[Federal Register Volume 76, Number 145 (Thursday, July 28, 2011)]
[Rules and Regulations]
[Pages 45195-45198]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19115]
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DEPARTMENT OF STATE
22 CFR Parts 120, 122, 123, and 129
RIN 1400-AC74
[Public Notice 7538]
International Traffic in Arms Regulations: Electronic Payment of
Registration Fees
AGENCY: Department of State.
ACTION: Final rule.
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SUMMARY: The Department of State is amending the International Traffic
in Arms Regulations (ITAR) to change the method of payment to
electronic submission of registration fees. The institution of the
electronic submission of registration fees will simplify the collection
and verification of payments, eliminate the need to manually process
and collect returned payments, and eliminate the possibility of lost
payments. Definitions for ``Foreign Ownership'' and ``Foreign Control''
are also added.
DATES: Effective Date: This rule is effective September 26, 2011.
FOR FURTHER INFORMATION CONTACT: Lisa V. Aguirre, Director, Office of
Defense Trade Controls Compliance, Directorate of Defense Trade
Controls, Department of State, 2401 E Street, NW., SA-1, Room H1200,
Washington, DC 20522-0112; telephone 202-632-2798 or fax 202-632-2878;
or e-mail through [email protected], with the subject line,
``Electronic Payment of Registration Fees.''
SUPPLEMENTARY INFORMATION: The Directorate of Defense Trade Controls
(DDTC) is responsible for the collection of registration fees from
persons in the business of manufacturing, exporting,
[[Page 45196]]
and/or brokering defense articles or defense services.
Previously, registrants submitted registration fees to DDTC by
check or money order, and these payments were processed manually. The
institution of the electronic submission of registration fees will
simplify the collection and verification of payments, eliminate the
need to manually process and collect returned payments, and eliminate
the possibility of lost payments.
Section 122.2(a) is revised to provide for electronic payment as
the sole means of registration fee submission. The form used for
obtaining registration, the DS-2032 Statement of Registration, has been
revised to reflect that fee payments are to be made electronically.
Additionally, the certifications previously required through the
transmittal letter referenced in Sec. 122.2(b) of the ITAR are
incorporated into the revised DS-2032. Consequently, Sec. 122.2(b) no
longer requires a separate transmittal letter; rather, it addresses
certain certifications to be made on the Statement of Registration that
previously were provided via the transmittal letter. The new Sec.
122.2(b) title will be ``Statement of Registration Certification.''
Definitions for ``ownership'' and ``control'' are removed from part
122 by the removal of Sec. 122.2(c). Definitions for ``Foreign
Ownership'' and ``Foreign Control'' constitute the new Sec. 120.37.
Section 122.3(a) is revised to remove reference to the transmittal
letter.
The revision to Sec. 129.4(a) is in line with the change in part
122 regarding the provision of electronic payment of registration fees.
References to the transmittal letter are removed from Sec. Sec.
129.4(a) and (b).
Title and number of the registration form is corrected in Sec.
120.28(a)(2), and Sec. 123.16(b)(9) is revised to correct a reference
to Sec. 122.2(c) and replace it with a reference to Sec. 120.37.
This rule was first presented as a proposed rule for public comment
on February 24, 2011. That comment period ended April 25, 2011. No
comments pertinent to this rule were received.
Having thoroughly reviewed and evaluated the rule, the Department
has determined that it will accept, and hereby does adopt, the proposed
rule as a final rule.
Regulatory Analysis and Notices
Administrative Procedure Act
The Department of State is of the opinion that controlling the
import and export of defense articles and services is a foreign affairs
function of the United States Government and that rules implementing
this function are exempt from Sec. 553 (Rulemaking) and Sec. 554
(Adjudications) of the Administrative Procedure Act. Although the
Department is of the opinion that this rule is exempt from the
rulemaking provisions of the APA, the Department published this rule
with a 60-day provision for public comment and without prejudice to its
determination that controlling the import and export of defense
services is a foreign affairs function.
Regulatory Flexibility Act
Since this amendment is not subject to the notice-and-comment
procedures of 5 U.S.C. 553, it does not require analysis under the
Regulatory Flexibility Act.
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.
Executive Order 13175
The Department has determined that this rulemaking will not have
Tribal implications, will not impose substantial direct compliance
costs on Indian Tribal governments, and will not pre-empt Tribal law.
Accordingly, the requirements of Executive Order 13175 do not apply to
this rulemaking.
Small Business Regulatory Enforcement Fairness Act of 1996
This 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 amendment will not have substantial direct 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 amendment.
Executive Order 12866
The Department of State does not consider this rule to be a
``significant regulatory action'' under Executive Order 12866, section
3(f), Regulatory Planning and Review. The Department is of the opinion
that controlling the import and export of defense articles and services
is a foreign affairs function of the United States Government and that
rules governing the conduct of this function are exempt from the
requirements of Executive Order 12866.
Executive Order 13563
The Department of State has considered this rule in light of
Executive Order 13563, dated January 18, 2011, and affirms that this
regulation is consistent with the guidance therein.
Executive Order 12988
The Department of State has reviewed the amendment 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
The information collection (IC) requirements for the current
Statement of Registration (Department of State form DS-2032) are
approved under Office of Management and Budget (OMB) control number
1405-0002. This rule imposes new reporting requirements subject to the
Paperwork Reduction Act, 44 U.S.C. chapter 35. The Department published
a notice in the Federal Register (76 FR 10291, with correction at 76 FR
16588) soliciting public comments on the revised information collection
and notifying the public that this collection was submitted to OMB for
review and approval. No comments pertinent to this rule were received.
Formerly, the ITAR, Sec. 122.2(b), required the respondent to
provide separate correspondence (via a ``transmittal letter,'' to
accompany the DS-2032, Statement of Registration, submission)
certifying criminal history, eligibility, and foreign ownership. Often,
this mandate was overlooked by the respondent, resulting in the return
without action of the incomplete application. The revised DS-2032
incorporates these certifications within the form, only requiring the
user to click on the appropriate response.
Other changes to the Statement of Registration include additional
data fields necessary to match electronic payment to the form. Whereas
payments
[[Page 45197]]
will be received electronically, respondents will continue submitting
the DS-2032 in paper format. New data elements specific to electronic
payment were not previously required on the DS-2032 because such
information is visible on U.S. and foreign bank drafts.
Additionally, data elements are added to ensure clarification
during analysis as well as standardization of responses. Specifically,
necessary information is listed in the form, only requiring the
respondent to make a selection by clicking the applicable checkbox
rather than manually entering the information. This enhancement
eliminates typographical errors and the misinterpretation of
information requested, which often results in the submission of
incorrect information.
With these changes, the estimated burden time for completion of the
DS-2032 is reduced from two hours to one hour.
List of Subjects in 22 CFR Parts 120, 122, 123, and 129
Arms and munitions, Registration, Exports, Brokering.
Accordingly, for the reasons set forth in the preamble, Title 22,
Chapter I, Subchapter M, parts 120, 122, 123, and 129 are amended as
follows:
PART 120--PURPOSE AND DEFINITIONS
0
1. The authority citation for part 120 continues 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;
E.O. 13284, 68 FR 4075; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a;
Pub. L. 105-261, 112 Stat. 1920.
0
2. In Sec. 120.28, paragraph (a)(2) is revised to read as follows:
Sec. 120.28 Listing of forms referred to in this subchapter.
* * * * *
(a) * * *
(2) Statement of Registration (Form DS-2032).
* * * * *
Sec. Sec. 120.33-120.36 [Reserved]
0
3. Part 120 is amended by reserving Sec. Sec. 120.33 through 120.36
and adding Sec. 120.37 to read as follows:
Sec. 120.37 Foreign ownership and foreign control.
Foreign ownership means more than 50 percent of the outstanding
voting securities of the firm are owned by one or more foreign persons
(as defined in Sec. 120.16). Foreign control means one or more foreign
persons have the authority or ability to establish or direct the
general policies or day-to-day operations of the firm. Foreign control
is presumed to exist where foreign persons own 25 percent or more of
the outstanding voting securities unless one U.S. person controls an
equal or larger percentage.
PART 122--REGISTRATION OF MANUFACTURERS AND EXPORTERS
0
4. 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.
0
5. Section 122.2 is revised to read as follows:
Sec. 122.2 Submission of registration statement.
(a) General. An intended registrant must submit a Department of
State Form DS-2032 (Statement of Registration) to the Office of Defense
Trade Controls Compliance by registered or overnight mail delivery, and
must submit an electronic payment via Automated Clearing House payable
to the Department of State of one of the fees prescribed in Sec.
122.3(a) of this subchapter. Automated Clearing House (ACH) is an
electronic network used to process financial transactions in the United
States. Intended registrants should access the Directorate of Defense
Trade Control's Web site at http://www.pmddtc.state.gov for detailed
guidelines on submitting an ACH electronic payment. Electronic payments
must be in U.S. currency and must be payable through a U.S. financial
institution. Cash, checks, foreign currency, or money orders will not
be accepted. In addition, the Statement of Registration must be signed
by a senior officer (e.g., Chief Executive Officer, President,
Secretary, Partner, Member, Treasurer, General Counsel) 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.
(b) Statement of Registration Certification. The Statement of
Registration of the intended registrant shall include a certification
by an authorized senior officer of the following:
(1) Whether the intended registrant, chief executive officer,
president, vice presidents, other senior officers or officials (e.g.,
Comptroller, Treasurer, General Counsel) or any member of the board of
directors:
(i) Has ever been indicted for or convicted of violating any of the
U.S. criminal statutes enumerated in Sec. 120.27 of this subchapter;
or
(ii) Is ineligible to contract with, or to receive a license or
other approval to import defense articles or defense services from, or
to receive an export license or other approval from, any agency of the
U.S. Government.
(2) Whether the intended registrant is foreign owned or foreign
controlled (see Sec. 120.37 of this subchapter). If the intended
registrant is foreign owned or foreign controlled, the certification
shall also include whether the intended registrant is incorporated or
otherwise authorized to engage in business in the United States.
0
6. Section 122.3 is amended by revising paragraph (a) introductory text
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 and payment of a fee
as follows:
* * * * *
PART 123--LICENSES FOR THE EXPORT OF DEFENSE ARTICLES
0
7. The authority citation for part 123 continues 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
8. Section 123.16 is amended by revising paragraph (b)(9) introductory
text to read as follows:
Sec. 123.16 Exemptions of general applicability.
* * * * *
(b) * * *
(9) Port Directors of U.S. Customs and Border Protection shall
permit the temporary export without a license by a U.S. person of any
unclassified component, part, tool or test equipment to a subsidiary,
affiliate or facility owned or controlled by the U.S. person (see Sec.
120.37 of this subchapter for definition of foreign ownership and
[[Page 45198]]
foreign control) if the component, part, tool or test equipment is to
be used for manufacture, assembly, testing, production, or modification
provided:
* * * * *
PART 129--REGISTRATION AND LICENSING OF BROKERS
0
9. 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).
0
10. Section 129.4 is amended by revising paragraphs (a) and (b) to read
as follows:
Sec. 129.4 Registration statement and fees.
(a) General. An intended registrant must submit a Department of
State Form DS-2032 (Statement of Registration) to the Office of Defense
Trade Controls Compliance by registered or overnight mail delivery, and
must submit an electronic payment via Automated Clearing House (ACH) or
Society for Worldwide Interbank Financial Telecommunications (SWIFT),
payable to the Department of State of the fees prescribed in Sec.
122.3(a) of this subchapter. Automated Clearing House is an electronic
network used to process financial transactions originating from within
the United States and SWIFT is the messaging service used by financial
institutions worldwide to issue international transfers for foreign
accounts. Payment methods (i.e., ACH and SWIFT) are dependent on the
source of the funds (U.S. or foreign bank) drawn from the applicant's
account. The originating account must be the registrant's account and
not a third party's account. Intended registrants should access the
Directorate of Defense Trade Control's Web site at http://www.pmddtc.state.gov for detailed guidelines on submitting ACH and
SWIFT electronic payments. Payments, including from foreign brokers,
must be in U.S. currency, payable through a U.S. financial institution.
Cash, checks, foreign currency, or money orders will not be accepted.
The Statement of Registration must be signed by a senior officer (e.g.,
Chief Executive Officer, President, Secretary, Partner, Member,
Treasurer, General Counsel) who has been empowered by the intended
registrant to sign such documents. The intended registrant, whether a
U.S. or foreign person, shall submit documentation that demonstrates it
is incorporated or otherwise authorized to do business in its
respective country. Foreign persons who are required to register shall
provide information that is substantially similar in content to 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. Registrants may not establish new entities
for the purpose of reducing registration fees.
(b) A person registering as a broker who is already registered as a
manufacturer or exporter in accordance with part 122 of this subchapter
must cite their existing manufacturer or exporter registration, and
must pay an additional fee according to the schedule prescribed in
Sec. 122.3(a) of this subchapter for registration as a broker.
* * * * *
Dated: July 20, 2011.
Ellen O. Tauscher,
Under Secretary, Arms Control and International Security, Department of
State.
[FR Doc. 2011-19115 Filed 7-27-11; 8:45 am]
BILLING CODE 4710-25-P