[Federal Register Volume 83, Number 101 (Thursday, May 24, 2018)]
[Proposed Rules]
[Pages 24198-24205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10366]



[[Page 24197]]

Vol. 83

Thursday,

No. 101

May 24, 2018

Part III





Department of State





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22 CFR Parts 121, 123, 124, et al.





International Traffic in Arms Regulations: U.S. Munitions List 
Categories I, II, and III; Proposed Rule

  Federal Register / Vol. 83 , No. 101 / Thursday, May 24, 2018 / 
Proposed Rules  

[[Page 24198]]


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DEPARTMENT OF STATE

22 CFR Parts 121, 123, 124, 126, and 129

[Public Notice 10094]
RIN 1400-AE30


International Traffic in Arms Regulations: U.S. Munitions List 
Categories I, II, and III

AGENCY: Department of State.

ACTION: Proposed rule.

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SUMMARY: The Department of State (the Department) proposes to amend the 
International Traffic in Arms Regulations (ITAR) to revise Categories I 
(firearms, close assault weapons and combat shotguns), II (guns and 
armament) and III (ammunition and ordnance) of the U.S. Munitions List 
(USML) to describe more precisely the articles warranting export and 
temporary import control on the USML. Items removed from the USML would 
become subject to the Export Administration Regulations (EAR).

DATES: The Department will accept comments on this proposed rule until 
July 9, 2018.

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--Categories I, II, and III.''
     Internet: At www.regulations.gov, search for this notice 
using Docket DOS-2017-0046.
    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 website 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.

FOR FURTHER INFORMATION CONTACT: Robert Monjay, Office of Defense Trade 
Controls Policy, Department of State, telephone (202) 663-2817; email 
[email protected]. ATTN: Regulatory Change, USML Categories 
I, II, and III.

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 through 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 through 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. The Department of Commerce is 
publishing a companion rule in this edition of the Federal Register.
    Pursuant to section 38(a)(1) of the Arms Export Control Act (AECA), 
all defense articles controlled for export or import are part of the 
United States Munitions List under the AECA. All references to the USML 
in this rule, however, are to the list of AECA defense articles that 
are controlled for purposes of export or temporary import pursuant to 
the ITAR, and not to the list of AECA defense articles on the United 
States Munitions Import List (USMIL) that are controlled by the Bureau 
of Alcohol, Tobacco, Firearms and Explosives (ATF) for purposes of 
permanent import under its regulations at 27 CFR part 447. References 
to the USMIL are to the list of AECA defense articles controlled by ATF 
for purposes of permanent import.
    Section 38(b)(1)(A)(ii) of the AECA, requires, with limited 
exceptions, registration of persons who engage in the business of 
brokering activities with respect to the manufacture, export, import, 
or transfer of any defense article or defense service designated by the 
President as such under section 38(a)(1) and licensing for such 
activities. Through Executive Order 13637, the President delegated the 
responsibility for registration and licensing of brokering activities 
to the Department of State with respect to defense articles or defense 
services controlled either for purposes of export by the Department of 
State or for purposes of permanent import by ATF. Section 129.1(b) of 
the ITAR states this requirement. As such, all defense articles 
described in the USMIL or the USML are subject to the brokering 
controls administered by the U.S. Department of State in part 129 of 
the ITAR. The transfer of defense articles from the ITAR's USML to the 
EAR's CCL for purposes of export controls does not affect the list of 
defense articles controlled on the USMIL under the AECA for purposes of 
permanent import or brokering controls for any brokering activity, 
including facilitation in their manufacture, export, permanent import, 
transfer, reexport, or retransfer. This rule proposes adding a new 
paragraph (b)(2)(vii) to Sec.  129.2 to update the enumerated list of 
actions that are not considered brokering. This change is a conforming 
change and is needed to address the movement of items from the USML to 
the CCL that will be subject to the brokering controls, to ensure that 
the U.S. government does not impose a double licensing requirement on 
the export, reexport or retransfer of such items.
    The Department of State is engaged in an effort to revise the U.S. 
Munitions List so that its scope is limited to those defense articles 
that provide the United States with a critical military or intelligence 
advantage or, in the case of weapons, are inherently for military end 
use. The articles now controlled by USML Categories I, II, and III that 
would be removed from the USML under this proposed rule do not meet 
this standard, including many items which are widely available in 
retail outlets in the United States and abroad.

Revision of Category I

    This proposed rule revises USML Category I, covering firearms and 
related articles, to control only defense articles that are inherently 
military or that are not otherwise widely available for commercial 
sale. In particular, the revised category will not include non-
automatic and semi-automatic firearms to caliber .50 (12.7mm) 
inclusive, currently controlled under paragraph (a), and all of the 
parts, components, accessories, and attachments specially designed for 
those articles. Such items will be subject to the new controls in 
Export Control Classification Numbers 0A501, 0A502, 0A503, 0A504, 
0A505, 0B501, 0B505, 0D501, 0D505, 0E501, and 0E502. Such controls in 
Category 0 of the CCL will be published in a separate rule by the 
Department of Commerce.
    Paragraph (a) of USML Category I will cover firearms that fire 
caseless ammunition. Paragraph (b) will continue to cover fully 
automatic firearms to caliber .50 (12.7mm) inclusive. Paragraph (c) 
will cover firearms specially designed to integrate fire control, 
automatic tracking, or automatic firing systems, and all

[[Page 24199]]

weapons previously described in paragraph (c) that remain on the USML 
will be covered by paragraph (a), (b) or (c) of this category or by 
Category II. Paragraph (d) will cover fully automatic shotguns. 
Paragraph (e) will continue to cover silencers, mufflers, sound 
suppressors, and specially designed parts and components; flash 
suppressors will be subject to the EAR. Paragraph (f) will be reserved, 
as riflescopes and other firearms sighting devices may be controlled in 
USML Category XII if they have night vison or infrared capabilities, 
and other riflescopes will be subject to the EAR. Paragraph (g) will 
continue to cover barrels, receivers (frames), bolts, bolt carriers, 
slides, or sears, specially designed for the firearms in Category I. 
Paragraph (h) will cover high capacity (greater than 50 rounds) 
magazines, and parts and components to convert a semi-automatic firearm 
into a fully automatic firearm, and accessories or attachments 
specially designed to automatically stabilize aim (other than gun 
rests) or for automatic targeting. Paragraph (i) will continue to cover 
the technical data and defense services.
    A new (x) paragraph will be added to USML Category I, allowing ITAR 
licensing for commodities, software, and technology subject to the EAR, 
provided those commodities, software, and technology are to be used in 
or with defense articles controlled in USML Category I and are 
described in the purchase documentation submitted with the license 
application.
    The note to Category I will be retained, with conforming revisions. 
A new second note will be added to clarify the terms ``firearm,'' 
``fully automatic,'' and ``caseless ammunition''.

Revision of Category II

    This proposed rule revises USML Category II, covering guns and 
armament, establishing a bright line between the USML and the CCL for 
the control of these articles.
    Most significantly, paragraph (j), controlling parts and 
components, will be revised to enumerate the articles controlled 
therein.
    Paragraph (a) will be revised to enumerate the articles controlled 
in that paragraph. The articles currently covered in paragraph (c) 
(apparatus and devices for launching or delivering ordnance) still 
warranting control on the ITAR will be included in new paragraph 
(a)(4). A new paragraph (a)(5) will be added for developmental guns and 
armaments funded by the Department of Defense and the specially 
designed parts and components of those developmental guns and 
armaments. The articles currently controlled in paragraph (f), engines 
for self-propelled guns and howitzers in paragraph (a), will be on the 
CCL in ECCN 0A606. Tooling and equipment for the production of articles 
controlled in USML Category II, currently in paragraph (g), will be on 
the CCL in ECCN 0B602. Test and evaluation equipment, currently in 
paragraph (h), will be on the CCL in ECCN 0B602. Certain autoloading 
systems controlled in paragraph (i) will be moved to paragraphs (j)(9) 
and (11).
    A new (x) paragraph will be added to USML Category II, allowing 
ITAR licensing for commodities, software, and technology subject to the 
EAR, provided those commodities, software, and technology are to be 
used in or with defense articles controlled in USML Category II and are 
described in the purchase documentation submitted with the application.

Revision of Category III

    This proposed rule revises USML Category III, covering ammunition 
and ordnance, to establish a bright line between the USML and the CCL 
for the control of these articles and to be consistent with the changes 
to Category I.
    Most significantly, paragraphs (a) and (d) will be revised to 
remove broad catch-alls and enumerate the articles to be controlled 
therein. For example, paragraph (a), which controls ammunition for 
articles in USML Categories I and II, will be revised to specifically 
list the ammunition that it controls. A new paragraph (a)(10) will be 
added for developmental ammunition funded by the Department of Defense 
and the parts and components specially designed for such developmental 
ammunition. Ammunition not enumerated in paragraph (a) will be subject 
to the EAR. Likewise, revised paragraph (d), which controls parts and 
components, will enumerate the articles it controls; those articles not 
identified but currently captured via the catch-all will be subject to 
the EAR.
    Additionally, paragraph (c), which controls production equipment 
and tooling, will be removed and placed into reserve. The articles 
currently covered by this paragraph will be subject to the EAR.
    A new (x) paragraph will be added to USML Category III, allowing 
ITAR licensing for commodities, software, and technology subject to the 
EAR, provided those commodities, software, and technology are to be 
used in or with defense articles controlled in USML Category III and 
are described in the purchase documentation submitted with the 
application.

Conforming ITAR Changes

    Additionally, conforming changes will be made to several sections 
of the ITAR that refer to the current controls in USML Category I(a). 
These sections will be amended because they all refer to firearms that 
will be controlled on the CCL. Section 123.16(b)(2) will be revised to 
remove reference to the firearms exemptions at Sec.  123.17(a) through 
(e), which describe the firearms exemptions, because the paragraphs 
will be removed as a consequence of the control of non-automatic and 
semi-automatic firearms on the CCL. For the same reason, Sec.  
123.16(b)(6) will be revised to describe only the remaining exemption 
at Sec.  123.17 (personal protective gear), and Sec.  123.16(b)(7) will 
be reserved. Section 123.17 will be amended to remove paragraphs (a) 
through (e), consistent with changes made to the USML. Section 123.18, 
as it describes exemptions for firearms that will be controlled for 
export by the Department of Commerce, will be removed and placed into 
reserve. Revision of Sec.  124.14(c)(9) will remove the example of 
``sporting firearms for commercial resale.'' The policy guidance on 
Zimbabwe in Sec.  126.1(s) will be revised to remove reference to the 
firearms exemption in Sec.  123.17.
    Section 129.1(b) of the ITAR will be revised to clarify that the 
regulations on brokering activities in part 129 apply to those defense 
articles and defense services designated as such on the USML and those 
items described on the USMIL (27 CFR 447.21). Section 129.4 of the ITAR 
will also be revised to clarify brokering requirements for items on the 
USMIL that are subject to the brokering requirements of the AECA. The 
items that will move to the CCL for export control purposes, yet are on 
the USMIL for permanent import purposes, remain subject to the 
brokering requirements of part 129 with respect to all brokering 
activities, including facilitation in their manufacture, export, 
permanent import, transfer, reexport, or retransfer. The revisions also 
clarify that foreign defense articles that are on the USMIL require 
brokering authorizations.

Request for Comments

    The Department welcomes comments from the public and specifically 
requests input on the following matters:
    (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 its Munitions List Categories 1, 2 and 3 (WA-
ML1, WA-ML2 and WA-ML3). Readers are asked to identify any potential 
gap in coverage

[[Page 24200]]

brought about by the changes for USML Categories I, II and III 
contained in this notice and the new Category 0, 0x5zz ECCNs published 
separately by the Department of Commerce when reviewed together.
    (2) The Department seeks to establish clear distinctions between 
the USML and the CCL for the control of firearms, large guns, 
armaments, ordnance and ammunition. The public should provide any 
specific examples of firearms (or parts, components, accessories 
thereof), large guns, armaments, ordnance or ammunition whose 
jurisdiction is unclear based on this revision.
    (3) The Department has, in the past, adopted a delayed effective 
date of 180 days for rules revising entire categories of the USML and 
moving items to the CCL. The Department seeks to allow industry 
sufficient time to implement this rule, including time to make changes 
to IT systems, technology controls plans, and other business processes. 
The public should provide input on the time necessary to implement any 
final rule for these categories, as well as a description of any 
increased burden that, in the view of the commenter, would be imposed 
on businesses or individuals should this rule be adopted.

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 proposed rule is exempt from the 
rulemaking provisions of the APA and without prejudice to its 
determination that controlling the import and export of defense 
services is a foreign affairs function, the Department is publishing 
this proposed rule with a 45-day provision for public comment.

Regulatory Flexibility Act

    Since the Department is of the opinion that this proposed 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 rulemaking 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 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, it is 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 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). The 
Department believes that the benefits of this rulemaking largely 
outweigh any costs, in that many items currently controlled on the 
more-restrictive USML are being moved to the CCL. We request comment 
from the public on any impact that would be imposed on the public if 
this rule were adopted.
    Executive Order 13563 emphasizes the importance of considering both 
benefits and costs, both qualitative and quantitative, 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).
    The Department believes the effect of this proposed rule would 
decrease the number of license applications submitted to the Department 
under OMB Control No. 1405-0003 by approximately 10,000 annually, for 
which the average burden estimates are one hour per form, which results 
in a burden reduction of 10,000 hours per year.
    The Department of Commerce estimates that 4,000 of the 10,000 
licenses that were required by the Department will be eligible for 
license exceptions or otherwise not require a separate license under 
the EAR. The Department of Commerce estimates that 6,000 transactions 
will require an individual validated license. The Department of 
Commerce will be collecting the information necessary to process 
license applications under OMB Control No. 0694-0088. The Department of 
Commerce estimates that OMB Control No. 0694-0088 takes approximately 
43.8 minutes for a manual or electronic submission. The Department of 
Commerce estimates that the 6,000 licenses constitute a burden of 4,380 
hours for this collection. The Department estimates a reduction in 
burden of 10,000 hours due to the proposed transition of these items to 
the Department of Commerce. The Department of Commerce estimates that 
the burden of submitting license applications for these items to the 
Department of Commerce will be 4,380 burden hours. Therefore, the net 
burden would be reduced by 5,620 hours. The Department estimates that 
the burden hour cost for completing a license application is $44.94 per 
hour. Therefore, the estimated net reduction of 5,620 burden hours per 
year is estimated to result in annual burden hour cost reduction of 
$252,562.80. There may also be other State Department forms that will 
no longer need to be submitted and that may further reduce the burden 
hours for applicants. The Department is seeking comments on the 
reduction from the other forms, as referenced below.
    In addition to the reduction in burden hours, there will be direct 
cost savings to the State Department that would result from the 10,000 
license applications no longer being required under the ITAR once these 
items are moved to the EAR. Pursuant to the AECA, ITAR, and associated 
delegations of authority, every person who engages in the business of 
brokering activities, manufacturing, exporting, or temporarily 
importing any defense articles or defense services must register with 
the Department of State and pay a registration fee. The Department of 
State adopted the current fee schedule to align the registration fees 
with the cost of licensing, compliance and other

[[Page 24201]]

related activities. The Department of Commerce would incur additional 
costs to administer these controls and process license applications. 
However, the Department of Commerce does not charge a registration fee 
to exporters under the EAR and we are unable to estimate the increase 
in costs to the Department of Commerce to process the new license 
applications. Therefore, we are unable to provide an estimate of the 
net change in resource costs to the government from moving these items 
from the ITAR to the EAR. It is the case, however, that the movement of 
these items from the ITAR would result in a direct transfer of 
$2,500,000 per year from the government to the exporting public, less 
the increased cost to taxpayers, because they would no longer pay fees 
to the State Department and there is no fee charged by the Department 
of Commerce to apply for a license.
    The Department welcomes comments from the public on the net 
reduction in burden described within this section, particularly if 
there are additional burden reductions that are not reflected here 
(please provide number of hours or cost) or if the estimates noted here 
appear otherwise inaccurate.
Estimated Cost Savings
    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 Executive Order 13771 (82 FR 9339, 
February 3, 2017). Although the Department is of the opinion that this 
proposed rule is exempt from E.O. 13771 and without prejudice to its 
determination that controlling the import and export of defense 
services is a foreign affairs function, this proposed rule is expected 
to be an E.O. 13771 deregulatory action. The Department has conducted 
this analysis in close consultation with the Department of Commerce. 
The total annual recurring dollar cost savings is estimated to be 
$1,376,281 for purposes of E.O. 13771 for the Department of State.

Executive Order 12988

    The Department of State has reviewed this rulemaking 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 
rulemaking.

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.
    The Department of State believes there would be a reduction in 
burden for OMB Control No. 1405-0003, Application/License for Permanent 
Export of Unclassified Defense Articles and Related Unclassified 
Technical Data. This form is an application that, when completed and 
approved by Department of State, constitutes the official record and 
authorization for the commercial export of unclassified U.S. Munitions 
List articles and technical data, pursuant to the AECA and ITAR. For an 
analysis of the reduction in burden for OMB Control No. 1405-0003, see 
the above Section for E.O. 12866. The Department of State requests 
comments on the collection of information or potential reduction in 
burden be sent also to the Office of Information and Regulatory Affairs 
of OMB, Attention: Desk Officer for Department of State, at 
[email protected] or Attention: Desk Officer for Department 
of State, Office of Information and Regulatory Affairs of OMB, 725 17th 
St. NW, Washington, DC 20503.

List of Subjects in 22 CFR Parts 121, 123, 124, 126, and 129

    Arms and munitions, Exports.

    Accordingly, for the reasons set forth above, title 22, chapter I, 
subchapter M, parts 121, 123, 124, 126, and 129 are proposed to be 
amended as follows:

PART 121--THE UNITED STATES MUNITIONS LIST

0
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); 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
2. Section 121.1 is amended by revising U.S. Munitions List Categories 
I, II, and III to read as follows:


Sec.  121.1  The United States Munitions List.

* * * * *

Category I--Firearms and Related Articles

    *(a) Firearms using caseless ammunition.
    *(b) Fully automatic firearms to .50 caliber (12.7 mm) inclusive.
    *(c) Firearms specially designed to integrate fire control, 
automatic tracking, or automatic firing (e.g., Precision Guided 
Firearms (PGFs)), and specially designed parts and components therefor.

    Note to paragraph (c): Integration does not include only 
attaching to the firearm or rail.

    *(d) Fully automatic shotguns regardless of gauge.
    *(e) Silencers, mufflers, and sound suppressors, and specially 
designed parts and components therefor.
    (f) [Reserved]
    (g) Barrels, receivers (frames), bolts, bolt carriers, slides, or 
sears specially designed for the articles in paragraphs (a), (b), and 
(d) of this category.
    (h) Parts, components, accessories, and attachments, as follows:
    (1) Drum and other magazines for firearms to .50 caliber (12.7 mm) 
inclusive with a capacity greater than 50 rounds, regardless of 
jurisdiction of the firearm, and specially designed parts and 
components therefor;
    (2) Parts and components specially designed for conversion of a 
semi-automatic firearm to a fully automatic firearm.
    (3) Accessories or attachments specially designed to automatically 
stabilize aim (other than gun rests) or for automatic targeting, and 
specially designed parts and components therefor.
    (i) Technical data (see Sec.  120.10 of this subchapter) and 
defense services (see Sec.  120.9 of this subchapter) directly related 
to the defense articles described in paragraphs (a), (b), (d), (e), 
(g), and (h) of this category and classified technical data directly 
related to items controlled in ECCNs 0A501, 0B501, 0D501, and 0E501 and 
defense services using the classified technical data. (See Sec.  125.4 
of this subchapter for exemptions.)
    (j)-(w) [Reserved]
    (x) Commodities, software, and technology subject to the EAR (see 
Sec.  120.42 of this subchapter) used in or with defense articles.

    Note to paragraph (x): Use of this paragraph is limited to 
license applications for defense articles where the purchase 
documentation includes commodities, software, or technology subject 
to the EAR (see Sec.  123.1(b) of this subchapter).


    Note 1 to Category I: Paragraphs (a), (b), (d), (e), (g), (h), 
and (i) of this category exclude: Any non-automatic or semi-

[[Page 24202]]

automatic firearms to .50 caliber (12.7 mm) inclusive; non-automatic 
shotguns; BB, pellet, and muzzle loading (e.g., black powder) 
firearms; and parts, components, accessories, and attachments of 
firearms and shotguns in paragraphs (a), (b), (d), and (g) of this 
category that are common to non-automatic firearms and shotguns. The 
Department of Commerce regulates the export of such items. See the 
Export Administration Regulations (15 CFR parts 730 through 774).


    Note 2 to Category I: The following interpretations explain and 
amplify the terms used in this category:
    (1) A firearm is a weapon not over .50 caliber (12.7 mm) which 
is designed to expel a projectile by the deflagration of propellant.
    (2) A fully automatic firearm or shotgun is any firearm or 
shotgun which shoots, is designed to shoot, or can readily be 
restored to shoot, automatically more than one shot, without manual 
reloading, by a single function of the trigger.
    (3) Caseless ammunition is firearm ammunition without a 
cartridge case that holds the primer, propellant, and projectile 
together as a unit.

Category II--Guns and Armament

    (a) Guns and armament greater than .50 caliber (12.7 mm), as 
follows:
    *(1) Guns, howitzers, artillery, and cannons;
    *(2) Mortars;
    *(3) Recoilless rifles;
    *(4) Grenade launchers; or
    (5) Developmental guns and armament greater than .50 caliber (12.7 
mm) funded by the Department of Defense and specially designed parts 
and components therefor.

    Note 1 to paragraph (a)(5): This paragraph does not control guns 
and armament greater than .50 caliber (12.7 mm) (a) in production, 
(b) determined to be subject to the EAR via a commodity jurisdiction 
determination (see Sec.  120.4 of this subchapter), or (c) 
identified in the relevant Department of Defense contract or other 
funding authorization as being developed for both civil and military 
applications.


    Note 2 to paragraph (a)(5): Note 1 does not apply to defense 
articles enumerated on the U.S. Munitions List, whether in 
production or development.


    Note 3 to paragraph (a)(5): This provision is applicable to 
those contracts or other funding authorizations that are dated (one 
year after publication of the final rule), or later.


    Note 1 to paragraph (a): This paragraph does not include: Non-
automatic and non-semi-automatic rifles, carbines, and pistols 
between .50 (12.7 mm) and .72 caliber (18.288 mm) that are 
controlled on the CCL under ECCN 0A501; shotguns controlled on the 
CCL under ECCN 0A502; or black powder guns and armaments 
manufactured between 1890 and 1919 controlled on the CCL under ECCN 
0A602.


    Note 2 to paragraph (a): Guns and armament when integrated into 
their carrier (e.g., ships, ground vehicles, or aircraft) are 
controlled in the category associated with the carrier. Self-
propelled guns and armament are controlled in USML Category VII. 
Towed guns and armament and stand-alone guns and armament are 
controlled under this category.

    (b) Flame throwers with a minimum effective range of 20 meters.
    (c) [Reserved]
    *(d) Kinetic energy weapon systems specially designed for 
destruction or rendering mission-abort of a target.

    Note to paragraph (d): Kinetic energy weapons systems include 
but are not limited to launch systems and subsystems capable of 
accelerating masses larger than 0.1g to velocities in excess of 1.6 
km/s, in single or rapid fire modes, using methods such as: 
Electromagnetic, electrothermal, plasma, light gas, or chemical. 
This does not include launch systems and subsystems used for 
research and testing facilities subject to the EAR, which are 
controlled on the CCL under ECCN 2B232.

    (e) Signature reduction devices specially designed for the guns and 
armament controlled in paragraphs (a), (b), and (d) of this category 
(e.g., muzzle flash suppression devices).
    (f)-(i) [Reserved]
    (j) Parts, components, accessories, and attachments, as follows:
    (1) Gun barrels, rails, tubes, and receivers specially designed for 
the weapons controlled in paragraphs (a) and (d) of this category;
    (2) Sights specially designed to orient indirect fire weapons;
    (3) Breech blocks for the weapons controlled in paragraphs (a) and 
(d) of this category;
    (4) Firing mechanisms for the weapons controlled in paragraphs (a) 
and (d) of this category and specially designed parts and components 
therefor;
    (5) Systems for firing superposed or stacked ammunition and 
specially designed parts and components therefor;
    (6) Servo-electronic and hydraulic elevation adjustment mechanisms;
    (7) Muzzle brakes;
    (8) Bore evacuators;
    (9) Independently powered ammunition handling systems and platform 
interface components as follows:
    (i) Mounts;
    (ii) Carriages;
    (iii) Gun pallets;
    (iv) Hydro-pneumatic equilibration cylinders; or
    (v) Hydro-pneumatic systems capable of scavenging recoil energy to 
power howitzer functions;

    Note to paragraph (j)(9): For weapons mounts specially designed 
for ground vehicles, see Category VII.

    (10) Recoil systems to mitigate the shock associated with the 
firing process of guns integrated into air platforms and specially 
designed parts and components therefor;
    (11) Independent ammunition handling systems for the guns and 
armament controlled in paragraphs (a), (b), and (d) of this category;
    (12) Ammunition containers/drums, ammunition chutes, ammunition 
conveyor elements, and ammunition container/drum entrance and exit 
units, specially designed for the guns and armament controlled in 
paragraphs (a), (b), and (d) of this category;
    (13) Aircraft/gun interface units to support gun systems with a 
designed rate of fire greater than 100 rounds per minute and specially 
designed parts and components therefor;
    (14) Prime power generation, energy storage, thermal management, 
conditioning, switching, and fuel-handling equipment, and the 
electrical interfaces between the gun power supply and other turret 
electric drive components specially designed for kinetic weapons 
controlled in paragraph (d) of this category;
    (15) Kinetic energy weapon target acquisition, tracking fire 
control, and damage assessment systems and specially designed parts and 
components therefor; or
    *(16) Any part, component, accessory, attachment, equipment, or 
system that:
    (i) Is classified;
    (ii) Contains classified software; or
    (iii) 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 or intergovernmental organization.
    (k) Technical data (see Sec.  120.10 of this subchapter) and 
defense services (see Sec.  120.9 of this subchapter) directly related 
to the defense articles described in paragraphs (a), (b), (d), (e), and 
(j) of this category and classified technical data directly related to 
items controlled in ECCNs 0A602, 0B602, 0D602, and 0E602 and defense 
services using the classified technical data. (See Sec.  125.4 of this 
subchapter for exemptions.)
    (l)-(w) [Reserved]
    (x) Commodities, software, and technology subject to the EAR (see 
Sec.  120.42 of this subchapter) used in or with defense articles.


[[Page 24203]]


    Note to paragraph (x): Use of this paragraph is limited to 
license applications for defense articles where the purchase 
documentation includes commodities, software, or technology subject 
to the EAR (see Sec.  123.1(b) of this subchapter).

Category III--Ammunition and Ordnance

    *(a) Ammunition, as follows:
    (1) Ammunition that incorporates a projectile controlled in 
paragraph (d)(1) or (3) of this category;
    (2) Ammunition preassembled into links or belts;
    (3) Shotgun ammunition that incorporates a projectile controlled in 
paragraph (d)(2) of this category;
    (4) Caseless ammunition manufactured with smokeless powder;

    Note to paragraph (a)(4): Caseless ammunition is ammunition 
without a cartridge case that holds the primer, propellant, and 
projectile together as a unit.

    (5) Ammunition, except shotgun ammunition, based on non-metallic 
cases, or non-metallic cases that have only a metallic base, which 
result in a total cartridge mass 80% or less than the mass of a brass- 
or steel-cased cartridge that provides comparable ballistic 
performance;
    (6) Ammunition employing pyrotechnic material in the projectile 
base and any ammunition employing a projectile that incorporates tracer 
materials of any type having peak radiance above 710 nm and designed to 
be observed primarily with night vision optical systems;
    (7) Ammunition for fully automatic firearms or guns that fire 
superposed or stacked projectiles;
    (8) Electromagnetic armament projectiles or billets for weapons 
with a design muzzle energy exceeding 5 MJ;
    (9) Ammunition, not specified above, for the guns and armaments 
controlled in Category II; or
    (10) Developmental ammunition funded by the Department of Defense 
and specially designed parts and components therefor.

    Note 1 to paragraph (a)(10): This paragraph does not control 
ammunition (a) in production, (b) determined to be subject to the 
EAR via a commodity jurisdiction determination (see Sec.  120.4 of 
this subchapter), or (c) identified in the relevant Department of 
Defense contract or other funding authorization as being developed 
for both civil and military applications.


    Note 2 to paragraph (a)(10): Note 1 does not apply to defense 
articles enumerated on the U.S. Munitions List, whether in 
production or development.


    Note 3 to paragraph (a)(10): This provision is applicable to 
those contracts or other funding authorizations that are dated (one 
year after publication of the final rule), or later.

    (b) Ammunition/ordnance handling equipment specially designed for 
the articles controlled in this category, as follows:
    (1) Belting, linking, and de-linking equipment; or
    (2) Fuze setting devices.
    (c) [Reserved]
    (d) Parts and components for the articles in this category, as 
follows:
    (1) Projectiles that use pyrotechnic tracer materials that 
incorporate any material having peak radiance above 710 nm or are 
incendiary, explosive, steel tipped, or contain a core or solid 
projectile produced from one or a combination of the following: 
tungsten, steel, or beryllium copper alloys;
    (2) Shotgun projectiles that are flechettes, incendiary, tracer, or 
explosive;

    Note to paragraph (d)(2): This paragraph does not include 
explosive projectiles specially designed to produce noise for 
scaring birds or other pests (e.g., bird bombs, whistlers, 
crackers).

    (3) Projectiles of any caliber produced from depleted uranium;
    (4) Projectiles not specified above, guided or unguided, for the 
items controlled in USML Category II, and specially designed parts and 
components therefor (e.g., fuzes, rotating bands, cases, liners, fins, 
boosters);
    (5) Canisters or sub-munitions (e.g., bomblets or minelets), and 
specially designed parts and components therefor, for the guns or 
armament controlled in USML Category II;
    (6) Hardened cores, regardless of caliber, produced from one or a 
combination of the following: tungsten, steel, or beryllium copper 
alloy;
    (7) Cartridge cases, powder bags, or combustible cases for the 
items controlled in USML Category II;
    (8) Non-metallic cases, including cases that have only a metallic 
base, for the ammunition controlled in paragraph (a)(5) of this 
category;
    (9) Cartridge links and belts for fully automatic firearms and guns 
controlled in USML Categories I or II;
    (10) Primers other than Boxer, Berdan, or shotshell types;

    Note to paragraph (d)(10): This paragraph does not control caps 
or primers of any type in use prior to 1890.

    (11) Safing, arming, and fuzing components (to include target 
detection and proximity sensing devices) for the ammunition in this 
category and specially designed parts therefor;
    (12) Guidance and control components for the ammunition in this 
category and specially designed parts therefor;
    (13) Terminal seeker assemblies for the ammunition in this category 
and specially designed parts and components therefor;
    (14) Illuminating flares or target practice projectiles for the 
ammunition controlled in paragraph (a)(9) of this category; or
    *(15) Any part, component, accessory, attachment, equipment, or 
system that:
    (i) Is classified;
    (ii) Contains classified software; or
    (iii) 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 or intergovernmental organization.
    (e) Technical data (see Sec.  120.10 of this subchapter) and 
defense services (see Sec.  120.9 of this subchapter) directly related 
to the defense articles enumerated in paragraphs (a), (b), and (d) of 
this category and classified technical data directly related to items 
controlled in ECCNs 0A505, 0B505, 0D505, and 0E505 and defense services 
using the classified technical data. (See Sec.  125.4 of this 
subchapter for exemptions.).
    (f)-(w) [Reserved]
    (x) Commodities, software, and technology subject to the EAR (see 
Sec.  120.42 of this subchapter) used in or with defense articles.

    Note to paragraph (x): Use of this paragraph is limited to 
license applications for defense articles where the purchase 
documentation includes commodities, software, or technology subject 
to the EAR (see Sec.  123.1(b) of this subchapter).


    Notes to Category III: 1. This category does not control 
ammunition crimped without a projectile (blank star) and dummy 
ammunition with a pierced powder chamber.
    2. This category does not control cartridge and shell casings 
that, prior to export, have been rendered useless beyond the 
possibility of restoration for use as a cartridge or shell casing by 
means of heating, flame treatment, mangling, crushing, cutting, or 
popping.
    3. Grenades containing non-lethal or less lethal projectiles are 
under the jurisdiction of the Department of Commerce.

* * * * *

PART 123--LICENSES FOR THE EXPORT OF DEFENSE ARTICLES

0
3. 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,

[[Page 24204]]

2797); 22 U.S.C. 2753; 22 U.S.C. 2651a; 22 U.S.C. 2776; Pub. L. 105-
261, 112 Stat. 1920; Sec 1205(a), Pub. L. 107-228; Sec. 520, Pub. L. 
112-55; Section 1261, Pub. L. 112-239; E.O. 13637, 78 FR 16129.

0
4. Section 123.15 is amended by revising paragraph (a)(3) to read as 
follows:


Sec.  123.15  Congressional certification pursuant to Section 36(c) of 
the Arms Export Control Act.

    (a) * * *
    (3) A license for export of defense articles controlled under 
Category I paragraphs (a) through (g) of the United States Munitions 
List, Sec.  121.1 of this subchapter, in an amount of $1,000,000 or 
more.
* * * * *
0
5. Section 123.16 is amended by revising paragraphs (b)(2) introductory 
text and (b)(6) and removing and reserving paragraph (b)(7) to read as 
follows:


Sec.  123.16  Exemptions of general applicability.

* * * * *
    (b) * * *
    (2) Port Directors of U.S. Customs and Border Protection shall 
permit the export of parts or components without a license when the 
total value does not exceed $500 in a single transaction and:
* * * * *
    (6) For exemptions for personal protective gear, refer to Sec.  
123.17.
* * * * *
0
6. Section 123.17 is amended by revising the section heading, removing 
and reserving paragraphs (a) through (e), and revising paragraph (j) to 
read as follows:


Sec.  123.17  Exemption for personal protective gear.

* * * * *
    (j) If the articles temporarily exported pursuant to paragraphs (f) 
through (i) of this section are not returned to the United States, a 
detailed report must be submitted to the Office of Defense Trade 
Controls Compliance in accordance with the requirements of Sec.  
127.12(c)(2) of this subchapter.
* * * * *


Sec.  123.18  [Removed and Reserved]

0
7. Section 123.18 is removed and reserved.

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

0
8. 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
9. Section 124.14 is amended by revising paragraph (c)(9) to read as 
follows:


Sec.  124.14  Exports to warehouses or distribution points outside the 
United States.

* * * * *
    (c) * * *
    (9) Unless the articles covered by the agreement are in fact 
intended to be distributed to private persons or entities (e.g., 
cryptographic devices and software for financial and business 
applications), the following clause must be included in all warehousing 
and distribution agreements: ``Sales or other transfers of the licensed 
article shall be limited to governments of the countries in the 
distribution territory and to private entities seeking to procure the 
licensed article pursuant to a contract with a government within the 
distribution territory, unless the prior written approval of the U.S. 
Department of State is obtained.''
* * * * *

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; Section 7045, Pub. L. 112-74; Section 7046, Pub. L. 112-74; 
E.O. 13637, 78 FR 16129.
0
11. Section 126.1 is amended by revising paragraph(s) to read as 
follows:


Sec.  126.1   Prohibited exports, imports, and sales to or from certain 
countries.

* * * * *
    (s) Zimbabwe. It is the policy of the United States to deny 
licenses or other approvals for exports or imports of defense articles 
and defense services destined for or originating in Zimbabwe, except 
that a license or other approval may be issued, on a case-by-case 
basis, for the temporary export of firearms and ammunition for personal 
use by individuals (not for resale or retransfer, including to the 
Government of Zimbabwe).
* * * * *

PART 129--REGISTRATION AND LICENSING OF BROKERS

0
12. The authority citation for part 129 continues to read as follows:

    Authority: Section 38, Pub. L. 104-164, 110 Stat. 1437, (22 
U.S.C. 2778); E.O. 13637, 78 FR 16129.
0
13. Section 129.1 is amended by revising paragraph (b) to read as 
follows:


Sec.  129.1  Purpose.

* * * * *
    (b) All brokering activities identified in this subchapter apply 
equally to those defense articles and defense services designated in 
Sec.  121.1 of this subchapter and those items designated in 27 CFR 
447.21 (U.S. Munitions Import List).
0
14. Section 129.2 is amended by:
0
a. In paragraph (b)(2)(v), removing the word ``or'' at the end of the 
paragraph;
0
b. Removing the period at the end of paragraph (b)(2)(vi) and adding 
``; or'' in its place; and
0
c. Adding paragraph (b)(2)(vii).
    The addition reads as follows:


Sec.  129.2  Definitions.

* * * * *
    (b) * * *
    (2) * * *
    (vii) Activities by persons to facilitate the export, reexport, or 
transfer of an item subject to the EAR that has been approved pursuant 
to a license or license exception under the EAR or a license or other 
approval under this subchapter.
* * * * *
0
15. Section 129.4 is amended by revising paragraphs (a)(1) and 
(a)(2)(i) to read as follows:


Sec.  129.4  Requirement for approval.

    (a) * * *
    (1) Any foreign defense article or defense service enumerated in 
part 121 of this subchapter (see Sec.  120.44 of this subchapter, and 
Sec.  129.5 for exemptions) and those foreign origin items on the U.S. 
Munitions Import List (see 27 CFR 447.21); or

[[Page 24205]]

    (2) * * *
    (i) Firearms and other weapons of a nature described by Category 
I(a) through (d), Category II(a) and (d), and Category III(a) of Sec.  
121.1 of this subchapter or Category I(a) through (c), Category II(a), 
and Category III(a) of the U.S. Munitions Import List (see 27 CFR 
447.21);
* * * * *
0
16. Section 129.6 is amended by revising paragraph (b)(3)(i) to read as 
follows:


Sec.  129.6  Procedures for obtaining approval.

* * * * *
    (b) * * *
    (3) * * *
    (i) The U.S. Munitions List (see Sec.  121.1 of this subchapter) or 
U.S. Munitions Import List (see 27 CFR 447.21) category and sub-
category for each article;
* * * * *
[FR Doc. 2018-10366 Filed 5-21-18; 8:45 am]
 BILLING CODE 4710-25-P