[Federal Register Volume 85, Number 88 (Wednesday, May 6, 2020)]
[Rules and Regulations]
[Pages 26847-26848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09748]


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DEPARTMENT OF STATE

22 CFR Part 122

[Public Notice: 11103]
RIN 1400-AF13


International Traffic in Arms Regulations: Temporary Reduction in 
Certain Registration Fees

AGENCY: Department of State.

ACTION: Temporary reduction in certain fees.

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SUMMARY: The Department of State is making a temporary change in the 
Tier I and Tier II and new registrant payment guidelines on the 
Directorate of Defense Trade Controls (DDTC) website at 
www.pmddtc.state.gov. These guidelines outline the registration fees 
charged to persons who engage in the United States in the business of 
manufacturing, exporting, or temporarily importing defense articles, 
furnishing defense services, or who engage in brokering activities 
pursuant to the International Traffic in Arms Regulations (ITAR). This 
temporary change is in the interest of the security and foreign policy 
of the United States. Further, it is consistent with the March 13, 2020 
declaration by President Trump of a National Emergency Concerning the 
Novel Coronavirus Disease (COVID-19) Outbreak and is warranted due to 
the extraordinary challenges to U.S. defense trade and the health of 
the Defense Industrial Base as a result of the exceptional and undue 
hardships and risks to safety caused by the public health emergency 
related to COVID-19. This temporary reduction in certain fees is 
intended to help mitigate the economic impact of the COVID-19 public 
health emergency on U.S. Defense Industrial Base and takes into account 
the operational requirements of DDTC that the fees fund.

DATES: The temporary reduction in fees was effective May 1, 2020, and 
shall expire on April 30, 2021, unless modified by a subsequent 
notification in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Neal Kringel, Office of Defense Trade 
Controls Management, U.S. Department of State, telephone (202) 663-
1282, or email [email protected]. ATTN: Temporary Fee 
Reduction.

SUPPLEMENTARY INFORMATION: This document serves to inform entities 
registered with the Directorate of Defense Trade Controls (DDTC) 
pursuant to ITAR Sec. Sec.  122.1(a) and 129.3(a), of a temporary 
reduction in registration fees charged to entities in Tier I and Tier 
II and new registrants. (For more information on DDTC registrations, 
please visit the ``Conduct Business'' page then select the 
``Registration'' tab and the ``Payment of Registration'' tab of the 
DDTC website). ITAR Sec.  122.1(a) provides that any person who engages 
in the United States in the business of manufacturing or exporting or 
temporarily importing defense articles, or furnishing defense services, 
is required to register with DDTC. ITAR Sec.  129.3(a) further provides 
that, with limited exceptions, any regulated person who engages in 
brokering activities is required to register with DDTC. ITAR Sec.  
122.3 provides that a person who is required to register must do so on 
an annual basis by submitting a completed Statement of Registration 
(form DS-2032) and payment of a fee following the payment guidelines 
available on the DDTC website at www.pmddtc.state.gov.

What is the purpose of this change?

    Given the extraordinary impact of the COVID-19 pandemic on the 
national economy and Defense Industrial Base, DDTC is temporarily 
reducing registration fees for DDTC registrants in Tier I and Tier II 
to $500 for registrations whose original expiration date is between May 
31, 2020 and April 30, 2021. Also, DDTC is reducing registration fees 
to $500 for new applicants who submit their registration application 
between May 1, 2020 and April 30, 2021. All new registrants are in Tier 
I in the first year. This will allow new registrants and existing 
registrants in Tiers I and II--including the many small to medium sized 
enterprises that must register under these tiers--to receive and plan 
for a reduced registration fee over the course of the coming year. The 
fee structure for Tier III entities remains unchanged at this time 
given the higher costs incurred by DDTC in processing the volume of 
licenses and other relevant submissions by entities in Tier III. Also, 
Tier III already has a provision for a reduced fee if the fee 
calculated above is greater than 3 percent of the total value of all 
applications. In such cases, the fee will be 3 percent of the total 
value of all applications or $2,750, whichever is greater. These 
measures were informed by consultations with U.S. industry, in 
particular the Defense Trade Advisory Group, as well as with DDTC's 
interagency partners in the Departments of Defense and Commerce. This 
temporary reduction in fees shall apply only through April 30, 2021, at 
which time fees for entities in Tiers I and II will return to the rates 
that were in effect on April 1, 2020, unless otherwise extended by a 
subsequent notification in the Federal Register.\1\
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    \1\ Proclamation 9994 of March 13, 2020, 85 FR 15337 (Mar. 18, 
2020).
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Temporary Fee Reduction

    For reasons stated above, the State Department amends the fee 
payment schedule referenced in 22 CFR 122.3 and posted on the DDTC 
website as follows:
    ``DDTC is temporarily reducing registration fees for DDTC 
registrants in Tier I and Tier II to $500 for registrations whose 
original expiration date is between May 31, 2020 and April 30, 2021. 
Also, DDTC is reducing registration fees to $500 for new applicants who 
submit their registration application between May 1, 2020 and April 30, 
2021. All new registrants are in Tier I in the first year. This will 
allow new registrants and existing registrants in Tiers I and II, the 
majority of which are small and medium-sized enterprises, to receive a 
reduced registration fee over the course of the coming year. The fee 
structure for Tier III entities remains unchanged at this time. We 
anticipate that this temporary reduction in fees for Tier I and Tier II 
and new registrants will save regulated industry over $20 million over 
the course of the coming year. The temporary reduction in fees is 
warranted as a result of the exceptional and undue economic hardship 
caused by the public health emergency caused by the COVID-19 
pandemic.''
    ``This temporary reduction in fees shall apply only through April 
30, 2021, at which time fees for entities in Tiers I and II will return 
to the rates that were in effect on April 1, 2020 unless otherwise 
extended by a subsequent notice in the Federal Register.''

Regulatory Findings

Administrative Procedure Act

    The Department of State is of the opinion that controlling the 
import and export of defense articles and defense services is a 
military or foreign affairs function of the United States Government 
and rules implementing

[[Page 26848]]

this function are exempt from section[thinsp]553 (Rulemaking) and 
section[thinsp]554 (Adjudications) of the Administrative Procedure Act 
(APA) pursuant to 5 U.S.C. 553(a)(1).

Regulatory Flexibility Act

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

Unfunded Mandates Reform Act of 1995

    This rulemaking does not involve a mandate that will result in the 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100 million or more in any year and it 
will not significantly or uniquely affect small governments. Therefore, 
no actions were deemed necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    The Department does not believe this rulemaking is a major rule 
under the criteria of 5 U.S.C. 804. Based on the criteria of 5 U.S.C. 
804(2), the Department does not believe this rulemaking will have an 
annual effect on the economy of $100,000,000 or more. The Department 
estimates that this rulemaking will result in the elimination of 
approximately $20,000,000 in registration fees that otherwise would 
have been collected by the Department.

Executive Orders 12372 and 13132

    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). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rulemaking is a significant but not an economically 
significant rule, under the criteria of Executive Order 12866, and is 
consistent with the provisions of Executive Order 13563.

Executive Order 12988

    The Department of State has reviewed this rulemaking in light of 
sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate 
ambiguity, minimize litigation, establish clear legal standards, and 
reduce burden.

Executive Order 13175

    The Department of State has determined that this rulemaking will 
not have tribal implications, will not impose substantial direct 
compliance costs on Indian tribal governments, and will not preempt 
tribal law. Accordingly, the requirements of Executive Order 13175 do 
not apply to this rulemaking.

Paperwork Reduction Act

    This rulemaking does not impose or revise any information 
collections subject to 44 U.S.C. Chapter 35.

Executive Order 13771

    This rulemaking is not subject to the requirements of E.O. 13771 
since it relates to a military or foreign affairs function of the 
United States.

Zachary A. Parker,
Director, Office of Directives Management, U.S. Department of State.
[FR Doc. 2020-09748 Filed 5-5-20; 8:45 am]
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