**TITLE 22\--FOREIGN RELATIONS**

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

**PART 122 \-- REGISTRATION OF MANUFACTURERS AND EXPORTERS**

**Section Contents**\
§ 122.1   Registration requirements.\
§ 122.2   Submission of registration statement.\
§ 122.3   Registration fees.\
§ 122.4   Notification of changes in information furnished by
registrants.\
§ 122.5   Maintenance of records by registrants.

**Authority:**   Secs. 2 and 38, Public Law 90--629, 90 Stat. 744 (22
U.S.C. 2752, 2778); E.O. 11958, 42 FR 4311; 1977 Comp. p. 79, 22 U.S.C.
2651a.

**Source:**   58 FR 39298, July 22, 1993, unless otherwise noted.

##### § 122.1   Registration requirements.

\(a\) Any person who engages in the United States in the business of
either manufacturing or exporting defense articles or furnishing defense
services is required to register with the Directorate of Defense Trade
Controls. For the purpose of this subchapter, engaging in the business
of manufacturing or exporting defense articles or furnishing defense
services requires only one occasion of manufacturing or exporting a
defense article or furnishing a defense service. Manufacturers who do
not engage in exporting must nevertheless register.

\(b\) *Exemptions.* Registration is not required for:

\(1\) Officers and employees of the United States Government acting in
an official capacity.

\(2\) Persons whose pertinent business activity is confined to the
production of unclassified technical data only.

\(3\) Persons all of whose manufacturing and export activities are
licensed under the Atomic Energy Act of 1954, as amended.

\(4\) Persons who engage only in the fabrication of articles for
experimental or scientific purpose, including research and development.

\(c\) *Purpose.* Registration is primarily a means to provide the U.S.
Government with necessary information on who is involved in certain
manufacturing and exporting activities. Registration does not confer any
export rights or privileges. It is generally a precondition to the
issuance of any license or other approval under this subchapter.

\[58 FR 39298, July 22, 1993, as amended at 71 FR 20540, Apr. 21, 2006\]

##### § 122.2   Submission of registration statement.

\(a\) *General.* The Department of State Form DS--2032 (Statement of
Registration) and the transmittal letter required by paragraph (b) of
this section must be submitted by an intended registrant with a payment
by check drawn against the registrant\'s account, payable to the
Department of State of the fee prescribed in §122.3(a) of this
subchapter. Checks must be in U.S. currency, and must be payable through
a U.S. financial institution. In addition, the Statement of Registration
and transmittal letter must be signed by a senior officer (e.g., Chief
Executive Officer, President, Secretary, Partner, Member, Treasurer,
General Counsel) who has been empowered by the intended registrant to
sign such documents. The intended registrant also shall submit
documentation that demonstrates that it is incorporated or otherwise
authorized to do business in the United States. The Directorate of
Defense Trade Controls will notify the registrant if the Statement of
Registration is incomplete either by notifying the registrant of what
information is required or through the return of the entire registration
package. Registrants may not establish new entities for the purpose of
reducing registration fees.

\(b\) *Transmittal letter* . A letter of transmittal, signed by an
authorized senior officer of the intended registrant, shall accompany
each Statement of Registration.

\(1\) The letter shall state whether the intended registrant, 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:

\(i\) Has ever been indicted for or convicted of violating any of the
U.S. criminal statutes enumerated in §120.27 of this subchapter; or

\(ii\) 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.

\(2\) The letter shall also declare whether the intended registrant is
owned or controlled by foreign persons (as defined in §120.16 of this
subchapter). If the intended registrant is owned or controlled by
foreign persons, the letter shall also state whether the intended
registrant is incorporated or otherwise authorized to engage in business
in the United States.

\(c\) *Definition.* For purpose of this section, *ownership* means that
more than 50 percent of the outstanding voting securities of the firm
are owned by one or more foreign persons. *Control* means that one or
more foreign persons have the authority or ability to establish or
direct the general policies or day-to-day operations of the firm.
Control is presumed to exist where foreign persons own 25 percent or
more of the outstanding voting securities if no U.S. persons control an
equal or larger percentage.

\[58 FR 39298, July 22, 1993, as amended at 69 FR 70889, Dec. 8, 2004;
71 FR 20540, Apr. 21, 2006; 73 FR 55440, Sept. 25, 2008\]

##### § 122.3   Registration fees.

\(a\) A person who is required to register must do so on an annual basis
upon submission of a completed Form DS--2032, transmittal letter, and
payment of a fee as follows:

\(1\) *Tier 1* : A set fee of \$2,250 per year is required for new
registrants or registrants for whom the Directorate of Defense Trade
Controls has not reviewed, adjudicated or issued a response to any
applications during a 12-month period ending 90 days prior to expiration
of the current registration.

\(2\) *Tier 2* : A set fee of \$2,750 per year is required for
registrants for whom the Directorate of Defense Trade Controls has
reviewed, adjudicated or issued a response to between one and ten
applications during a 12-month period ending 90 days prior to expiration
of the current registration.

\(3\) *Tier 3* : The third tier is for registrants for whom the
Directorate of Defense Trade Controls has reviewed, adjudicated or
issued a response to more than ten applications during a 12-month period
ending 90 days prior to expiration of the current registration. For this
tier, registrants will pay a fee of \$2,750 plus an additional fee based
on the number of applications for which the Directorate of Defense Trade
Controls has reviewed, adjudicated or issued a response. The additional
fee will be determined by multiplying \$250 times the number of
applications over ten for whom the Directorate of Defense Trade Controls
has reviewed, adjudicated or issued a response during a 12-month period
ending 90 days prior to expiration of the current registration.

\(4\) For registrants, including universities, exempt from income
taxation pursuant to 26 U.S.C. 501(c)(3), their fee may be reduced to
the Tier 1 registration fee provided a copy of their certification
letter from the Internal Revenue Service is submitted with their
registration package. To be eligible, the registrant and all of its
subsidiaries/affiliates must be exempt from income taxation pursuant to
26 U.S.C. 501(c)(3).

\(5\) The fee for registrants whose total registration fee is greater
than 3% of the total value of applications for whom the Directorate of
Defense Trade Controls has reviewed, adjudicated or issued a response
during the 12-month period ending 90 days prior to expiration of the
current registration will be reduced to 3% of such total application
value or \$2,750, which ever is greater.

\(6\) For those renewing a registration, notice of the fee due for the
next year\'s registration will be sent to the registrant of record at
least 60 days prior to its expiration date.

\(7\) For purposes of this subsection, *"applications"* refers to the
actions enumerated within parts 123 through 126 of this subchapter that
require the Directorate of Defense Trade Controls to review, adjudicate
and issue responses. Only those applications that the Department has
taken final action on and provided response to will be counted in
determining the annual registration fee. Those applications that are
"returned without action" or "denied" will not be counted.

\(b\) *Expiration of registration.* A registrant must submit its request
for registration renewal at least 30 days but no earlier than 60 days
prior to the expiration date.

\(c\) *Lapse in registration.* A registrant who fails to renew a
registration and, after an intervening period, seeks to register again
must pay registration fees for any part of such intervening period
during which the registrant engaged in the business of manufacturing or
exporting defense articles or defense services.

\[58 FR 39298, July 22, 1993, as amended at 62 FR 27497, May 20, 1997;
69 FR 70889, Dec. 8, 2004; 70 FR 50959, Aug. 29, 2005; 73 FR 41259, July
18, 2008; 73 FR 55440, Sept. 25, 2008\]

##### § 122.4   Notification of changes in information furnished by registrants.

\(a\) A registrant must, within five days of the event, notify the
Directorate of Defense Trade Controls by registered mail if:

\(1\) Any of the persons referred to in §122.2(b) are indicted for or
convicted of violating any of the U.S. criminal statutes enumerated in
§120.27 of this subchapter, or become ineligible to contract with, or to
receive a license or other approval to export or temporarily import
defense articles or defense services from any agency of the U.S.
government; or

\(2\) There is a material change in the information contained in the
Statement of Registration, including a change in the senior officers;
the establishment, acquisition or divestment of a subsidiary or foreign
affiliate; a merger; a change of location; or the dealing in an
additional category of defense articles or defense services.

\(b\) A registrant must notify the Directorate of Defense Trade Controls
by registered mail at least 60 days in advance of any intended sale or
transfer to a foreign person of ownership or control of the registrant
or any entity thereof. Such notice does not relieve the registrant from
obtaining the approval required under this subchapter for the export of
defense articles or defense services to a foreign person, including the
approval required prior to disclosing technical data. Such notice
provides the Directorate of Defense Trade Controls with the information
necessary to determine whether the authority of §38(g)(6) of the Arms
Export Control Act regarding licenses or other approvals for certain
sales or transfers of defense articles or data on the U.S. Munitions
List should be invoked (see §§120.10 and 126.1(e) of this subchapter).

\(c\) The new entity formed when a registrant merges with another
company or acquires, or is acquired by, another company or a subsidiary
or division of another company shall advise the Directorate of Defense
Trade Controls of the following:

\(1\) The new firm name and all previous firm names being disclosed;

\(2\) The registration number that will survive and those that are to be
discontinued (if any);

\(3\) The license numbers of all approvals on which unshipped balances
will be shipped under the surviving registration number, since any
license not the subject of notification will be considered invalid; and

\(4\) Amendments to agreements approved by the Directorate of Defense
Trade Controls to change the name of a party to those agreements. The
registrant must, within 60 days of this notification, provide to the
Directorate of Defense Trade Controls a signed copy of an amendment to
each agreement signed by the new U.S. entity, the former U.S. licensor
and the foreign licensee. Any agreements not so amended will be
considered invalid.

\(d\) Prior approval by the Directorate of Defense Trade Controls is
required for any amendment making a substantive change.

\[58 FR 39298, July 22, 1993, as amended at 71 FR 20540, Apr. 21, 2006\]

##### § 122.5   Maintenance of records by registrants.

\(a\) A person who is required to register must maintain records
concerning the manufacture, acquisition and disposition (to include
copies of all documentation on exports using exemptions and applications
and licenses and their related documentation), of defense articles; of
technical data; the provision of defense services; brokering activities;
and information on political contributions, fees, or commissions
furnished or obtained, as required by part 130 of this subchapter.
Records in an electronic format must be maintained using a process or
system capable of reproducing all records on paper. Such records when
displayed on a viewer, monitor, or reproduced on paper, must exhibit a
high degree of legibility and readability. (For the purpose of this
section, "legible" and "legibility" mean the quality of a letter or
numeral that enables the observer to identify it positively and quickly
to the exclusion of all other letters or numerals. "Readable" and
"readability" means the quality of a group of letters or numerals being
recognized as complete words or numbers.) This information must be
stored in such a manner that none of it may be altered once it is
initially recorded without recording all changes, who made them, and
when they were made. For processes or systems based on the storage of
digital images, the process or system must afford accessibility to all
digital images in the records being maintained. All records subject to
this section must be maintained for a period of five years from the
expiration of the license or other approval, to include exports using an
exemption (See §123.26 of this subchapter); or, from the date of the
transaction (e.g., expired licenses or other approvals relevant to the
export transaction using an exemption). The Managing Director,
Directorate of Defense Trade Controls, and the Director of the Office of
Defense Trade Controls Licensing, may prescribe a longer or shorter
period in individual cases.

\(b\) Records maintained under this section shall be available at all
times for inspection and copying by the Directorate of Defense Trade
Controls or a person designated by the Directorate of Defense Trade
Controls (e.g., the Diplomatic Security Service) or U.S. Immigration and
Customs Enforcement, or U.S. Customs and Border Protection. Upon such
request, the person maintaining the records must furnish the records,
the equipment, and if necessary, knowledgeable personnel for locating,
reading, and reproducing any record that is required to be maintained in
accordance with this section.

\[70 FR 50959, Aug. 29, 2005\]