[Federal Register Volume 81, Number 233 (Monday, December 5, 2016)]
[Rules and Regulations]
[Pages 87427-87430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28406]


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DEPARTMENT OF STATE

22 CFR Parts 120, 121, 122, 124, 126 and 127

[Public Notice: 9757]
RIN 1400-AE05


Amendment to the International Traffic in Arms Regulations: 
Corrections and Clarifications

AGENCY: Department of State.

ACTION: Final rule; request for comments.

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SUMMARY: The Department of State is amending the International Traffic 
in Arms Regulations (ITAR) to clarify recent revisions made pursuant to 
the President's Export Control Reform (ECR) initiative. This rule 
clarifies the scope of disclosure of information submitted to the 
Directorate of Defense Trade Controls (DDTC), clarifies the policies 
and procedures regarding statutory debarments, and corrects 
administrative and typographical errors.

DATES: This Final rule is effective on December 5, 2016. The Department 
will accept comments on the Final regulation up to January 4, 2017.

ADDRESSES: Interested parties may submit comments within 30 days of the 
date of publication by one of the following methods:
     Email: DDTCResponseTeam@state.gov with the subject line, 
``ITAR Corrections and Clarifications.''
     Internet: You may view this Final rule and submit your 
comments by visiting the Regulations.gov Web site at 
www.regulations.gov, and searching for docket number DOS-2016-0070.
    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 asserted in those comments or their transmittal 
emails) will be made

[[Page 87428]]

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: Mr. C. Edward Peartree, Director, 
Office of Defense Trade Controls Policy, Department of State, telephone 
(202) 663-2792; email DDTCResponseTeam@state.gov. ATTN: Regulatory 
Change, Corrections and Clarifications.

SUPPLEMENTARY INFORMATION: The Department makes the following revisions 
to the ITAR in this final rule:
     A definition of ``classified'' is moved from Sec.  
121.1(e) to Sec.  120.46;
     The structure of Sec.  121.1(a)-(e) is realigned, with 
paragraphs (a) and (b) revised to clarify the existing requirements for 
United States Munitions List (USML) controls, and paragraphs (c), (d) 
and (e) removed;
     Thirteen USML categories are amended to clarify that 
commodities, software, and technology subject to the Export 
Administration Regulations (EAR) and related to defense articles in a 
USML category may be exported or temporarily imported on the same 
license with defense articles from any category, provided they are to 
be used in or with that defense article;
     In three places within the USML, the word ``enumerated'' 
is replaced with the word ``described'' to make the language consistent 
with changes directed in the Final Rule published at 79 FR 61226, Oct. 
10, 2014;
     Section 122.4(c)(4) is revised to permit the Directorate 
of Defense Trade Controls (DDTC) to approve an alternative timeframe, 
not less than 60 days, to the current 60-day requirement for 
registrants to provide a signed amended agreement;
     Section 124.2(c)(5)(v) is revised to correct errors to the 
USML category references for gas turbine engine hot sections, from 
VI(f) and VIII(b) to Category XIX;
     Section 124.12 is amended in paragraph (a)(9) to update 
the name of the Defense Investigative Service to Defense Security 
Service;
     Section 126.9 on Advisory Opinions and Related 
Authorizations is amended to correct paragraph (a);
     Paragraph (b) of Sec.  126.10 is amended to clarify the 
scope of control and disclosure of information, however, 
notwithstanding the changes to paragraph (b) it is the Department's 
policy not to publicly release information relating to activities 
regulated by the ITAR except as required by law or when doing so is 
otherwise in the interest of the United States Government; and
     Section 127.7(b) is amended to clarify the policies and 
procedures regarding statutory debarments (addressing inadvertent 
omissions resulting from a prior amendment to that section), and Sec.  
127.11 is amended to make conforming revisions to paragraph (c) omitted 
from prior amendment to that section.

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 sections 553 (Rulemaking) and 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 providing 30 days 
for the public to submit comments without prejudice to its 
determination that controlling the import and export of defense 
services is a foreign affairs function.

Regulatory Flexibility Act

    Since this rule is exempt from the provisions of 5 U.S.C. 553, 
there is no requirement for an analysis under the Regulatory 
Flexibility Act.

Unfunded Mandates Reform Act of 1995

    This rulemaking 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 rulemaking is not a major rule within the definition of 5 
U.S.C. 804.

Executive Orders 12372 and 13132

    This rulemaking 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, the Department has determined that this rulemaking 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 rulemaking.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess 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). These executive orders 
stress the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. The 
Department has determined that, given the nature of the amendments made 
in this rulemaking, there will be minimal cost to the public. 
Therefore, the benefits of this rulemaking outweigh the cost. This rule 
has not been designated a ``significant regulatory action'' by the 
Office and Information and Regulatory Affairs under Executive Order 
12866.

Executive Order 12988

    The Department of State reviewed this rulemaking in light of 
Executive Order 12988 to eliminate ambiguity, minimize litigation, 
establish clear legal standards, and reduce burden.

Executive Order 13175

    The Department of State 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, the requirements of Executive Order 13175 do not apply to 
this rulemaking.

Paperwork Reduction Act

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

List of Subjects

22 CFR Parts 120 and 121

    Arms and munitions, Classified information, Exports.

[[Page 87429]]

22 CFR Part 122

    Arms and munitions, Exports.

22 CFR Part 124

    Arms and munitions, Exports, Technical assistance.

22 CFR Part 126

    Arms and munitions, Exports.

22 CFR Part 127

    Arms and munitions, Exports, Crime, Law, Penalties, Seizures and 
forfeitures.

    Accordingly, for the reasons set forth above, title 22, chapter I, 
subchapter M, parts 120, 121, 122, 124, 126, and 127 are amended as 
follows:

PART 120--PURPOSE AND DEFINITIONS

0
1. The authority citation for part 120 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. 2794; 22 U.S.C. 2651a; Pub. 
L. 105-261, 112 Stat. 1920; Pub. L. 111-266; Section 1261, Pub. L. 
112-239; E.O. 13637, 78 FR 16129.


0
2. Section 120.46 is added to read as follows:


Sec.  120.46   Classified.

    Classified means classified pursuant to Executive Order 13526, and 
a security classification guide developed pursuant thereto or 
equivalent, or to the corresponding classification rules of another 
government or international organization.

PART 121--THE UNITED STATES MUNITIONS LIST

0
3. 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); 22 U.S.C. 2651a; Pub. L. 105-261, 112 
Stat. 1920; Section 1261, Pub. L. 112-239; E.O. 13637, 78 FR 16129.


0
4. Section 121.1 is amended by:
0
a. Revising paragraphs (a) and (b);
0
b. Removing paragraphs (c), (d), and (e);
0
c. Removing the words ``controlled in this category'' in paragraph (x) 
and the Note to paragraph (x) for each of the following USML 
categories: Category IV, Category V, Category VI, Category VII, 
Category VIII, Category IX, Category X, Category XI, Category XIII, 
Category XV, Category XVI, Category XIX, and Category XX;
0
d. In Category VI:
0
i. Removing the word ``enumerated'' and adding in its place the word 
``described'' in Note 1 to paragraph (f); and
0
ii. Removing the word ``enumerated'' and adding in its place the word 
``described'' in paragraph (g); and
0
e. Removing the word ``enumerated'' and adding in its place the word 
``described'' in paragraph (h) of Category VII.
    The revisions read as follows:


Sec.  121.1  The United States Munitions List.

    (a) U.S. Munitions List. In this part, articles, services, and 
related technical data are designated as defense articles or defense 
services pursuant to sections 38 and 47(7) of the Arms Export Control 
Act and constitute the U.S. Munitions List (USML). Changes in 
designations are published in the Federal Register. Paragraphs (a)(1) 
through (3) of this section describe or explain the elements of a USML 
category:
    (1) Composition of U.S. Munitions List categories. USML categories 
are organized by paragraphs and subparagraphs identified 
alphanumerically. They usually start by enumerating or otherwise 
describing end-items, followed by major systems and equipment; parts, 
components, accessories, and attachments; and technical data and 
defense services directly related to the defense articles of that USML 
category.
    (2) Significant Military Equipment. All items described within a 
USML paragraph or subparagraph that is preceded by an asterisk (*) are 
designated ``Significant Military Equipment'' (see Sec.  120.7 of this 
subchapter). Note that technical data directly related to the 
manufacture or production of a defense article designated as 
Significant Military Equipment (SME) is also designated as SME.
    (3) Missile Technology Control Regime (MTCR) designation. 
Annotation with the parenthetical ``(MT)'' at the end of a USML entry, 
or inclusion in Sec.  121.16, indicates those defense articles that are 
on the MTCR Annex. See Sec.  120.29 of this subchapter.
    (b) Order of review. Articles are controlled on the U.S. Munitions 
List because they are either:
    (1) Enumerated in a category; or
    (2) Described in a ``catch-all'' paragraph that incorporates 
``specially designed'' (see Sec.  120.41 of this subchapter) as a 
control parameter. In order to classify an item on the USML, begin with 
a review of the general characteristics of the item. This should guide 
you to the appropriate category, whereupon you should attempt to match 
the particular characteristics and functions of the article to a 
specific entry within that category. If the entry includes the term 
``specially designed,'' refer to Sec.  120.41 to determine if the 
article qualifies for one or more of the exclusions articulated in 
Sec.  120.41(b). An item described in multiple entries should be 
categorized according to an enumerated entry rather than a specially 
designed catch-all paragraph. In all cases, articles not controlled on 
the USML may be subject to another U.S. government regulatory agency 
(see Sec.  120.5 of this subchapter, and Supplement No. 4 to part 774 
of the Export Administration Regulations for guidance on classifying an 
item subject to the EAR).
* * * * *

PART 122--REGISTRATION OF MANUFACTURERS AND EXPORTERS

0
5. The authority citation for part 122 continues to read as follows:

    Authority:  Sections 2 and 38, Pub. L. 90-629, 90 Stat. 744 (22 
U.S.C. 2752, 2778); 22 U.S.C. 2651a; E.O. 13637, 78 FR 16129.


0
6. Section 122.4 is amended by revising paragraph (c)(4) to read as 
follows:


Sec.  122.4   Notification of changes in information furnished by 
registrants.

* * * * *
    (c) * * *
    (4) Amendments to agreements approved by the Directorate of Defense 
Trade Controls to change the name of a party to those agreements. The 
registrant must provide to the Directorate of Defense Trade Controls a 
signed copy of such an amendment to each agreement signed by the new 
U.S. entity, the former U.S. licensor and the foreign licensee, within 
60 days of this notification, unless an extension of time is approved 
by the Directorate of Defense Trade Controls. Any agreement not so 
amended may be considered invalid.
* * * * *

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

0
7. The authority citation for part 124 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. 2651a; 22 U.S.C. 2776; 
Section 1514, Pub. L. 105-261; Pub. L. 111-266; Section 1261, Pub. 
L. 112-239; E.O. 13637, 78 FR 16129.


0
8. Section 124.2 is amended by revising paragraph (c)(5)(v) to read as 
follows:


Sec.  124.2  Exemptions for training and military service.

* * * * *

[[Page 87430]]

    (c) * * *
    (5) * * *
    (v) Gas turbine engine hot sections covered by Category XIX(f);
* * * * *

0
9. Section 124.12 is amended by revising paragraph (a)(9) to read as 
follows:


Sec.  124.12  Required information in letters of transmittal.

    (a) * * *
    (9) For agreements that may require the export of classified 
information, the Defense Security Service cognizant security offices 
that have responsibility for the facilities of the U.S. parties to the 
agreement shall be identified. The facility security clearance codes of 
the U.S. parties shall also be provided.
* * * * *

PART 126--GENERAL POLICIES AND PROVISIONS

0
10. The authority citation for part 126 continues to read as follows:

    Authority: Secs. 2, 38, 40, 42, and 71, Pub. L. 90-629, 90 Stat. 
744 (22 U.S.C. 2752, 2778, 2780, 2791, and 2797); 22 U.S.C. 2651a; 
22 U.S.C. 287c; E.O. 12918, 59 FR 28205; 3 CFR, 1994 Comp., p. 899; 
Sec. 1225, Pub. L. 108-375; Sec. 7089, Pub. L. 111-117; Pub. L. 111-
266; Sections 7045 and 7046, Pub. L. 112-74; E.O. 13637, 78 FR 
16129.

0
11. Section 126.9 is amended by revising paragraph (a) to read as 
follows:


Sec.  126.9  Advisory opinions and related authorizations.

    (a) Preliminary authorization determinations. A person may request 
information from the Directorate of Defense Trade Controls as to 
whether it would likely grant a license or other approval for a 
particular defense article or defense service to a particular country. 
Such information from the Directorate of Defense Trade Controls is 
issued on a case-by-case basis and applies only to the particular 
matters presented to the Directorate of Defense Trade Controls. These 
opinions are not binding on the Department of State and may not be used 
in future matters before the Department. A request for an advisory 
opinion must be made in writing and must outline in detail the 
equipment, its usage, the security classification (if any) of the 
articles or related technical data, and the country or countries 
involved.
* * * * *

0
12. Section 126.10 is amended by revising paragraph (b) to read as 
follows:


Sec.  126.10  Disclosure of information.

* * * * *
    (b) Determinations required by law. Section 38(e) of the Arms 
Export Control Act (22 U.S.C. 2778(e)) provides, by reference to 
section 12(c) of the Export Administration Act (50 U.S.C. 2411), that 
information obtained for the purpose of consideration of, or 
concerning, license applications shall be withheld from public 
disclosure unless the release of such information is determined by the 
Secretary to be in the national interest. Section 38(e) of the Arms 
Control Export Act further provides that, the names of countries and 
types and quantities of defense articles for which licenses are issued 
under this section shall not be withheld from public disclosure unless 
certain determinations are made that the release of such information 
would be contrary to the national interest. Such determinations 
required by section 38(e) shall be made by the Assistant Secretary of 
State for Political-Military Affairs.
* * * * *

PART 127--VIOLATIONS AND PENALTIES

0
13. The authority citation for part 127 continues to read as follows:

    Authority: Sections 2, 38, and 42, Pub. L. 90-629, 90 Stat. 744 
(22 U.S.C. 2752, 2778, 2791); 22 U.S.C. 401; 22 U.S.C. 2651a; 22 
U.S.C. 2779a; 22 U.S.C. 2780; E.O. 13637, 78 FR 16129; Pub. L. 114-
74, 129 Stat. 584.


0
14. Section 127.7 is amended by revising paragraph (b) to read as 
follows:


Sec.  127.7  Debarment.

* * * * *
    (b) Statutory debarment. It is the policy of the Department of 
State not to consider applications for licenses or requests for 
approvals involving any person who has been convicted of violating the 
Arms Export Control Act or convicted of conspiracy to violate that Act 
for a three year period following conviction and to prohibit that 
person from participating directly or indirectly in any activities that 
are subject to this subchapter. Such individuals shall be notified in 
writing that they are statutorily debarred pursuant to this policy. A 
list of persons who have been convicted of such offenses and debarred 
for this reason shall be published periodically in the Federal 
Register. Statutory debarment in such cases is based solely upon the 
outcome of a criminal proceeding, conducted by a court of the United 
States, which established guilt beyond a reasonable doubt in accordance 
with due process. Reinstatement is not automatic, and in all cases the 
debarred person must submit a request for reinstatement to the 
Department of State and be approved for reinstatement before engaging 
in any activities subject to this subchapter. The procedures of part 
128 of this subchapter are not applicable in such cases.
* * * * *

0
15. Section 127.11(c) is revised to read as follows:


Sec.  127.11   Past violations.

* * * * *
    (c) Debarred persons. Persons debarred pursuant to Sec.  127.7(b) 
(statutory debarment) may not utilize the procedures provided by 
paragraph (b) of this section while the statutory debarment is in 
force. Such persons may utilize only the procedures provided by Sec.  
127.7(d).

    Dated: November 18, 2016.
Tom Countryman,
Acting Under Secretary, Arms Control and International Security, 
Department of State.
[FR Doc. 2016-28406 Filed 12-2-16; 8:45 am]
 BILLING CODE 4710-25-P