[Federal Register Volume 70, Number 114 (Wednesday, June 15, 2005)]
[Rules and Regulations]
[Pages 34652-34655]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-11892]


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DEPARTMENT OF STATE

22 CFR Parts 120, 123, 124, 126, and 127

[Public Notice 5108]
Z-RIN 1400-ZA15


Amendments to the International Traffic in Arms Regulations: 
Various

AGENCY: Department of State.

ACTION: Final rule.

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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

[[Page 34653]]

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 
[email protected] 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 (202) 663-2799 or 
FAX (202) 261-8199. 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.

0
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

0
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.


0
2. Section 120.1 is amended by revising paragraphs (b)(2)(i)(B) and (D) 
to read as follows:


Sec.  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

[[Page 34654]]

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

0
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.


0
4. Section 123.15 is revised to read as follows:


Sec.  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 Sec. 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

0
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.


0
6. Section 124.11 is revised to read as follows:


Sec.  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 
Sec.  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 Sec. 120.8 of this subchapter 
shall also require a certification when meeting the requirements of 
Sec.  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

0
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.


0
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:


Sec.  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

[[Page 34655]]

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

0
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.

0
10. Section 127.12 is amended by revising paragraph (g) as follows:


Sec.  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.
[FR Doc. 05-11892 Filed 6-14-05; 8:45 am]
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