[Federal Register Volume 76, Number 234 (Tuesday, December 6, 2011)]
[Proposed Rules]
[Pages 76100-76103]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30975]


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DEPARTMENT OF STATE

22 CFR Part 121

[Public Notice 7702]
RIN 1400-AC77


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

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 VII (ground vehicles) of the U.S. 
Munitions List (USML) to describe more precisely the military ground 
vehicles warranting control on the USML.

DATES: The Department of State will accept comments on this proposed 
rule until January 20, 2012.

ADDRESSES: Interested parties may submit comments within 45 days of the 
date of publication by one of the following methods:
     Email: [email protected] with the subject line, 
``ITAR Amendments--Category VII.''
     Internet: At www.regulations.gov, search for this notice 
by using this rule's RIN (1400-AC77).
    Comments received after that date will be considered if feasible, 
but consideration cannot be assured. We will make all comments 
(including any personally identifying information or information for 
which a claim of confidentiality is asserted in those comments or their 
transmittal emails) available for public inspection and copying after 
the close of the comment period via the Directorate of Defense Trade 
Controls Web site at www.pmddtc.state.gov. Parties who wish to comment 
anonymously may do so by submitting their comments via 
www.regulations.gov, leaving the fields that would identify the 
commenter blank and including no identifying information in the comment 
itself. Comments submitted via www.regulations.gov are immediately 
available for public inspection.

FOR ADDITIONAL INFORMATION CONTACT: Director Charles B. Shotwell, 
Office of Defense Trade Controls Policy, Department of State, telephone 
(202) 663-2792, or email [email protected]. ATTN: Regulatory 
Change, USML Category VII.

SUPPLEMENTARY INFORMATION: On December 10, 2010, the Department 
published as a proposed rule a revised Category VII that included 
tiering (75 FR 76930). As discussed below, the tiering of the 
categories has been postponed. In this regard, this revision differs 
from the earlier one. Because the differences between the two proposed 
versions of Category VII are considerable, the Department will not 
provide an assessment of public comments received from the first 
proposed rule, but welcomes comments on this proposed rule from all 
parties. If you submitted comments in response to the December 2010 
rulemaking, please re-submit your comments, if they are still 
appropriate.

Background

    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 re-export 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 VII

    This proposed rule revises USML Category VII, Ground Vehicles, to 
establish a clear ``bright line'' between the USML and the CCL for the 
control of military ground vehicles. The proposed revision narrows the 
types of ground vehicle controlled on the USML to only those that 
warrant control under the stringent requirements of the Arms Export 
Control Act. Changes include the removal of most unarmored and unarmed 
military vehicles, trucks, trailers, and trains (unless ``specially 
designed'' as firing platforms for weapons above .50 caliber), and 
armored vehicles (either unarmed or with inoperable weapons) 
manufactured

[[Page 76101]]

before 1956. Also, this revision removes gas turbine engines designed 
for ground vehicles from inclusion in this category. 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.
    This proposed rule also would remove from reserved status Sec.  
121.4 and define therein ``ground vehicles'' for purposes of the 
revised USML Category VII.
    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 a positive list of specific types of parts, 
components, accessories, and attachments that continue to warrant 
control on the USML. All other parts, components, accessories, and 
attachments will become subject to the new 600 series controls in 
Category 0 of the CCL that we anticipate will 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 rule 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 multilateral regime 
obligations, 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, but based on a preliminary evaluation of the comments 
and other considerations, 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 6 (ML 6). To that end, 
the public is asked to identify any potential lack of coverage brought 
about by the proposed rules for Category VII contained in this FRN and 
the new Category 0 ECCNs published separately by the Department of 
Commerce, when reviewed together.
    (2) This amendment removes from the USML unarmed but armored 
military vehicles manufactured prior to 1956. The rationale is to 
discontinue controlling on the USML vehicles of almost no military 
significance. Armored military vehicles manufactured after 1955 would 
be maintained on the USML. We ask the public to comment on the efficacy 
of splitting jurisdiction for these vehicles between the USML and the 
CCL.

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 a related 
Notice of Proposed Rulemaking (RIN 1400-AC77), and accepted comments 
for 60 days in response to both notices.

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

[[Page 76102]]

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.

List of Subjects in 22 CFR Part 121

    Arms and munitions, Exports

    Accordingly, for the reasons set forth above, Title 22, Chapter I, 
Subchapter M, part 121 is proposed to be amended as follows:

PART 121--THE UNITED STATES MUNITIONS LIST

    1. 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.

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


Sec.  121.1  General. The United States Munitions List.

* * * * *

Category VII--Ground Vehicles

    *(a) Armored combat ground vehicles (see Sec.  121.4 of this 
subchapter) as follows:
    (1) tanks; or
    (2) infantry fighting vehicles.
    *(b) Ground vehicles (not enumerated in paragraph (a) of this 
category) and trailers that are armed or are ``specially designed'' 
to serve as a firing or launch platform (see Sec.  121.4 of this 
subchapter).
    (c) Ground vehicles and trailers equipped with any mission 
systems controlled under this subchapter (see Sec.  121.4 of this 
subchapter).
    (d) [Reserved]
    *(e) Armored support ground vehicles (see Sec.  121.4 of this 
subchapter).
    *(f) [Reserved--for articles formerly controlled under this 
paragraph see Category XIX and ECCN 0A606.]
    (g) Ground vehicle components, parts, accessories, attachments, 
and associated equipment as follows:
    (1) armored hulls, armored turrets, and turret rings;
    (2) active protection systems (i.e., defensive systems that 
actively detect and track incoming threats and launch a ballistic, 
explosive, energy, or electromagnetic countermeasure(s) to 
neutralize the threat prior to contact with a vehicle) and parts and 
components ``specially designed'' therefor;
    (3) composite armor parts and components ``specially designed'' 
for the vehicles in this category;
    (4) spaced armor components and parts, including slat armor 
components and parts ``specially designed'' for the vehicles in this 
category;
    (5) reactive armor parts and components;
    (6) electromagnetic armor parts and components, including pulsed 
power parts and components ``specially designed'' therefor;
    (7) built in test equipment (BITE) to evaluate the condition of 
weapons or other mission systems for vehicles identified in this 
Category. This does not include BITE that provides diagnostics 
solely for a subsystem or component for the basic operation of the 
vehicle.
    (8) gun mount, stabilization, turret drive, and automatic 
elevating systems, and parts and components ``specially designed'' 
therefor;
    (9) self-launching bridge components rated class 60 or above for 
deployment by vehicles enumerated in this category;
    (10) suspension components as follows:
    (i) rotary shock absorbers ``specially designed'' for the 
vehicles weighing more than 30 tons in this category; or
    (ii) torsion bars ``specially designed'' for the vehicles 
weighing more than 50 tons in this category;
    (11) kits ``specially designed'' to convert a vehicle enumerated 
in this category into either an unmanned or a driver-optional 
vehicle. For a kit to be controlled by this paragraph, it must, at a 
minimum, include equipment for:
    (i) remote or autonomous steering;
    (ii) acceleration and braking; and
    (iii) a control system;
    (12) fire control computers, mission computers, vehicle 
management computers, integrated core processers, stores management 
systems, armaments control processors, vehicle-weapon interface 
units and computers;
    (13) test or calibration equipment for the mission systems of 
the vehicles controlled in this category, except those enumerated 
elsewhere; or
    *(14) 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'' 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.

    Note: Parts, components, accessories, and attachments 
``specially designed'' for vehicles enumerated in this category but 
not listed in Category VII(g) are subject to the EAR under ECCN 
0A606.

    (h) 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 (g) of this category (see Sec.  125.4 of this subchapter for 
exemptions).
* * * * *
    3. Section 121.4 is added to read as follows:


121.4  Ground vehicles.

    (a) In Category VII, ``Ground Vehicles'' means developmental, 
production, or inventory ground vehicles, whether manned or unmanned, 
that:
    (1) are armed or are ``specially designed'' to be used as a 
platform to deliver munitions or otherwise destroy or incapacitate 
targets (e.g., firing lasers, launching rockets, firing missiles, 
firing mortars, firing artillery rounds, or firing other ammunition 
greater than .50 caliber);
    (2) are armored support vehicles capable of off-road or amphibious 
use ``specially designed'' to transport or deploy personnel or 
materiel, or to move with other vehicles over land in

[[Page 76103]]

close support of combat vehicles or troops (e.g., personnel carriers, 
resupply vehicles, combat engineer vehicles, recovery vehicles, 
reconnaissance vehicles, bridge launching vehicles, ambulances, and 
command and control vehicles); or
    (3) 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, such as by providing military 
communication, target designation, surveillance, target detection, or 
sensor capabilities.

    Note: ``Armored'' ground vehicles, for purposes of paragraph (a) 
of this section, (i) are ground vehicles that have integrated, fully 
armored hulls or cabs, or (ii) are ground vehicles on which add-on 
armor has been installed to provide ballistic protection to level 
III (National Institute of Justice Standard 0108.01, September 1985) 
or better. ``Armored'' vehicles do not include those that are merely 
capable of being equipped with add-on armor.

    (b) Ground Vehicles ``specially designed'' for military 
applications that are not identified in (a) of this section are subject 
to the EAR under ECCN 0A606, including any unarmed ground vehicles, 
regardless of origin or designation, manufactured prior to 1956 and 
unmodified since 1955. Modifications made to incorporate safety 
features required by law, are cosmetic (e.g. different paint, 
repositioning of bolt holes), or that add parts or components otherwise 
available prior to 1956 are considered ``unmodified'' for the purposes 
of this subparagraph. ECCN 0A606 also includes unarmed vehicles derived 
from otherwise EAR99 civilian vehicles that have been modified or 
otherwise fitted with materials to provide ballistic protection, 
including protection to level III (National Institute of Justice 
Standard 0108.01, September 1985) or better and that do not have 
reactive or electromagnetic armor.

    Dated: 28 November 2011.
 Ellen O. Tauscher,
Under Secretary, Arms Control and International Security, Department of 
State.
[FR Doc. 2011-30975 Filed 12-5-11; 8:45 am]
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