Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Category IV

AGENCY:

Department of State.

ACTION:

Proposed rule.

SUMMARY:

As part of the President's Export Control Reform effort, the Department of State proposes to amend the International Traffic in Arms Regulations (ITAR) to revise Category IV (launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs, and mines) of the U.S. Munitions List (USML) to describe more precisely the articles warranting control on the USML. The revisions contained in this rule are part of the Department of State's retrospective plan under E.O. 13563 completed on August 17, 2011. The Department of State's full plan can be accessed at http://www.state.gov/documents/organization/181028.pdf. In addition, several ITAR sections addressing the Missile Technology Control Regime (MTCR) Annex are revised to provide a new method of identifying articles common to the MTCR Annex and the USML. And, the ITAR section describing shipments between U.S. possessions is clarified to only encompass those shipments that do not transit a foreign country.

DATES:

The Department of State will accept comments on this proposed rule until March 18, 2013.

ADDRESSES:

Interested parties may submit comments within 45 days of the date of publication by one of the following methods:

• Email: DDTCResponseTeam@state.gov with the subject line, “ITAR Amendment—Category IV.”
• Internet: At www.regulations.gov,, search for this notice by using this rule's RIN (1400-AD19).

Comments received after that date will be considered if feasible, but consideration cannot be assured. Those submitting comments should not include any personally identifying information they do not desire to be made public or information for which a claim of confidentiality is asserted because those comments and/or transmittal emails will be made available for public inspection and copying after the close of the comment period via the Directorate of Defense Trade Controls Web site at www.pmddtc.state.gov. Parties who wish to comment anonymously may do so by submitting their comments via www.regulations.gov,, leaving the fields that would identify the commenter blank and including no identifying information in the comment itself. Comments submitted via www.regulations.gov are immediately available for public inspection.

FOR FURTHER INFORMATION CONTACT:

Ms. Candace M. J. Goforth, Director, Office of Defense Trade Controls Policy, U.S. Department of State, telephone (202) 663-2792, or email DDTCResponseTeam@state.gov. ATTN: Regulatory Change, USML Category IV.

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 120-130). The items subject to the jurisdiction of the ITAR, i.e., “defense articles,” are identified on the ITAR's U.S. Munitions List (USML) (22 CFR 121.1). With few exceptions, items not subject to the export control jurisdiction of the ITAR are subject to the jurisdiction of the Export Administration Regulations (“EAR,” 15 CFR parts 730-774, 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.

All references to the USML in this rule are to the list of defense articles that are controlled for the purpose of export or temporary import pursuant to the ITAR, and not to the defense articles on the USML that are controlled by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) for the purpose of permanent import under its regulations (see 27 CFR part 447). 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. For the sake of clarity, the list of defense articles controlled by ATF for the purpose of permanent import is the United States Munitions Import List (USMIL). The transfer of defense articles from the ITAR's USML to the EAR's CCL for the purpose of export control does not affect the list of defense articles controlled on the USMIL under the AECA for the purpose of permanent import.

Export Control Reform Update

The Departments of State and Commerce described in their respective Advanced Notices of Proposed Rulemaking (ANPRM) in December 2010 the Administration's plan to make the USML and the CCL positive, tiered, and aligned so that eventually they can be combined into a single control list (see “Commerce Control List: Revising Descriptions of Items and Foreign Availability,” 75 FR 76664 (December 9, 2010) and “Revisions to the United States Munitions List,” 75 FR 76935 (December 10, 2010)). The notices also called for the establishment of a “bright line” between the USML and the CCL to reduce government and industry uncertainty regarding export jurisdiction by clarifying whether particular items are subject to the jurisdiction of the ITAR or the EAR. While these remain the Administration's ultimate Export Control Reform objectives, their concurrent implementation would be problematic in the near term. In order to more quickly reach the national security objectives of greater interoperability with U.S. allies, enhancing the defense industrial base, and permitting the U.S. Government to focus its resources on controlling and monitoring the export and reexport of more significant items to destinations, end-uses, and end-users of greater concern than NATO allies and other multi-regime partners, the Administration has decided, as an interim step, to propose and implement revisions to both the USML and the CCL that are more positive, but not yet tiered.

Specifically, based in part on a review of the comments received in response to the December 2010 notices, the Administration has determined that fundamentally altering the structure of the USML by tiering and aligning it on a category-by-category basis would significantly disrupt the export control compliance systems and procedures of exporters and reexporters. For example, until the entire USML was revised and became final, some USML categories would follow the legacy numbering and control structures while the newly revised categories would follow a completely different numbering structure. In order to allow for the national security benefits to flow from re-aligning the jurisdictional status of defense articles that no longer warrant control on the USML on a category-by-category basis while minimizing the impact on exporters' internal control and jurisdictional and classification marking systems, the Administration plans to proceed with building positive lists now and afterward return to structural changes.

Revision of Category IV and Other ITAR Sections

This proposed rule revises USML Category IV (launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs, and mines).

Paragraph (a) is revised to remove demolition blocks and blasting caps, and to add subparagraphs (1) through (11) to more clearly describe the articles controlled in (a). ITAR § 121.11, which further describes demolition blocks and blasting caps, is removed and placed in reserve.

Paragraphs (b) and (d) are revised to more specifically enumerate the articles controlled therein.

Military explosive excavating devices, currently enumerated in paragraph (e), are to be transferred to the jurisdiction of the Department of Commerce under Export Control Classification Number (ECCN) 0A604.c. The articles currently enumerated in paragraph (f), ablative materials, will remain under ITAR control but are to be moved to USML Category XIII(d).

Paragraph (h) is revised by removing its broad catch-all wording and adding subparagraphs (1) through (31) to specifically enumerate the articles controlled in that paragraph.

ITAR § 121.5, which provides clarification of paragraph (c), is removed. Articles currently therein are identified in a note to paragraph (c) or are enumerated in paragraph (h).

ITAR § 121.16, which lists articles on the Missile Technology Control Regime (MTCR) Annex also enumerated on the USML, including in USML Category IV, is removed and placed in reserve. Articles common to the MTCR Annex and the USML are to be identified on the USML with the parenthetical “(MT)” at the end of each section containing such articles. ITAR §§ 120.29, 121.1(c), and 121.2 are also revised accordingly.

Finally, ITAR § 123.12 is revised to add clarifying language regarding the shipment of defense articles between U.S. possessions. For a shipment of defense articles between U.S. possessions not to require an export license, the shipment must be direct, without transiting a foreign country. A temporary export license is required for shipments that do transit a foreign country.

Definition for Specially Designed

Although one of the goals of the export control reform initiative is to describe USML controls without using design intent criteria, a few of the controls in the proposed revision nonetheless use the term “specially designed.” It is, therefore, necessary for the Department to define the term. Three proposed definitions have been published to date. For the purpose of evaluation of this proposed rule, reviewers should use the definition provided by the Department of State in the June 19, 2012, proposed rule (77 FR 36428).

Request for Comments

As the U.S. Government works through the proposed revisions to the USML, some solutions have been adopted that were determined to be the best of available options. With the thought that multiple perspectives would be beneficial to the USML revision process, the Department welcomes the assistance of users of the lists and requests input on the following:

(1) A key goal of this rulemaking is to ensure the USML and the CCL together control all the items that meet Wassenaar Arrangement commitments embodied in Munitions List Category 4 (WA-ML4). To that end, the public is asked to identify any potential lack of coverage brought about by the proposed rules for USML Category IV contained in this notice and for CCL ECCN 0A604 published separately by the Department of Commerce when reviewed together.

(2) The key goal of this rulemaking is to establish a “bright line” between the USML and the CCL for the control of these items. The public is asked to provide specific examples of launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs, and mines whose jurisdiction would be in doubt based on this revision.

In addition, the Department welcomes comments on the proposed revision of §§ 121.16 and 123.12.

Regulatory Analysis and Notices

Administrative Procedure Act

The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules implementing this function are exempt from sections 553 (rulemaking) and 554 (adjudications) of the Administrative Procedure Act (APA). Although the Department is of the opinion that this rule is exempt from the rulemaking provisions of the APA, the Department is publishing this rule 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. As noted above, and also without prejudice to the Department position that this rulemaking is not subject to the APA, the Department previously published a related Advance Notice of Proposed Rulemaking (RIN 1400-AC78), and accepted comments for 60 days.

Regulatory Flexibility Act

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

Small Business Regulatory Enforcement Fairness Act of 1996

This proposed rulemaking has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.

Executive Orders 12372 and 13132

This proposed 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 proposed 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 proposed rulemaking.

Executive Orders 12866 and 13563

Executive Orders 13563 and 12866 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). These Executive Orders stress the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. These rules have been designated “significant regulatory actions,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, this proposed rule has been reviewed by the Office of Management and Budget (OMB).

Executive Order 12988

The Department of State has reviewed this proposed 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 proposed 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 proposed 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. This proposed rule would affect the following approved collections: (1) Statement of Registration, DS-2032, OMB No. 1405-0002; (2) Application/License for Permanent Export of Unclassified Defense Articles and Related Unclassified Technical Data, DSP-5, OMB No. 1405-0003; (3) Application/License for Temporary Import of Unclassified Defense Articles, DSP-61, OMB No. 1405-0013; (4) Nontransfer and Use Certificate, DSP-83, OMB No. 1405-0021; (5) Application/License for Permanent/Temporary Export or Temporary Import of Classified Defense Articles and Classified Technical Data, DSP-85, OMB No. 1405-0022; (6) Application/License for Temporary Export of Unclassified Defense Articles, DSP-73, OMB No. 1405-0023; (7) Statement of Political Contributions, Fees, or Commissions in Connection with the Sale of Defense Articles or Services, OMB No. 1405-0025; (8) Authority to Export Defense Articles and Services Sold Under the Foreign Military Sales (FMS) Program, DSP-94, OMB No. 1405-0051; (9) Application for Amendment to License for Export or Import of Classified or Unclassified Defense Articles and Related Technical Data, DSP-6, -62, -74, -119, OMB No. 1405-0092; (10) Request for Approval of Manufacturing License Agreements, Technical Assistance Agreements, and Other Agreements, DSP-5, OMB No. 1405-0093; (11) Maintenance of Records by Registrants, OMB No. 1405-0111; (12) Annual Brokering Report, DS-4142, OMB No. 1405-0141; (13) Brokering Prior Approval (License), DS-4143, OMB No. 1405-0142; (14) Projected Sale of Major Weapons in Support of Section 25(a)(1) of the Arms Export Control Act, DS-4048, OMB No. 1405-0156; (15) Export Declaration of Defense Technical Data or Services, DS-4071, OMB No. 1405-0157; (16) Request for Commodity Jurisdiction Determination, DS-4076, OMB No. 1405-0163; (17) Request to Change End-User, End-Use, and/or Destination of Hardware, DS-6004, OMB No. 1405-0173; (18) Request for Advisory Opinion, DS-6001, OMB No. 1405-0174; (19) Voluntary Disclosure, OMB No. 1405-0179; and (20) Technology Security/Clearance Plans, Screening Records, and Non-Disclosure Agreements Pursuant to 22 CFR 126.18, OMB No. 1405-0195. The Department of State believes there will be minimal changes to these collections. The Department of State believes the combined effect of all rules to be published moving commodities from the USML to the EAR as part of the Administration's Export Control Reform would decrease the number of license applications by approximately 30,000 annually. The Department of State is looking for comments on the potential reduction in burden.

List of Subjects in Parts 120, 121, and 123

• Arms and munitions
• Exports

Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, parts 120, 121, and 123 are proposed to be amended as follows:

PART 120—PURPOSE AND DEFINITIONS

1. The authority citation for part 120 continues to read as follows:

Authority: Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2794; E.O. 11958, 42 FR 4311; E.O. 13284, 68 FR 4075; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; Pub. L. 105-261, 112 Stat. 1920; Pub. L. 111-266.

2. Section 120.29 is revised to read as follows:

PART 121—THE UNITED STATES MUNITIONS LIST

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

Authority: Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; Pub. L. 105-261, 112 Stat. 1920.

4. Section 121.1 is amended by revising paragraph (c) and U.S. Munitions List Category IV, as follows:

5. Section 121.2 is revised to read as follows:

6. Section 121.5 is removed and reserved, as follows:

7. Section 121.11 is removed and reserved, as follows:

8. Section 121.16 is removed and reserved, as follows:

PART 123—LICENSES FOR THE EXPORT OF DEFENSE ARTICLES

9. 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; E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 2776; Pub. L. 105-261, 112 Stat. 1920; Sec 1205(a), Pub. L. 107-228.

10. Section 123.12 is revised to read as follows: