[Federal Register Volume 77, Number 114 (Wednesday, June 13, 2012)]
[Proposed Rules]
[Pages 35317-35321]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-14443]



22 CFR Part 121

RIN 1400-AD15
[Public Notice 7920]

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

AGENCY: Department of State.

ACTION: Proposed rule.


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 IX (military training equipment) 
of the U.S. Munitions List (USML) to describe more precisely the 
materials warranting control on the USML. The revisions to this rule 
are part of the Department of State's retrospective plan under E.O. 
13563 completed on August 17, 2011.

[[Page 35318]]

The Department of State's full plan can be accessed at http://www.state.gov/documents/organization/181028.pdf.

DATES: The Department of State will accept comments on this proposed 
rule until July 30, 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 IX.''
     Internet: At www.regulations.gov, search for this notice 
by using this rule's RIN (1400-AD15).
    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: Ms. Candace M. J. Goforth, Director, 
Office of Defense Trade Controls Policy, Department of State, telephone 
(202) 663-2792; email [email protected]. ATTN: Regulatory 
Change, USML Category IX.

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 (CCL) in Supplement No. 1 to 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 
``Revisions 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 U.S. 
allies, enhancing the 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 NATO allies 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 

Revision of Category IX

    This proposed rule would revise USML Category IX, covering military 
training equipment, to further the national security objectives set 
forth above and to more accurately describe the articles within the 
category in order to establish a ``bright line'' between the USML and 
the CCL for the control of these articles.
    The title of the category is changed to indicate that it covers 
training equipment only. Training on a defense article would be a 
defense service covered under the category in which the defense article 
is enumerated.
    Paragraph (a) is to list all the types of training equipment 
covered in the category.
    Paragraph (b) is also revised to more specifically describe the 
items (simulators) controlled therein. Radar target generators are to 
be controlled in Category XI(a). Infrared scene generators are to be 
controlled in Category XII(c).
    Tooling and production equipment, currently controlled in paragraph 
(c), are to be covered on the CCL in proposed ECCN 0B614.
    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 (currently 
captured in paragraph (d)) 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. These items are 
to be subject to the new 600 series controls in Category 0 of the CCL, 
to be published separately by the Department of Commerce. Parts, 
components, accessories, or attachments of a simulator that are common 
to the simulated system or end-item are to be controlled under the same 
USML Category or CCL ECCN as the parts, components, accessories, and 
attachments of the simulated system or end-item.

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

[[Page 35319]]

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 
    (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 14 (WA-ML14). To that 
end, the public is asked to identify any potential lack of coverage 
brought about by the proposed rules for Category IX contained in this 
notice and the new Category 0 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 these articles. 
The public is asked to provide specific examples of articles 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 (APA). 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 the Department is of the opinion that this rule is exempt 
from the rulemaking provisions of 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 Orders 12866 and 13563

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributed impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a ``significant regulatory 
action,'' although not economically significant, under section 3(f) of 
Executive Order 12866. Accordingly, the rule has been reviewed by the 
Office of Management and Budget (OMB).

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 preempt 
tribal law. Accordingly, Executive Order 13175 does not apply to this 

Paperwork Reduction Act

    Notwithstanding any other provision of law, no person is required 
to respond to, nor is subject to a penalty for failure to comply with, 
a collection of information, subject to the requirements of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless 
that collection of information displays a currently valid OMB control 
number. This proposed rule would affect the

[[Page 35320]]

following approved collections: (1) Statement of Registration, DS-2032, 
OMB No. 1405-0002; (2) Application/License for Permanent Export of 
Unclassified Defense Articles and Related Unclassified Technical Data, 
DSP-5, OMB No. 1405-0003; (3) Application/License for Temporary Import 
of Unclassified Defense Articles, DSP-61, OMB No. 1405-0013; (4) 
Nontransfer and Use Certificate, DSP-83, OMB No. 1405-0021; (5) 
Application/License for Permanent/Temporary Export or Temporary Import 
of Classified Defense Articles and Classified Technical Data, DSP-85, 
OMB No. 1405-0022; (6) Application/License for Temporary Export of 
Unclassified Defense Articles, DSP-73, OMB No. 1405-0023; (7) Statement 
of Political Contributions, Fees, or Commissions in Connection with the 
Sale of Defense Articles or Services, OMB No. 1405-0025; (8) Authority 
to Export Defense Articles and Services Sold Under the Foreign Military 
Sales (FMS) Program, DSP-94, OMB No. 1405-0051; (9) Application for 
Amendment to License for Export or Import of Classified or Unclassified 
Defense Articles and Related Technical Data, DSP-6, -62, -74, -119, OMB 
No. 1405-0092; (10) Request for Approval of Manufacturing License 
Agreements, Technical Assistance Agreements, and Other Agreements, DSP-
5, OMB No. 1405-0093; (11) Maintenance of Records by Registrants, OMB 
No. 1405-0111; (12) Annual Brokering Report, DS-4142, OMB No. 1405-
0141; (13) Brokering Prior Approval (License), DS-4143, OMB No. 1405-
0142; (14) Projected Sale of Major Weapons in Support of Section 
25(a)(1) of the Arms Export Control Act, DS-4048, OMB No. 1405-0156; 
(15) Export Declaration of Defense Technical Data or Services, DS-4071, 
OMB No. 1405-0157; (16) Request for Commodity Jurisdiction 
Determination, DS-4076, OMB No. 1405-0163; (17) Request to Change End-
User, End-Use, and/or Destination of Hardware, DS-6004, OMB No. 1405-
0173; (18) Request for Advisory Opinion, DS-6001, OMB No. 1405-0174; 
(19) Voluntary Disclosure, OMB No. 1405-0179; and (20) Technology 
Security/Clearance Plans, Screening Records, and Non-Disclosure 
Agreements Pursuant to 22 CFR 126.18, OMB No. 1405-0195. The Department 
of State believes there will be minimal changes to these collections. 
The Department of State believes the combined effect of all rules to be 
published moving commodities from the USML to the EAR as part of the 
Administration's Export Control Reform would decrease the number of 
license applications by approximately 30,000 annually. The Department 
of State is looking for comments on the potential reduction in burden.

List of Subjects in 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:


    1. The authority citation for part 121 continues to read as 

    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 IX to read as follows:

Sec.  121.1  General. The United States Munitions List.

* * * * *

Category IX--Military Training Equipment

    (a) Training equipment, as follows:
    (1) Ground, surface, submersible, space, or towed airborne targets 
    (i) Have an infrared, radar, acoustic, magnetic, or thermal 
signature that mimic a specific defense article, other item, or person; 
    (ii) Are instrumented to provide hit/miss performance information;

    Note to paragraph (a)(1):  Target drones are controlled in 
Category VIII(a).

    (2) Devices that are mockups of articles enumerated in this 
subchapter used for maintenance training or disposal training for 
ordnance enumerated in this subchapter;
    (3) Air combat maneuvering instrumentation and ground stations 
    (4) Physiological flight trainers for fighter aircraft or attack 
    (5) Radar trainers ``specially designed'' for training on radars 
controlled by Category XI;
    (6) Training devices ``specially designed'' to be attached to a 
crew station, mission system, or weapon of an article controlled in 
this subchapter;

    Note to paragraph (a)(6):  This paragraph includes stimulators 
that are built-in or add-on devices that cause the actual equipment 
to act as a trainer.

    (7) Anti-submarine warfare trainers;
    (8) Missile launch trainers;
    (9) Any training device 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 to paragraph (a):  Training equipment does not include 
combat games without item signatures or tactics, techniques, and 
procedures covered by this subchapter.

    (b) Simulators, as follows:
    (1) System specific simulators that replicate the operation of an 
individual crew station, a mission system, or a weapon of an end-item 
that is controlled in this subchapter;
    (2) [Reserved]
    (3) [Reserved]
    (4) Software and associated databases not elsewhere enumerated in 
this subchapter that can be used to simulate the following:
    (i) Trainers specified by this category;
    (ii) Battle management;
    (iii) Military test scenarios/models; or
    (iv) Effects of weapons enumerated in this subchapter;
    (5) Simulators that:
    (i) Are classified;
    (ii) Contain classified software;
    (iii) Are manufactured using classified production data; or
    (iv) Are 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.
    (c) [Reserved]
    (d) [Reserved]
    (e) 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 (b) of this category.
    (f) [Reserved]

    Note:  Parts, components, accessories, or attachments of a 
simulator that are common to the simulated system or end-item are 
controlled under the same USML Category or CCL ECCN as the parts, 
components, accessories, and attachments of the simulated system or 

* * * * *

[[Page 35321]]

    Dated. June 7, 2012.
Rose E. Gottemoeller,
Acting Under Secretary, Arms Control and International Security, 
Department of State.
[FR Doc. 2012-14443 Filed 6-12-12; 8:45 am]