02-32424. Bureau of Political-Military Affairs; Amendments to the International Traffic in Arms Regulation: Canadian Exemption

AGENCY:

Department of State.

ACTION:

Final rule.

SUMMARY:

This rule clarifies the Canadian Exemption at the International Traffic in Arms Regulations (ITAR) as to how the Department of State will identify Canadian Crown Corporations as authorized end-users.

EFFECTIVE DATE:

December 26, 2002.

FOR FURTHER INFORMATION CONTACT:

David C. Trimble, Director, Compliance Division, Office of Defense Trade Controls, Bureau of Political-Military Affairs, Department of State [phone].

SUPPLEMENTARY INFORMATION:

On February 16, 2001, the Department of State published a final rule amending the Canadian Exemption (22 CFR 126.5) of the ITAR (66 FR 10575). Authorized end-users included Canadian Federal or Provincial governmental authorities acting in an official capacity or a “Canadian-registered person.” The term “Canadian-registered person” encompassed any Canadian national (including Canadian business entities organized under the laws of Canada), dual national, and permanent resident registered in Canada in accordance with the Canadian Defence Production Act, and such other Canadian Crown Corporations as may be identified by the Department of State. This final rule amends section 126.5(b) of the ITAR by adding “Canadian Crown Corporations identified by the Department of State in a list of such persons publicly available through the Internet Website of the Office of Defense Trade Controls and by other means.”

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 to ensure consistency with the purposes thereof. This rule does not require analysis under the Regulatory Flexibility Act or the Unfunded Mandates Reform Act. It has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Act of 1966. 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, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to warrant application of Executive Orders 12372 and 13123. However, interested parties are invited to submit written comments to the Department of State, Office of Defense Trade Controls, ATTN: Regulatory Change, Canadian Exemption, 12th Floor, SA-1, Washington, D.C. 20522-0112. Such persons must be so registered with the Department of State's Office of Defense Trade Controls (DTC) pursuant to the registration requirements of section 38 of the Arms Export Control Act.

List of Subjects in 22 CFR Part 126

• Arms and munitions
• Exports

Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, Part 126, is being amended as follows:

PART 126—GENERAL POLICIES AND PROVISIONS

1. The authority citation for part 126 continues to reads 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); 22 U.S.C. 2778; E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp., p.79; 22 U.S.C. 2658; 22 U.S.C. 287c; E.O. 12918, 59 FR 28205, 3 CFR 1994 Comp., p 899.

2. Section 126.5(b) introductory text is revised to read as follows:

§ 126.5

Canadian exemptions.

(a) * * *

(b) Permanent and temporary export of defense articles. Except for the defense articles and related technical data, and defense services identified in paragraphs (b)(1) through (b)(20) of this section, for exports that transit third countries, and provided the requirements of this subchapter are met, (to include 22 CFR 120.1 (c) and (d), parts 122 and 123 (except insofar as exemption from licensing requirements is herein authorized) and § 126.1, and the requirement to obtain non-transfer and use assurances for all significant military equipment), 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 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, except as described in paragraphs (b)(1) through (20) of this section, and the defense services and technical data described in paragraph (c) of this section. For purposes of this section, “Canadian-registered person” is any Canadian national (including Canadian business entities organized under the laws of Canada), dual national, 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 Website of the Office 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:

* * * * *

Dated: October 28, 2002.

John R. Bolton,

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