[Federal Register Volume 85, Number 15 (Thursday, January 23, 2020)]
[Rules and Regulations]
[Pages 3819-3833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00574]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF STATE

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

[Public Notice: 10603]
RIN 1400-AE30


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

AGENCY: Department of State.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of State (the Department) amends 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/ordnance of the U.S. Munitions List 
(USML) to describe more precisely the articles that provide a critical 
military or intelligence advantage or, in the case of weapons, perform 
an inherently military function and thus warrant export and temporary 
import control on the USML. These revisions complete the initial review 
of the USML that the Department began in 2011. Items not subject to the 
ITAR or to the exclusive licensing jurisdiction of any other set of 
regulations are subject to the Export Administration Regulations.

DATES: This final rule is effective March 9, 2020.

FOR FURTHER INFORMATION CONTACT: Sarah Heidema, Office of Defense Trade 
Controls Policy, Department of State, telephone (202) 663-2809; 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). On May 24, 
2018, DDTC published a proposed rule, 83 FR 24198, for public comment 
regarding proposed revisions to Categories I, II, and III of the ITAR's 
U.S. Munitions List (USML) (22 CFR 121.1). After review of received 
comments and with the revisions to the proposed rule further described 
below, DDTC now publishes this final rule to amend the ITAR.
    The articles and related technical data subject to the jurisdiction 
of the ITAR, i.e., ``defense articles,'' are identified on the USML. 
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. Items not subject to the ITAR or 
to the exclusive licensing jurisdiction of any other set of regulations 
are subject to the EAR. 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 
USML 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 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 jurisdiction from the ITAR's USML to the EAR's

[[Page 3820]]

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 adds two new paragraphs, 
(b)(2)(vii) and (viii), to Sec.  129.2 to update the enumerated list of 
actions that are not brokering. This change is a conforming change and 
is needed to address the transfer from the USML to the CCL of USMIL 
defense articles that remain subject to the brokering controls, and to 
ensure that the U.S. government does not impose a double licensing 
requirement on the export, reexport, or retransfer of such items 
subject to the EAR or continue to require registration with the 
Department solely based on activities related to the manufacture of 
these items.
    The Department of State is engaged in an effort, described more 
fully below, to revise the USML 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, have an 
inherently military function. The Department has undertaken these 
revisions pursuant to the President's delegated discretionary statutory 
authority in section 38(a)(1) of the AECA to control the import and 
export of defense articles and defense services in furtherance of world 
peace and the security and foreign policy of the United States and to 
designate those items which constitute the USML. The Department 
determined that the articles in USML Categories I, II, and III that are 
removed from the USML under this final rule do not meet this standard, 
including many articles that are widely available in retail outlets in 
the United States and abroad (such as many firearms previously 
described in Category I, paragraph (a), including, for example, a .22 
caliber rifle).
    The descriptions below describe the status of the subject 
categories of the USML and CCL as of the effective date of this rule 
and the companion rule published by the Department of Commerce in this 
Federal Register issue. Any reference in the preamble to this final 
rule to transfer from the USML to the CCL reflects the combined effects 
of removal of the defense article from the controls of the ITAR by 
virtue of the removal of an item (i.e., enumerated control text) from 
the USML by this rule and the corresponding adoption of the former 
defense article as an item subject to the EAR by action of the 
companion rule. Comments regarding the overall rule are addressed 
immediately below, while comments specific to a Category or amended 
section of the ITAR are addressed in the relevant discussion of 
revisions to Categories I, II, or III, or in the discussion under the 
title of ``Conforming ITAR Changes.''

Comments of General Applicability

    The Department believes that a restatement of the overall 
principles behind the multi-year review of the USML and the efforts to 
better harmonize the ITAR and the EAR and the larger U.S. government's 
export control system is applicable to many of the comments received 
and to the reasoning behind this rule. Therefore, before addressing 
individual comments, the Department reiterates that it, along with its 
interagency partners, is engaged in a years-long effort to revise the 
USML to limit its scope to those items that provide the United States 
with a critical military or intelligence advantage or, in the case of 
weapons, perform an inherently military function. Review of the USML is 
statutorily required by section 38(f) of the AECA, and the Department 
conducts this review in accordance with, and in full recognition of, 
the President's authority, conferred in section 38(a) of the Act, to 
control the import and export of defense articles and defense services 
in furtherance of world peace and the security and foreign policy of 
the United States, and to designate those items that constitute the 
USML. In connection with this effort, the Department has published 26 
final, or interim final, rules revising eighteen of the twenty-one USML 
categories, removing less sensitive items from the USML. While a wide 
range of interagency stakeholders review and clear the Federal Register 
notices that revise the USML, the Department works particularly closely 
with the Departments of Defense and Commerce to solicit their views on 
the appropriate composition of the USML. As required by Executive Order 
13637, the Department obtains the concurrence of the Secretary of 
Defense for designations, including changes in designations, of items 
or categories of items that are defense articles and defense services 
enumerated on the USML. The engagement with the Department of Commerce 
is further intended to ensure that the jurisdictional posture of a 
given item is clear, and that the application of ITAR or EAR controls 
to that item can be discerned and understood by the public.
    The Department underscores that this rule constitutes an important 
part of a nine-year program of revisions that has streamlined the USML. 
From the beginning, the Department has repeatedly stated its goals for 
that program (see e.g., 76 FR 68694 (Nov. 7, 2011), 76 FR 76097 (Dec. 
6, 2011), 80 FR 11313 (Mar. 2, 2015), 82 FR 4226 (Jan. 13, 2017)). 
First, that it is seeking to better focus its resources on protecting 
those articles and technologies that provide the United States with a 
critical military or intelligence advantage. As applied to this rule, 
for example, firearms and firearms technology that are otherwise 
readily available do not provide such an advantage, whereas an M134 
Minigun or the next generation squad automatic rifle continues to 
warrant USML control even if there is some limited civil availability 
for either. Second, to resolve jurisdictional confusion between the 
ITAR and EAR among the regulated community through revision to ``bright 
line'' positive lists. Third, to provide clarity to the regulated 
community thereby making it easier for exporters to comply with the 
regulations and enable them to compete more successfully in the global 
marketplace. Finally, to develop a regulatory system that supports 
enhanced interoperability between the United States and its allies and 
partners and thereby better supports our ability to address shared 
security challenges.
    With respect to revisions of Categories I-III, the review was 
focused on identifying the defense articles that are now controlled on 
the USML that are either (i) inherently military and otherwise warrant 
control on the USML or (ii) if of a type common to non-military 
firearms applications, possess parameters or characteristics that 
provide a critical military or intelligence advantage to the United 
States. If a defense article satisfies one or both of those criteria, 
it remained on the USML. For example, while the U.S. military supplies 
some of its service members with sidearms for military use, a sidearm 
also has many uses outside of the military, such that its function is 
not inherently military and therefore it does not warrant control on 
the USML. Alternatively, squad automatic weapons do not generally have 
such non-military uses and remain controlled on the USML in this final 
rule. Any single non-military use, however, does not negate such a 
weapon's inherently military function. In summary, the Department 
analyzes the patterns, both current and anticipated, of use and 
availability of the defense articles and the utility they provide to 
the U.S. military or intelligence community to inform the ultimate 
determination as to whether control is merited on the USML.
    The Department recognizes the sensitivities and foreign policy 
implications associated with the sale

[[Page 3821]]

and export of small arms, light weapons, and associated equipment and 
ammunition as expressed in the President's National Security Policy 
Memorandum Regarding U.S. Conventional Arms Transfer Policy of April 
19, 2018 (Conventional Arms Transfer Policy). Those sensitivities and 
foreign policy implications will continue to be addressed through the 
licensing and enforcement requirements of the Department of Commerce. 
All export license applications for the items transitioning to Commerce 
jurisdiction are subject to review by the interagency, specifically the 
Departments of State, Defense, and Energy, as appropriate. The 
Department will continue to advance its foreign policy mission by 
reviewing all license applications submitted to the Department of 
Commerce for the export of firearms and related technology.
    Multiple commenters took issue with the proposed transfer from the 
USML to the CCL of weapons that the Department determined, in 
conjunction with its interagency partners, are not inherently for 
military end-use, citing the fact that military and law enforcement 
personnel regularly use them. As previously noted, the fact that a 
military uses a specific piece of hardware is not a dispositive factor 
when determining whether it has an inherently military function. Given 
that the majority of the items referenced in these comments that will 
transfer to the CCL through this rule are widely available in retail 
outlets in the United States and abroad, and widely utilized by the 
general public in the United States, it is reasonable for the 
Department to determine that they do not serve an inherently military 
function, absent specific characteristics that provide military users 
with significantly enhanced utility, such as automatic weapons, sound 
suppressors, and high capacity magazines.
    Several commenters disputed that the U.S. market should be the 
basis for assessing the commercial availability of firearms, as this is 
not the market to which the proposed rule would be directed. The 
Department recognizes that there are variations in commercial 
availability of firearms not only between nations, but also within the 
domestic market itself; however, this variation in availability does 
not overcome the Department's assessment that the subject firearms do 
not provide a critical military or intelligence advantage such that 
they warrant control under the ITAR. In addition, all exports of 
firearms are subject to the laws of the importing country, and the U.S. 
government does not issue licenses for exporters to ship firearms to 
countries where the end-use is illegal.
    Several commenters predicted that the rule will make it easier for 
foreign manufacturers to obtain U.S.-origin components and proprietary 
technology, thereby causing U.S. firearms manufacturers to lose global 
market share. The Department refers the commenters to the above-stated 
objectives of this review effort, which include making it easier for 
exporters to comply with export control regulations and enabling them 
to compete more successfully in the global marketplace. The Department 
further notes that this rule is expected to provide certain key 
advantages that will substantially benefit domestic manufacturers by: 
(1) Amending the regulatory burden on the U.S. commercial firearms and 
ammunition industry; (2) clarifying the regulatory requirements for 
independent gunsmiths; and (3) enabling foreign manufacturers to source 
from small- and medium-sized U.S. companies more easily.
    Several commenters predicted that this rule will diminish the 
United States' ability to set global normative standards for arms 
transfers and non-proliferation. The Department strongly disagrees and 
remains fully committed to the goals outlined in the AECA. In 
particular, the Department takes seriously its responsibility to 
implement the AECA's declaration that: ``It shall be the policy of the 
United States to exert leadership in the world community to bring about 
arrangements for reducing the international trade in implements of war 
and to lessen the danger of outbreak of regional conflict and the 
burdens of armaments'' (22 U.S.C. 2751). The Department will continue 
to meet this responsibility, in part, by reviewing export license 
applications for items subject to the EAR that were formerly controlled 
by the ITAR, including those on the Wassenaar Arrangement on Export 
Controls for Conventional Arms and Dual-Use Goods and Technologies 
(Wassenaar Arrangement) control lists. The Department will continue to 
take into account the considerations of Section 3 of the Conventional 
Arms Transfer Policy, such as the national security and foreign policy 
interests of the United States, when making arms transfer decisions, 
both for firearms that remain subject to the ITAR and firearms that are 
subject to the EAR.
    Other commenters suggested that this rule contravenes international 
commitments the United States has made through mechanisms such as the 
Wassenaar Arrangement. The transfer of the concerned items to the CCL 
does not contravene U.S. international commitments, as the U.S. 
government will continue to apply a high level of control to these 
items and require U.S. government authorization for all exports of 
firearms and major components.
    Multiple commenters raised concerns about the role and function of 
the Department of Commerce regarding the items that are transferred 
from the USML to the CCL. Some commenters expressed concerns that the 
Department of Commerce has neither the appropriate resources nor the 
appropriate expertise or mission to process associated applications for 
export. Other commenters asserted that because the Department of 
Commerce, unlike the Department of State, does not charge registration 
or licensing fees, the transfer to the CCL constitutes an unnecessary 
burden on taxpayers. As stated previously, the Department is engaged in 
an effort to revise the USML so that its scope is limited to those 
defense articles that warrant the U.S. government's highest level of 
export control because those defense articles offer a critical military 
or intelligence advantage or, in the case of weapons, have an 
inherently military function. The revisions implemented by the 
Department are necessary in order to focus our resources on such 
defense articles. This effort in general, and this rule in particular, 
were developed in close consultation with other departments and 
agencies, including the Department of Commerce. While the Department of 
Commerce is best suited to address the specific details of the 
implementation of its regulations and its allocation of appropriated 
resources, the Department is confident that the framework for control 
of firearms, and parts and components thereof, across the EAR and the 
ITAR is sufficient to address the concerns of the U.S government and 
does not diminish or damage the national security or foreign policy 
interests of the United States. The Department does not share the 
concerns expressed about the Department of Commerce's expertise or 
mission, and the Department further notes that the Department of 
Commerce has been licensing shotguns and shotgun ammunition, as well as 
various firearms-related articles such as sighting devices and a range 
of other similar articles and technologies, for decades. Additionally, 
the Department of Commerce has investigated and disrupted numerous 
diversion rings related to EAR-controlled items and will apply its 
years of export control enforcement expertise to the items this rule 
transfers to its jurisdiction.
    Multiple commenters expressed a general concern that the transfer 
to the

[[Page 3822]]

CCL increases the risk of overseas trafficking, proliferation, or 
diversion. Multiple commenters also raised concerns about the 
Department of Commerce's end-use monitoring (EUM) capabilities and the 
impact this rule has on the Department of State's EUM programs. This 
rule does not deregulate the export of firearms. All firearms and major 
components being transferred to the CCL will continue to require export 
authorization from the Department of Commerce. Further, the Department 
of Commerce has both a robust EUM program and a law enforcement 
division sufficiently capable of monitoring foreign recipients' 
compliance with their obligations regarding the transfer, use, and 
protection of items on the CCL. Additionally, the Federal Bureau of 
Investigation and the Department of Homeland Security will continue to 
investigate and enforce criminal violations of the export control laws 
as appropriate. This rule also will not impact the Department's ability 
to execute the Blue Lantern EUM program required by section 40A of the 
AECA, 22 U.S.C. 2785. Finally, this rule will not affect existing 
federal or state public safety laws that address domestic criminal 
conduct.
    Several commenters expressed concern that the Department of 
Commerce will not have access to the same databases and background 
information that the Department of State uses to evaluate license 
applications. Similarly, some commenters expressed concern that as a 
result of this rule some exporters will no longer be subject to U.S. 
government registration requirements, thereby depriving regulators of 
an important source of information and decreasing transparency and 
reporting regarding firearms exports. The Department considered these 
concerns and determined that the interagency license review process 
maintains appropriate oversight of the articles at issue. The 
Department of Commerce's export licensing requirements and process are 
calibrated both to the sensitivity of the article and the proposed 
destination. Additionally, all requests for export licenses for 
firearms remain subject to interagency review, including by the 
Department of State.
    Several commenters suggested that the Department create a 
registration exemption or reduce registration fees for small volume 
non-exporting firearms manufacturers. Multiple commenters similarly 
suggested modifying ITAR Sec.  122.1 to include a minimum size 
requirement for registration. Modification of the requirements of part 
122 is outside the scope of this rulemaking; however, the Department 
highlights that the Department of Commerce does not have a registration 
requirement for manufacturers and exporters of the items under its 
jurisdiction. Therefore, gunsmiths that do not manufacture, export, or 
broker articles that remain subject to the ITAR after this rule's 
effective date will no longer need to determine if they are required to 
register under the ITAR. They may, however, still be required to comply 
with ATF licensing requirements. Any additional changes to the ITAR 
related to the registration requirement would be addressed in a 
separate rulemaking.
    On the issue of registration, one commenter noted that as a result 
of this rule some U.S. manufacturers may no longer have to register 
with the Department of State and be subject to the requirements in ITAR 
Sec.  122.4(b) for advance notification of intended sales or transfers 
to foreign persons of ownership or control of the registrant. The 
commenter asserted that without the advance notification requirement 
foreign entities could potentially influence the sales and marketing 
activities of U.S. manufacturers in a manner that would be detrimental 
to U.S. national security. The Department notes in response that its 
regulatory authorities are limited to export-related activities for 
defense articles and services, and highlights that other federal 
regulatory regimes, such as the Committee on Foreign Investment in the 
United States, have the ability to address potential foreign ownership 
or control issues that may impact national security.
    Multiple commenters expressed concerns that this rule would reduce 
congressional oversight of arms transfers since the Department of 
Commerce does not have to notify Congress of firearms sales in excess 
of $1 million as the Department of State does. The Department 
acknowledges those concerns and notes that those firearms that the U.S. 
government deemed through the interagency review process to warrant 
continued control under the ITAR as defense articles will remain 
subject to congressional notification requirements in conformity with 
section 36 of the AECA and Executive Order 13637.
    A number of commenters suggested the proposed rule, if made final, 
may have a negative impact on human rights in foreign countries. As 
stated previously, the Department of Commerce will continue its 
longstanding end-use monitoring efforts, including vetting of potential 
end-users, to help prevent human rights abuses. Similarly, as part of 
the aforementioned continuing interagency review of export licenses for 
firearms, the Departments of Defense and State will review export 
license applications on a case-by-case basis for national security and 
foreign policy reasons, including the prevention of human rights 
abuses.
    One commenter expressed concern that foreign law enforcement 
personnel in particular are at risk of having the transferred CCL items 
used against them. These concerns are mitigated by the fact that, as 
stated previously: (1) These articles remain subject to the Department 
of Commerce's EUM programs that vet potential end-users of concern, and 
(2) license applications for CCL items will be approved only if their 
end-use is permitted under the laws of the importing country.
    Multiple commenters expressed concerns that, as a result of the 
revision of the USML to remove items from Category I, the rule will 
also remove from the USML the technical data directly related to these 
items, thereby lifting a purported block on the domestic dissemination 
of computer-aided design (CAD) files for the three-dimensional (3-D) 
printing or CAD-enabled production of firearms. Commenters suggested 
that use of these files in the United States could lead to a potential 
increase in the number of unserialized firearms in circulation, or the 
manufacture or distribution of a non-metal firearm otherwise prohibited 
under federal law. Some commenters also expressed concerns that foreign 
dissemination of such files could provide adversaries with a military 
or intelligence advantage.
    The Department considered the concerns of the commenting parties. 
While the Department concluded that these concerns do not warrant 
modification to the controls on the USML, the Department of Commerce, 
as described below, determined that certain modifications to its 
companion rule are warranted to address similar concerns expressed by 
commenters to its proposed rule.
    As an initial matter, the Department reiterates that the scope of 
this rulemaking is limited to the Department's delegated authority 
under the AECA. Neither the AECA nor ITAR expressly provide the 
Department with authority to regulate the distribution of technical 
data in the United States to U.S. persons. This applies to all 
technical data subject to the ITAR, regardless of whether it is for the 
manufacture of ITAR-controlled firearms or any other defense article. 
Furthermore, the Department notes that the AECA does not provide the

[[Page 3823]]

Department with the authority to (1) prohibit the domestic manufacture 
or possession of firearms, whether produced from CAD files with a 3-D 
printer or otherwise, or (2) regulate the domestic distribution among 
U.S. persons of any defense article, including firearms. Domestic 
activities that do not involve release to foreign persons are generally 
left to other federal agencies--and the states--to regulate. The 
manufacture, import, sale, shipment, delivery, transfer, receipt, or 
possession of firearms that are undetectable as provided in federal law 
is a federal crime, punishable by fine and/or up to five years in 
prison. 18 U.S.C. 924(f). Among other statutes, the Undetectable 
Firearms Act of 1988 prohibits the manufacture, possession, sale, 
import, shipment, delivery, receipt, or transfer of undetectable 
firearms. See 18 U.S.C. 922(p).
    When determining whether nonautomatic and semi-automatic firearms 
to .50 caliber (12.7mm) inclusive should be removed from the USML, and 
the technical data directly related thereto, the Department evaluated 
whether the hardware and its directly related technical data would 
confer a critical military or intelligence advantage or whether they 
are inherently military based on their function. The Department made a 
determination that neither the hardware nor its directly related 
technical data met these criteria. In response to the specific comments 
related to the potential uses for CAD files that can be used to 3-D 
print firearms, the Department confirms that it did consider the 
potential uses for these CAD files in its review. The Department 
determined, in consultation with the Department of Defense and other 
interagency partners, that these CAD files do not confer a critical 
military or intelligence advantage and are not inherently military 
based on their function. This determination took into account the 
effect that a transfer to the CCL would have on the national security 
and foreign policy interests of the United States, consistent with the 
AECA and ITAR, to include the degree to which it would limit the 
ability of a foreign person to obtain CAD files, publish them on the 
internet, and subsequently manufacture CCL-controlled firearms, 
including those that are unserialized or manufactured from a non-
metallic material.
    Although the Department determined that such hardware and its 
directly related technical data do not confer a critical military or 
intelligence advantage or perform an inherently military function for 
purposes of maintaining inclusion on the USML, the Department agrees 
with the Department of Commerce that maintaining controls over such 
exports under the EAR remains in the national security and foreign 
policy interests of the United States. The Department of Commerce has 
recognized in its companion rule that concerns raised over the 
possibility of widespread and unchecked availability of 3-D printing 
technology and software, the lack of government visibility into 
production and use, and the potential damage to U.S. counter-
proliferation efforts warrant making certain technology and software 
capable of producing firearms subject to the EAR when posted on the 
internet, as described in the Department of Commerce's companion rule. 
The Department agrees that EAR controls on technology and software for 
firearms previously controlled in USML Category I(a)--and for all other 
items this rule removes from the USML--sufficiently address the U.S. 
national security and foreign policy interests relevant to export 
controls. In sum, while Commerce controls over such items and 
technology and software are appropriate, continued inclusion of them on 
the USML is not.
    This rule is consistent with broader USML to CCL review efforts. 
During the multi-year process of reviewing and revising the USML, the 
Department has exercised its discretion, authorized by delegation in 
section 38(a)(1) of the AECA, to determine which national security and 
foreign policy interests warrant consideration within the context of 
export controls. Under its current standard, the Department assesses 
the national security and foreign policy interests against factors, 
such as those discussed above and in other Federal Register notices, in 
assessing whether items merit inclusion on the USML; this analysis has 
resulted in a number of items previously included in other USML 
categories being transferred to the EAR (see, e.g., 78 FR 22740 (Apr. 
16, 2013), 81 FR 70340 (Oct. 12, 2016)). Through this rule, the 
Department is now applying this standard to Categories I, II, and III 
of the USML. As previously noted, the AECA requires periodic review of 
the USML, and the Department will continue to evaluate technological 
advancements, including those related to 3-D printing, to inform future 
revisions to the USML.
    One commenter predicted that the rule's effect of removing 
licensing requirements for temporary imports of the items removed from 
the USML would create another channel for criminal elements to obtain 
weapons in the United States. The Department did not receive any 
further information to support the assertion that the hypothetical 
diversion of temporary imports of firearms from foreign countries would 
appreciably bolster criminal access to such items. The Department 
additionally notes that other departments and agencies possess 
enforcement capabilities relevant to criminal acquisition of firearms 
within the United States.
    One commenter recommended coordinating proposed changes with ATF so 
that the corresponding changes are made to the U.S. Munitions Import 
List (USMIL) at the same time, which would prevent businesses from 
having to consult both the USML and USMIL when deciding whether a 
transaction involves brokering. The USML and the USMIL are separate 
lists of AECA defense articles with both shared as well as different 
AECA objectives, and as such warrant the retention as separate lists 
for AECA defense article and control purposes.

Effective Date

    The Department has determined that the appropriate effective date 
for this final rule is March 9, 2020. The Department notes that the 
Department has previously articulated a policy of providing a 180-day 
transition period between the publication of the final rule for each 
revised USML category and the effective date of the transition to the 
CCL for items that will undergo a change in export jurisdiction. See 78 
FR 22,740, 22,747 (Apr. 16, 2013). In addition, some commenters 
suggested that the final rule should have a delayed effective date or a 
split effective date for companies of a particular size. However, in 
consultation with interagency partners, the Department has determined 
that, based on the nature of the items at issue, a 180-day transition 
period or a delayed or a split effective date for certain companies is 
not necessary.

Revision of Category I

    This final rule renames Category I as ``USML Category I--Firearms 
and Related Articles'' (formerly ``Category I--Firearms, Close Assault 
Weapons and Combat Shotguns'') and amends the category to control only 
defense articles that are inherently military or that are not otherwise 
widely available for commercial sale. In particular, the amended 
category does not include non-automatic and semi-automatic firearms to 
.50 caliber (12.7mm) inclusive, formerly controlled under paragraph 
(a), and all of the parts, components, accessories, and attachments for 
those

[[Page 3824]]

articles. Such items are subject to the new controls in Export Control 
Classification Numbers 0A501, 0A502, 0A503, 0A504, 0A505, 0B501, 0B505, 
0D501, 0D505, 0E501, 0E502, 0E504, and 0E505, which also includes the 
items moved from Category II described below. Such controls in Category 
0 of the CCL are being published in the companion rule by the 
Department of Commerce.
    Paragraph (a) of amended USML Category I covers firearms that fire 
caseless ammunition. Paragraph (b) continues to cover fully automatic 
firearms, which are firearms that shoot more than one bullet by a 
single function of the trigger, to .50 caliber (12.7mm) inclusive. 
Paragraph (c) covers firearms specially designed to integrate fire 
control, automatic tracking, or automatic firing systems, and all 
weapons previously described in paragraph (c) that remain on the USML 
are now covered by paragraphs (a), (b) or (c) of this category or by 
Category II. Specially designed parts and components for the defense 
articles that remain in paragraph (c) are moved to Category I paragraph 
(h) of this final rule. This change from the proposed rule is necessary 
to allow for the designation of the end-item defense articles in 
paragraph (c) as Significant Military Equipment (SME) whereas the 
specially designed parts and components therefor are not. Paragraph (d) 
covers fully automatic shotguns. Paragraph (e) continues to cover 
silencers, mufflers, and sound suppressors. However, for the same 
reason as paragraph (c) above, specially designed parts and components 
for those defense articles in paragraph (e) are moved to paragraph (h) 
so as not to be designated SME. Flash suppressors are removed from 
paragraph (e) and are transferred to the CCL. The text of paragraph (f) 
is removed and the subsection is reserved, thereby removing as a 
controlled item ``[r]iflescopes manufactured to military 
specifications.'' However, any firearms sighting device (including 
riflescopes) that fits within the controls in USML Category XII (see 
e.g., XII(c)(2) regarding night vison or infrared capabilities) remains 
subject to the ITAR under that category. Other riflescopes are 
transferred to the CCL. Paragraph (g) continues to cover barrels, 
receivers (frames), bolts, bolt carriers, slides, or sears, specially 
designed for the firearms that remain in Category I. Paragraph (h) 
covers 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. In a change from the proposed rule, this final rule 
paragraph (h) includes a new paragraph (h)(3) to control parts and 
components specially designed for defense articles in (c) and (e) as 
described above. This addition necessitated the renumbering of proposed 
paragraph (h)(3) to (h)(4) in this final rule. Paragraph (i) covers the 
technical data and defense services directly related to all of the 
defense articles in the category as well as classified technical data 
directly related to items controlled in ECCNs 0A501, 0B501, 0D501, and 
0E501 and defense services using the classified technical data. This is 
a change from the proposed rule, in which defense articles in paragraph 
(c) were inadvertently omitted from the technical data paragraph.
    This rule adds a new (x) paragraph to USML Category I, allowing 
ITAR licensing for all 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 text of the note to Category I is removed and replaced with a 
note containing a slightly revised interpretation of the term 
``firearm,'' (formerly included at (j)(1)) and to add interpretations 
of the terms ``fully automatic'' and ``caseless ammunition.''
    Several commenters requested clarification regarding the proposed 
Note 1 to USML Category I. The Department determined that the control 
text of the category sufficiently describes the defense articles to be 
controlled, and, as a result, the final rule removes the proposed Note 
1 to Category I in order to avoid possible confusion.
    One commenter recommended changes to the text of paragraph (b) in 
an effort to avoid potential overlap with other paragraphs in the 
category. The Department believes these changes are unnecessary because 
the control text adequately differentiates the controlled defense 
articles to allow for self-determination. If an exporter or 
manufacturer requires a definitive determination of category, they may 
submit a commodity jurisdiction request to DDTC.
    Several commenters expressed concern about the designation of 
certain parts and components in USML Category I as SME. The Department 
recognizes these concerns, and, in response, the final rule revises the 
proposed rule by moving the specially designed parts and components for 
paragraphs (c) and (e) to (h) where they are not designated as SME.
    Multiple commenters suggested that the rule should remove firearm 
sound suppressors (silencers) from paragraph (e) and transfer them to 
the CCL. The Department recognizes that sound suppressors (silencers) 
are sold commercially in some jurisdictions, often for use at ranges or 
for hunting in certain environments, although their availability in 
retail markets varies significantly within the United States as well as 
foreign countries. However, sound suppressors (silencers) provide the 
capability to muffle the sound of weapons fire, which can degrade the 
ability of an adversary to localize the source of the incoming rounds 
and return fire or raise an alarm. The Department has determined, in 
coordination with the interagency, that silencers continue to warrant 
control on the USML.
    One commenter requested clarification regarding paragraph (g) and 
the barrels, receivers (frames), bolts, bolt carriers, slides, or sears 
that are common to semi-automatic and automatic firearms on the 
civilian market. The commenter noted that the lack of clarity arises 
from the difference between the control text in USML Category I(g) and 
Note 1 to Category I in the proposed rule. The commenter also requested 
clarification about which specially designed articles are controlled 
under this paragraph. The commenter's concerns can be resolved by 
applying the definition of ``specially designed'' in ITAR Sec.  
120.41(b)(3), as any article that is common to a non-automatic or 
semiautomatic firearm that is on the CCL (i.e., not on the USML) is not 
specially designed and thus is not subject to the ITAR (but is subject 
to the EAR).
    One commenter suggested amending the Canadian exemptions located in 
ITAR Sec.  126.5 to allow exports of receivers and breech mechanisms 
under paragraph (g). The Department is not revising Supplement No. 1 to 
ITAR Sec.  126 or the provisions of the Canadian exemptions through 
this rulemaking. However, the Department is currently undertaking a 
review of Supplement No. 1 to ITAR Part 126 and any changes will be the 
subject of a separate rulemaking.
    Multiple commenters suggested that paragraph (h)(1) under this rule 
should exclude high-capacity magazines, i.e., drums or magazines for 
firearms with a capacity of greater than 50 rounds. The Department 
recognizes that civilians can purchase magazines and drums with a

[[Page 3825]]

capacity of greater than 50 rounds; however, these high-capacity 
magazines provide an inherently military function and warrant continued 
control on the USML due to their utility in enabling effective use of 
automatic weapons and combat tactics.
    One commenter requested clarification regarding paragraph (h)(3) in 
order to differentiate the terms ``automatic targeting'' and 
``automatic tracking'' or ``automatic firing.'' However, the comment 
did not identify any specific confusion. The Department believes that 
the control text appropriately describes the capabilities that warrant 
control, so the final rule does not make any changes to this provision.
    One commenter noted that the technical data and defense service 
control in paragraph (i) did not apply to USML Category I(c) and 
suggested that the Department include paragraph (c) in the list of 
paragraphs to which the technical data and defense service controls 
applies. This was an oversight and final rule paragraph (i) is revised 
to exclude the paragraph identifiers in the proposed rule. Excluding 
the paragraph identifiers clarifies that technical data and defense 
services for all USML Category I articles are controlled.

Revision of Category II

    This final 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, amended paragraph (j), controlling parts and 
components, is revised to enumerate the items controlled therein. In a 
change from the proposed rule explained below, proposed paragraph 
(j)(10) is revised to clarify that the control applies only to recoil 
systems specially designed to mitigate the shock associated with the 
firing process of guns integrated into air platforms. When reviewing 
proposed paragraph (j) for this final rule, the Department noted that 
proposed paragraphs (10) and (13) described related defense articles, 
as did proposed paragraphs (j)(9) and (j)(11). In order to keep related 
articles in consecutive paragraphs within the category, the Department 
reorganized the paragraphs such that the control text of paragraph (10) 
of the proposed rule is found at paragraph (14) of the final rule and 
the control text of paragraphs (9) and (11) of the proposed rule are 
found at paragraphs (10) and (9) of the final rule, respectively. In 
addition, a new paragraph (12) is added to (j) to clarify that systems 
and equipment for the defense articles in the category for programming 
ammunition are controlled on the USML. Where necessary, paragraphs are 
renumbered to accommodate movement of proposed paragraphs (j)(10) and 
(9) and the addition of new paragraph (12). The Note to proposed 
paragraph (j)(9) is also revised from the proposed rule to include 
reference to mounts for surface vessels and special naval equipment 
controlled in Category VI.
    Amended paragraph (a) enumerates the items controlled in that 
paragraph. The item formerly covered in paragraph (c) (i.e., apparatus 
and devices for launching or delivering ordnance) is removed, and 
defense articles still warranting control on the ITAR are described in 
new paragraph (a)(4). A new paragraph (a)(5) is added for developmental 
guns and armaments funded by the Department of Defense and the 
specially designed parts and components of those items. The item 
formerly controlled in paragraph (f), (i.e., engines specifically 
designed or modified for the self-propelled guns and howitzers 
controlled in paragraph (a)), is removed from the USML and placed on 
the CCL in ECCN 0A606 pursuant to the companion rule. Tooling and 
equipment specifically designed or modified for the production of items 
controlled in USML Category II, formerly in paragraph (g), is also 
removed from the USML and transferred to the CCL in ECCN 0B602 through 
the Commerce rule. Test and evaluation equipment and test models, 
formerly in paragraph (h), is removed from the USML and transferred to 
the CCL in ECCN 0B602 through the Commerce rule. Certain autoloading 
systems formerly controlled in paragraph (i) are moved to paragraphs 
(j)(9) and components therefor to (j)(10) (paragraph (j)(11) of the 
proposed rule). In a change from the proposed rule explained below, 
final paragraph (j)(11) now contains a specific reference to 
``ammunition feeder systems.''
    This rule adds a new (x) paragraph to USML Category II, allowing 
ITAR licensing for all 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.
    One commenter recommended defining the term ``gun'' as it is used 
in both the category title and in paragraph (a)(1). The control text in 
the proposed rule appropriately described the capabilities that warrant 
control, and so the final rule does not make any changes in this 
regard.
    One commenter pointed out that U.S law classifies firearms as 
antique if they were made on or before 1898 and took issue with the 
usage of the year 1890 in Note 1 to paragraph (a). The Gun Control Act 
of 1968 does define antique firearms for domestic purposes, in part, as 
any firearm manufactured in or before 1898. See 18 U.S.C. 
921(a)(16)(A). However, as this rule is regarding the export of 
firearms, it uses the year 1890 in order for the United States to 
remain consistent with its international export control commitments 
under the Wassenaar Arrangement, which uses 1890 as the cutoff year to 
identify many firearms and armaments that are not on the control list.
    One commenter requested clarification regarding what is considered 
to be part of the firing mechanisms listed in paragraph (j)(4) and 
inquired whether the rule controls electronic firing mechanisms. The 
language in the rule appropriately describes the capabilities that 
warrant control and confirms that the control does include electronic 
firing mechanisms.
    One commenter requested a note be added to proposed paragraph 
(j)(9) (final paragraph (j)(10)) to clarify what constitutes an 
independently powered ammunition handling system and platform interface 
components. The control text appropriately describes the capabilities 
of concern that warrant control and confirms that an independently-
powered ammunition handling system need not be external to the gun or 
platform for the control to apply.
    One commenter expressed concern that proposed paragraphs (j)(9) and 
(j)(11) (final paragraphs (j)(10) and (j)(9), respectively) may capture 
the same parts and components and recommended deleting proposed 
paragraph (j)(11) if the paragraphs are redundant. These paragraphs are 
distinct, as proposed (j)(9) identifies certain components for the end-
item ammunition handling system that are controlled and proposed 
(j)(11) controls the end-item independent ammunition handling system 
itself. Because these paragraphs are not redundant, the final rule 
retains both of them. The Department revised proposed paragraph (j)(11) 
(final paragraph (j)(9)) to clarify its scope in response to this 
comment.
    Proposed paragraph (j)(10) (final paragraph (j)(14)) is revised in 
this final rule with language limiting recoil systems to those 
specially designed to mitigate the shock associated with the firing 
process of guns integrated into air platforms. This revision was made 
in response to a commenter who

[[Page 3826]]

highlighted that the language in the proposed rule would have 
controlled recoil systems solely due to end-use platform and not due to 
the performance capability.
    One commenter suggested that the Department reconcile proposed 
paragraphs (j)(10) and (j)(13) (final paragraphs (j)(14) and (j)(13), 
respectively) to prevent an overlap in the control text. Proposed 
(j)(10) and (j)(13) are adequately differentiated to allow for self-
determination. If an exporter or manufacturer requires a definitive 
determination of category, they may submit a commodity jurisdiction 
request to DDTC.
    One commenter submitted a question about whether specific 
ammunition containers that are independent of a cannon system would be 
controlled under the proposed paragraph (j)(12) (final paragraph 
(j)(11)). Although absent a commodity jurisdiction request the 
Department cannot make a definitive determination, it is unlikely that 
the ammunition container is controlled because proposed paragraph 
(j)(12) requires that the ammunition container be specially designed 
for the gun or armament, not for the ammunition. The control text 
appropriately describes the capabilities that warrant control, and so 
the final rule does not make any changes to this provision.
    One commenter also recommended adding clarifying language to 
proposed paragraph (j)(12) (final paragraph (j)(11)) regarding whether 
``conveyor elements'' are intended to relate to large caliber 
ammunition or medium caliber ammunition. As the control is not limited, 
it applies to all such systems. To clarify the scope of the control, 
the Department adds ``ammunition feeder systems'' to the text of final 
paragraph (j)(11).

Revision of Category III

    This final rule renames Category III as ``USML Category III--
Ammunition and Ordnance'' (formerly ``Category III--Ammunition/
Ordnance'') and revises its content 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) are revised to remove 
broad catch-alls and enumerate the articles controlled therein. For 
example, paragraph (a), which controls ammunition for articles in USML 
Categories I and II, is amended to specifically list the ammunition 
that it controls. In a change from the proposed rule, paragraph (a)(7) 
regarding ammunition for automatic and superposed (or stacked) guns and 
firearms is revised to clarify the control text. A new paragraph 
(a)(10) is added for developmental ammunition funded by the Department 
of Defense and the parts and components specially designed for such 
developmental ammunition. In a change from the proposed rule, the SME 
designator is moved from paragraph (a) in its entirety to only those 
paragraphs of III(a) warranting control as SME and the SME designation 
is removed from paragraph (a)(10), to be consistent with the controls 
on developmental defense articles funded by the Department of Defense 
in other categories of the USML. Ammunition formerly controlled in 
paragraph (a) that is not now specifically enumerated in paragraph (a) 
or captured by paragraph (a)(10) is transferred to the CCL pursuant to 
the companion rule. Likewise, revised paragraph (d), which controls 
parts and components, enumerates the items it controls; those parts and 
components previously captured via the catch-all and not now enumerated 
are transferred to the CCL.
    Additionally, paragraph (c) is removed and placed into reserve. The 
production equipment and tooling formerly controlled in that paragraph 
is now controlled by the CCL pursuant to the companion rule.
    In a change from the proposed rule, the references to steel tipped 
ammunition, and hardened core or solid projectiles made of tungsten, 
steel, or beryllium copper alloys are moved from (d)(1) to paragraph 
(d)(6) for additional clarity.
    This rule adds a new (x) paragraph to USML Category III, allowing 
ITAR licensing for all 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.
    In addition, in this final rule, DDTC revised the format of the 
notes to Category III from the proposed rule in order to make them 
consistent with concluding notes to other categories (see, e.g., notes 
to Category VII). In place of three notes within one heading of ``Notes 
to Category III'' as in the proposed rule, this final rule identifies 
each clearly as Note 1, Note 2, and Note 3.
    One commenter highlighted that the placement of the asterisk beside 
paragraph (a) in the proposed rule created inconsistencies with other 
USML category provisions concerning developmental defense articles 
funded by the Department of Defense (DoD). The Department agrees, and 
the final rule revises the category in order to clarify that DoD-funded 
developmental ammunition is not SME. In particular, the final rule adds 
a specific SME identifier to each relevant subcategory and removes one 
from paragraph (a)(10).
    One commenter suggested removing paragraph (a)(2) on the grounds 
that the underlying commodity does not fundamentally change when it is 
incorporated into an ammunition link. The control appropriately 
identifies the object that warrants control (linked or belted 
ammunition) which are used primarily for automatic weapons. 
Consequently, the final rule makes no changes to the text of paragraph 
(a)(2).
    One commenter suggested revising proposed paragraph (a)(4) to 
remove the language ``manufactured with smokeless powder'' on the 
grounds that the rule could be interpreted to mean caseless ammunition 
manufactured with anything besides smokeless powder, which is 
controlled on the CCL. The Department disagrees because the control 
text accurately describes the defense article to be controlled. 
Caseless ammunition that is not manufactured with smokeless powder is 
not controlled by the subcategory. The Department controls ammunition 
in paragraph (a)(4) because smokeless powder has higher energy than 
other propellants and is more readily adapted to a sustained fire.
    One commenter suggested removing the articles under paragraphs 
(a)(5) and (a)(8) and transferring them to the CCL. The Department 
disagrees, as lightweight and railgun ammunition offer a significant 
military advantage because lightweight ammunition significantly 
improves battlefield activities and railguns are a uniquely military 
capability in which the United States enjoys a critical advantage, in 
part due to our projectiles, and therefore warrant control on the USML.
    One commenter recommended revising paragraph (a)(6) to address the 
potential redundancy with (a)(1) and to clarify whether the ammunition 
control parameters in the paragraph are based on the pyrotechnic 
material, the tracer materials, or the specification that it must be 
able to be seen by night vision optical systems. While it is possible 
that there may be some overlap between these controls for specific 
articles, each control correctly identifies a capability that warrants 
control on the USML. To clarify the control text, the Department 
replaces the word ``and'' in paragraph (a)(6) of the proposed rule with 
``or'' in this final rule to identify that these are separate articles. 
If an exporter or

[[Page 3827]]

manufacturer requires a definitive determination of category, they may 
submit a commodity jurisdiction determination request to DDTC.
    One commenter highlighted that paragraph (a)(7) in the proposed 
rule could be interpreted to cover all ammunition for fully automatic 
firearms, which could take ammunition currently controlled by the 
Department of Commerce and change it into SME if for use in a fully 
automatic firearm. The Department notes this concern and has revised 
the control to limit the scope of the control to ammunition that is not 
used with semi or non-automatic firearms (i.e., firearms not on the 
USML).
    One commenter suggested changing the description of ``primers'' in 
paragraph (d)(10) to ``cap type primers'' on the grounds that the 
provision as written is overly broad. The Department disagrees, as the 
final rule appropriately reflects the primers that warrant control on 
the USML. The final rule does not make any changes to this provision.
    One commenter assessed that certain production equipment previously 
controlled on the USML would not be captured by the revised USML 
Category III or by the corresponding Department of Commerce rule. The 
Department of Commerce's companion rule to this final rule expands the 
relevant ECCNs 0B505.a as a control for all production equipment 
specially designed for USML Category III, and 0B501.e, for all 
production equipment specially designed for USML Category I.
    One commenter expressed concern that paragraph (d)(1) appears to 
overlap with the control text in paragraphs (a)(1) and (6) and (d)(2) 
and (6). While it is possible that there may be some overlap between 
these controls for specific articles, each correctly identifies a 
capability that warrants control on the USML. To add additional 
clarity, the Department is removing the reference to steel tipped and 
core or solid projectiles made from tungsten, steel, or beryllium 
copper alloys, and addressing those fully in (d)(6). If an exporter or 
manufacturer requires a definitive determination of category, they may 
submit a commodity jurisdiction determination request to DDTC.
    One commenter suggested deleting the word ``tracer'' from paragraph 
(d)(2) on the grounds that that would make the provision consistent 
with (d)(1). Because certain tracer shotgun shells are non-pyrotechnic 
and warrant control on the USML, no change is made in this final rule.
    One commenter suggested deleting ``specially designed parts and 
components'' from paragraph (d)(4) on the basis that the language adds 
duplicative controls on parts that are also subject to the controlled 
parts in paragraphs (d)(7) and (d)(11). The Department believes that 
the paragraphs are not duplicative and the language appropriately 
describes the capabilities that warrant control, so the final rule does 
not make any changes to this provision.
    One commenter recommended adding language to paragraph (d)(6) in 
the proposed rule to clarify whether the paragraph is intended to 
capture all armor piercing rounds. The Department did not adopt this 
recommendation, as the control text adopted in this rule provides 
objective criteria that more effectively identifies the ammunition 
types that warrant control on the USML.
    Multiple commenters recommend revising paragraph (d)(7). One 
commenter suggested adding ``specially designed for items controlled in 
USML Category II'' to ensure that articles common to those used with 
non-USML items are not described. The Department agrees and made this 
change.
    One commenter suggested modifying the wording in paragraph (d)(11) 
to capture all artillery and ammunition fuses and to delete ``specially 
designed parts therefor'' to align with bomb fusing wording in Category 
IV(h)(25). The control correctly identifies a capability warranting 
control on the USML; fuses and arming and safing devices for Category 
III articles cover a wider range of sensitive devices that provide the 
United States with a critical military advantage, separate and apart 
from the control in Category IV(h)(25), for fuses specific to that 
category, so the Department is not implementing any change to paragraph 
(d)(11).
    One commenter noted that paragraph (e) controls technical data and 
defense services directly related to the defense articles controlled in 
paragraphs (a), (b), and (d) and that technical data and defense 
services in these areas would not be controlled on the USML as they are 
already in the public domain. Information that is in the public domain 
(see ITAR Sec.  120.11), is not controlled; however, defense services 
remain controlled, as would any controlled technical data.

Conforming ITAR Changes

    Additionally, this final rule makes conforming changes to several 
sections of the ITAR that referred to the control of articles formerly 
in USML Category I(a). These sections are amended because they all 
refer to firearms that are now controlled on the CCL. The firearms 
exemptions formerly at Sec.  123.17(a) through (e) are removed and the 
subsections reserved as a consequence of the removal from the USML of 
non-automatic and semi-automatic firearms and their transfer to the 
CCL. Section 123.17 is renamed ``Exemption for personal protective 
gear'' (formerly ``Exports of firearms, ammunition, and personal 
protective gear'') to accurately reflect the articles permitted for 
export without a license by that section. Sections 123.16(b)(2) and (6) 
are amended to make conforming changes to reflect the removal of the 
Sec.  123.17 firearms exemptions, as is the policy guidance on Zimbabwe 
found at Sec.  126.1(s). The text of Sec.  123.18 is removed, as it 
described exemptions for firearms that are now controlled for export by 
the Department of Commerce, and the section placed into reserve. The 
text of Sec.  123.16(b)(7) referencing the removed Sec.  123.18 
exemption is also removed and the subsection placed in reserve. In 
addition, Sec.  124.14(c)(9) is amended to remove the example of 
``sporting firearms for commercial resale.''
    Section 129.1(b) of the ITAR is amended 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 
is also amended to clarify brokering requirements for items on the 
USMIL that are subject to the brokering requirements of the AECA. The 
articles that are transferred to the CCL for export control purposes, 
yet are on the USMIL for permanent import control purposes, remain 
subject to the brokering requirements of part 129 with respect to all 
brokering activities, including facilitation in their manufacture 
abroad, permanent import, transfer, reexport, or retransfer. In a 
change from the proposed rule, this final rule revises slightly the 
proposed language of Sec.  129.2(b)(2)(vii), renumbers it as (viii), 
and adds a new paragraph (b)(2)(vii) to that section, in order to 
definitively exclude from the definition of brokering activities 
certain domestic activities related to the manufacture of EAR 
controlled items and their export. The revisions to Sec.  129.4 also 
clarify that foreign defense articles that are on the USMIL require 
brokering authorizations.
    One commenter asserted that this rule's revisions to Sec.  123.15 
will unnecessarily expand congressional notification requirements to 
parts, components, and accessories under Categories I(e) and I(g). The 
commenter recommended that Sec.  123.15 be revised to limit the 
notification requirements to ``USML Category I paragraphs (a) through 
(d).'' Contrary to the

[[Page 3828]]

commenter's assertion, this rule does not extend congressional 
notification requirements to parts, components, and accessories. 
Department practice is, and has been, to notify Congress of the 
proposed exports of all Category I(e) and (g) articles that meet the 
threshold value requirement of $1,000,000.
    One commenter expressed concern that the proposed rule's removal 
and placement of ITAR Sec.  123.16(b)(7) in reserve could potentially 
affect the exemption at ITAR Sec.  123.18 regarding firearms for 
personal use by civilian and active duty members of the U.S. Armed 
Forces. The Department notes in response that amendatory instruction 
number 5 of the proposed rule directed the removal and reserving of 
paragraph (b)(7) of Sec.  123.16. In order to eliminate any confusion 
regarding this action, the final rule includes exemplary text showing 
the subsection as reserved.
    Several commenters suggested raising the value of the low value 
shipment exemption in ITAR Sec.  123.17(a) from $100 to $500 because 
although the rule's changes increase the eligible amount, they then 
reduce it by shifting the definition of value from wholesale to selling 
price. The Department appreciates this suggestion, but notes in 
response that amendatory instruction 6 of the proposed and final rules 
directs the removal of ITAR Sec.  123.17(a).
    One commenter noted that the current language in ITAR Sec.  
125.4(b)(6) refers to ``. . . firearms not in excess of caliber .50 and 
ammunition for such weapons . . .'' and suggested a review to ensure 
consistency with language in other areas of the ITAR. The Department 
appreciates the commenter's suggestion and directs the commenter's 
attention to the Note to Category I of the final rule, paragraph (1), 
which uses a similar description to the one in ITAR Sec.  125.4(b)(6) 
and which has been present since the 2003 CFR. The Department believes 
the regulated community clearly understands caliber demarcation and 
declines to make changes at this time. The Department notes the 
commenter's concern for future consideration.
    Multiple commenters expressed concerns that this rule would remove 
license requirements for brokers, or potentially relinquish enforcement 
authority over brokers. The Department asserts that this rule makes no 
changes to the statutory requirements for the registration and 
licensing of brokers, which remain the same under section 
38(b)(1)(A)(ii) of the AECA (see 28 U.S.C. 2778) and are implemented 
through ITAR part 129, which will continue to apply to all firearms 
listed on the USMIL in addition to those on the USML. Regarding 
enforcement, the Department retains its civil enforcement capacity for 
violations of the ITAR, including all articles subject to the brokering 
regulations, and the Department of Commerce retains its civil 
enforcement authority over items subject to its jurisdiction. 
Additionally, the Department of Justice retains the ability under 
separate authorities to prosecute persons criminally for violations 
involving firearms on the CCL or for brokering violations under the 
AECA.
    One commenter expressed concern that this rule will create a double 
licensing requirement because the scope of ``brokering activities'' 
requiring registration, fee payments, and licensing under ITAR part 129 
includes many types of activities that occur before the Department of 
Commerce will issue a license. The Department does not intend to impose 
a double licensing requirement for individuals undertaking activities 
on behalf of another to facilitate a transaction that will require 
licensing by the Department of Commerce. Therefore, the Department is 
revising the proposed Sec.  129.2(b)(2)(vii) and adding a new 
(b)(2)(viii) to clarify that activities to facilitate the domestic 
manufacture or export of items subject to the EAR are not brokering 
under the ITAR and do not require authorization or registration.
    One commenter requested clarification regarding whether ``brokering 
activities'' as defined in Sec.  129.2(b)(2) apply to activities to 
facilitate the manufacture, export, permanent import, transfer, 
reexport, or retransfer of items designated on the USMIL. The 
Department directs the commenter to the preambles of the proposed rule 
and this final rule, which state the regulations in part 129 apply to 
both USML and USMIL defense articles and defense services.
    One commenter requested clarification regarding whether the 
proposed rule's revision to Sec.  129.2(b)(2)(vii) would apply not only 
to items currently controlled in USML Categories I, II, and III, or to 
all items on the USMIL that are currently subject to the EAR (i.e., to 
include 600 series items previously transferred to the EAR). The 
commenter also recommended specifying whether the paragraph (b)(2)(vii) 
exclusion would apply to activities related to exports, reexports, or 
transfers of an items subject to the EAR that does not require use of 
an EAR license or license exception (i.e., No License Required (NLR)). 
The commenter assessed that the language at (b)(2)(vii) appears to 
provide a broad carve-out to the brokering activities definition. The 
commenter also requested clarification regarding whether the language 
was intended to convey that any ITAR or EAR approval for the items in 
question is sufficient to meet this criteria and that the approvals do 
not have to list the specific consignees or end-users for the future 
export, reexport, or transfer. The Department confirms that new 
provisions in Sec.  129.2(b)(2)(vii) and (viii) apply to all items 
subject to the EAR, not just those that transitioned from USML 
Categories I, II or III, to the extent that other items subject to the 
EAR are also included on the USMIL. These provisions also clarify the 
use of the NLR designation and revise the scope of the exclusion from 
brokering activities to include those activities that are controlled by 
the Department of Commerce.

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 military or 
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 final rule is 
exempt from the rulemaking provisions of the APA, the Department 
published this rule as a proposed rule (83 FR 24198) 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.

Regulatory Flexibility Act

    Since the Department is of the opinion that this final 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 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

[[Page 3829]]

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.
    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 rule will 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 are eligible for license 
exceptions or otherwise not require a separate license under the EAR. 
The Department of Commerce estimates that 6,000 transactions require an 
individual validated license. The Department of Commerce collects the 
information necessary to process license applications under OMB Control 
No. 0694-0088. The Department of Commerce estimates that each manual or 
electronic response to that information collection takes approximately 
43.8 minutes. 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 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 is 4,380 
burden hours. Therefore, the net burden is 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.
    In addition to the reduction in burden hours, there are direct cost 
savings to the State Department that result from the 10,000 license 
applications no longer required under the ITAR for items transferred 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 related activities. The Department 
of Commerce will 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 will 
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 will no longer pay fees to the State Department and there is no 
fee charged by the Department of Commerce to apply for a license.

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 
final 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 rule is an E.O. 13771 
deregulatory action. The Department has conducted this analysis in 
close consultation with the Department of Commerce.
    The total cost savings will be $1,376,281 in present (2017) 
dollars. To allow for cost comparisons under E.O. 13771, the value of 
these costs savings in 2016 dollars is $1,353,574. Assuming a 7% 
discount rate, the present value of these cost savings in perpetuity is 
$19,336,771. Since the costs savings of this rule are expected to be 
permanent and recurring, the annualized value of these cost savings is 
also $1,353,574 in 2016 dollars.

Executive Order 12988

    The Department of State 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 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 will be a reduction in 
burden for the following forms: OMB Control No. 1405-0003, Application/
License for Permanent Export of Unclassified Defense Articles and 
Related Unclassified Technical Data; OMB control number 1405-0092, 
Application for Amendment of a DSP-5 License;

[[Page 3830]]

OMB control number 1405-0013, Application/License for Temporary Import 
of Unclassified Defense Articles; OMB control number 1405-0092, 
Application for Amendment to a DSP-61 License ; OMB control number 
1405-0023, Application/License for Temporary Export of Unclassified 
Defense Articles; OMB control number 1405-0092, Application for 
Amendment to a DSP-73 License ; OMB control number 1405-0022, 
Application/License for Permanent/Temporary Export or Temporary Import 
of Classified Defense Articles and Related Classified Technical Data; 
OMB control number 1405-0174, Request for Advisory Opinion; and OMB 
control number 1405-0173, Request To Change End User, End Use and/or 
Destination of Hardware. 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 proposed version of this rule referenced only the first of 
these forms. However, subsequent its release, the Department of State 
submitted the remaining eight forms for public notice via Federal 
Register Public Notice 10646 on February 12, 2019. As such, this final 
rule is being amended to reflect all nine forms associated with the 
changes reflected in this rule.

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 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).
    Note 1 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.
    (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) Parts and components specially designed for defense articles 
described in paragraphs (c) and (e) of this category; or
    (4) 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 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: 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 
that 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; and
    (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 to pargraph (a)(5) 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 January 23, 
2021, 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; 
black powder guns and armaments manufactured between 1890 and 1919 
controlled on the CCL under ECCN 0A602; or black powder guns and 
armaments manufactured earlier than 1890.
    Note 2 to paragraph (a): Guns and armament when integrated into 
their

[[Page 3831]]

carrier (e.g., surface vessels, 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) Flamethrowers with an effective range greater than or equal to 
20 meters.
    (c) [Reserved]
    *(d) Kinetic energy weapon systems specially designed for 
destruction or rendering mission-abort of a target.
    Note 1 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) Independent ammunition handling systems for the guns and 
armament controlled in paragraphs (a), (b), and (d) of this category;
    (10) Components for independently powered ammunition handling 
systems and platform interface, 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 1 to paragraph (j)(10): For weapons mounts specially designed 
for surface vessels and special naval equipment, see Category VI. For 
weapons mounts specially designed for ground vehicles, see Category 
VII.
    (11) Ammunition containers/drums, ammunition chutes, ammunition 
conveyor elements, ammunition feeder systems, 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;
    (12) Systems and equipment for the guns and armament controlled in 
paragraphs (a) and (d) of this category for use in programming 
ammunition, and specially designed parts and components therefor;
    (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) Recoil systems specially designed to mitigate the shock 
associated with the firing process of guns integrated into air 
platforms and specially designed parts and components therefor;
    (15) 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;
    (16) Kinetic energy weapon target acquisition, tracking fire 
control, and damage assessment systems and specially designed parts and 
components therefor; or
    *(17) Any part, component, accessory, attachment, equipment, or 
system that:
    (i) Is classified;
    (ii) Contains classified software; or
    (iii) Is being developed using classified information.
    Note 1 to paragraph (j)(17): ``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.
    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 1 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 or 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 that fire superposed 
or stacked projectiles or for 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

[[Page 3832]]

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 January 23, 
2021, 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 or explosive;
    (2) Shotgun projectiles that are flechettes, incendiary, tracer, or 
explosive;
    Note 1 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) Projectiles that employ tips (e.g., M855A1 Enhanced Performance 
Round (EPR)) or 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 specially 
designed 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 1 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.
    Note 1 to paragraph (d)(15): ``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).
    Note 1 to Category III: This category does not control ammunition 
crimped without a projectile (blank star) and dummy ammunition with a 
pierced powder chamber.
    Note 2 to Category III: 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.
    Note 3 to Category III: 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, 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.
    (7) [Reserved]
* * * * *

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

[[Page 3833]]

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 ``.'' at the end of paragraph (b)(2)(vi) and adding 
``;'' in its place; and
0
c. Adding paragraphs (b)(2)(vii) and (viii).
    The addition reads as follows:


Sec.  129.2  Definitions.

* * * * *
    (b) * * *
    (2) * * *
    (vii) Activities by persons to facilitate the manufacture in the 
United States or export of an item subject to the EAR; or
    (viii) Activities by persons to facilitate the reexport, or 
transfer of an item subject to the EAR that has been approved pursuant 
to a license, license exception, or no license required authorization 
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
    (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;
* * * * *

Michael R. Pompeo,
Secretary of State.
[FR Doc. 2020-00574 Filed 1-17-20; 11:15 am]
BILLING CODE 4710-25-P