[Federal Register Volume 76, Number 247 (Friday, December 23, 2011)]
[Proposed Rules]
[Pages 80302-80305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32865]


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DEPARTMENT OF STATE

22 CFR Part 121

RIN 1400-AC99
[Public Notice 7736]


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

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 VI (surface vessels of war and 
special naval

[[Page 80303]]

equipment) of the U.S. Munitions List (USML) to describe more precisely 
the combatant vessels and other naval equipment warranting control on 
the USML.

DATES: The Department of State will accept comments on this proposed 
rule until February 6, 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 Amendment--Category VI.''
     Internet: At www.regulations.gov, search for this notice 
by using this rule's RIN (1400-AC99).

Comments received after that date will be considered if feasible, but 
consideration cannot be assured. Those submitting comments should not 
include any personally identifying information they do not desire to be 
made public or information for which a claim of confidentiality is 
asserted because those comments and/or 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 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 FURTHER INFORMATION CONTACT: Director Charles B. Shotwell, Office 
of Defense Trade Controls Policy, Department of State, telephone (202) 
663-2792; email [email protected]. ATTN: Regulatory Change, 
USML Category VI.

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 (December 9, 2010) and 
``Revision to the United States Munitions List,'' 75 FR 76935 (December 
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 it 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 VI

    This proposed rule revises USML Category VI, covering surface 
vessels of war and special naval equipment, to establish a clear 
``bright line'' between the USML and the CCL for the control of these 
articles. The proposed revision narrows the types of surface vessels of 
war and special naval equipment controlled on the USML to only those 
that warrant control under the stringent requirements of the Arms 
Export Control Act. It will remove from control of the USML harbor 
entrance detection devices formerly controlled under Category VI(d) and 
will no longer include submarines, which will be controlled in Category 
XX.
    This proposed rule also revises Sec.  121.15 to more clearly define 
``surface vessels of war and special naval equipment'' for purposes of 
the revised USML Category VI.
    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 in 
any way 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 8 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 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

[[Page 80304]]

designed.'' It is, therefore, necessary for the Department to define 
the term. Two proposed definitions have been published 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 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. In 
the interim, and for the purpose of evaluation of this proposed rule, 
reviewers should use the definition provided in the December 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 9 (ML9). To that end, 
the public is asked to identify any potential lack of coverage brought 
about by the proposed rules for Category VI contained in this FRN and 
the new Category 8 ECCNs published separately by the Department of 
Commerce when reviewed together.
    (2) The key goal of this rulemaking is to establish a ``bright 
line'' between the USML and the CCL for the control of surface vessels. 
The public is asked to provide specific examples of vessels whose 
jurisdiction would be in doubt based on this revision.

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 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 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, Executive Order 13175 does not apply to this 
rulemaking.

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 Part 121

    Arms and munitions, Exports.


[[Page 80305]]


    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 VI to read as follows:


Sec.  121.1  General. The United States Munitions List.

* * * * *

VI--Surface Vessels of War and Special Naval Equipment

    *(a) Warships and other combatant vessels (see Sec.  121.15 of this 
subchapter).
    (b) Other vessels not controlled in paragraph (a) of this section 
(see Sec.  121.15 of this subchapter).
    (c) Developmental vessels and ``specially designed'' parts, 
components, accessories, and attachments therefor, developed under a 
contract with the U.S. Department of Defense.
    (d) [Reserved]
    *(e) Naval nuclear propulsion plants, their land prototypes, and 
special facilities for their construction, support, and maintenance 
(see Sec.  123.20 of this subchapter).
    (f) Vessel and naval equipment components, parts, accessories, 
attachments, and associated equipment, as follows:
    (1) hulls or superstructures ``specially designed'' for any vessels 
controlled in paragraph (a) of this section;
    (2) hulls or superstructures having armor, active protection 
systems, or developmental armor systems;
    (3) hulls or superstructures designed to survive 12.5% or greater 
damage across the length as measured between perpendiculars;
    (4) propulsion and supporting auxiliary, control, and monitoring 
systems that store, create, distribute, conserve, transfer, and use 
energy outside propulsion system boundaries exceeding 30MJ storage, 
discharge less than 3 seconds and cycle time under 45 seconds, and 
parts and components ``specially designed'' therefor;
    (5) shipborne auxiliary systems for Chemical, Biological, 
Radiological, and Nuclear (CBRN) compartmentalization, over-
pressurization and filtration systems, and parts and components 
``specially designed'' therefor;
    *(6) control and monitoring systems for autonomous unmanned vessels 
capable of on-board, autonomous perception and decision-making 
necessary for the vessel to navigate while avoiding fixed and moving 
hazards, and obeying rules-of-the-road without human intervention;
    *(7) any machinery, device, component, or equipment specifically 
developed, designed, or modified for use in plants or facilities 
controlled in paragraph (e) of this section (see Sec.  123.20 of this 
subchapter);
    (8) components, parts, accessories, attachments, and equipment 
``specially designed'' for integration of articles controlled by 
Categories II, IV, or XVIII or catapults for launching aircraft or 
arresting gear for recovering aircraft;
    (9) shipborne 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 vessel) and parts and components 
``specially designed'' therefor;
    (10) minesweeping and mine hunting equipment (including mine 
countermeasures equipment deployed by aircraft) and parts and 
components ``specially designed'' therefor; or
    *(11) 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 1 to paragraph (f): Parts, components, accessories, and 
attachments ``specially designed'' for vessels enumerated in this 
category but not listed in Category VI(f) are subject to the EAR 
under ECCN 8A609.



    Note 2 to paragraph (f): For controls related to ship signature 
management, see also Category XIII.

    (g) 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 (f) of this category.
* * * * *
    3. Section 121.15 is revised to read as follows:


Sec.  121.15  Surface vessels of war and special naval equipment.

    (a) In Category VI, ``surface vessels of war'' means developmental, 
demilitarized, decommissioned, production, or inventory vessels, manned 
or unmanned, that:
    (1) Are warships or other combatant vessels (battleships, aircraft 
carriers, destroyers, frigates, cruisers, corvettes, littoral combat 
ships, mine sweepers, mine hunters, mine countermeasure ships, dock 
landing ships, amphibious assault ships), or Coast Guard Cutters (with 
or equivalent to those with U.S. designations WHEC, WMEC, WMSL, or 
WPB);
    (2) are foreign-origin vessels ``specially designed'' to provide 
functions equivalent to those of the vessels listed in (a)(1) of this 
section;
    (3) are high-speed air cushion vessels for transporting cargo and 
personnel, ship-to-shore and across a beach, with a payload over 25 
tons;
    (4) are surface vessels integrated with nuclear propulsion systems;
    (5) 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 torpedoes, rockets, or 
missiles, or firing munitions greater than .50 caliber); 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 perform specific military functions 
such as by providing military communication, electronic warfare, target 
designation, surveillance, target detection, or sensor capabilities.
    (b) Vessels ``specially designed'' for military use that are not 
identified in (a) of this section are subject to the EAR under ECCN 
8A609.

    Dated: December 16, 2011.
 Ellen O. Tauscher,
Under Secretary, Arms Control and International Security, Department of 
State.
[FR Doc. 2011-32865 Filed 12-22-11; 8:45 am]
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