[Federal Register Volume 88, Number 81 (Thursday, April 27, 2023)]
[Rules and Regulations]
[Pages 25488-25491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08825]


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DEPARTMENT OF STATE

22 CFR Part 121

[Public Notice: 11986]
RIN 1400-AF27


International Traffic in Arms Regulations: U.S. Munitions List 
Targeted Revisions

AGENCY: Department of State.

ACTION: Interim final rule; request for comments.

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SUMMARY: The Department of State (the Department) amends the 
International Traffic in Arms Regulations (ITAR) to remove from U.S. 
Munitions List (USML) Category XI certain high-energy storage 
capacitors and to clearly identify the high-energy storage capacitors 
that remain in USML Category XI.

DATES: Effective date May 21, 2023.
    Send comments by May 30, 2023.

ADDRESSES: Interested parties may submit comments to the Department of 
State by any of the following methods:
     Visit the Regulations.gov website at: http://www.regulations.gov and search for the docket number DOS-2023-0003.

[[Page 25489]]

     Email: [email protected]. Commenting parties 
must include RIN 1400-AF27 in the subject line of the email message.
     All comments should include the commenter's name, the 
organization the commenter represents, if applicable, and the 
commenter's address. If the Department of State is unable to read a 
comment for any reason, and cannot contact the commenting party for 
clarification, the Department of State may not be able to consider your 
comment. After the conclusion of the comment period, the Department of 
State will publish a Final Rule (in which it will address relevant 
comments) as expeditiously as possible.

FOR FURTHER INFORMATION CONTACT: Mr. Chris Weil, Office of Defense 
Trade Controls Policy, Department of State, telephone (202) 571-7051; 
email [email protected] SUBJECT: ITAR Amendment--USML 
Targeted Revisions (RIN 1400-AF27).

SUPPLEMENTARY INFORMATION: The Department of State's Directorate of 
Defense Trade Controls (DDTC) administers the ITAR (22 CFR parts 120 
through 130) to regulate the export, reexport, retransfer, and 
temporary import of, and brokering activities related to certain items 
and services. The articles, services, and information subject to the 
jurisdiction of the Department of State under the ITAR (e.g., ``defense 
articles'' and ``defense services'') are identified on the USML at ITAR 
Sec.  121.1. Items not subject to the ITAR or to the exclusive 
licensing jurisdiction of any other Department or Agency of the U.S. 
Government are subject to 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. This rule 
does not modify the list of defense articles subject to permanent 
import control by the Attorney General, as enumerated on the U.S. 
Munitions Import List at 27 CFR part 447.
    The Department seeks to control on the USML those articles and 
services that provide a critical military or intelligence advantage. 
The Department undertakes these revisions pursuant to the discretionary 
statutory authority afforded the President in section 38(a)(1) of the 
AECA and delegated to the Department of State in Executive Order 13637, 
to control the export and temporary import 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, informed by consultations with its 
interagency partners, determined the articles removed from the USML 
under this rulemaking no longer warrant control pursuant to the ITAR.

Targeted USML Revisions

    With this rulemaking, the Department is removing from USML Category 
XI certain high-energy storage capacitors that it assesses have broad 
commercial application, are available internationally, and do not 
provide a critical military or intelligence advantage. The Department 
assesses that adding a 125-volt (125 V) voltage criterion for the high-
energy capacitors described on the USML ensures the capacitors that 
remain warrant control on the USML. While adding the 125 V criterion to 
paragraph (c)(5), the Department is simultaneously reorganizing the 
paragraph to delineate each element of the control criteria more 
clearly and adding a note to explain those criteria.
    These changes are warranted because the Department found that 
certain low-voltage high-energy storage capacitor technology has 
progressed such that many models that exceed the existing USML control 
criteria no longer provide a critical military or intelligence 
advantage. Although these lower-voltage capacitors meet the energy 
density and full energy life criteria, the technology for these lower-
voltage capacitors is well understood, and the capacitors have been 
extensively integrated into commercial applications, such as Wi-Fi 
routers and civil aviation aircraft transponders. Further, comparable 
capacitors manufactured in other countries are widely available 
internationally without multilateral export restrictions placed on 
them.
    The Department considered two methods of implementation for 
specifying this voltage criterion. First, the Department considered 
applying a voltage rating criterion, assessing it to be an industry-
standard term used to describe a value for existing capacitors that is 
readily accessible to exporters and customers through the 
specifications typically provided by Original Equipment Manufacturers 
(OEMs). The Department assessed that this criterion would facilitate 
compliance and implementation. This approach also would be in keeping 
with the Department's intent to establish threshold criteria in 
language readily understood by practitioners. However, it is possible 
different OEMs determine voltage ratings using differing methodologies 
or underlying assumptions, which could produce significantly different 
ratings for equivalent products. The Department assesses this drawback 
could be mitigated by clearly defining the term ``voltage rating'' in 
the regulation but would require more information to do so 
appropriately.
    Second, the Department considered identifying the voltage 
performance capability of the capacitors, as performance capability can 
be empirically tested and is potentially less prone to 
misinterpretation. However, it is not clear to the Department how much 
additional testing would be required to confirm a given capacitor 
model's capability or whether customers have ready access to that 
information to facilitate compliance.
    In this interim final rule, the Department implements the 125 V 
criterion based on the voltage at which the capacitor is capable of 
operating, in order to allow for public comment on advantages or 
disadvantages of each approach and on potential definitions for 
``voltage rating'' and ``capable of.''
    The Department further reaffirms a core concept for compliance 
programs:
    When a commodity is described by a single criterion within a USML 
entry, it is imperative to evaluate the remaining criteria of the 
control to verify whether the commodity is described--even when the 
commodity was not intentionally designed to meet or exceed the control 
criteria.

Request for Comments

    Consistent with its ongoing USML review process, the Department is 
requesting public comments on the revisions described in this 
rulemaking. The Department encourages the public to provide comments 
directly related to this rule and responsive to the questions described 
below. To facilitate timely review and assessment, comments should be 
provided in a concise sentence or paragraph, followed by supporting 
explanatory paragraphs and examples, with each distinct comment treated 
separately (as opposed to multiple comments in one paragraph or 
section). The Department requests comments focused on the following 
questions:
    1. Please provide specific examples of any high-energy storage 
capacitors that exceed the 125 V threshold but fall under a 500 V 
threshold that you believe do not provide a critical military 
advantage.
    2. What implementation challenges are presented by the use of 
either ``capable of operating'' or ``voltage

[[Page 25490]]

rating'' to describe the voltage threshold?
    3. Is there additional guidance that would be useful in parsing 
``capable of operating,'' as used in this rule?
    a. Is it sufficiently clear in the ``capable of operating'' 
implementation that the voltage capability is for steady-state, versus 
transient or surge, operating conditions?
    b. Is it sufficiently clear in the `capable of operating' 
implementation that the voltage capability does not vary based on 
circuit design margins?
    4. Could a ``voltage rating'' criterion be implemented more easily 
and consistently? If so,
    a. Do you assess that a sufficient definition of ``voltage rating'' 
would be ``the value, based on the capacitor's design, testing, and 
evaluation, that describes the maximum amount of continuous voltage 
that will not damage the capacitor''?
    b. Is it sufficiently clear in the alternative `voltage rating' 
implementation that the voltage rating is for steady-state, versus 
transient or surge, operating conditions?
    c. Is it sufficiently clear in the alternative `voltage rating' 
implementation that the voltage rating does not vary based on circuit 
design margins?
    d. What would be the effect of adding a temperature criterion 
(e.g., ``measured at or below 85 [deg]C'') and is it accurate that the 
voltage rating of a capacitor only declines with an increase in 
temperature?
    e. Would a criterion such as ``will not reduce the capacitor's full 
energy life below 10,000 discharges'' address the fact that each charge 
and discharge cycle likely inflicts some damage on a capacitor?
    5. Are these revisions unclear in any way, or can they be more 
concisely stated? For example, please identify any:

--Terms that you find ambiguous in definition or context
--Constructions or language that vary from existing USML entries

    6. Are there other technical issues directly related to this entry 
which the Department should address in a future rulemaking?

Comment Submissions

Instructions

    Include the agency name and docket number or Regulatory Information 
Number (RIN) (1400-AF27) for all submissions related to this 
rulemaking. Relevant comments may be posted without substantive change 
to the DDTC website (www.pmddtc.state.gov). Please remove any personal 
information, because the Department will not edit comments. Parties who 
wish to comment anonymously may do so by submitting their comments via 
www.regulations.gov, leaving the fields that would identify the 
commenter blank and including no identifying information in the comment 
itself. Commenters are cautioned not to include proprietary, export-
controlled, or other sensitive information that they are not 
comfortable making public in their comments. If such information would 
provide useful insight to the comment: (1) assemble that information in 
a separate document with proprietary markings; (2) include 
``Proprietary supplement on file with: [provide POC]'' as the first 
line in the body of the email submission; (3) submit the public portion 
of the comment via email; and (4) call DDTC at (202) 663-1282 to 
coordinate submission of the proprietary supplement.

Regulatory Analysis and Notices

Administrative Procedure Act

    This rulemaking is exempt from section 553 (Rulemaking) and section 
554 (Adjudications) of the Administrative Procedure Act (APA) pursuant 
to 5 U.S.C. 553(a)(1) as a military or foreign affairs function of the 
United States Government. Although the Department is of the opinion 
that this rule is exempt from the rulemaking provisions of the APA, the 
Department is publishing this rule with a 30-day provision for public 
comment and a delayed effective date, without prejudice to its 
determination that controlling the import and export of defense 
articles and defense services is a military or foreign affairs 
function.

Regulatory Flexibility Act

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

Unfunded Mandates Reform Act of 1995

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

Congressional Review Act

    The Department assesses that this rulemaking is not a major rule 
under the criteria of 5 U.S.C. 804. Moving the subject commodities to 
the jurisdiction of the EAR will reduce regulatory restrictions and 
compliance costs, particularly for U.S. exporters as well as some 
importers who source the subject commodities from abroad. This will not 
increase costs or prices and should have no adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S.-based enterprises to compete with foreign-based 
enterprises in domestic and export markets. To the contrary, the rule 
is expected to reduce regulatory compliance costs in the long term and 
facilitate U.S. manufacturers' competitiveness with foreign 
manufacturers of similar commodities. The Department does not, however, 
expect this change to have an annual effect on the economy of $100 
million or more.

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 rule has been deemed a ``significant regulatory 
action'' by the Office and Information and Regulatory Affairs under 
Executive Order 12866.
    This rule moves the export regulation of certain capacitors from 
the ITAR to the EAR. This action reduces the regulatory burden on those 
who export, temporarily import, retransfer, reexport, or perform 
brokering activities involving the subject capacitors. In particular, 
this action averts substantial regulatory burdens that would otherwise 
apply to supply chains that rely on the subject capacitors and 
commercial items into which the subject capacitors have been integrated 
or incorporated. As discussed in ITAR Sec.  120.11(c), defense articles 
remain subject to the ITAR after

[[Page 25491]]

incorporation or integration into an item not described on the USML, 
unless otherwise provided in the ITAR. The Department assesses that 
continuing to subject these capacitors (which are used in a wide swath 
of everyday commercial items, including commercial aircraft and Wi-Fi 
equipment) to the ITAR is unnecessary and would have significant 
negative consequences for global commerce, including the grounding of 
civil aircraft and the disruption of supply chains.
    In implementing this rule, the Department is also revising USML 
Category XI(c)(5) to clarify its structure and explain certain terms 
used therein to minimize the potential for uncertainty.
    The Department assesses that the benefits of this rulemaking 
outweigh any costs, that modifying the USML in this manner is the most 
cost-effective method to achieve the Department's regulatory objectives 
on this matter, and that doing so will result in a net reduction of the 
burden on the regulated community.

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.

List of Subjects in 22 CFR Part 121

    Arms and munitions, Classified information, Exports.

    Accordingly, for the reasons set forth above, Title 22, Chapter I, 
Subchapter M, part 121 is amended as follows:

PART 121--THE UNITED STATES MUNITIONS LIST

0
1. The authority citation for part 121 continues to read as follows:

    Authority:  22 U.S.C. 2752, 2778, 2797; 22 U.S.C. 2651a; Sec. 
1514, Pub. L. 105-261, 112 Stat. 2175; E.O. 13637, 78 FR 16129, 3 
CFR, 2013 Comp., p. 223.


0
2. In Sec.  121.1, under Category XI, revise paragraph (c)(5) as 
follows:


Sec.  121.1  The United States Munitions List.

* * * * *
    Category XI--Military Electronics
* * * * *
    (c) * * *
    (5) High-energy storage capacitors that:
    (i) Are capable of operating at greater than one hundred twenty-
five volts (125 V);
    (ii) Have a repetition rate greater than or equal to six (6) 
discharges per minute;
    (iii) Have a full energy life greater than or equal to 10,000 
discharges at greater than 0.2 Amps per Joule peak current; and
    (iv) Have any of the following:
    (A) Volumetric energy density greater than or equal to 1.5 J/cc; or
    (B) Mass energy density greater than or equal to 1.3 kJ/kg;

    Note to paragraph (c)(5): Volumetric energy density is Energy 
per unit Volume. Mass energy density is Energy per unit Mass, 
sometimes referred to as Gravimetric energy density or Specific 
energy. Energy (E = \1/2\CV\2\, where C is Capacitance and V is the 
Voltage rating) in these calculations must not be confused with 
useful energy or extractable energy.

* * * * *
    The Under Secretary of State for Arms Control and International 
Security, Bonnie Jenkins, having reviewed and approved this document, 
is delegating the authority to electronically sign this document to Jae 
E. Shin, who is the Director of the Office of Defense Trade Controls 
Compliance within the Directorate of Defense Trade Controls, for 
purposes of publication in the Federal Register.

Jae E. Shin,
Director, Office of Defense Trade Controls Compliance, Department of 
State.
[FR Doc. 2023-08825 Filed 4-26-23; 8:45 am]
BILLING CODE 4710-25-P