[Federal Register Volume 76, Number 215 (Monday, November 7, 2011)]
[Proposed Rules]
[Pages 68694-68698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28502]


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DEPARTMENT OF STATE

22 CFR Part 121

RIN 1400-AC96
[Public Notice: [ 7673]]


Amendment to the International Traffic in Arms Regulations: 
Revision of U.S. Munitions List Category VIII

AGENCY: Department of State.

ACTION: Proposed rule.

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SUMMARY: As part of the President's Export Control Reform effort, the 
Department of State proposes to amend the International Traffic in Arms 
Regulations (ITAR) to revise Category VIII (aircraft and related 
articles) of the U.S. Munitions List (USML) to describe more precisely 
the military aircraft and related defense articles warranting control 
on the USML.

DATES: The Department of State will accept comments on this proposed 
rule until December 22, 2011.

ADDRESSES: Interested parties may submit comments within 45 days of the 
date of publication by one of the following methods:
     E-mail: [email protected] with the subject line, 
``ITAR Amendments--Category VIII.
     Internet: At http://www.regulations.gov, search for this 
notice by using this rule's RIN (1400-AC96).

Comments received after that date will be considered if feasible, but 
consideration cannot be assured. All comments (including any personally 
identifying information or information for which a claim of 
confidentiality is

[[Page 68695]]

asserted in those comments or their transmittal emails) will be made 
available for public inspection and copying after the close of the 
comment period via the Directorate of Defense Trade Controls Web site 
at http://www.pmddtc.state.gov. Parties who wish to comment anonymously 
may do so by submitting their comments via http://www.regulations.gov, 
leaving the fields that would identify the commenter blank and 
including no identifying information in the comment itself. Comments 
submitted via  http://www.regulations.gov are immediately available for 
public inspection.

SUPPLEMENTARY INFORMATION: The Directorate of Defense Trade Controls 
(DDTC), U.S. Department of State, administers the International Traffic 
in Arms Regulations (ITAR) (22 CFR parts 120-130). The items subject to 
the jurisdiction of the ITAR, i.e., ``defense articles,'' are 
identified on the ITAR's U.S. Munitions List (USML) (22 CFR 121.1). 
With few exceptions, items not subject to the export control 
jurisdiction of the ITAR are subject to the jurisdiction of the Export 
Administration Regulations (``EAR,'' 15 CFR parts 730-774, which 
includes the Commerce Control List in part 774), administered by the 
Bureau of Industry and Security (BIS), U.S. Department of Commerce. 
Both the ITAR and the EAR impose license requirements on exports and 
reexports. Items not subject to the ITAR or to the exclusive licensing 
jurisdiction of any other set of regulations are subject to the EAR.

Export Control Reform Update

    The Departments of State and Commerce described in their respective 
Advanced Notices of Proposed Rulemaking (ANPRM) in December 2010 the 
Administration's plan to make the USML and the CCL positive, tiered, 
and aligned so that eventually they can be combined into a single 
control list (see ``Commerce Control List: Revising Descriptions of 
Items and Foreign Availability,'' 75 FR 76664 (Dec. 9, 2010) and 
``Revision to the United States Munitions List,'' 75 FR 76935 (Dec. 10, 
2010)). The notices also called for the establishment of a ``bright 
line'' between the USML and the CCL to reduce government and industry 
uncertainty regarding export jurisdiction by clarifying whether 
particular items are subject to the jurisdiction of the ITAR or the 
EAR. While these remain the Administration's ultimate Export Control 
Reform objectives, their concurrent implementation would be problematic 
in the near term. In order to more quickly reach the national security 
objectives of greater interoperability with our allies, enhancing our 
defense industrial base, and permitting the U.S. Government to focus 
its resources on controlling and monitoring the export and reexport of 
more significant items to destinations, end uses, and end users of 
greater concern than our NATO and other multi-regime partners, the 
Administration has decided, as an interim step, to propose and 
implement revisions to both the USML and the CCL that are more 
positive, but not yet tiered.
    Specifically, based in part on a review of the comments received in 
response to the December 2010 notices, the Administration has 
determined that fundamentally altering the structure of the USML by 
tiering and aligning them on a category-by-category basis would 
significantly disrupt the export control compliance systems and 
procedures of exporters and reexporters. For example, until the entire 
USML was revised and became final, some USML categories would follow 
the legacy numbering and control structures while the newly revised 
categories would follow a completely different numbering structure. In 
order to allow for the national security benefits to flow from re-
aligning the jurisdictional status of defense articles that no longer 
warrant control on the USML on a category-by-category basis while 
minimizing the impact on exporters' internal control and jurisdictional 
and classification marking systems, the Administration plans to proceed 
with building positive lists now and afterward return to structural 
changes.

Revision of Category VIII

    This proposed rule revises USML Category VIII, covering aircraft 
and related articles, to establish a clearer line between the USML and 
the CCL regarding controls over military aircraft and related articles. 
The proposed revision narrows the types of aircraft and related items 
controlled on the USML to only those that warrant control under the 
stringent requirements of the Arms Export Control Act. Changes include 
moving similar articles currently controlled in multiple categories 
into a single category or subcategory (e.g., inertial navigations 
systems for aircraft formerly controlled under Category VIII(e) will 
likely be moved to controls either in Category XII or the CCL in future 
proposed rules and, as noted in proposed Category VIII(b), gas turbine 
engines for articles controlled in this category will likely be 
included in proposed Category XIX, which will be the subject of a 
separate notice). Other former Category VIII subcategories have been 
``reserved'' because the Department is proposing to change the 
jurisdictional status of the items covered therein so that they would 
become subject to the EAR, most likely under ECCN 9A610 or 9A619.
    This proposed rule also revises Sec.  121.3 to more clearly define 
``aircraft'' for purposes of the revised USML Category VIII.
    The most significant aspect of this more positive, but not yet 
tiered, proposed USML category is that it does not contain controls on 
all generic parts, components, accessories, and attachments that are 
specifically designed or modified for a defense article, regardless of 
their significance to maintaining a military advantage for the United 
States. Rather, it contains, with one principal exception, a positive 
list of specific types of parts, components, accessories, and 
attachments that continue to warrant control on the USML. The exception 
pertains to parts, components, accessories, and attachments ``specially 
designed'' for the following U.S.-origin aircraft that have low 
observable features or characteristics: B-1B, B-2, F-15SE, F/A18E/F/G, 
F-22, F-35 (and variants thereof), F-117, or United States Government 
technology demonstrators.
    All other parts, components, accessories, and attachments 
``specially designed'' for a military aircraft and other articles now 
subject to USML Category VIII would become subject to the new 600 
series controls in Category 9 of the CCL to be published separately by 
the Department of Commerce. The Administration has also proposed 
revisions to the jurisdictional status of certain militarily less 
significant end items that do not warrant USML control, but the primary 
impact of this proposed change will be with respect to current USML 
controls on parts, components, accessories, and attachments that no 
longer warrant USML control.

Definition for Specially Designed

    Although one of the goals of the export control reform initiative 
is to describe USML controls without using design intent criteria, a 
few of the controls in the proposed revision nonetheless use the term 
``specially designed.'' It is, therefore, necessary for the Department 
to define the term. Two definitions have been proposed to date.
    The Department first provided a draft definition for ``specially 
designed'' in the December 2010 ANPRM (75 FR 76935) and noted the term 
would be used minimally in the USML, and then only to remain consistent 
with the Wassenaar Arrangement or other

[[Page 68696]]

multilateral regime obligation or when no other reasonable option 
exists to describe the control without using the term. The draft 
definition provided at that time is as follows: ``For the purposes of 
this Subchapter, the term ``specially designed'' means that the end-
item, equipment, accessory, attachment, system, component, or part (see 
ITAR Sec.  121.8) has properties that (i) distinguish it for certain 
predetermined purposes, (ii) are directly related to the functioning of 
a defense article, and (iii) are used exclusively or predominantly in 
or with a defense article identified on the USML.''
    The Department of Commerce subsequently published on July 15, 2011, 
for public comment, the Administration's proposed definition of 
``specially designed'' that would be common to the CCL and the USML. 
The public provided more than 40 comments on that proposed definition 
on or before the September 13 deadline for comments. The Departments of 
State, Commerce, and Defense are now reviewing those comments and 
related issues, and the Departments of State and Commerce plan to 
publish for public comment another proposed rule on a definition of 
``specially designed'' that would be common to the USML and the CCL. 
For the purpose of evaluation of this proposed rule, reviewers should 
use the definition provided in the December 2010 ANPRM.

Request for Comments

    As the U.S. Government works through the proposed revisions to the 
USML, some solutions have been adopted that were determined to be the 
best of available options. With the thought that multiple perspectives 
would be beneficial to the USML revision process, the Department 
welcomes the assistance of users of the lists and requests input on the 
following: (1) A key goal of this rulemaking is to ensure the USML and 
the CCL together control all the items that meet Wassenaar Arrangement 
commitments embodied in Munitions List Category 10 (ML 10). To that 
end, the public is asked to identify any potential lack of coverage 
brought about by the proposed rules for Category VIII contained in this 
FRN and the new Category 9 ECCNs published separately by the Department 
of Commerce when reviewed together.
    (2) While many of the aircraft controlled in paragraph (a) of 
Category VIII are defined based on objective parameters, some are not. 
For example, unmanned aerial vehicles controlled under (a)(6) are 
simply described as ``military.'' This is to differentiate those 
unmanned aerial vehicles currently controlled under Category VIII from 
those currently controlled, and will remain so controlled, under ECCN 
9A012. The public is asked to provide input on regulatory language that 
would control those with an objective description that precludes 
removal from the USML and does not inadvertently designate as ``defense 
articles'' aircraft currently subject to the EAR.

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 is publishing this 
rule with a 45-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. As noted above, and also 
without prejudice to the Department position that this rulemaking is 
not subject to the APA, the Department previously published a related 
Advance Notice of Proposed Rulemaking (RIN 1400-AC78), and accepted 
comments for 60 days.

Regulatory Flexibility Act

    Since this proposed amendment is not subject to 5 U.S.C. 553, it 
does not require analysis under the Regulatory Flexibility Act.

Unfunded Mandates Reform 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 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 proposed 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.

Executive Order 12866

    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. However, the Department has reviewed the proposed rule to ensure 
its consistency with the regulatory philosophy and principles set forth 
in the Executive Order.

Executive Order 12988

    The Department of State has reviewed the proposed 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.

Executive Order 13175

    The Department of State 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 requirement of Executive Order 13175 does 
not apply to this rulemaking.

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.

Paperwork Reduction Act

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

[[Page 68697]]

List of Subjects in Parts 120 and 121

    Arms and munitions, Exports.

    Accordingly, for the reasons set forth above, Title 22, Chapter I, 
Subchapter M, parts 120 and 121 are proposed to be amended as follows:

PART 120--PURPOSE AND DEFINITIONS

    1. Section Contents is revised to read as follows:
* * * * *
120.33-120.36 [Reserved]
120.37 Foreign ownership and foreign control.
120.38 [Reserved]
120.39 Regular employee.
120.40 [Reserved]

PART 121--THE UNITED STATES MUNITIONS LIST

    2. The authority citation for part 121 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); E.O. 11958, 42 FR 4311; 3 CFR, 1977 
Comp. p. 79; 22 U.S.C. 2651a; Pub. L. 105-261, 112 Stat. 1920.

    3. Section 121.1 is amended by revising U.S. Munitions List 
Category VIII to read as follows:


Sec.  121.1  General. The United States Munitions List.

* * * * *

VIII--Aircraft and Related Articles

    (a) Aircraft (see Sec.  121.3 of this subchapter) as follows:
    *(1) Bombers;
    *(2) Fighters, fighter bombers, and fixed-wing attack aircraft;
    *(3) Jet-powered trainers used to train pilots for fighter, attack, 
or bomber aircraft;
    *(4) Attack helicopters;
    *(5) Unarmed military unmanned aerial vehicles (UAVs);
    *(6) Armed unmanned aerial vehicles;
    *(7) Military intelligence, surveillance, and reconnaissance 
aircraft;
    *(8) Electronic warfare, airborne warning and control aircraft;
    (9) Air refueling aircraft and Strategic airlift aircraft;
    (10) Target drones;
    (11) Aircraft equipped with any mission systems controlled under 
this subchapter; or
    (12) Aircraft capable of being refueled in flight including hover-
in-flight refueling (HIFR).
    (b) [Reserved--for items formerly controlled under this subcategory 
see Category XIX and an ECCN to be determined]
    (c) [Reserved]
    (d) Launching and recovery equipment ``specially designed'' for 
defense articles described in paragraph (a) of this category.
    (e) [Reserved]
    (f) Developmental aircraft and ``specially designed'' parts, 
components, accessories, and attachments therefor developed under a 
contract with the U.S. Department of Defense.
    (g) [Reserved]
    (h) Aircraft components, parts, accessories, attachments, and 
associated equipment as follows:
    (1) Components, parts, accessories, attachments, and equipment 
``specially designed'' for the following U.S.-origin aircraft: B-1B, B-
2, F-15SE, F/A18E/F/G, F-22, F-35 (and variants thereof), F-117, or 
United States Government technology demonstrators. Components, parts, 
accessories, attachments, and equipment of the F-15SE, and F/A-18 E/F/G 
that are common to earlier models of these aircraft, unless listed 
below, are subject to the jurisdiction of the Export Administration 
Regulations;
    (2) Face gear gearboxes, split-torque gearboxes, variable speed 
gearboxes, synchronization shafts, interconnecting drive shafts, and 
gearboxes with internal pitch line velocities exceeding 15,000 feet per 
minute and parts and components ``specially designed'' therefor;
    (3) Tail boom, stabilator and automatic rotor blade folding systems 
and parts and components ``specially designed'' therefor;
    (4) Aircraft wing folding systems and parts and components 
``specially designed'' therefor;
    (5) Tail hooks and arresting gear and parts and components 
``specially designed'' therefor;
    (6) Bomb racks, missile launchers, missile rails, weapon pylons, 
pylon-to-launcher adapters, UAV launching systems, and external stores 
support systems and parts and components ``specially designed'' 
therefor;
    (7) Damage/failure-adaptive flight control systems;
    (8) Threat-adaptive autonomous flight control systems;
    (9) Non-surface-based flight control systems and effectors, e.g., 
thrust vectoring from gas ports other than main engine thrust vector, 
``specially designed'' for aircraft;
    (10) Radar altimeters with output power management or signal 
modulation (i.e., frequency hopping, chirping, direct sequence-spectrum 
spreading) LPI (low probability of intercept) capabilities;
    (11) Air-to-air refueling systems and hover-in-flight refueling 
(HIFR) systems and parts and components ``specially designed'' 
therefor;
    (12) UAV flight control systems and vehicle management systems with 
swarming capability, i.e., UAVs interact with each other to avoid 
collisions and stay together, or, if weaponized, coordinate targeting;
    (13) Aircraft lithium-ion batteries that provide 28 VDC or 270 VDC;
    (14) Lift fans, clutches, and roll posts for short take-off, 
vertical landing (STOVL) aircraft and parts and components ``specially 
designed'' for such lift fans and roll posts;
    (15) Helmet Mounted Cueing Systems, Joint Helmet Mounted Cueing 
Systems (JHMCS), Helmet Mounted Displays, Display and Sight Helmets 
(DASH), and variants thereof;
    (16) Fire control computers, mission computers, vehicle management 
computers, integrated core processers, stores management systems, 
armaments control processors, aircraft-weapon interface units and 
computers (e.g., AGM-88 HARM Aircraft Launcher Interface Computer 
(ALIC)) ``specially designed'' for aircraft;
    (17) Radomes ``specially designed'' for operation in multiple or 
nonadjacent radar bands or designed to withstand a combined thermal 
shock greater than 4.184 x 10\6\ J/m\2\ accompanied by a peak 
overpressure of greater than 50 kPa;
    (18) Drive systems and flight control systems ``specially 
designed'' to function after impact of a 7.62 mm or larger projectile; 
or
    (19) Any component, part, accessory, attachment, equipment, or 
system that:
    (i) is classified;
    (ii) contains classified software;
    (iii) is manufactured using classified production data; or
    (iv) is being developed using classified information.
    ``Classified'' in this subcategory means classified pursuant to 
Executive Order 13526, or predecessor order, and a security 
classification guide developed pursuant thereto or equivalent, or to 
the corresponding classification rules of another government.
    (i) Technical data (as defined in Sec.  120.10 of this subchapter) 
and defense services (as defined in Sec.  120.9 of this subchapter) 
directly related to the defense articles enumerated in paragraphs (a) 
through (h) of this category. (See Sec.  125.4 of this subchapter for 
exemptions.)
* * * * *
    4. Section 121.3 is revised to read as follows:


Sec.  121.3  Aircraft and related articles.

    (a) In Category VIII, except as described in (b) below, 
``aircraft'' means

[[Page 68698]]

developmental, production, or inventory aircraft that:
    (1) Are U.S.-origin aircraft that bear an original military 
designation of A, B, E, F, K, M, P, R or S;
    (2) Are foreign-origin aircraft ``specially designed'' to provide 
functions equivalent to those of the aircraft listed in (a)(1) of this 
section;
    (3) Are armed or are ``specially designed'' to be used as a 
platform to deliver munitions or otherwise destroy targets (e.g., 
firing lasers, launching rockets, firing missiles, dropping bombs, or 
strafing);
    (4) Are strategic airlift aircraft capable of airlifting payloads 
over 35,000 lbs to ranges over 2,000 nm without being refueled in-
flight into short or unimproved airfields;
    (5) Are capable of being refueled in-flight; or
    (6) Incorporate any ``mission systems'' controlled under this 
subchapter. ``Mission systems'' are defined as ``systems'' (see Sec.  
121.8(g) of this subchapter) that are defense articles that perform 
specific military functions beyond airworthiness, such as by providing 
military communication, radar, active missile counter measures, target 
designation, surveillance, or sensor capabilities.
    (b) Aircraft ``specially designed'' for military applications that 
are not identified in (a) of this section are subject to the EAR under 
an ECCN to be determined, including any unarmed military aircraft, 
regardless of origin or designation, manufactured prior to 1956 and 
unmodified since manufacture. Modifications made to incorporate safety 
of flight features or other FAA or NTSB modifications such as 
transponders and air data recorders are considered ``unmodified'' for 
the purposes of this subparagraph.

    Dated: October 28, 2011.
Ellen O. Tauscher,
Under Secretary, Arms Control and International Security, Department of 
State.
[FR Doc. 2011-28502 Filed 11-4-11; 8:45 am]
BILLING CODE 4710-25-P