadian Crown Corporations identified by the Department of State in a list of such persons publicly available through the Internet Web site of the Directorate of Defense Trade Controls and by other means. The defense articles, related technical data, and defense services identified in 22 CFR 121.1 continuing to require a license are:

* * * * *

(6) Firearms, close assault weapons and combat shotguns listed in Category I.

* * * * *

(10) All Category VIII(a) items, and developmental aircraft, engines and components identified in Category VIII(f).

* * * * *

(13) Nuclear radiation measuring devices manufactured to military specifications listed in Category XVI(c).

* * * * *

(18) Nuclear weapons, design and testing equipment listed in Category XVI.

* * * * *

(21) Man-portable air defense systems, and their parts and components, and technical data for such systems covered by Category IV.

(c) Defense service exemption. A defense service is exempt from the licensing requirements of part 124 of this subchapter, when the following criteria can be met.

(1) The item, technical data, defense service and transaction is not identified in paragraphs (b)(1) through (21) of this section; and

* * * * *

Notes to Sec. 126.5

* * * * *

2. Additional exemptions exist in other sections of this subchapter that are applicable to Canada, for example Secs. 123.9, 125.4 and 124.2, which allows for the performance of defense services related to training in basic operations and maintenance, without a license, for defense articles lawfully exported, including those identified in paragraphs (b)(1) through (21) of this section.

PART 127—VIOLATIONS AND PENALTIES

9. The authority citation for part 127 is amended to read as follows:

Authority: Secs. 2, 38, and 42, Pub. L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2791); E.O. 11958, 42 FR 4311; 3 CFR, 1977 Com. p. 79; 22 U.S.C. 401; 22 U.S.C. 2651a; 22 U.S.C. 2779a; 22 U.S.C. 2780.

10. Section 127.12 is amended by revising paragraph (g) as follows:

§ 127.12

Voluntary disclosures.

* * * * *

(g) Voluntary disclosures should be sent to the Office of Defense Trade Controls Compliance, Directorate of Defense Trade Controls. Exporters should consult the Directorate of Defense Trade Controls Web site at http://www.pmdtc.org for the appropriate street address.

* * * * *

Dated: May 10, 2005.

John R. Bolton,

Under Secretary, Arms Control and International Security, Department of State.