[Federal Register Volume 73, Number 145 (Monday, July 28, 2008)]
[Proposed Rules]
[Pages 43653-43654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-17232]



[[Page 43653]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF STATE

22 CFR Parts 122 and 129

[Public Notice 6246]
RIN 1400-AC50


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

AGENCY: Department of State.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Department of State is proposing to amend the 
International Traffic in Arms Regulations (ITAR) by increasing the 
registration fees, changing the registration renewal period, and making 
other minor administrative changes.

DATES: Effective Date: The Department of State will accept comments on 
this proposed rule until August 27, 2008.

ADDRESSES: Interested parties may submit comments within 30 days of the 
date of publication by any of the following methods:
    E-mail: [email protected] with the subject line: ITAR 
Regulatory Change, 22 CFR Parts 122 and 129.
    Mail: Department of State, Directorate of Defense Trade Controls, 
ATTN: Regulatory Change, ITAR sections 122 and 129, SA-1, 12th floor, 
Washington, DC 20522-0112.
    Persons with access to the Internet may also view this notice by 
going to the regulations.gov Web site at: http://www.regulations.gov/index.cfm.

FOR FURTHER INFORMATION CONTACT: Patricia Slygh, Directorate of Defense 
Trade Controls, Bureau of Political-Military Affairs, Department of 
State (202) 663-2830 or FAX (202) 261-8199; e-mail 
[email protected], Attn: Regulatory Change, ITAR Parts 122 and 
129.

SUPPLEMENTARY INFORMATION: The President has required that the U.S. 
Department of State initiate a self-financing mechanism so that up to 
75% of the Directorate of Defense Trade Controls' (DDTC) mission will 
eventually be self-financed.
    This proposed rule increases the fee charged to those persons 
required to register with DDTC in accordance with Section 38 of the 
Arms Export Control Act (AECA) (22 U.S.C. 2778). ITAR registration fees 
are set forth at 22 CFR 122.3 and were last adjusted in 2004.
    To better align registration fees with the cost of licensing, 
compliance and other related activities, the Department is adopting a 
three-tier registration fee schedule. The first tier will be a set fee 
of $2,250 per year for registrants who are renewing a registration, 
required to register by law and who have not submitted any applications 
during the twelve month period ending 90 days prior to the expiration 
of their current registration. This tier includes those registering 
with the Department for the first time.
    The second tier is for registrants who have submitted ten or fewer 
applications during the twelve month period ending 90 days prior to the 
expiration of their current registration. For this tier, registrants 
will pay a set fee of $2,750 per year.
    The third tier is for registrants who have submitted more than ten 
applications during the twelve month period ending 90 days prior to the 
expiration of their current registration. For this tier, registrants 
will pay a fee of $2,750 plus an additional fee that is based on the 
number of applications they submitted during the twelve months ending 
90 days prior to the expiration of their current registration. The 
additional fee will be determined by multiplying $250 times the number 
of applications over ten submitted during the twelve month period 
ending 90 days prior to the expiration of the current registration.
    Fees for registrants whose total registration fee is greater than 
3% of the total value of applications submitted during the twelve month 
period ending 90 days prior to expiration of the current registration 
will be reduced to 3% of such total application value or $2,750, which 
ever is greater. Fees for universities and other registrants who are 
exempt from income taxation pursuant to 26 U.S.C. 501(c)(3) may be 
reduced to the first tier registration fee provided proof of such 
status is submitted with their registration package.
    In addition, 22 CFR 129.4(a) and 22 CFR 129.4(b) is revised to 
reflect the new registration fee schedule.

Regulatory Analysis and Notices

    Administrative Procedure Act: This amendment involves a foreign 
affairs function of the United States and, therefore, is not subject to 
the procedures contained in 5 U.S.C. 553 and 554.
    Regulatory Flexibility Act: Because this proposed rule is exempt 
from notice and comment rulemaking under 5 U.S.C. 553, it is exempt 
from the regulatory flexibility analysis requirements set forth in 
sections 603 and 604 of the Regulatory Flexibility Act (5 U.S.C. 603 
and 604).
    Unfunded Mandates Reform Act of 1995: This amendment does not 
involve a mandate that will result in the expenditure by State, local, 
and tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any year and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.
    Small Business Regulatory Enforcement Fairness Act of 1996: This 
amendment has been found to be a major rule within the meaning of the 
Small Business Regulatory Enforcement Fairness Act of 1996.
    Executive Orders 12372 and 13132: This amendment will not have 
substantial effects on the States, on 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 Executive Order 13132, it is determined that this 
amendment does not have sufficient federalism implications to require 
consultations or warrant the preparation of a federalism summary impact 
statement. Executive Order 12372, regarding intergovernmental 
consultation on Federal programs and activities, does not apply to this 
amendment.
    Executive Order 12866: This amendment is exempt from the review 
under Executive Order 12866, but has been reviewed internally by the 
Department of State to ensure consistency with the purposes thereof.
    Executive Order 12988: The Department of State has reviewed the 
proposed regulations in light of sections 3(a) and 3(b)(2) of Executive 
Order 12988 to eliminate ambiguity, minimize litigation, establish 
clear legal standards, and reduce burden.
    Paperwork Reduction Act: 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 122

    Arms and munitions, Exports, Reporting and recordkeeping 
requirements.

22 CFR Part 129

    Arms and munitions, Exports, Technical assistance.

    Accordingly, for the reasons set forth above, Title 22, Chapter I, 
Subchapter M, parts 122 and 129 are proposed to be amended as follows:

[[Page 43654]]

PART 122--REGISTRATION OF MANUFACTURERS AND EXPORTERS

    1. The authority citation for part 122 continues to read as 
follows:

    Authority: Secs. 2 and 38, Public Law 90-629, 90 Stat. 744 (22 
U.S.C. 2752, 2778); E.O. 11958, 42 FR 4311, 1977 Comp. p. 79, 22 
U.S.C. 2651a.

    2. Section 122.2 is amended by revising paragraph (a) to read as 
follows:


Sec.  122.2  Submission of registration statement.

    (a) General. The Department of State Form DS-2032 (Statement of 
Registration) and the transmittal letter required by paragraph (b) of 
this section must be submitted by an intended registrant with a payment 
(by check or money order) payable to the Department of State of the fee 
prescribed in Sec.  122.3(a) of this subchapter. Checks and money 
orders must be in U.S. currency, and checks must be payable through a 
U.S. financial institution. In addition, the Statement of Registration 
and transmittal letter must be signed by a senior officer who has been 
empowered by the intended registrant to sign such documents. The 
intended registrant also shall submit documentation that demonstrates 
that it is incorporated or otherwise authorized to do business in the 
United States. The Directorate of Defense Trade Controls will notify 
the registrant if the Statement of Registration is incomplete either by 
notifying the registrant of what information is required or through the 
return of the entire registration package. Registrants may not 
establish new entities for the purpose of reducing registration fees.
* * * * *
    3. Section 122.3 is amended by revising paragraph (a) to read as 
follows:


Sec.  122.3  Registration fees.

    (a) A person who is required to register must do so on an annual 
basis upon submission of a completed Form DS-2032, transmittal letter, 
and payment of a fee as follows:
    (1) Tier 1: A set fee of $2,250 per year is required for new 
registrants or registrants who have not submitted any applications 
during a 12-month period ending 90 days prior to expiration of the 
current registration.
    (2) Tier 2: A set fee of $2,750 per year is required for 
registrants who have submitted ten or fewer applications during a 12-
month period ending 90 days prior to expiration of the current 
registration.
    (3) Tier 3: The third tier is for registrants who have submitted 
more than ten applications during a 12-month period ending 90 days 
prior to expiration of the current registration. For this tier, 
registrants will pay a fee of $2,750 plus an additional fee based on 
the number of applications submitted. The additional fee will be 
determined by multiplying $250 times the number of applications over 
ten submitted during a 12-month period ending 90 days prior to 
expiration of the current registration.
    (4) For universities and other registrants exempt from income 
taxation pursuant to 26 U.S.C. 501(c)(3), their fee may be reduced to 
the Tier 1 registration fee provided proof of such status is submitted 
with their registration package.
    (5) The fee for registrants whose total registration fee is greater 
than 3% of the total value of applications submitted during the 12-
month period ending 90 days prior to expiration of the current 
registration will be reduced to 3% of such total application value or 
$2,750, which ever is greater.
    (6) For those renewing a registration, notice of the fee due for 
the next year's registration will be sent to the Senior Officer signing 
the previous DS2032 at least 60 days prior to its expiration date.
    (7) For purposes of this subsection, ``applications'' refers to the 
actions enumerated within Sections 123 through 125 of the ITAR that 
require DDTC to review, adjudicate and issue responses to.
* * * * *

PART 129--REGISTRATION AND LICENSING OF BROKERS

    4. The authority citation for part 129 continues to read as 
follows:

    Authority: Sec. 38, Pub. L. 104-164, 110 Stat. 1437 (22 U.S.C. 
2778).

    5. Section 129.4 is amended by revising paragraph (a) to read as 
follows:


Sec.  129.4  Registration statement and fees.

    (a) General. The Department of State Form DS-2032 (Statement of 
Registration) and the transmittal letter meeting the requirements of 
Sec.  122.2(b) of this subchapter must be submitted by an intended 
registrant with a payment by check or money order payable to the 
Department of State of the fees prescribed in Section 122.3(a) of this 
subchapter. The Statement of Registration and transmittal letter must 
be signed by a senior officer who has been empowered by the intended 
registrant to sign such documents. The intended registrant shall also 
submit documentation that demonstrates that it is incorporated or 
otherwise authorized to do business in the United States. The 
requirement to submit a Department of State Form DS-2032 and to submit 
documentation demonstrating incorporation or authorization to do 
business in the United States does not exclude foreign persons from the 
requirement to register. Foreign persons who are required to register 
shall provide information that is substantially similar in content as 
that which a U.S. person would provide under this provision (e.g., 
foreign business license or similar authorization to do business). The 
Directorate of Defense Trade Controls will notify the registrant if the 
Statement of Registration is incomplete either by notifying the 
registrant of what information is required or through the return of the 
entire registration package with payment. Registrants may not establish 
new entities for the purpose of reducing registration fees.
* * * * *

    Dated: July 3, 2008.
John C. Rood,
Acting Under Secretary for Arms Control, and International Security, 
Department of State.
 [FR Doc. E8-17232 Filed 7-25-08; 8:45 am]
BILLING CODE 4710-25-P