[Federal Register Volume 71, Number 15 (Tuesday, January 24, 2006)]
[Rules and Regulations]
[Pages 3762-3763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-667]


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DEPARTMENT OF STATE

22 CFR Parts 122 and 129

[Public Notice: 5278]
RIN 1400-AB97


Rule Title: Amendment to the International Traffic in Arms 
Regulations: Registration Fee Change

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: This rule makes final the interim rule that amended the 
International Traffic in Arms Regulations (ITAR) (22 CFR Parts 122 and 
129) by increasing the registration fees, changing the registration 
renewal period, and making other minor administrative changes. Comments 
received on the interim rule are analyzed in the SUPPLEMENTARY 
INFORMATION section. No changes were made to the interim rule.

DATES: Effective Date: The interim rule is adopted as final February 
23, 2006.

FOR FURTHER INFORMATION CONTACT: David Trimble, Office of Defense Trade 
Controls Compliance, Bureau of Political-Military Affairs, Department 
of State, Washington, DC 20522-0112, 202-663-2807 or FAX 202-261-8199. 
ATTN: ITAR Regulatory Change, 22 CFR part 122 and part 129.

SUPPLEMENTARY INFORMATION:

Background

    On December 8, 2004, the Department of State published an interim 
rule (Public Notice 4920; 69 FR 70888), with a request for comments, 
amending the ITAR (22 CFR parts 122 and 129) by increasing the 
registration fees, changing the registration renewal period, and making 
other minor administrative changes. The administration of the Arms 
Export Control Act (22 U.S.C. 2751 et seq.), regulations for which are 
set forth in the ITAR, is a foreign affairs function. The Department 
received 43 comments from ITAR registrants and defense-related 
associations.

[[Page 3763]]

Comment Analysis

Impact on Small Business and Fee Relief

    The majority of comments received concerned the fee increase's 
impact on small businesses. The comments provided noted the burden the 
fee increase would place on small businesses, and some sought relief 
from the increase. Prior to the publication of the interim rule, the 
Department fully considered the financial burden the fee increase would 
place on industry and small businesses when it decided upon the new fee 
structure, and concluded that the impact would be minimal for the 
majority of the registrants. In addition, as noted in the Regulatory 
Findings and Notice section, the Department has found that this fee 
increase will not result in an annual effect on the economy of $100 
million or more; a major increase in costs or prices for consumers, 
individual industries, Federal, State, or local government agencies, or 
geographic regions; or significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
United States-based enterprises to compete with foreign-based 
enterprises in domestic and export markets.

Rational for Increasing Registration Fees

    Ten comments were received regarding the rationale for increasing 
the registration fee. The Department has increased the ITAR 
registration fee to help fund the activities of its Directorate of 
Defense Trade Controls (DDTC), as set forth in 22 U.S.C. 2717. In 
particular, the additional revenue will assist DDTC in achieving its 
goals of expanded automation, compliance, training, and quality 
assurance. The additional resources will enable DDTC to serve the 
export community with greater efficiency. This increase in registration 
fees is the first increase since 1997.

Registration Requirements

    Three comments were received regarding whether particular entities 
must register with DDTC. The interim rule and this final rule address 
an increase in the registration fee, the registration renewal period, 
and other minor administrative changes. The regulations pertaining to 
who must register with DDTC remain unchanged. Pursuant to 22 CFR 122.1, 
any person who engages in the United States in the business of either 
manufacturing or exporting defense articles or furnishing defense 
services is required to register with the Office (now Directorate) of 
Defense Trade Controls. Manufacturers who do not engage in exporting 
must nevertheless register. In addition, 22 CFR 129.1 states that 
section 38(b)(1)(A)(ii) of the Arms Export Control Act (22 U.S.C. 2778) 
provides that persons engaged in the business of brokering activities 
shall register and pay a registration fee. Furthermore, 22 CFR 129.2 
states that, inter alia, brokering activities include activities by 
U.S. persons who are located inside or outside of the United States or 
foreign persons subject to U.S. jurisdiction involving defense articles 
or defense services of U.S. or foreign origin, which are located inside 
or outside of the United States.

Rationale for Two-Year Registration

    Two comments were received requesting the retention of the option 
to register up to a maximum period of four years. DDTC has reduced the 
maximum registration period to two years because the increased volume 
of mergers and acquisitions by regulated companies has made it more 
difficult to maintain accurate information on registrants. Also, DDTC 
encountered problems with companies not updating their registration, 
except at the time of their renewal, as required by 22 CFR 129.4(c). 
The change from a four-year to a two-year maximum registration period 
will improve the currency and accuracy of the registrants' information, 
which is critical to all licensing decisions.

List of Subjects

22 CFR Part 122

    Arms and munitions, Exports.

22 CFR Part 129

    Arms and munitions, Exports, Technical assistance.
    Accordingly, for the reasons set forth above, the interim rule 
published at 69 FR 70888 is adopted as final.

    Dated: Decemher 21, 2005.
Robert G. Joseph,
Under Secretary, Arms Control and International Security, Department of 
State.
[FR Doc. 06-667 Filed 1-23-06; 8:45 am]
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