[Federal Register Volume 76, Number 247 (Friday, December 23, 2011)]
[Proposed Rules]
[Pages 80305-80308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32866]


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DEPARTMENT OF STATE

22 CFR Parts 121, 123, 124, and 125

RIN 1400-AD01

[Public Notice 7737]


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

AGENCY: Department of State.

ACTION: Proposed rule.

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[[Page 80306]]

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 XX (submersible vessels and 
related articles) of the U.S. Munitions List (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 XX.''
     Internet: At www.regulations.gov, search for this notice 
by using this rule's RIN (1400-AD01).

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 XX.

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 XX

    This proposed rule revises USML Category XX, covering submersible 
vessels and related articles. The proposed revision accounts for the 
movement of submarines from Category VI and consolidates the controls 
that will apply to all submersible vessels in a single category. In 
addition, naval nuclear propulsion power plants for submersible vessels 
controlled under Category XX, formerly controlled under Category VI(e), 
will now be controlled under Category XX(b).
    This proposed rule also creates Sec.  121.14 to more clearly define 
``submersible vessels and related articles.''
    Finally, this revision makes conforming edits to Sec. Sec.  123.20, 
124.2, and 125.1 (nuclear related controls).
    This proposed rule controls only those parts, components, 
accessories, and attachments that are specifically designed for a 
defense article controlled in this category. 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.

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 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

[[Page 80307]]

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 XX contained in this FRN and 
the new Category 8 ECCNs published separately by the Department of 
Commerce when reviewed together.
    (2) 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 Parts 121, 123, 124, and 125

    Arms and munitions, Exports, Classified information.

    Accordingly, for the reasons set forth above, Title 22, Chapter I, 
Subchapter M, parts 121, 123, 124, and 125 are 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 XX to read as follows:

[[Page 80308]]

Sec.  121.1  General. The United States Munitions List.

* * * * *

XX--Submersible Vessels and Related Articles

    (a) Submersible and semi-submersible vessels (see Sec.  121.14 of 
this subchapter) that are:
    *(1) submarines;
    (2) mine countermeasure vehicles;
    (3) anti-submarine warfare vehicles;
    (4) armed;
    (5) swimmer delivery vehicles ``specially designed'' for the 
deployment, recovery, or support of swimmers or divers from submarines;
    (6) vessels equipped with any mission systems controlled under this 
subchapter; or
    *(7) developmental vessels developed under a contract with the U.S. 
Department of Defense.
    *(b) Naval nuclear propulsion plants, their land prototypes, and 
special facilities for their construction, support, and maintenance 
(see Sec.  123.20 of this subchapter).
    (c) Components, parts, accessories, attachments, and associated 
equipment ``specially designed'' for any of the articles in paragraphs 
(a) and (b) of this category.

    Note to paragraph (c): Parts, components, accessories, and 
attachments that are common to vessels subject to the EAR, or that 
are enumerated on the CCL or elsewhere in this subchapter, are not 
included in this paragraph.

    (d) 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 (c) of this category. (See Sec.  125.4 of this subchapter for 
exemptions.)
* * * * *
    3. Section 121.14 is removed from reserved status and added to read 
as follows:


Sec.  121.14  Submersible vessels and related articles.

    (a) Category XX controls developmental, demilitarized, 
decommissioned, production, or inventory submersible and semi-
submersible vessels, manned or unmanned, tethered or untethered, that:
    (1) are submarines ``specially designed'' for military use;
    (2) are armed or are ``specially designed'' to be used as a 
platform to deliver munitions or otherwise destroy or incapacitate 
targets (e.g., firing torpedoes, launching rockets, firing missiles, 
deploying mines, deploying countermeasures) or deploy military 
payloads;
    (3) are ``specially designed'' for the deployment, recovery, or 
support of swimmers or divers from submarines;
    (4) are integrated with nuclear propulsion systems; or
    (5) 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) Submersible and semi-submersible vessels that are not 
identified in (a) above are subject to the EAR under Category 8.

PART 123--LICENSES FOR THE EXPORT OF DEFENSE ARTICLES

    4. 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.

    5. Section 123.20 is amended by revising paragraphs (a) and (c) to 
read as follows:


Sec.  123.20  Nuclear related controls.

    (a) The provisions of this subchapter do not apply to equipment, 
technical data or services in Category VI, Category XX, and Category 
XVI of Sec.  121.1 of this subchapter to the extent such equipment, 
technical data or services are under the export control of the 
Department of Energy or the Nuclear Regulatory Commission pursuant to 
the Atomic Energy Act of 1954, as amended, and the Nuclear Non-
Proliferation Act of 1978, as amended, or is a government transfer 
authorized pursuant to these Acts.
* * * * *
    (c) A license for the export of any machinery, device, component, 
equipment, or technical data relating to equipment referred to in 
Category VI(e) or Category XX(b) of Sec.  121.1 of this subchapter will 
not be granted unless the proposed equipment comes within the scope of 
an existing Agreement for Cooperation for Mutual Defense Purposes 
concluded pursuant to the Atomic Energy Act of 1954, as amended, with 
the government of the country to which the Article is to be exported. 
Licenses may be granted in the absence of such an agreement only:
* * * * *

PART 124--AGREEMENTS, OFF-SHORE PROCUREMENT, AND OTHER DEFENSE 
SERVICES

    6. The authority citation for part 124 continues to read as 
follows:

    Authority:  Sec. 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; 22 U.S.C. 2776; Pub. L. 105-261.

    7. Section 124.2 is amended by revising paragraph (c) to read as 
follows:


Sec.  124.2  Exemptions for training and military service.

* * * * *
    (c) * * *
* * * * *
    (5) * * *
* * * * *
    (iv) Naval nuclear propulsion equipment listed in Category VI and 
Category XX;
* * * * *

PART 125--LICENSES FOR THE EXPORT OF TECHNICAL DATA AND CLASSIFIED 
DEFENSE ARTICLES

    8. The authority citation for part 125 continues to read as 
follows:

    Authority: Secs. 2 and 38, Pub. L. 90-629, 90 Stat. 744 (22 
U.S.C. 2752, 2778); E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp. p. 79; 
22 U.S.C. 2651a.

    9. Section 125.1 is amended by revising paragraph (e) to read as 
follows:
* * * * *
    (e) The provisions of this subchapter do not apply to technical 
data related to articles in Category VI(e), Category XX(b), and 
Category XVI of Sec.  121.1 of this subchapter. The export of such data 
is controlled by the Department of Energy or the Nuclear Regulatory 
Commission pursuant to the Atomic Energy Act of 1954, as amended, and 
the Nuclear Non-Proliferation Act of 1978, as amended.

    Dated: December 16, 2011.
Ellen O. Tauscher,
 Under Secretary, Arms Control and International Security, Department 
of State.
[FR Doc. 2011-32866 Filed 12-22-11; 8:45 am]
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