**TITLE 22\--FOREIGN RELATIONS**

**CHAPTER I\--DEPARTMENT OF STATE**

**PART 126 \-- GENERAL POLICIES AND PROVISIONS**

**Section Contents**\
§ 126.1   Prohibited exports and sales to certain countries.\
§ 126.2   Temporary suspension or modification of this subchapter.\
§ 126.3   Exceptions.\
§ 126.4   Shipments by or for United States Government agencies.\
§ 126.5   Canadian exemptions.\
§ 126.6   Foreign-owned military aircraft and naval vessels, and the
Foreign Military Sales program.\
§ 126.7   Denial, revocation, suspension or amendment of licenses and
other approvals.\
§ 126.8   Proposals to foreign persons relating to significant military
equipment.\
§ 126.9   Advisory opinions and related authorizations.\
§ 126.10   Disclosure of information.\
§ 126.11   Relations to other provisions of law.\
§ 126.12   Continuation in force.\
§ 126.13   Required information.\
§ 126.14   Special comprehensive export authorizations for NATO,
Australia, and Japan.\
§ 126.15   Expedited processing of license applications for the export
of defense articles and defense services to Australia or the United
Kingdom.

**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); E.O. 11958, 42 FR
4311; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 287c; E.O.
12918, 59 FR 28205, 3 CFR, 1994 Comp. p. 899.

**Source:**   58 FR 39312, July 22, 1993, unless otherwise noted.

##### § 126.1   Prohibited exports and sales to certain countries.

\(a\) *General.* It is the policy of the United States to deny licenses
and other approvals for exports and imports of defense articles and
defense services, destined for or originating in certain countries. This
policy applies to Belarus, Cuba, Eritrea, Iran, North Korea, Syria, and
Venezuela. This policy also applies to countries with respect to which
the United States maintains an arms embargo (*e.g.*, Burma, China,
Liberia, and Sudan) or whenever an export would not otherwise be in
furtherance of world peace and the security and foreign policy of the
United States. Information regarding certain other embargoes appears
elsewhere in this section. Comprehensive arms embargoes are normally the
subject of a State Department notice published in the Federal Register.
The exemptions provided in the regulations in this subchapter, except
§123.17 of this subchapter, do not apply with respect to articles
originating in or for export to any proscribed countries, areas, or
persons in this §126.1.

\(b\) *Shipments.* A defense article licensed for export under this
subchapter may not be shipped on a vessel, aircraft or other means of
conveyance which is owned or operated by, or leased to or from, any of
the proscribed countries or areas.

\(c\) *Exports and sales prohibited by United Nations Security Council
embargoes.* Whenever the United Nations Security Council mandates an
arms embargo, all transactions that are prohibited by the embargo and
that involve U.S. persons anywhere, or any person in the United States,
and defense articles or services of a type enumerated on the United
States Munitions List (22 CFR part 121), irrespective of origin, are
prohibited under the ITAR for the duration of the embargo, unless the
Department of State publishes a notice in the Federal Register
specifying different measures. This would include, but is not limited
to, transactions involving trade by U.S. persons who are located inside
or outside of the United States in defense articles or services of U.S.
or foreign origin that are located inside or outside of the United
States. United Nations Arms Embargoes include, but are not necessarily
limited to, the following countries:

\(1\) Cote d\'Ivoire

\(2\) Democratic Republic of Congo (see also paragraph (i) of this
section)

\(3\) Iraq

\(4\) Iran

\(5\) Lebanon

\(6\) Liberia

\(7\) North Korea

\(8\) Sierra Leone

\(9\) Somalia

\(10\) Sudan

\(d\) *Terrorism.* Exports to countries which the Secretary of State has
determined to have repeatedly provided support for acts of international
terrorism are contrary to the foreign policy of the United States and
are thus subject to the policy specified in paragraph (a) of this
section and the requirements of section 40 of the Arms Export Control
Act (22 U.S.C. 2780) and the Omnibus Diplomatic Security and
Anti-Terrorism Act of 1986 (22 U.S.C. 4801, note). The countries in this
category are: Cuba, Iran, North Korea, Sudan and Syria.

\(e\) *Proposed sales*. No sale or transfer and no proposal to sell or
transfer any defense articles, defense services or technical data
subject to this subchapter may be made to any country referred to in
this section (including the embassies or consulates of such a country),
or to any person acting on its behalf, whether in the United States or
abroad, without first obtaining a license or written approval of the
Directorate of Defense Trade Controls. However, in accordance with
paragraph (a) of this section, it is the policy of the Department of
State to deny licenses and approvals in such cases. Any person who knows
or has reason to know of such a proposed or actual sale, or transfer, of
such articles, services or data must immediately inform the Directorate
of Defense Trade Controls.

\(f\) *Iraq.* It is the policy of the United States to deny licenses,
other approvals, exports and imports of defense articles, destined for
or originating in Iraq except, if determined to be in the national
interest of the United States and subject to the notification
requirements of section 1504 of Public Law 108--11, exports may be
authorized of nonlethal military equipment and, in the case of lethal
military equipment, only that which is designated by the Secretary of
State (or designee) for use by a reconstituted (or interim) Iraqi
military or police force, and of small arms designated by the Secretary
of State (or designee) for use for private security purposes.

\(g\) *Afghanistan.* It is the policy of the United States to deny
licenses, other approvals, exports and imports of defense articles and
defense services, destined for or originating in Afghanistan except for
the Government of Afghanistan (currently the Afghan Interim Authority)
and the International Security Assistance Force, which will be reviewed
on a case-by-case basis. In addition, lists of persons subject to a
broad prohibition, including an arms embargo, due to their affiliation
with the Taliban, Usama bin Laden, Al-Qaida or those associated with
them will continue to be published from time to time.

\(h\) \[Reserved\]

\(i\) *Democratic Republic of the Congo.* It is the policy of the United
States to deny licenses, other approvals, exports or imports of defense
articles and defense services destined for or originating in the
Democratic Republic of the Congo except for non-lethal equipment and
training (lethal and non-lethal) to the United Nations Organization
Mission in the Democratic Republic of the Congo (MONUC), the
transitional National Unity Government of the Democratic Republic of the
Congo and the integrated Congolese national army and police forces, such
units operating under the command of the etat-major integre of the
Congolese Armed Forces or National Police, and such units in the process
of being integrated outside the provinces of North and South Kivu and
the Ituri district; and non-lethal equipment for humanitarian or
protective use, and related assistance and training, as notified in
advance to the UN. An arms embargo exists with respect to any recipient
in the Democratic Republic of the Congo.

\(j\) *Haiti.* It is the policy of the United States to deny licenses,
other approvals, exports or imports of defense articles and defense
services, destined for or originating in Haiti. A denial policy will
remain for exports or imports of defense articles and defense services
destined for or originating in Haiti except, on a case-by-case basis,
for supplies of arms and related materials or technical training and
assistance intended solely for the support of or use by security units
that operate under the command of the Government of Haiti, supplies of
arms and related materials for technical training and assistance
intended solely for the support of or use by the United Nations or a
United Nations-authorized mission, and personal protective clothing,
including flak jackets and helmets, for use by personnel from the United
Nations and other international organizations, representatives of the
media, and development workers and associated personnel. All shipments
of arms and related materials consistent with such exemptions shall only
be made to Haitian security units as designated by the Government of
Haiti, in coordination with the U.S. Government.

\(k\) *Libya.* It is the policy of the United Sates to deny licenses,
other approvals, exports or imports of defense articles and defense
services destined for or originating in Libya except, on a case-by-case
basis, for:

\(1\) Non-lethal defense articles and defense services,

\(2\) Non-lethal safety-of-use defense articles (e.g., cartridge
actuated devices, propellant actuated devices and technical manuals for
military aircraft for purposes of enhancing the safety of the aircrew)
as spare parts for lethal end-items.

For non-lethal defense end-items, no distinction will be made between
Libya\'s existing and new inventory.

\(l\) *Vietnam*. It is the policy of the United Sates to deny licenses,
other approvals, exports or imports of defense articles and defense
services destined for or originating in Vietnam except, on a
case-by-case basis, for:

\(1\) Non-lethal defense articles and defense services, and

\(2\) Non-lethal, safety-of-use defense articles (e.g., cartridge
actuated devices, propellant actuated devices and technical manuals for
military aircraft for purposes of enhancing the safety of the aircraft
crew) for lethal end-items.

For non-lethal defense end-items, no distinction will be made between
Vietnam\'s existing and new inventory.

\(m\) *Somalia.* It is the policy of the United Sates to deny licenses,
or other approvals, for exports or imports of defense articles and
defense services destined for or originating in Somalia. A denial policy
will remain for exports or imports of defense articles and defense
services destined for or originating in Somalia except, on a
case-by-case basis, for defense articles and defense services intended
solely for:

\(1\) Support for the African Union Mission to Somalia (AMISOM), and

\(2\) Support for the purpose of helping develop security sector
institutions in Somalia that further the objectives of peace, stability
and reconciliation in Somalia, after advance notification of the
proposed export by the United States Government to the UN Somalia
Sanctions Committee and the absence of a negative decision by that
committee.

Exemptions from the licensing requirement may not be used with respect
to any export to Somalia unless specifically authorized in writing by
the Directorate of Defense Trade Controls.

\(n\) *Sri Lanka*. It is the policy of the United States to deny
licenses and other approvals to export or otherwise transfer defense
articles and services to Sri Lanka except, on a case-by-case basis, for
technical data or equipment made available for the limited purposes of
maritime and air surveillance and communications.

\[58 FR 39312, July 22, 1993, as amended at 59 FR 15625, Apr. 4, 1994;
59 FR 42158, Aug. 17, 1994; 61 FR 6113, Feb. 16, 1996; 61 FR 36625, July
12, 1996; 61 FR 41499, Aug. 9, 1996; 62 FR 37133, July 11, 1997; 67 FR
1075, Jan. 9, 2002; 67 FR 15101, Mar. 29, 2002; 67 FR 44352, July 2,
2002; 68 FR 44614, July 30, 2003; 68 FR 65634, Nov. 21, 2003; 69 FR
7350, Feb. 17, 2004; 69 FR 18811, Apr. 9, 2004; 70 FR 50967, Aug. 29,
2005; 71 FR 20546, Apr. 21, 2006; 71 FR 58497, Oct. 4, 2006; 72 FR 5615,
Feb. 7, 2007; 72 FR 15831, Apr. 3, 2007; 72 FR 28603, May 22, 2007; 72
FR 71575, Dec. 18, 2007; 73 FR 15410, Mar. 24, 2008; 73 FR 55441, Sept.
25, 2008; 73 FR 58041, Oct. 6, 2008\]

##### § 126.2   Temporary suspension or modification of this subchapter.

The Deputy Assistant Secretary for Defense Trade Controls or the
Managing Director, Directorate of Defense Trade Controls, may order the
temporary suspension or modification of any or all of the regulations of
this subchapter in the interest of the security and foreign policy of
the United States.

\[71 FR 20546, Apr. 21, 2006\]

##### § 126.3   Exceptions.

In a case of exceptional or undue hardship, or when it is otherwise in
the interest of the United States Government, the Director, Office of
Defense Trade Controls may make an exception to the provisions of this
subchapter.

##### § 126.4   Shipments by or for United States Government agencies.

(a) A license is not required for the temporary import, or temporary
export, of any defense article, including technical data or the
performance of a defense service, by or for any agency of the U.S.
Government for official use by such an agency, or for carrying out any
foreign assistance, cooperative project or sales program authorized by
law and subject to control by the President by other means. This
exemption applies only when all aspects of a transaction (export,
carriage, and delivery abroad) are affected by a United States
Government agency or when the export is covered by a United States
Government Bill of Lading. This exemption, however, does not apply when
a U.S. Government agency acts as a transmittal agent on behalf of a
private individual or firm, either as a convenience or in satisfaction
of security requirements. The approval of the Directorate of Defense
Trade Controls must be obtained before defense articles previously
exported pursuant to this exemption are permanently transferred (e.g.,
property disposal of surplus defense articles overseas) unless the
transfer is pursuant to a grant, sale, lease, loan or cooperative
project under the Arms Export Control Act or a sale, lease or loan under
the Foreign Assistance Act of 1961, as amended, or the defense articles
have been rendered useless for military purposes beyond the possibility
of restoration.

Note: *Special definition.* For purposes of this section, defense
articles exported abroad for incorporation into a foreign launch vehicle
or for use on a foreign launch vehicle or satellite that is to be
launched from a foreign country shall be considered a permanent export.

\(b\) This section does not authorize any department or agency of the
U.S. Government to make any export which is otherwise prohibited by
virtue of other administrative provisions or by any statute.

\(c\) A license is not required for the temporary import, or temporary
or permanent export, of any classified or unclassified defense articles,
including technical data or the performance of a defense service, for
end-use by a U.S. Government Agency in a foreign country under the
following circumstances:

\(1\) The export or temporary import is pursuant to a contract with, or
written direction by, an agency of the U.S. Government; and

\(2\) The end-user in the foreign country is a U.S. Government agency or
facility, and the defense articles or technical data will not be
transferred to any foreign person; and

\(3\) The urgency of the U.S. Government requirement is such that the
appropriate export license or U.S. Government Bill of Lading could not
have been obtained in a timely manner.

\(d\) A Shipper\'s Export Declaration (SED), required under §123.22 of
this subchapter, and a written statement by the exporter certifying that
these requirements have been met must be presented at the time of export
to the appropriate Port Director of U.S. Customs and Border Protection
or Department of Defense transmittal authority. A copy of the SED and
the written certification statement shall be provided to the Directorate
of Defense Trade Controls immediately following the export.

\[58 FR 39312, July 22, 1993, as amended at 70 FR 50964, Aug. 29, 2005\]

##### § 126.5   Canadian exemptions.

(a) *Temporary import of defense articles.* Port Director of U.S.
Customs and Border Protection and postmasters shall permit the temporary
import and return to Canada without a license of any unclassified
defense articles (see §120.6 of this subchapter) that originate in
Canada for temporary use in the United States and return to Canada. All
other temporary imports shall be in accordance with §§123.3 and 123.4 of
this subchapter.

\(b\) *Permanent and temporary export of defense articles.* Except as
provided below, the Port Director of U.S. Customs and Border Protection
and postmasters shall permit, when for end-use in Canada by Canadian
Federal or Provincial governmental authorities acting in an official
capacity or by a Canadian-registered person or return to the United
States, the permanent and temporary export to Canada without a license
of defense articles and related technical data identified in 22 CFR
121.1. The above exemption is subject to the following limitations:
Defense articles and related technical data, and defense services
identified in paragraphs (b)(1) through (b)(21) of this section and
exports that transit third countries. Such limitations also are subject
to meeting the requirements of this subchapter, (to include 22 CFR
120.1(c) and (d), parts 122 and 123 (except insofar as exemption from
licensing requirements is herein authorized) and §126.1, and the
requirement to obtain non-transfer and use assurances for all
significant military equipment. For purposes of this section,
"Canadian-registered person" is any Canadian national (including
Canadian business entities organized under the laws of Canada), dual
citizen of Canada and a third country (subject to §126.1), and permanent
resident registered in Canada in accordance with the Canadian Defense
Production Act, and such other Canadian Crown Corporations identified by
the Department of State in a list of such persons publicly available
through the Internet Web site of the Directorate of Defense Trade
Controls and by other means. The defense articles, related technical
data, and defense services identified in 22 CFR 121.1 continuing to
require a license are:

\(1\) All classified articles, technical data and defense services
covered by §121.1 of this subchapter.

\(2\) All Missile Technology Control Regime (MTCR) Annex Items.

\(3\) Defense services covered by part 124 of this subchapter, except
for those in paragraph (c) of this section.

\(4\) Any transaction involving the export of defense articles and
defense services for which congressional notification is required in
accordance with §123.15 and §124.11 of this subchapter.

\(5\) All technical data and defense services for gas turbine engine hot
sections covered by Categories VI(f) and VIII(b). (This does not include
hardware).

\(6\) Firearms, close assault weapons and combat shotguns listed in
Category I.

\(7\) Ammunition listed in Category III for the firearms in Category I.

\(8\) Nuclear weapons strategic delivery systems and all components,
parts, accessories and attachments specifically designed for such
systems and associated equipment.

\(9\) Naval nuclear propulsion equipment listed in Category VI(e).

\(10\) All Category VIII(a) items, and developmental aircraft, engines
and components identified in Category VIII(f).

\(11\) All Category XII(c), except any 1st- and 2nd-generation image
intensification tube and 1st- and 2nd-generation image intensification
night sighting equipment. End items (see §121.8 of this subchapter) in
Category XII(c) and related technical data limited to basic operations,
maintenance and training information as authorized under the exemption
in §125.4(b)(5) of this subchapter may be exported directly to a
Canadian Government entity ( *i.e.* federal, provincial, territorial, or
municipal) without a license.

\(12\) Chemical agents listed in Category XIV (a), (d), and (e),
biological agents and biologically derived substances in Category XIV
(b), and equipment listed in Category XIV (f) for dissemination of the
chemical agents and biological agents listed in Category XIV (a), (b),
(d), and (e).

\(13\) Nuclear radiation measuring devices manufactured to military
specifications listed in Category XVI(c).

\(14\) All spacecraft in Category XV(a), except commercial
communications satellites.

\(15\) Category XV(c), except end items (see §121.8 of this subchapter)
for end use by the Federal Government of Canada exported directly or
indirectly through a Canadian-registered person.

\(16\) Category XV(d).

\(17\) The following systems, components and parts included within the
coverage of Category XV(e):

\(i\) Anti-jam systems with the ability to respond to incoming
interference by adaptively reducing antenna gain (nulling) in the
direction of the interference.

\(ii\) Antennas:

\(A\) With aperture (overall dimension of the radiating portions of the
antenna) greater than 30 feet; or

\(B\) With all sidelobes less than or equal to −35dB, relative to the
peak of the main beam; or

\(C\) Designed, modified, or configured to provide coverage area on the
surface of the earth less than 200 nautical miles in diameter, where
"coverage area" is defined as that area on the surface of the earth that
is illuminated by the main beam width of the antenna (which is the
angular distance between half power points of the beam).

\(iii\) Optical intersatellite data links (cross links) and optical
ground satellite terminals.

\(iv\) Spaceborne regenerative baseband processing (direct up and down
conversion to and from baseband) equipment.

\(v\) Propulsion systems which permit acceleration of the satellite
on-orbit ( *i.e.,* after mission orbit injection) at rates greater than
0.1g.

\(vi\) Attitude control and determination systems designed to provide
spacecraft pointing determination and control or payload pointing system
control better than 0.02 degrees per axis.

\(vii\) All specifically designed or modified systems, components,
parts, accessories, attachments, and associated equipment for all
Category XV(a) items, except when specifically designed or modified for
use in commercial communications satellites.

\(18\) Nuclear weapons, design and testing equipment listed in Category
XVI.

\(19\) Submersible and oceanographic vessels and related articles listed
in Category XX(a) through (d).

\(20\) Miscellaneous articles covered by Category XXI.

\(21\) Man-portable air defense systems, and their parts and components,
and technical data for such systems covered by Category IV.

\(c\) *Defense service exemption.* A defense service is exempt from the
licensing requirements of part 124 of this subchapter, when the
following criteria can be met.

\(1\) The item, technical data, defense service and transaction is not
identified in paragraphs (b)(1) through (21) of this section; and

\(2\) The transfer of technical data and provision of defense service is
limited to the following activities:

\(i\) Canadian-registered person or a registered and eligible U.S.
company (in accordance with part 122 of this subchapter) preparing a
quote or bid proposal in response to a written request from a Department
or Agency of the United States Federal Government or from a Canadian
Federal, Provincial, or Territorial Government; or

\(ii\) Produce, design, assemble, maintain or service a defense article
( *i.e.* , hardware, technical data) for use by a registered U.S.
company; or, a U.S. Federal Government Program; or for end use in a
Canadian Federal, Provincial, or Territorial Government Program; and

\(iii\) The defense services and technical data are limited to that
defined in paragraph (c)(6) of this section; and

\(3\) The Canadian contractor and subcontractor certify, in writing, to
the U.S. exporter that the technical data and defense service being
exported will be used only for an activity identified in paragraph
(c)(2) of this section; and

\(4\) A written arrangement between the U.S. exporter and the Canadian
recipient (such as a consummated Non-Disclosure or other multi-party
agreement, Technology Transfer Control Plan, contract or purchase order)
must:

\(i\) Limit delivery of the defense articles being produced directly to
an identified manufacturer in the United States registered in accordance
with part 122 of this subchapter; a Department or Agency of the United
States Federal Government; a Canadian-registered person authorized in
writing to manufacture defense articles by and for the Government of
Canada; a Canadian Federal, Provincial, or Territorial Government; and

\(ii\) Prohibit the disclosure of the technical data to any other
contractor or subcontractor who is not a Canadian-registered person; and

\(iii\) Provide that any subcontract contain all the limitations of this
section; and

\(iv\) Require that the Canadian contractor, including subcontractors,
destroy or return to the U.S. exporter in the United States all of the
technical data exported pursuant to the contract or purchase order upon
fulfillment of the contract, unless for use by a Canadian or United
States Government entity that requires in writing the technical data be
maintained. The U.S. exporter must be provided written certification
that the technical data is being retained or destroyed; and

\(v\) Include a clause requiring that all documentation created from
U.S. technical data contain the statement, "This document contains
technical data, the use of which is restricted by the U.S. Arms Export
Control Act. This data has been provided in accordance with, and is
subject to, the limitations specified in §126.5 of the International
Traffic In Arms Regulations (ITAR). By accepting this data, the
consignee agrees to honor the requirements of the ITAR"; and

\(5\) The U.S. exporter must provide the Directorate of Defense Trade
Controls a semi-annual report of all their on-going activities
authorized under this section. The report shall include the article(s)
being produced; the end user(s) ( *i.e.* , name of U.S. or Canadian
company); the end item into which the product is to be incorporated; the
intended end use of the product (e.g., United States or Canadian Defense
contract number and identification of program); the name and address of
all the Canadian contractors and subcontractors; and

\(6\) The defense services and technical data are limited to those in
paragraphs (c)(6)(i), (ii), (iii) and (iv), and do not include
paragraphs (c)(6)(v), (vi) and (vii) of this section:

\(i\) *Build-to-Print.* Build-to-Print means that a foreign consignee
can produce a defense article from engineering drawings without any
technical assistance from a U.S. exporter. This transaction is based
strictly on a "hand-off" approach because the foreign consignee is
understood to have the inherent capability to produce the defense
article and only lacks the necessary drawings. Supporting documentation
such as acceptance criteria, and specifications, may be released on an
as-required basis ( *i.e.* "must have") such that the foreign consignee
would not be able to produce an acceptable defense article without this
additional supporting documentation. Documentation which is not
absolutely necessary to permit manufacture of an acceptable defense
article ( *i.e.* "nice to have") is not considered within the boundaries
of a "Build-to Print" data package; and/or

\(ii\) *Build/Design-to-Specification.* "Build/Design-to-Specification"
means that a foreign consignee can design and produce a defense article
from requirement specifications without any technical assistance from
the U.S. exporter. This transaction is based strictly on a "hands-off"
approach since the foreign consignee is understood to have the inherent
capability to both design and produce the defense article and only lacks
the necessary requirement information; and/or

\(iii\) *Basic Research.* "Basic Research"---means a systemic study
directed toward greater knowledge or understanding of the fundamental
aspects of phenomena and observable facts without specific applications
towards processes or products in mind. It does not include "Applied
Research" ( *i.e.* a systemic study to gain knowledge or understanding
necessary to determine the means by which a recognized and specific need
may be met. It is a systematic application of knowledge toward the
production of useful materials, devices, and systems or methods,
including design, development, and improvement of prototypes and new
processes to meet specific requirements.); and

\(iv\) *Maintenance* ( *i.e.,* inspection, testing, calibration or
repair, including overhaul, reconditioning and one-to-one replacement of
any defective items, parts or components, but excluding any
modification, enhancement, upgrade or other form of alteration or
improvement that changes the basic performance of the item); and does
not include

\(v\) *Design Methodology,* such as: The underlying engineering methods
and design philosophy utilized ( *i.e.,* the "why" or information that
explains the rationale for particular design decision, engineering
feature, or performance requirement); engineering experience (e.g.,
lessons learned); and the rationale and associated databases (e.g.,
design allowables, factors of safety, component life predictions,
failure analysis criteria) that establish the operational requirements
(e.g., performance, mechanical, electrical, electronic, reliability and
maintainability) of a defense article. (Final analytical results and the
initial conditions and parameters may be provided.)

\(vi\) *Engineering Analysis,* such as: Analytical methods and tools
used to design or evaluate a defense article\'s performance against the
operational requirements. Analytical methods and tools include the
development and/or use of mockups, computer models and simulations, and
test facilities. (Final analytical results and the initial conditions
and parameters may be provided.)

\(vii\) *Manufacturing Know-how,* such as: Information that provides
detailed manufacturing processes and techniques needed to translate a
detailed design into a qualified, finished defense article. (Information
may be provided in a build-to-print package identified in paragraph
(c)(6)(i) of this section that is necessary in order to produce an
acceptable defense article.).

\(d\) *Reexports/retransfer.* Reexport/re-transfer in Canada to another
end user or end use or from Canada to another destination, except the
United States, must in all instances have the prior approval of the
Directorate of Defense Trade Controls. Unless otherwise exempt in this
subchapter, the original exporter is responsible, upon request from a
Canadian-registered person, for obtaining or providing
reexport/retransfer approval. In any instance when the U.S. exporter is
no longer available to the Canadian end user the request for
reexport/retransfer may be made directly to Department of State,
Directorate of Defense Trade Controls. All requests must include the
information in §123.9(c) of this subchapter. Reexport/retransfer
approval is acquired by:

\(1\) If the reexport/retransfer being requested could be made pursuant
to this section ( *i.e.,* a retransfer within Canada to another eligible
Canadian recipient under this section) if exported directly from the
U.S., upon receipt by the U.S. company of a request by a Canadian end
user, the original U.S. exporter is authorized to grant on behalf of the
U.S. Government by confirming in writing to the Canadian requester that
the reexport/retransfer is authorized subject to the conditions of this
section; or

\(2\) If the reexport/retransfer is to an end use or end user that, if
directly exported from the U.S. requires a license, retransfer must be
handled in accordance with §123.9 of this subchapter.

Notes to §126.5: 1. In any instance when the exporter has knowledge that
the defense article exempt from licensing is being exported for use
other than by a qualified Canadian-registered person or for export to
another foreign destination, other than the United States, in its
original form or incorporated into another item, an export license must
be obtained prior to the transfer to Canada.

2\. Additional exemptions exist in other sections of this subchapter
that are applicable to Canada, for example Secs. 123.9, 125.4 and 124.2,
which allows for the performance of defense services related to training
in basic operations and maintenance, without a license, for defense
articles lawfully exported, including those identified in paragraphs
(b)(1) through (21) of this section.

\[66 FR 10576, Feb. 16, 2001; 66 FR 36834, July 13, 2001, as amended at
67 FR 78686, Dec. 26, 2002; 70 FR 34654, June 15, 2005; 70 FR 39919,
July 12, 2005; 70 FR 50964, Aug. 29, 2005; 71 FR 20546, Apr. 21, 2006\]

##### § 126.6   Foreign-owned military aircraft and naval vessels, and the Foreign Military Sales program.

(a) A license from the Directorate of Defense Trade Controls is not
required if:

\(1\) The article or technical data to be exported was sold, leased, or
loaned by the Department of Defense to a foreign country or
international organization pursuant to the Arms Export Control Act or
the Foreign Assistance Act of 1961, as amended, and

\(2\) The article or technical data is delivered to representatives of
such a country or organization in the United States; and

\(3\) The article or technical data is to be exported from the United
States on a military aircraft or naval vessel of that government or
organization or via the Defense Transportation Service (DTS).

\(b\) *Foreign military aircraft and naval vessels*. A license is not
required for the entry into the United States of military aircraft or
naval vessels of any foreign state if no overhaul, repair, or
modification of the aircraft or naval vessel is to be performed.
However, Department of State approval for overflight (pursuant to the 49
U.S.C. 40103) and naval visits must be obtained from the Bureau of
Political-Military Affairs, Office of International Security Operations.

\(c\) *Foreign Military Sales Program.* A license from the Directorate
of Defense Trade Controls is not required if the defense article or
technical data or a defense service to be transferred was sold, leased
or loaned by the Department of Defense to a foreign country or
international organization under the Foreign Military Sales (FMS)
Program of the Arms Export Control Act pursuant to an Letter of Offer
and Acceptance (LOA) authorizing such transfer which meets the criteria
stated below:

\(1\) Transfers of the defense articles, technical data or defense
services using this exemption may take place only during the period
which the FMS Letter of Offer and Acceptance (LOA) and implementing USG
FMS contracts and subcontracts are in effect and serve as authorization
for the transfers hereunder in lieu of a license. After the USG FMS
contracts and subcontracts have expired and the LOA no longer serves as
such authorization, any further provision of defense articles, technical
data or defense services shall not be covered by this section and shall
instead be subject to other authorization requirements of this
subchapter; and

\(2\) The defense article, technical data or defense service to be
transferred are specifically identified in an executed LOA, in
furtherance of the Foreign Military Sales Program signed by an
authorized Department of Defense Representative and an authorized
representative of the foreign government, and

\(3\) The transfer of the defense article and related technical data is
effected during the duration of the relevant Letter of Offer and
Acceptance (LOA), similarly a defense service is to be provided only
during the duration of the USG FMS contract or subcontract and not to
exceed the specified duration of the LOA, and

\(4\) The transfer is not to a country identified in §126.1 of this
subchapter, and

\(5\) The U.S. person responsible for the transfer maintains records of
all transfers in accordance with Part 122 of this subchapter, and

\(6\) For transfers of defense articles and technical data,

\(i\) The transfer is made by the relevant foreign diplomatic mission of
the purchasing country or its authorized freight forwarder, provided
that the freight forwarder is registered with the Directorate of Defense
Trade Controls pursuant to part 122 of this subchapter, and

\(ii\) At the time of shipment, the Port Director of U.S. Customs and
Border Protection is provided an original and properly executed DSP--94
accompanied by a copy of the LOA and any other documents required by
U.S. Customs and Border Protection in carrying out its responsibilities.
The Shippers Export Declaration or, if authorized, the outbound
manifest, must be annotated "This shipment is being exported under the
authority of Department of State Form DSP--94. It covers FMS Case
\[insert case identification\], expiration \[insert date\]. 22 CFR 126.6
applicable. The U.S. Government point of contact is \_\_\_\_, telephone
number \_\_\_\_," and

\(iii\) If, classified hardware and related technical data are involved
the transfer must have the requisite USG security clearance and
transportation plan and be shipped in accordance with the Department of
Defense National Industrial Security Program Operating Manual, or

\(7\) For transfers of defense services:

\(i\) A contract or subcontract between the U.S. person(s) responsible
for providing the defense service and the USG exists that:

\(A\) Specifically defines the scope of the defense service to be
transferred;

\(B\) Identifies the FMS case identifier,

\(C\) Identifies the foreign recipients of the defense service

\(D\) Identifies any other U.S. or foreign parties that may be involved
and their roles/responsibilities, to the extent known when the contract
is executed,

\(E\) Provides a specified period of duration in which the defense
service may be performed, and

\(ii\) The U.S. person(s) identified in the contract maintain a
registration with the Directorate of Defense Trade Controls for the
entire time that the defense service is being provided. In any instance
when the U.S. registered person(s) identified in the contract employs a
subcontractor, the subcontractor may only use this exemption when
registered with DDTC, and when such subcontract meets the above stated
requirements, and

\(iii\) In instances when the defense service involves the transfer of
classified technical data, the U.S. person transferring the defense
service must have the appropriate USG security clearance and a
transportation plan, if appropriate, in compliance with the Department
of Defense National Industrial Security Program Operating Manual, and

\(iv\) The U.S. person responsible for the transfer reports the initial
transfer, citing this section of the ITAR, the FMS case identifier,
contract and subcontract number, the foreign country, and the duration
of the service being provided to the Directorate of Defense Trade
Controls using DDTC\'s Direct Shipment Verification Program.

\[65 FR 45287, July 21, 2000, as amended at 70 FR 50964, Aug. 29, 2005;
71 FR 20546, Apr. 21, 2006\]

##### 

##### 

##### § 126.7   Denial, revocation, suspension or amendment of licenses and other approvals.

(a) *Policy* . Licenses or approvals shall be denied or revoked whenever
required by any statute of the United States (see §§127.7 and 127.11 of
this subchapter). Any application for an export license or other
approval under this subchapter may be disapproved, and any license or
other approval or exemption granted under this subchapter may be
revoked, suspended, or amended without prior notice whenever:

\(1\) The Department of State deems such action to be in furtherance of
world peace, the national security or the foreign policy of the United
States, or is otherwise advisable; or

\(2\) The Department of State believes that 22 U.S.C. 2778, any
regulation contained in this subchapter, or the terms of any U.S.
Government export authorization (including the terms of a manufacturing
license or technical assistance agreement, or export authorization
granted pursuant to the Export Administration Act, as amended) has been
violated by any party to the export or other person having significant
interest in the transaction; or

\(3\) An applicant is the subject of an indictment for a violation of
any of the U.S. criminal statutes enumerated in §120.27 of this
subchapter; or

\(4\) An applicant or any party to the export or the agreement has been
convicted of violating any of the U.S. criminal statutes enumerated in
§120.27 of this subchapter; or

\(5\) An applicant is ineligible to contract with, or to receive a
license or other authorization to import defense articles or defense
services from, any agency of the U.S. Government; or

\(6\) An applicant, any party to the export or agreement, any source or
manufacturer of the defense article or defense service or any person who
has a significant interest in the transaction has been debarred,
suspended, or otherwise is ineligible to receive an export license or
other authorization from any agency of the U.S. government (e.g.,
pursuant to debarment by the Department of Commerce under 15 CFR part
760 or by the Department of State under part 127 or 128 of this
subchapter); or

\(7\) An applicant has failed to include any of the information or
documentation expressly required to support a license application or
other request for approval under this subchapter or as required in the
instructions in the applicable Department of State form; or

\(8\) An applicant is subject to sanctions under other relevant U.S.
laws (e.g., the Missile Technology Controls title of the National
Defense Authorization Act for FY 1991 (Pub. L. 101--510); the Chemical
and Biological Weapons Control and Warfare Elimination Act of 1991 (Pub.
L. 102--182); or the Iran-Iraq Arms Non-Proliferation Act of 1992 (Pub.
L. 102--484)).

\(b\) *Notification* . The Directorate of Defense Trade Controls will
notify applicants or licensees or other appropriate United States
persons of actions taken pursuant to paragraph (a) of this section. The
reasons for the action will be stated as specifically as security and
foreign policy considerations permit.

\(c\) *Reconsideration* . If a written request for reconsideration of an
adverse decision is made within 30 days after a person has been informed
of the decision, the U.S. person will be accorded an opportunity to
present additional information. The case will then be reviewed by the
Directorate of Defense Trade Controls.

\(d\) *Reconsideration of certain applications.* Applications for
licenses or other requests for approval denied for repeated failure to
provide information or documentation expressly required will normally
not be reconsidered during the thirty day period following denial. They
will be reconsidered after this period only after a final decision is
made on whether the applicant will be subject to an administrative
penalty imposed pursuant to this subchapter. Any request for
reconsideration shall be accompanied by a letter explaining the steps
that have been taken to correct the failure and to ensure compliance
with the requirements of this subchapter.

\(e\) *Special definition.* For purposes of this section, the term
*party to the export* means:

\(1\) The chief executive officer, president, vice-presidents, other
senior officers and officials (e.g., comptroller, treasurer, general
counsel) and any member of the board of directors of the applicant;

\(2\) The freight forwarders or designated exporting agent of the
applicant; and

\(3\) Any consignee or end-user of any item to be exported.

\[58 FR 39312, July 22, 1993, as amended at 71 FR 20546, Apr. 21, 2006\]

##### § 126.8   Proposals to foreign persons relating to significant military equipment.

(a) *Proposals* . Certain proposals to foreign persons for the sale or
manufacture abroad of significant military equipment require either the
prior approval of, or prior notification to, the Directorate of Defense
Trade Controls.

\(1\) Sale of significant military equipment: The prior approval of the
Directorate of Defense Trade Controls is required before a U.S. person
may make a proposal or presentation designed to constitute a basis for a
decision on the part of any foreign person to purchase significant
military equipment on the U.S. Munitions List whenever all the following
conditions are met:

\(i\) The value of the significant military equipment to be sold is
\$14,000,000 or more; and

\(ii\) The equipment is intended for use by the armed forces of any
foreign country other than a member of the North Atlantic Treaty
Organization, Australia, New Zealand, or Japan; and

\(iii\) The sale would involve the export from the United States of any
defense article or the furnishing abroad of any defense service
including technical data; and

\(iv\) The identical significant military equipment has not been
previously licensed for permanent export or approved for sale under the
Foreign Military Sales Program of the Department of Defense, to any
foreign country.

\(2\) Sale of significant military equipment: The Directorate of Defense
Trade Controls must be notified in writing at least thirty days in
advance of any proposal or presentation concerning the sale of
significant military equipment whenever the conditions specified in
paragraphs (a)(1)(i) through (iii) of this section are met and the
identical equipment has been previously licensed for permanent export or
approved for sale under the FMS Program to any foreign country.

\(3\) Manufacture abroad of significant military equipment: The prior
approval of the Directorate of Defense Trade Controls is required before
a U.S. person may make a proposal or presentation designed to constitute
a basis for a decision on the part of any foreign person to enter into
any manufacturing license agreement or technical assistance agreement
for the production or assembly of significant military equipment,
regardless of dollar value, in any foreign country, whenever:

\(i\) The equipment is intended for use by the armed forces of any
foreign country; and

\(ii\) The agreement would involve the export from the United States of
any defense article or the furnishing abroad of any defense service
including technical data.

\(b\) *Definition of proposal or presentation.* The terms proposal or
presentation (designed to constitute a basis for a decision to purchase
and to enter into any agreement) mean the communication of information
in sufficient detail that the person communicating that information
knows or should know that it would permit an intended purchaser to
decide either to acquire the particular equipment in question or to
enter into the manufacturing license agreement or technical assistance
agreement. For example, a presentation which describes the equipment\'s
performance characteristics, price, and probable availability for
delivery would require prior notification or approval, as appropriate,
where the conditions specified in paragraph (a) of this section are met.
By contrast, the following would not require prior notification or
approval: Advertising or other reporting in a publication of general
circulation; preliminary discussions to ascertain market potential; or
merely calling attention to the fact that a company manufactures a
particular item of significant military equipment.

\(c\) *Satisfaction of requirements.* (1) The requirement of this
section for prior approval is met by any of the following:

\(i\) A written statement from the Directorate of Defense Trade Controls
approving the proposed sale or agreement or approving the making of a
proposal or presentation.

\(ii\) A license issued under §125.2 or §125.3 of this subchapter for
the export of technical data relating to the proposed sale or agreement
to the country concerned.

\(iii\) A temporary export license issued under §123.5 of this
subchapter relating to the proposed sale or agreement for a
demonstration to the armed forces of the country of export.

\(iv\) With respect to manufacturing license agreements or technical
assistance agreements, the application for export licenses pursuant to
the two preceding subparagraphs must state that they are related to
possible agreements of this kind.

\(2\) The requirement of this section for prior notification is met by
informing the Directorate of Defense Trade Controls by letter at least
30 days before making the proposal or presentation. The letter must
comply with the procedures set forth in paragraph (d) of this section
and must identify the relevant license, approval, or FMS case by which
the identical equipment had previously been authorized for permanent
export or sale. The Directorate of Defense Trade Controls will provide
written acknowledgement of such prior notification to confirm compliance
with this requirement and the commencement of the 30-day notification
period.

\(d\) *Procedures* . Unless a license has been obtained pursuant to
§126.8(c)(1)(ii) or (iii), a request for prior approval to make a
proposal or presentation with respect to significant military equipment,
or a 30-day prior notification regarding the sale of such equipment,
must be made by letter to the Directorate of Defense Trade Controls. The
letter must outline in detail the intended transaction, including usage
of the equipment involved and the country (or countries) involved. Seven
copies of the letter should be provided as well as seven copies of
suitable descriptive information concerning the equipment.

\(e\) *Statement to accompany licensing requests.* (1) Every application
for an export license or other approval to implement a sale or agreement
which meets the criteria specified in paragraph (a) of this section must
be accompanied by a statement from the applicant which either:

\(i\) Refers to a specific notification made or approval previously
granted with respect to the transaction; or

\(ii\) Certifies that no proposal or presentation requiring prior
notification or approval has been made.

\(2\) The Department of State may require a similar statement from the
Foreign Military Sales contractor concerned in any case where the United
States Government receives a request for a letter of offer for a sale
which meets the criteria specified in paragraph (a) of this section.

\(f\) *Penalties.* In addition to other remedies and penalties
prescribed by law or this subchapter, a failure to satisfy the prior
approval or prior notification requirements of this section may be
considered to be a reason for disapproval of a license, agreement or
sale under the FMS program.

\(g\) *License for technical data.* Nothing in this section constitutes
or is to be construed as an exemption from the licensing requirement for
the export of technical data that is embodied in any proposal or
presentation made to any foreign persons.

\[58 FR 39312, July 22, 1993, as amended at 71 FR 20547, Apr. 21, 2006\]

##### 

##### § 126.9   Advisory opinions and related authorizations.

(a) *Advisory opinion* . Any person desiring information as to whether
the Directorate of Defense Trade Controls would be likely to grant a
license or other approval for the export or approval of a particular
defense article or defense service to a particular country may request
an advisory opinion from the Directorate of Defense Trade Controls.
Advisory opinions are issued on a case-by-case basis and apply only to
the particular matters presented to the Directorate of Defense Trade
Controls. These opinions are not binding on the Department of State, and
may not be used in future matters before the Department. A request for
an advisory opinion must be made in writing and must outline in detail
the equipment, its usage, the security classification (if any) of the
articles or related technical data, and the country or countries
involved. An original and seven copies of the letter must be provided
along with seven copies of suitable descriptive information concerning
the defense article or defense service.

\(b\) *Related authorizations* . The Directorate of Defense Trade
Controls may, as appropriate, in accordance with the procedures set
forth in paragraph (a) of this section, provide export authorization,
subject to all other relevant requirements of this subchapter, both for
transactions that have been the subject of advisory opinions requested
by prospective U.S. exporters, or for the Directorate\'s own
initiatives. Such initiatives may cover pilot programs, or specifically
anticipated circumstances for which the Directorate considers special
authorizations appropriate.

\[71 FR 20547, Apr. 21, 2006\]

##### § 126.10   Disclosure of information.

(a) *Freedom of information* . Subchapter R of this title contains
regulations on the availability to the public of information and records
of the Department of State. The provisions of subchapter R apply to such
disclosures by the Directorate of Defense Trade Controls.

\(b\) *Determinations required by law.* Section 38(e) of the Arms Export
Control Act (22 U.S.C. 2778) provides by reference to certain procedures
of the Export Administration Act that certain information required by
the Department of State in connection with the licensing process may
generally not be disclosed to the public unless certain determinations
relating to the national interest are made in accordance with the
procedures specified in that provision, except that the names of the
countries and types and quantities of defense articles for which
licenses are issued under this section shall not be withheld from public
disclosure unless the President determines that release of such
information would be contrary to the national interest. Registration
with the Directorate of Defense Trade Controls is required of certain
persons, in accordance with Section 38 of the Arms Export Control Act.
The requirements and guidance are provided in the ITAR pursuant to parts
122 and 129. Registration is generally a precondition to the issuance of
any license or other approvals under this subchapter, to include the use
of any exemption. Therefore, information provided to the Department of
State to effect registration, as well as that regarding actions taken by
the Department of State related to registration, may not generally be
disclosed to the public. Determinations required by Section 38(e) shall
be made by the Assistant Secretary for Political-Military Affairs.

\(c\) *Information required under part 130.* Part 130 of this subchapter
contains specific provisions on the disclosure of information described
in that part.

\(d\) *National Interest Determinations.* In accordance with section
38(e) of the Arms Export Control Act (22 U.S.C. 2778(e)), the Secretary
of State has determined that the following disclosures are in the
national interest of the United States:

\(1\) Furnishing information to foreign governments for law enforcement
or regulatory purposes; and

\(2\) Furnishing information to foreign governments and other agencies
of the U.S. Government in the context of multilateral or bilateral
export regimes (e.g., the Missile Technology Control Regime, the
Australia Group, and Wassenaar Arrangement).

\[58 FR 39312, July 22, 1993, as amended at 62 FR 67276, Dec. 24, 1997;
70 FR 50965, Aug. 29, 2005; 71 FR 20547, Apr. 21, 2006\]

##### § 126.11   Relations to other provisions of law.

The provisions in this subchapter are in addition to, and are not in
lieu of, any other provisions of law or regulations. The sale of
firearms in the United States, for example, remains subject to the
provisions of the Gun Control Act of 1968 and regulations administered
by the Department of Justice. The performance of defense services on
behalf of foreign governments by retired military personnel continues to
require consent pursuant to Part 3a of this title. Persons who intend to
export defense articles or furnish defense services should not assume
that satisfying the requirements of this subchapter relieves one of
other requirements of law.

\[71 FR 20547, Apr. 21, 2006\]

##### § 126.12   Continuation in force.

All determinations, authorizations, licenses, approvals of contracts and
agreements and other action issued, authorized, undertaken, or entered
into by the Department of State pursuant to section 414 of the Mutual
Security Act of 1954, as amended, or under the previous provisions of
this subchapter, continue in full force and effect until or unless
modified, revoked or superseded by the Department of State.

##### § 126.13   Required information.

(a) All applications for licenses (DSP--5, DSP--61, DSP--73, and
DSP--85), all requests for approval of agreements and amendments thereto
under part 124 of this subchapter, all requests for other written
authorizations, and all 30-day prior notifications of sales of
significant military equipment under §126.8(c) must include a letter
signed by a responsible official empowered by the applicant and
addressed to the Directorate of Defense Trade Controls, stating whether:

\(1\) The applicant or the chief executive officer, president,
vice-presidents, other senior officers or officials (e.g., comptroller,
treasurer, general counsel) or any member of the board of directors is
the subject of an indictment for or has been convicted of violating any
of the U.S. criminal statutes enumerated in §120.27 of this subchapter
since the effective date of the Arms Export Control Act, Public Law
94--329, 90 Stat. 729 (June 30, 1976);

\(2\) The applicant or the chief executive officer, president,
vice-presidents, other senior officers or officials (e.g., comptroller,
treasurer, general counsel) or any member of the board of directors is
ineligible to contract with, or to receive a license or other approval
to import defense articles or defense services from, or to receive an
export license or other approval from, any agency of the U.S.
Government;

\(3\) To the best of the applicant\'s knowledge, any party to the export
as defined in §126.7(e) has been convicted of violating any of the U.S.
criminal statutes enumerated in §120.27 of this subchapter since the
effective date of the Arms Export Control Act, Public Law 94--329, 90
Stat. 729 (June 30, 1976), or is ineligible to contract with, or to
receive a license or other approval to import defense articles or
defense services from, or to receive an export license or other approval
from any agency of the U.S. government; and

\(4\) The natural person signing the application, notification or other
request for approval (including the statement required by this
subsection) is a citizen or national of the United States, has been
lawfully admitted to the United States for permanent residence (and
maintains such a residence) under the Immigration and Nationality Act,
as amended (8 U.S.C. 1101(a), section 101(a)20, 60 Stat. 163), or is an
official of a foreign government entity in the United States.

\(b\) In addition, all applications for licenses must include, on the
application or an addendum sheet, the complete names and addresses of
all U.S. consignors and freight forwarders, and all foreign consignees
and foreign intermediate consignees involved in the transaction. If
there are multiple consignors, consignees or freight forwarders, and all
the required information cannot be included on the application form, an
addendum sheet and seven copies containing this information must be
provided. The addendum sheet must be marked at the top as follows:
"Attachment to Department of State License Form (insert DSP--5, 61, 73,
or 85, as appropriate) for Export of (insert commodity) valued at
(insert U.S. dollar amount) to (insert country of ultimate
destination)." The Directorate of Defense Trade Controls will impress
one copy of the addendum sheet with the Department of State seal and
return it to the applicant with each license. The sealed addendum sheet
must remain attached to the license as an integral part thereof. Port
Directors of U.S. Customs and Border Protection and Department of
Defense transmittal authorities will permit only those U.S. consignors
or freight forwarders listed on the license or sealed addendum sheet to
make shipments under the license, and only to those foreign consignees
named on the documents. Applicants should list all freight forwarders
who may be involved with shipments under the license to ensure that the
list is complete and to avoid the need for amendments to the list after
the license has been approved. If there are unusual or extraordinary
circumstances that preclude the specific identification of all the U.S.
consignors and freight forwarders and all foreign consignees, the
applicant must provide a letter of explanation with each application.

\(c\) In cases when foreign nationals are employed at or assigned to
security-cleared facilities, provision by the applicant of a Technology
Control Plan (available from the Defense Security Service) will
facilitate processing.

\[58 FR 39312, July 22, 1993, as amended at 70 FR 50965, Aug. 29, 2005;
71 FR 20547, Apr. 21, 2006\]

##### § 126.14   Special comprehensive export authorizations for NATO, Australia, and Japan.

(a) *Comprehensive authorizations.* With respect to NATO members,
Australia, Japan, and Sweden, the Directorate of Defense Trade Controls
may provide the comprehensive authorizations described in paragraphs (a)
and (b) of this section for circumstances where the full parameters of a
commercial export endeavor including the needed defense exports can be
well anticipated and described in advance, thereby making use of such
comprehensive authorizations appropriate.

\(1\) *Major project authorization.* With respect to NATO members,
Australia, Japan, and Sweden, the Directorate of Defense Trade Controls
may provide comprehensive authorizations for well circumscribed
commercially developed "major projects", where a principal registered
U.S. exporter/prime contractor identifies in advance the broad
parameters of a commercial project including defense exports needed,
other participants (e.g., exporters with whom they have "teamed up," or
subcontractors), and foreign government end users. Projects eligible for
such authorization may include a commercial export of a major weapons
system for a foreign government involving, for example, multiple U.S.
suppliers under a commercial teaming agreement to design, develop and
manufacture defense articles to meet a foreign government\'s
requirements. U.S. exporters seeking such authorization must provide
detailed information concerning the scope of the project, including
other exporters, U.S. subcontractors, and planned exports (including
re-exports) of defense articles, defense services, and technical data,
and meet the other requirements set forth in paragraph (b) of this
section.

\(2\) *Major program authorization.* With respect to NATO members,
Australia, Japan, and Sweden, the Directorate of Defense Trade Controls
may provide comprehensive authorizations for well circumscribed
commercially developed "major program". This variant would be available
where a single registered U.S. exporter defines in advance the
parameters of a broad commercial program for which the registrant will
be providing all phases of the necessary support (including the needed
hardware, technical data, defense services, development, manufacturing,
and logistic support). U.S. exporters seeking such authorization must
provide detailed information concerning the scope of the program,
including planned exports (including re-exports) of defense articles,
defense services, and technical data, and meet the other requirements
set forth in paragraph (b) of this section.

(3)(i) *Global project authorization.* With respect to NATO members,
Australia, Japan, and Sweden, the Directorate of Defense Trade Controls
may provide a comprehensive "Global Project Authorization" to registered
U.S. exporters for exports of defense articles, technical data or
defense services in support of government to government cooperative
projects (covering research and development or production) with one of
these countries undertaken pursuant to an agreement between the U.S.
Government and the government of such country, or a memorandum of
understanding/agreement between the Department of Defense and the
country\'s Ministry of Defense.

\(ii\) A set of standard terms and conditions derived from and
corresponding to the breadth of the activities and phases covered in
such a cooperative MOU will provide the basis for this comprehensive
authorization for all U.S. exporters (and foreign end users) identified
by DoD as participating in such cooperative project. Such authorizations
may cover a broad range of defined activities in support of such
programs including multiple shipments of defense articles and technical
data and performance of defense services for extended periods, and
re-exports to approved end users.

\(iii\) Eligible end users will be limited to ministries of defense of
MOU signatory countries and foreign companies serving as contractors of
such countries.

\(iv\) Any requirement for non-transfer and use assurances from a
foreign government may be deemed satisfied by the signature by such
government of a cooperative agreement or by its ministry of defense of a
cooperative MOU/MOA where the agreement or MOU contains assurances that
are comparable to that required by a DSP--83 with respect to foreign
governments and that clarifies that the government is undertaking
responsibility for all its participating companies. The authorized
non-government participants or end users (e.g., the participating
government\'s contractors) will still be required to execute DSP--83s.

\(4\) *Technical data supporting an acquisition, teaming arrangement,
merger, joint venture authorization.* With respect to NATO member
countries, Australia, Japan, and Sweden, the Directorate of Defense
Trade Controls may provide a registered U.S. defense company a
comprehensive authorization to export technical data in support of the
U.S. exporter\'s consideration of entering into a teaming arrangement,
joint venture, merger, acquisition, or similar arrangement with
prospective foreign partners. Specifically, the authorization is
designed to permit the export of a broadly defined set of technical data
to qualifying well established foreign defense firms in NATO countries,
Australia, Japan, or Sweden in order to better facilitate a sufficiently
in depth assessment of the benefits, opportunities and other relevant
considerations presented by such prospective arrangements. U.S.
exporters seeking such authorization must provide detailed information
concerning the arrangement, joint venture, merger or acquisition,
including any planned exports of defense articles, defense services, and
technical data, and meet the other requirements set forth in paragraph
(b) of this section.

\(b\) *Provisions and requirements for comprehensive authorizations.*
Requests for the special comprehensive authorizations set forth in
paragraph (a) of this section should be by letter addressed to the
Directorate of Defense Trade Controls. With regard to a commercial major
program or project authorization, or technical data supporting a teaming
arrangement, merger, joint venture or acquisition, registered U.S.
exporters may consult the Managing Director of the Directorate of
Defense Trade Controls about eligibility for and obtaining available
comprehensive authorizations set forth in paragraph (a) of this section
or pursuant to §126.9(b).

\(1\) Requests for consideration of all such authorizations should be
formulated to correspond to one of the authorizations set out in
paragraph (a) of this section, and should include:

\(i\) A description of the proposed program or project, including where
appropriate a comprehensive description of all phases or stages; and

\(ii\) Its value; and

\(iii\) Types of exports needed in support of the program or project;
and

\(iv\) Projected duration of same, within permissible limits; and

\(v\) Description of the exporter\'s plan for record keeping and
auditing of all phases of the program or project; and

\(vi\) In the case of authorizations for exports in support of
government to government cooperative projects, identification of the
cooperative project.

\(2\) Amendments to the requested authorization may be requested in
writing as appropriate, and should include a detailed description of the
aspects of the activities being proposed for amendment.

\(3\) The comprehensive authorizations set forth in paragraph (a) of
this section may be made valid for the duration of the major commercial
program or project, or cooperative project, not to exceed 10 years.

\(4\) Included among the criteria required for such authorizations are
those set out in Part 124, e.g., §§124.7, 124.8 and 124.9, as well as
§§125.4 (technical data exported in furtherance of an agreement) and
123.16 (hardware being included in an agreement). Provisions required
will also take into account the congressional notification requirements
in §§123.15 and 124.11 of the ITAR. Specifically, comprehensive
congressional notifications corresponding to the comprehensive
parameters for the major program or project or cooperative project
should be possible, with additional notifications such as those required
by law for changes in value or other significant modifications.

\(5\) All authorizations will be consistent with all other applicable
requirements of the ITAR, including requirements for non-transfer and
use assurances (see §§123.10 and 124.10), congressional notifications
(e.g., §§123.15 and 124.11), and other documentation (e.g., §§123.9 and
126.13).

\(6\) Special auditing and reporting requirements will also be required
for these authorizations. Exporters using special authorizations are
required to establish an electronic system for keeping records of all
defense articles, defense services and technical data exported and
comply with all applicable requirements for submitting shipping or
export information within the allotted time.

\[65 FR 45285, July 21, 2000, as amended at 66 FR 35900, July 10, 2001;
71 FR 20548, Apr. 21, 2006\]

##### § 126.15   Expedited processing of license applications for the export of defense articles and defense services to Australia or the United Kingdom.

(a) Any application submitted for authorization of the export of defense
articles or services to Australia or the United Kingdom will be
expeditiously processed by the Department of State, in consultation with
the Department of Defense. Such license applications will not be
referred to any other Federal department or agency, except when the
defense articles or defense services are classified or exceptional
circumstances apply. (See section 1225, Pub. L. 108--375).

\(b\) To be eligible for the expedited processing in paragraph (a) of
this section, the destination of the prospective export must be limited
to Australia or the United Kingdom. No other country may be included as
intermediary or ultimate end-user.

\[70 FR 39919, July 12, 2005\]

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