[Federal Register Volume 74, Number 226 (Wednesday, November 25, 2009)]
[Proposed Rules]
[Pages 61586-61589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-27685]


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

DEPARTMENT OF STATE

22 CFR Part 126

[Public Notice: 6813]
RIN 1400-AC52


Amendment to the International Arms Traffic in Arms Regulations: 
U.S. Government Transfer Programs and Foreign-Owned Military Aircraft 
and Naval Vessels

AGENCY: Department of State.

ACTION: Proposed rule.

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

SUMMARY: The Department of State is proposing to amend Section 126.6 of 
the International Traffic in Arms Regulations (ITAR) pertaining to U.S. 
Government transfer programs and foreign-owned military aircraft and 
naval vessels. Section 126.6 is being amended to clarify the particular 
circumstances when a license is not required by the Directorate of 
Defense Trade Controls.

DATES: The Department of State will accept comments on this proposed 
rule until January 25, 2010.

ADDRESSES: Interested parties may submit comments within 60 days of the 
date of the publication by any of the following methods:
     E-mail: [email protected] with an appropriate 
subject line.
     Mail: Department of State, Directorate of Defense Trade 
Controls, Office of Defense Trade Controls Policy, ATTN: Regulatory 
Change, 126.6, SA-1, 12th Floor, Washington, DC 20522-0112.
    Persons with access to the Internet may also view this notice by 
going to the U.S. Government regulations.gov Web site at http://regulations.gov/index.cfm.

FOR FURTHER INFORMATION CONTACT: Director Charles B. Shotwell, Office 
of Defense Trade Controls Policy, Department of State, Telephone (202) 
663-2792 or Fax (202) 261-8199; E-mail [email protected]. 
ATTN: Regulatory Change, 126.6.

[[Page 61587]]


SUPPLEMENTARY INFORMATION: Section 126.6 of the ITAR specifies when a 
license from the Directorate of Defense Trade Controls is not required 
for certain specified U.S. Government transfer programs and exports 
involving foreign-owned military aircraft and naval vessels. The title 
of this particular section has been changed from ``Foreign-owned 
military aircraft and naval vessels, and the Foreign Military Sales 
program'' to ``U.S. Government transfer programs and foreign-owned 
military aircraft and naval vessels'' to more accurately describe its 
coverage. Section 126.6 is being amended to clarify the particular 
circumstances when a license is not required by the Directorate of 
Defense Trade Controls. Current regulatory language was implemented 
when the U.S. Government executed these programs with mostly U.S. 
Government personnel. Over the years the U.S. Government, especially 
the Department of Defense, has expanded operations and migrated to 
utilization of the Defense Transportation System as well as commercial 
carriers to, in some instances, fully replace government transportation 
systems and personnel. As a result, U.S. Customs and Border Protection 
was unclear as to which programs were U.S. Government programs and, 
therefore, which items were qualified to be exported from the United 
States without an associated export license. The proposed changes 
address this issue. Also, the proposed amendment addresses in more 
detail the export requirements involving the Foreign Military Sales 
program and extends the exemption to exports pursuant to section 1206 
of the National Defense Authorization Act for Fiscal Year 2006, as 
amended and extended, or section 1206 of the National Defense 
Authorization Act for Fiscal Year 2008. It further delineates 
requirements, authorized periods for license exemptions, documentary 
requirements, and the applicable terms and conditions relating to the 
U.S. Government's transfer and/or loan of defense articles to foreign 
governments or international organizations.

Regulatory Analysis and Notices

Administrative Procedure Act and Executive Order 12866

    Applicability of 5 U.S.C. 553 and Executive Order 12866 is under 
discussion with the Office of Management and Budget.

Regulatory Flexibility Act

    The applicability of the Regulatory Flexibility Act is contingent 
on the applicability of 5 U.S.C. 553, which will be determined at a 
later time.

Unfunded Mandates Act of 1995

    This proposed 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 proposed amendment has been found not to be a major rule 
within the meaning of the Small Business Regulatory Enforcement 
Fairness Act of 1996.

Executive Orders 12372 and 13132

    This proposed 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. The 
regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this proposed amendment.

Paperwork Reduction Act

    This proposed rule would not impose any new reporting or 
recordkeeping requirements subject to the Paperwork Reduction Act, 44 
U.S.C. Chapter 35.

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 proposed to be amended as follows:

PART 126--GENERAL POLICIES AND PROVISIONS

    1. The authority citation for part 126 continues to read as 
follows:

    Authority: Secs. 2, 38, 40, 42 and 71, Public Law 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; Sec. 1225, 
Public Law 108-375.

    2. Section 126.6 is amended by revising paragraphs (a)(1), (a)(2), 
(a)(3), (b), (c), and (d) to read as follows:


Sec.  126.6  U.S. Government transfer programs and foreign-owned 
military aircraft and naval vessels.

    (a) * * *
    (1) The defense article to be exported was sold, granted, leased, 
or loaned by the Department of Defense to the government of a foreign 
country or to an international organization pursuant to the Arms Export 
Control Act, as amended, (AECA) or the Foreign Assistance Act of 1961, 
as amended;
    (2) The defense article is exported to representatives of the 
government of the foreign country or international organization in the 
United States;
    (3) The defense article is to be exported from the United States:
    (i) On a military aircraft or naval vessel of the government of the 
foreign country or international organization. The shippers export 
declaration (SED) must be entered in the Automated Export System (AES) 
by such government or international organization prior to export;
    (ii) By the Department of Defense via the Department of Defense 
Transportation System (DTS) in accordance with the vetting procedures 
and the requirements in DoD 5105.38-M, ``Security Assistance Management 
Manual'' (SAMM), and DoD Regulations 4500.9E and 4500.9R, ``Defense 
Transportation Regulations'' (DTR). The SED must be entered in the AES 
by the cognizant or responsible military service or implementing 
agency; or
    (iii) By a Department of Defense contracted carrier via the DTS in 
accordance with the vetting procedures and the requirements in DoD 
5105.38-M, ``Security Assistance Management Manual'' (SAMM), and DoD 
Regulations 4500.9E and 4500.9R, ``Defense Transportation Regulations'' 
(DTR). The SED must be entered in the AES by the cognizant or 
responsible military service or implementing agency; and
    (4) In the event the defense article to be exported is classified, 
the export is made by a person having the appropriate USG security 
clearance, in compliance with the Department of Defense National 
Industrial Security Program Operating Manual (DoD NISPOM), and pursuant 
to an approved transportation plan.
    (b) Foreign military aircraft and naval vessels. A license is not 
required for the entry into and subsequent exit from the United States 
of military aircraft or naval vessels of any foreign state if no 
overhaul, repair, or modification of the aircraft or naval vessel is to 
be

[[Page 61588]]

performed. However, Department of State approval for overflight 
(pursuant to 49 U.S.C. 40103) and naval visits must be obtained from 
the Department of State, Bureau of Political-Military Affairs, Office 
of International Security Operations.
    (c) Foreign Military Sales program. A license from the Directorate 
of Defense Trade Controls is not required if the defense article or 
defense service is to be exported to a foreign country or international 
organization under the Foreign Military Sales (FMS) program of the AECA 
pursuant to a jointly-signed Letter of Offer and Acceptance (LOA) 
authorizing such export where such export meets the criteria stated 
below:
    (1) Exports of the defense article or defense service using this 
exemption may take place only during the period in which the FMS 
Program LOA and implementing USG FMS contracts and subcontracts are in 
effect and serve as authorization for the exports hereunder in lieu of 
a license. The Department of Defense shall ensure that defense articles 
and defense services exported are limited to those authorized under the 
valid LOA, maintain the dollar value balance shipped against the LOA, 
and shall promptly notify U.S. Customs and Border Protection (CBP) of 
any amendments or modifications to the LOA, including the remaining 
balance when the LOA is completed, closed, or is no longer valid as an 
authorization;
    (2) The defense article or defense service to be exported is 
specifically identified in an executed LOA, in furtherance of the FMS 
program, signed by an authorized representative of the Department of 
Defense and an authorized representative of the foreign government;
    (3) The total value of the defense articles and defense services 
exported must not exceed that value authorized by the relevant LOA and 
any relevant contract and subcontract;
    (4) The export is not to a country proscribed in Sec.  126.1 of 
this subchapter;
    (5) The U.S. person responsible for the transfer or the Department 
of Defense (in the case of DTS shipments) maintains records of all 
exports in accordance with Part 122 of this subchapter;
    (6) For exports of defense articles:
    (i) The shipment is made by the relevant foreign diplomatic mission 
of the purchasing country or its authorized freight forwarder, provided 
that the freight forwarder is so designated in writing by the foreign 
government to, and is registered with, the Directorate of Defense Trade 
Controls pursuant to Part 122 of this subchapter;
    (ii) Prior to shipment, the Department of Defense shall lodge the 
LOA, and any amendments or modifications thereto, with the Port 
Director of U.S. Customs and Border Protection of the primary port;
    (iii) The relevant foreign diplomatic mission of the purchasing 
country, or its authorized freight forwarder, prepares and provides to 
the Port Director of U.S. Customs and Border Protection a properly 
executed DSP-94 that has been countersigned by an authorized 
representative of the Department of Defense verifying that the export 
is in accordance with the LOA. The exporter must also provide any other 
documents required by the Port Director of U.S. Customs and Border 
Protection in carrying out its responsibilities. The AES SED or, if 
authorized, the outbound manifest must be annotated as follows: ``This 
shipment is being exported under the authority of Department of State 
Form DSP-94 pursuant to a current and valid FMS Case [case 
identification], implemented [implementation date]. 22 CFR 126.6(c) 
applicable. The U.S. Government point of contact is------, telephone 
number ------,''; and
    (iv) In the event the defense article to be exported is classified, 
the export must be made by a person having the appropriate USG security 
clearance and must be made in compliance with the Department of Defense 
National Industrial Security Program Operating Manual (DoD NISPOM) and 
pursuant to an approved transportation plan; and
    (7) For exports of defense services:
    (i) The U.S. exporter must have entered into a contract with the 
Department of Defense that:
    (A) Specifically defines the scope of the defense service to be 
exported;
    (B) Cites the FMS case identifier;
    (C) Identifies the foreign recipients of the defense service;
    (D) Identifies any other U.S. or foreign parties that may be 
involved and their roles/responsibilities to the extent known when the 
contract is executed; and
    (E) Specifies the period during which the defense service may be 
performed;
    (ii) The U.S. person that is a party to a contract with the 
Department of Defense for the provision of defense services pursuant to 
an FMS case must maintain a valid registration with the Directorate of 
Defense Trade Controls for the entire time that the defense service is 
being provided. In any instance when that U.S. person employs a U.S. 
subcontractor, that subcontractor may only provide defense services 
pursuant to this subsection when registered with Directorate of Defense 
Trade Controls, and when such subcontract meets the requirements of 
paragraphs (c)(7)(i)(A) thorugh (E) of this section;
    (iii) In instances when the defense service involves the transfer 
of classified technical data, the U.S. person transferring the defense 
service must have the appropriate USG security clearance and a 
transportation plan, if appropriate, in compliance with the Department 
of Defense National Industrial Security Program Operating Manual (DoD 
NISPOM);
    (iv) Where defense articles are exported along with defense 
services, the exporter must comply with paragraph (c)(6) of this 
section; and
    (v) The U.S. exporter reports its initial export, citing this 
section of the International Traffic in Arms Regulations. The U.S. 
exporter must maintain records of the export to include the FMS case 
identifier, the contract and subcontract number, the foreign country, 
and the duration of the service being provided. These records must be 
kept in accordance with Sec.  122.5 of this subchapter.
    (d) Other USG Programs. A license from the Directorate of Defense 
Trade Controls is not required if:
    (1) Defense articles to be exported were sold, granted, leased or 
loaned by the Department of Defense to a foreign country or 
international organization pursuant to section 1206 of the National 
Defense Authorization Act for Fiscal Year 2006, as amended and 
extended, or section 1206 of the National Defense Authorization Act for 
Fiscal Year 2008;
    (2) The defense article is to be exported from the United States:
    (i) By the Department of Defense via the Department of Defense 
Transportation System (DTS) in accordance with the vetting procedures 
and the requirements in DoD 5105.38-M, ``Security Assistance Management 
Manual'' (SAMM), and DoD Regulations 4500.9E and 4500.9R, ``Defense 
Transportation Regulations'' (DTR). The SED must be entered in the AES 
by the cognizant or responsible military service or implementing 
agency; or
    (ii) By a Department of Defense contracted carrier via the DTS in 
accordance with the vetting procedures and the requirements in DoD 
5105.38-M, ``Security Assistance Management Manual'' (SAMM), and DoD 
Regulations 4500.9E and 4500.9R, ``Defense Transportation Regulations'' 
(DTR). The SED must be entered in the AES by the cognizant or 
responsible military service or implementing agency; and
    (3) In the event the defense article to be exported is classified, 
the export is made by a person having the appropriate USG security 
clearance, in

[[Page 61589]]

compliance with the Department of Defense National Industrial Security 
Program Operating Manual (DoD NISPOM) and pursuant to an approved 
transportation plan.

    Dated: November 3, 2009.
Ellen O. Tauscher,
Under Secretary, Arms Control and International Security, Department of 
State.
[FR Doc. E9-27685 Filed 11-24-09; 8:45 am]
BILLING CODE 4710-25-P