72246 Federal Register / Vol. 76, No. 225 / Tuesday, November 22, 2011 / Proposed Rules 

DEPARTMENT OF STATE 

22 CFR Parts 120, 123, 124, 126, 127, 

and 129 

[Public Notice 7683] 

RIN 1400–AC95 

Implementation of Defense Trade 

Cooperation Treaties 

AGENCY: Department of State. 

ACTION: Proposed rule. 

SUMMARY: The Department of State is 

proposing to amend the International 

Traffic in Arms Regulations (ITAR) to 

implement the Defense Trade 

Cooperation Treaty between the United 

States and Australia and the Defense 

Trade Cooperation Treaty between the 

United States and the United Kingdom, 

and identify via a supplement the 

defense articles and defense services 

that may not be exported pursuant to 

the Treaties. Additionally, the 

Department of State proposes to amend 

the section pertaining to the Canadian 

exemption to reference the new 

supplement, and, with regard to 

Congressional certification, the 

Department of State proposes to add 

Israel to the list of countries and entities 

that have a shorter certification time 

period and a higher dollar value 

reporting threshold. 

DATES: The Department of State will 

accept comments on this proposed rule 

until December 22, 2011. 

ADDRESSES: Interested parties may 

submit comments within 30 days of the 

date of the publication by any of the 

following methods: 

• Email: DDTCResponseTeam@state.

gov with the subject line, Regulatory 

Change—Treaties. 

• Persons with access to the Internet 

may also view and comment on this 

notice by searching for its RIN on the 

U.S. Government regulations Web site at 

http://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Sarah Heidema, Office of Defense Trade 

Controls Policy, Department of State, 

Telephone (202) 663–2809; Fax (202) 

261–8199; or Email 

DDTCResponseTeam@state.gov. ATTN: 

Regulatory Change—Treaties. 

SUPPLEMENTARY INFORMATION: 

ITAR Part Proposed change 

Part 120 .......................................... Section 120.19 revised to clarify meaning of reexport or retransfer; new §§ 120.33 and 120.34 added to 

provide definitions of the Defense Trade Cooperation Treaties between the United States and Australia 

and the U.K., respectively; new §§ 120.35 and 120.36 added to define the implementing arrangements 

pursuant to the Treaties between the United States and Australia and the United States and the U.K., 

respectively. 

Part 123 .......................................... Clarifying edits made throughout section and references to new proposed §§ 126.16 and 126.17 added; 

Israel added to § 123.9(e). 

Part 124 .......................................... § 124.11 revised to add Israel to the list of countries and entities subject to the 15-day time period regarding Congressional certification. 

Part 126 .......................................... Clarifying edits made throughout section; § 126.5(b) revised to reference the new supplement to part 126, 

consequently, §§ 126.5(b)(1)–(21) are removed; § 126.16 added to describe the exemption pursuant to 

the Defense Trade Cooperation Treaty between the United States and Australia; § 126.17 added to describe the exemption pursuant to the Defense Trade Cooperation Treaty between the United States and 

the United Kingdom; Supplement No. 1 to part 126 added. 

Part 127 .......................................... Clarifying edits made throughout section; revised to make reference to new proposed §§ 126.16 and 

126.17. 

Part 129 .......................................... Sections 129.6(b)(2), 129.7(a)(1)(vii), and 129.7(a)(2) revised to include Israel in the listing of countries 

and entities. 

These proposed amendments are 

pursuant to the Security Cooperation 

Act of 2010 (Pub. L. 111–266), with the 

inclusion of other proposed changes. 

Title I of the Security Cooperation Act, 

the Defense Trade Cooperation Treaties 

Implementation Act of 2010, 

implements the Defense Trade 

Cooperation Treaty between the United 

States and Australia, done at Sydney, 

Australia, on September 5, 2007; and 

the Defense Trade Cooperation Treaty 

between the United States and the 

United Kingdom, done at Washington, 

DC and London on June 21 and 26, 

2007, respectively (collectively referred 

to herein as the ‘‘Treaties’’). We propose 

a supplement to part 126 that will 

identify those defense articles and 

defense services exempt from the scope 

of the Treaties. These proposed 

amendments would affect parts 120, 

123, 126, and 127, with new sections in 

part 126 describing the licensing 

exemptions pursuant to the Treaties. 

Title III of the Security Cooperation 

Act creates for Israel a status in law 

similar to the North Atlantic Treaty 

Organization (NATO), the member 

countries of NATO, Australia, Japan, 

New Zealand, and the Republic of Korea 

concerning certification to the Congress. 

Pursuant to the proposed change, we 

would require certification for transfers 

to Israel prior to granting any license or 

other approval for transactions of major 

defense equipment sold under a 

contract in the amount of $25,000,000 or 

more (currently required for amounts of 

$14,000,000 or more), or for defense 

articles and defense services sold under 

a contract in the amount of 

$100,000,000 or more (currently 

required for amounts of $50,000,000 or 

more), and provided the transfer does 

not include any other countries. The 

change would also shorten from thirty 

(30) to fifteen (15) calendar days the 

certification time period during which 

approval may not be granted. This 

proposed amendment would affect parts 

123, 124, and 129. 

Additionally, we are revising § 126.5, 

describing the Canadian exemption, to 

reference the proposed supplement to 

part 126. This proposed amendment 

would affect part 126. Section by 

section identification of the proposed 

changes follows. 

We are revising the authority citation 

for part 120 to include Public Law 111– 

266; section 120.1 to reference the 

Treaties as authorities; and section 

120.19 to clarify the meaning of reexport 

or retransfer. In § 120.28, we are 

correcting an outdated reference 

(Shipper’s Export Declaration) to refer to 

the Electronic Export Information. We 

are proposing new §§ 120.33 and 120.34 

to provide definitions of the Defense 

Trade Cooperation Treaties between the 

United States and Australia and the 

U.K., respectively. Also, we are 

proposing new §§ 120.35 and 120.36 to 

define the implementing arrangements 

pursuant to the Treaties between the 

United States and Australia and the 

United States and the U.K., respectively. 

The proposed change in § 123.4 

replaces the word ‘‘export’’ with the 

word ‘‘exporter.’’ In the last sentence in 


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§ 123.9(a), ‘‘a person’’ will replace 

‘‘exporters,’’ and we are adding 

‘‘destination’’ as an item that must be 

determined prior to the submission of 

an application or the claiming of an 

exemption. We are adding a note 

following this section. We are revising 

section 123.9(b) to expand the reference 

to documents, and to reference the new 

proposed §§ 126.16 and 126.17. We are 

adding clarifying language to 

§§ 123.9(c), (c)(1), and (c)(2); and adding 

the language of the current (c)(4) to 

(c)(3). New language pertaining to new 

§§ 126.16 and 126.17 will comprise a 

new (c)(4). We are removing and 

reserving section 123.9(d). We are 

adding Israel to the list of countries and 

entities in § 123.9(e); citing the new 

§§ 126.16 and 126.17 in § 123.9(e)(1); 

and adding clarifying language to 

§§ 123.9(e)(3) and (e)(4). We are adding 

Israel to the list of countries and entities 

in §§ 123.15(a)(1), (a)(2), and (b). We are 

adding Australia and the United 

Kingdom to § 123.16(a), and reference to 

the Electronic Export Information 

replaces reference to the Shipper’s 

Export Declaration in this section and in 

§ 123.16(b)(1)(iii). We are clarifying 

documents in § 123.16(b)(2)(vi), and 

adding new §§ 123.16(c) and (d) 

referencing the new §§ 126.16 and 

126.17. Section 123.22(b)(2) replaces 

references to the Shipper’s Export 

Declaration with the Electronic Export 

Information. We are revising the title 

and text for § 123.26. 

We are revising the authority citation 

for part 124 to include Public Law 111– 

266. We are revising section 124.11 to 

add Israel to the list of countries and 

entities subject to the 15-day time 

period regarding Congressional 

certification. 

We are revising the authority citation 

for part 126 to include Public Law 111– 

266, and revising section 126.1(e) for 

clarification. We are adding a section 

(e)(1), to contain the current 

requirement found in (e) to notify the 

Directorate of Defense Trade Controls of 

any transactions that contravene the 

prohibitions of § 126.1(a). We are 

reserving section (e)(2). We are revising 

section 126.3 to change ‘‘Director’’ to 

‘‘Managing Director’’ and ‘‘Office’’ to 

‘‘Directorate.’’ We are replacing 

references to Shipper’s Export 

Declaration with Electronic Export 

Information in § 126.4(d). We are 

revising section 126.5(a) to change ‘‘Port 

Director’’ to ‘‘Port Directors.’’ We are 

revising section 126.5(b) to reference the 

new supplement to part 126; 

consequently, we are removing 

§§ 126.5(b)(1)–(21). We are removing 

and reserving section 126.5(c) (defense 

services not subject to exemption will 

be covered by the new supplement to 

part 126). We are revising Section 

126.5(d) to change ‘‘re-transfer’’ to 

‘‘retransfer,’’ and revising § 126.5(d)(2) 

Note 2 to reference the proposed new 

supplement to part 126. We are adding 

the terms ‘‘criminal complaint’’ and 

‘‘other criminal charge’’ to § 126.7(a)(3), 

and adding clarifying language to 

§ 126.7(a)(7). We are revising section 

126.13(a) to include reference to § 123.9; 

revising § 126.13(a)(1) to add the terms 

‘‘criminal complaint’’ and ‘‘other 

criminal charge’’; and revising 

§ 126.13(a)(4) to include reference to 

§ 123.9. We are proposing section 

126.16 to describe the exemption 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia, and proposing 

§ 126.17 to describe the exemption 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom. We are 

proposing the addition of Supplement 

No. 1 to part 126, and this provision 

will delineate those items of the U.S. 

Munitions List that are outside the 

scope of the exemptions established by 

the Treaties and the Canadian 

exemptions at § 126.5. 

We are revising the authority citation 

for part 127 to include Public Law 111– 

266. We are revising section 127.1 to 

make reference, where appropriate, to 

new proposed §§ 126.16 and 126.17, 

and we are providing clarifying 

language, leading to the inclusion of a 

new proposed § 127.1(e). We are adding 

the words ‘‘or attempt to use’’ in 

§ 127.2(a); ‘‘subchapter’’ will replace 

‘‘section’’ in § 127.2(b); we are adding 

‘‘reexport’’ and ‘‘retransfer to 

§ 127.2(b)(1); adding ‘‘Electronic Export 

Information filing’’ to § 127.2(b)(2); and 

proposing a new § 127.2(b)(14). We are 

adding clarifying language to § 127.3(a); 

adding the words ‘‘or by exemption’’ to 

§ 127.4(a); adding the words ‘‘or claim 

of an exemption’’ to § 127.4(c); and 

proposing new § 127.4(d). We are 

revising section 127.7(a) to remove the 

words ‘‘for which a license or approval 

is required by this subchapter.’’ In 

§ 127.10(a), we are modifying the word 

‘‘approval’’ with addition of the word 

‘‘written.’’ We are proposing new 

§ 127.12(b)(5). We are revising the 

structure of § 127.12(d), removing an 

unnecessary level, and expanding the 

example list for ‘‘shipping documents’’. 

We are revising sections 129.6(b)(2), 

129.7(a)(1)(vii), and 129.7(a)(2) to 

include Israel in the listing of countries 

and entities. 

Regulatory Analysis and Notices 

Administrative Procedure Act 

The Department of State is of the 

opinion that controlling the import and 

export of defense services is a foreign 

affairs function of the United States 

Government and that rules 

implementing this function are exempt 

from § 553 (Rulemaking) and § 554 

(Adjudications) of the Administrative 

Procedure Act. Although the 

Department is of the opinion that this 

proposed rule is exempt from the 

rulemaking provisions of the APA, the 

Department is publishing this proposed 

rule with a 30-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. 

Regulatory Flexibility Act 

Since this proposed amendment is not 

subject to the notice-and-comment 

procedures of 5 U.S.C. 553, it does not 

require analysis under the Regulatory 

Flexibility Act. 

Unfunded Mandates Reform Act of 1995 

This proposed amendment 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. 

Executive Order 13175 

The Department of State has 

determined that this proposed 

amendment will not have tribal 

implications, will not impose 

substantial direct compliance costs on 

Indian tribal governments, and will not 

pre-empt tribal law. Accordingly, the 

requirement of Executive Order 13175 

does not apply to this proposed 

amendment. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 

This proposed amendment 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 amendment 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 


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levels of government. Therefore, in 

accordance with Executive Order 13132, 

it is determined that this proposed 

amendment 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 

amendment. 

Executive Order 12866 

The Department is of the opinion that 

restricting defense articles exports is a 

foreign affairs function of the United 

States Government and that rules 

governing the conduct of this function 

are exempt from the requirements of 

Executive order 12866. However, the 

Department has nevertheless reviewed 

this regulation to ensure its consistency 

with the regulatory philosophy and 

principles set forth in that Executive 

Order. 

Executive Order 12988 

The Department of State has reviewed 

this proposed amendment 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 13563 

The Department of State has 

considered this rule in light of 

Executive Order 13563, dated January 

18, 2011, and affirms that this regulation 

is consistent with the guidance therein. 

Paperwork Reduction Act 

This proposed amendment does not 

impose any new reporting or 

recordkeeping requirements subject to 

the Paperwork Reduction Act, 44 U.S.C. 

Chapter 35. 

List of Subjects 

22 CFR Parts 120, 123, 124, and 126 

Arms and Munitions, Exports. 

22 CFR Part 127 

Arms and Munitions, Crime, Exports, 

Penalties, Seizures and Forfeitures. 

22 CFR Part 129 

Arms and Munitions, Exports, 

Brokering. 

Accordingly, for the reasons set forth 

above, Title 22, Chapter I, Subchapter 

M, parts 120, 123, 124, 126, 127, and 

129 are proposed to be amended as 

follows: 

PART 120—PURPOSE AND 

DEFINITIONS 

1. The authority citation for Part 120 

is revised 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 120.1 is amended by 

revising paragraphs (a), (c), and (d) to 

read as follows: 

§ 120.1 General authorities and eligibility. 

(a) Section 38 of the Arms Export 

Control Act (22 U.S.C. 2778), as 

amended, authorizes the President to 

control the export and import of defense 

articles and defense services. The 

statutory authority of the President to 

promulgate regulations with respect to 

exports of defense articles and defense 

services was delegated to the Secretary 

of State by Executive Order 11958, as 

amended. This subchapter implements 

that authority. Portions of this 

subchapter also implement the Defense 

Trade Cooperation Treaty between the 

United States and Australia and the 

Defense Trade Cooperation Treaty 

between the United States and the 

United Kingdom. (Note, however, that 

the Treaties are not the source of 

authority for the prohibitions in part 

127, but instead are the source of one 

limitation on the scope of such 

prohibitions.) By virtue of delegations of 

authority by the Secretary of State, these 

regulations are primarily administered 

by the Deputy Assistant Secretary of 

State for Defense Trade and Regional 

Security and the Managing Director of 

Defense Trade Controls, Bureau of 

Political-Military Affairs. 

* * * * * 

(c) Receipt of Licenses and Eligibility. 

(1) A U.S. person may receive a 

license or other approval pursuant to 

this subchapter. A foreign person may 

not receive such a license or other 

approval, except as follows: 

(i) A foreign governmental entity in 

the United States may receive an export 

license or other export approval; 

(ii) A foreign person may receive a 

reexport or retransfer approval; and 

(iii) A foreign person may receive a 

prior approval for brokering activities. 

Requests for a license or other 

approval other than by a person referred 

to in paragraphs (c)(1)(i) and (c)(1)(ii) 

will be considered only if the applicant 

has registered with the Directorate of 

Defense Trade Controls pursuant to part 

122 or 129 of this subchapter, as 

appropriate. 

(2) Persons who have been convicted 

of violating the criminal statutes 

enumerated in § 120.27 of this 

subchapter, who have been debarred 

pursuant to part 127 or 128 of this 

subchapter, who are subject to 

indictment or are otherwise charged 

(e.g., by information) for violating the 

criminal statutes enumerated in § 120.27 

of this subchapter, who are ineligible to 

contract with, or to receive a license or 

other form of authorization to import 

defense articles or defense services from 

any agency of the U.S. Government, 

who are ineligible to receive an export 

license or other approval from any other 

agency of the U.S. Government, or who 

are subject to a Department of State 

policy of denial, suspension or 

revocation under § 126.7(a) of this 

subchapter, or to interim suspension 

under § 127.8 of this subchapter, are 

generally ineligible to be involved in 

activities regulated under this 

subchapter. 

(d) The exemptions provided in this 

subchapter do not apply to transactions 

in which the exporter, any party to the 

export (as defined in § 126.7(e) of this 

subchapter), any source or 

manufacturer, broker or other 

participant in the brokering activities, is 

generally ineligible as set forth above in 

paragraph (c) of this section, unless 

prior written authorization has been 

granted by the Directorate of Defense 

Trade Controls. 

3. Section 120.19 is revised to read as 

follows: 

§ 120.19 Reexport or retransfer. 

Reexport or retransfer means the 

transfer of defense articles or defense 

services to an end-use, end-user, or 

destination not previously authorized 

by license, written approval, or 

exemption pursuant to this subchapter. 

4. Section 120.28 is amended by 

revising paragraph (b)(2) to read as 

follows: 

§ 120.28 Listing of forms referred to in this 

subchapter. 

* * * * * 

(b) * * * 

(2) Electronic Export Information filed 

via the Automated Export System. 

* * * * * 

5. Section 120.33 is added to read as 

follows: 

§ 120.33 Defense Trade Cooperation 

Treaty between the United States and 

Australia. 

Defense Trade Cooperation Treaty 

between the United States and Australia 

means the Treaty between the 

Government of the United States of 

America and the Government of 


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Australia Concerning Defense Trade 

Cooperation, done at Sydney, 

September 5, 2007. For additional 

information on making exports pursuant 

to this treaty, see § 126.16 of this 

subchapter. 

6. Section 120.34 is added to read as 

follows: 

§ 120.34 Defense Trade Cooperation 

Treaty between the United States and the 

United Kingdom. 

Defense Trade Cooperation Treaty 

between the United States and the 

United Kingdom means the Treaty 

between the Government of the United 

States of America and the Government 

of the United Kingdom of Great Britain 

and Northern Ireland Concerning 

Defense Trade Cooperation, done at 

Washington DC and London, June 21 

and 26, 2007. For additional 

information on making exports pursuant 

to this treaty, see § 126.17 of this 

subchapter. 

7. Section 120.35 is added to read as 

follows: 

§ 120.35 Australia Implementing 

Arrangement. 

Australia Implementing Arrangement 

means the Implementing Arrangement 

Pursuant to the Treaty between the 

Government of the United States of 

America and the Government of 

Australia Concerning Defense Trade 

Cooperation, done at Washington, 

March 14, 2008, as it may be amended. 

8. Section 120.36 is added to read as 

follows: 

§ 120.36 United Kingdom Implementing 

Arrangement. 

United Kingdom Implementing 

Arrangement means the Implementing 

Arrangement Pursuant to the Treaty 

between the Government of the United 

States of America and the Government 

of the United Kingdom of Great Britain 

and Northern Ireland Concerning 

Defense Trade Cooperation, done at 

Washington DC, February 14, 2008, as it 

may be amended. 

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 123.4 is amended by 

revising paragraph (d) introductory text 

to read as follows: 

§ 123.4 Temporary import license 

exemptions. 

* * * * * 

(d) Procedures. To the satisfaction of 

the Port Directors of U.S. Customs and 

Border Protection, the importer and 

exporter must comply with the 

following procedures: 

* * * * * 

11. Section 123.9 is amended by 

revising paragraphs (a), (b), (c), (e), 

(e)(1), (e)(3), (e)(4), and removing and 

reserving paragraph (d), to read as 

follows: 

§ 123.9 Country of ultimate destination 

and approval of reexports or retransfers. 

(a) The country designated as the 

country of ultimate destination on an 

application for an export license, or in 

an Electronic Export Information filing 

where an exemption is claimed under 

this subchapter, must be the country of 

ultimate end use. The written approval 

of the Directorate of Defense Trade 

Controls must be obtained before 

reselling, transferring, reexporting, 

retransferring, transshipping, or 

disposing of a defense article to any 

end-user, end-use, or destination other 

than as stated on the export license, or 

in the Electronic Export Information 

filing in cases where an exemption is 

claimed under this subchapter, except 

in accordance with the provisions of an 

exemption under this subchapter that 

explicitly authorizes the resell, transfer, 

reexport, retransfer, transshipment, or 

disposition of a defense article without 

such approval. A person must 

determine the specific end-user, enduse, and destination prior to submitting 

an application to the Directorate of 

Defense Trade Controls or claiming an 

exemption under this subchapter. 

Note to paragraph (a): In making the 

aforementioned determination, a person is 

expected to review all readily available 

information, including information available 

to the public generally as well as information 

available from other parties to the 

transaction. 

(b) The exporter shall incorporate the 

following statement as an integral part 

of the bill of lading, airway bill, or other 

shipping documents and the invoice 

whenever defense articles or defense 

services are to be exported or transferred 

pursuant to a license, other written 

approval, or an exemption under this 

subchapter, other than the exemptions 

contained in § 126.16 and § 126.17 of 

this subchapter (Note: for exports made 

pursuant to § 126.16 or § 126.17 of this 

subchapter, see § 126.16(j)(5) or 

§ 126.17(j)(5)): ‘‘These commodities are 

authorized by the U.S. Government for 

export only to [country of ultimate 

destination] for use by [end-user]. They 

may not be transferred, transshipped on 

a non-continuous voyage, or otherwise 

be disposed of, to any other country or 

end-user, either in their original form or 

after being incorporated into other enditems, without the prior written 

approval of the U.S. Department of 

State.’’ 

(c) Any person requesting written 

approval from the Directorate of Defense 

Trade Controls for the reexport, 

retransfer, other disposition, or change 

in end use, end user, or destination of 

a defense article or defense service 

initially exported or transferred 

pursuant to a license or other written 

approval, or an exemption under this 

subchapter, must submit all the 

documentation required for a permanent 

export license (see § 123.1 of this 

subchapter) and shall also submit the 

following: 

(1) The license number, written 

authorization, or exemption under 

which the defense article or defense 

service was previously authorized for 

export from the United States (Note: For 

exports under exemptions at § 126.16 or 

§ 126.17 of this subchapter, the original 

end-use, program, project, or operation 

under which the item was exported 

must be identified.); 

(2) A precise description, quantity, 

and value of the defense article or 

defense service; 

(3) A description and identification of 

the new end-user, end-use, and 

destination; and 

(4) With regard to any request for such 

approval relating to a defense article or 

defense service initially exported 

pursuant to an exemption contained in 

§ 126.16 or § 126.17 of this subchapter, 

written request for the prior approval of 

the transaction from the Directorate of 

Defense Trade Controls must be 

submitted: 

(i) By the original U.S. exporter, 

provided a written request is received 

from a member of the Australian 

Community, as identified in § 126.16 of 

this subchapter, or the United Kingdom 

Community, as identified in § 126.17 of 

this subchapter (where such a written 

request includes a written certification 

from the member of the Australian 

Community or the United Kingdom 

Community providing the information 

set forth in this subsection); or 

(ii) By a member of the Australian 

Community or the United Kingdom 

Community, where such request 

provides the information set forth in 

this section. 

(d) [Reserved] 

(e) Reexports or retransfers of U.S.- 

origin components incorporated into a 

foreign defense article to NATO, NATO 

agencies, a government of a NATO 


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country, or the governments of 

Australia, Israel, Japan, New Zealand, or 

the Republic of Korea are authorized 

without the prior written approval of 

the Directorate of Defense Trade 

Controls, provided: 

(1) The U.S.-origin components were 

previously authorized for export from 

the United States, either by a license, 

written authorization, or an exemption 

other than those described in either 

§ 126.16 or § 126.17 of this subchapter; 

* * * * * 

(3) The person reexporting the 

defense article provides written 

notification to the Directorate of Defense 

Trade Controls of the retransfer not later 

than 30 days following the reexport. The 

notification must state the articles being 

reexported and the recipient 

government. 

(4) The original license or other 

approval of the Directorate of Defense 

Trade Controls did not include 

retransfer or reexport restrictions 

prohibiting use of this exemption. 

12. Section 123.15 is amended by 

revising paragraphs (a)(1), (a)(2), and (b) 

to read as follows: 

§ 123.15 Congressional certification 

pursuant to Section 36(c) of the Arms 

Export Control Act. 

(a) * * * 

(1) A license for the export of major 

defense equipment sold under a 

contract in the amount of $14,000,000 or 

more, or for defense articles and defense 

services sold under a contract in the 

amount of $50,000,000 or more, to any 

country that is not a member of the 

North Atlantic Treaty Organization 

(NATO), or Australia, Israel, Japan, New 

Zealand, or the Republic of Korea that 

does not authorize a new sales territory; 

or 

(2) A license for export to a country 

that is a member country of the North 

Atlantic Treaty Organization (NATO), or 

Australia, Israel, Japan, New Zealand, or 

the Republic of Korea, of major defense 

equipment sold under a contract in the 

amount in the amount of $25,000,000 or 

more, or for defense articles and defense 

services sold under a contract in the 

amount of $100,000,000 or more, and 

provided the transfer does not include 

any other countries; or 

* * * * * 

(b) Unless an emergency exists which 

requires the proposed export in the 

national security interests of the United 

States, approval may not be granted for 

any transaction until at least 15 calendar 

days have elapsed after receipt by the 

Congress of the certification required by 

22 U.S.C. 2776(c)(1) involving the North 

Atlantic Treaty Organization, or 

Australia, Israel, Japan, New Zealand, or 

the Republic of Korea or at least 30 

calendar days have elapsed for any 

other country; in the case of a license for 

an export of a commercial 

communications satellite for launch 

from, and by nationals of, the Russian 

Federation, Ukraine, or Kazakhstan, 

until at least 15 calendar days after the 

Congress receives such certification. 

* * * * * 

13. Section 123.16 is amended by 

revising paragraphs (a) introductory 

text, (b)(1)(iii), (b)(2)(vi), and adding 

paragraphs (c) and (d), to read as 

follows: 

§ 123.16 Exemptions of general 

applicability. 

(a) The following exemptions apply to 

exports of unclassified defense articles 

for which no approval is needed from 

the Directorate of Defense Trade 

Controls. These exemptions do not 

apply to: Proscribed destinations under 

§ 126.1 of this subchapter; exports for 

which Congressional notification is 

required (see § 123.15 of this 

subchapter); MTCR articles; Significant 

Military Equipment (SME); and may not 

be used by persons who are generally 

ineligible as described in § 120.1(c) of 

this subchapter. All shipments of 

defense articles, including but not 

limited to those to and from Australia, 

Canada, and the United Kingdom, 

require an Electronic Export Information 

(EEI) filing or notification letter. If the 

export of a defense article is exempt 

from licensing, the EEI filing must cite 

the exemption. Refer to § 123.22 of this 

subchapter for EEI filing and letter 

notification requirements. 

(b) * * * 

(1) * * * 

(iii) The exporter certifies in the EEI 

filing that the export is exempt from the 

licensing requirements of this 

subchapter. This is done by writing, ‘‘22 

CFR 123.16(b)(1) and the agreement or 

arrangement (identify/state number) 

applicable’’; and 

* * * * * 

(2) * * * 

(vi) The exporter must certify on the 

invoice, the bill of lading, air waybill, or 

shipping documents and in the EEI 

filing that the export is exempt from the 

licensing requirements of this 

subchapter. This is done by writing ‘‘22 

CFR 123.16(b)(2) applicable’’. 

* * * * * 

(c) For exports to Australia pursuant 

to the Defense Trade Cooperation Treaty 

between the United States and Australia 

refer to § 126.16 of this subchapter. 

(d) For exports to the United Kingdom 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom refer to 

§ 126.17 of this subchapter. 

14. Section 123.22 is amended by 

revising paragraph (b)(2) to read as 

follows: 

§ 123.22 Filing, retention, and return of 

export licenses and filing of export 

information. 

* * * * * 

(b) * * * 

(2) Emergency shipments of hardware 

that cannot meet the pre-departure 

filing requirements. U.S. Customs and 

Border Protection may permit an 

emergency export of hardware by truck 

(e.g., departures to Mexico or Canada) or 

air, by a U.S. registered person, when 

the exporter is unable to comply with 

the Electronic Export Information (EEI) 

filing timeline in paragraph (b)(1)(i) of 

this section. The applicant, or an agent 

acting on the applicant’s behalf, in 

addition to providing the EEI using the 

AES, must provide documentation 

required by the U.S. Customs and 

Border Protection and this subchapter. 

The documentation provided to the U.S. 

Customs and Border Protection at the 

port of exit must include the External 

Transaction Number (XTN) or Internal 

Transaction Number (ITN) for the 

shipment and a copy of a notification to 

the Directorate of Defense Trade 

Controls stating that the shipment is 

urgent accompanied by an explanation 

for the urgency. The original of the 

notification must be immediately 

provided to the Directorate of Defense 

Trade Controls. The AES filing of the 

export information when the export is 

by air must be at least two hours prior 

to any departure from the United States; 

and, when a truck shipment, at the time 

when the exporter provides the articles 

to the carrier or at least one hour prior 

to departure from the United States, 

when the permanent export of the 

hardware has been authorized for 

export: 

* * * * * 

15. Section 123.26 is revised to read 

as follows: 

§ 123.26 Recordkeeping for exemptions. 

Any person engaging in any export, 

reexport, transfer, or retransfer of a 

defense article or defense service 

pursuant to an exemption must 

maintain records of each such export, 

reexport, transfer, or retransfer. The 

records shall include the following 

information: A description of the 

defense article, including technical data, 

or defense service; the name and 

address of the end-user and other 

available contact information (e.g., 

telephone number and electronic mail 

address); the name of the natural person 


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responsible for the transaction; the 

stated end-use of the defense article or 

defense service; the date and time of the 

transaction; the Electronic Export 

Information (EEI) Internal Transaction 

Number (ITN); and the method of 

transmission. The person using or acting 

in reliance upon the exemption shall 

also comply with any additional 

recordkeeping requirements enumerated 

in the text of the regulations concerning 

such exemption. 

* * * * * 

PART 124—AGREEMENTS, OFF– 

SHORE PROCUREMENT AND OTHER 

DEFENSE SERVICES 

16. The authority citation for part 124 

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; 22 U.S.C. 2776; 

Pub. L. 105–261. 

17. Section 124.11 is amended by 

revising paragraph (b) to read as follows: 

§ 124.11 Congressional certification 

pursuant to Section 36(d) of the Arms 

Export Control Act. 

* * * * * 

(b) Unless an emergency exists which 

requires the immediate approval of the 

agreement in the national security 

interests of the United States, approval 

may not be granted until at least 15 

calendar days have elapsed after receipt 

by the Congress of the certification 

required by 22 U.S.C. 2776(d)(1) 

involving the North Atlantic Treaty 

Organization, any member country of 

that Organization, or Australia, Israel, 

Japan, New Zealand, or the Republic of 

Korea or at least 30 calendar days have 

elapsed for any other country. 

Approvals may not be granted when the 

Congress has enacted a joint resolution 

prohibiting the export. 

* * * * * 

PART 126—GENERAL POLICIES AND 

PROVISIONS 

18. The authority citation for part 126 

is revised to read as follows: 

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; Sec. 1225, 

Pub. L. 108–375; Sec. 7089, Pub. L. 111–117; 

Pub. L. 111–266. 

19. Section 126.1 is amended by 

revising paragraph (e) to read as follows: 

§ 126.1 Prohibited exports, imports, and 

sales to or from certain countries. 

* * * * * 

(e) Proposed sales. No sale, export, 

transfer, reexport, or retransfer and no 

proposal to sell, export, transfer, 

reexport, or retransfer any defense 

articles or defense services 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. 

(1) Duty to Notify: Any person who 

knows or has reason to know of such a 

proposed or actual sale, export, transfer, 

reexport, or retransfer of such articles, 

services, or data must immediately 

inform the Directorate of Defense Trade 

Controls. Such notifications should be 

submitted to the Office of Defense Trade 

Controls Compliance, Directorate of 

Defense Trade Controls. 

(2) [Reserved] 

* * * * * 

20. Section 126.3 is revised to read as 

follows: 

§ 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 Managing Director, 

Directorate of Defense Trade Controls, 

may make an exception to the 

provisions of this subchapter. 

21. Section 126.4 is amended by 

revising paragraph (d) to read as 

follows: 

§ 126.4 Shipments by or for United States 

Government agencies. 

* * * * * 

(d) An Electronic Export Information 

(EEI) filing, 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 Directors of U.S. 

Customs and Border Protection or 

Department of Defense transmittal 

authority. A copy of the EEI filing and 

the written certification statement shall 

be provided to the Directorate of 

Defense Trade Controls immediately 

following the export. 

22. Section 126.5 is amended by 

removing and reserving paragraph (c) 

and revising paragraphs (a), (b), (d) 

introductory text, and Notes 1 and 2, to 

read as follows: 

§ 126.5 Canadian exemptions. 

(a) Temporary import of defense 

articles. Port Directors 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 

in Supplement No. 1 to part 126 of this 

subchapter and for exports that transit 

third countries, Port Directors of U.S. 

Customs and Border Protection and 

postmasters shall permit, when for enduse in Canada by Canadian Federal or 

Provincial governmental authorities 

acting in an official capacity or by a 

Canadian-registered person for return to 

the United States, the permanent and 

temporary export to Canada without a 

license of unclassified defense articles 

and defense services identified on the 

U.S. Munitions List (22 CFR 121.1). The 

exceptions noted above 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, ‘‘Canadianregistered person’’ is any Canadian 

national (including Canadian business 

entities organized under the laws of 

Canada), dual citizen of Canada and a 

third country other than a country listed 

in § 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. 

(c) [Reserved] 

(d) Reexports/retransfer. Reexport/ 

retransfer 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 


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request for reexport/retransfer may be 

made directly to the Directorate of 

Defense Trade Controls. All requests 

must include the information in 

§ 123.9(c) of this subchapter. Reexport/ 

retransfer approval is acquired by: 

* * * * * 

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 §§ 123.9, 125.4, and 

124.2, that allow for the performance of 

defense services related to training in basic 

operations and maintenance, without a 

license, for certain defense articles lawfully 

exported, including those identified in 

Supplement No. 1 to part 126 of this 

subchapter. 

23. Section 126.7 is amended by 

revising the section heading and 

paragraphs (a)(3), (a)(7) and (e) 

introductory text to read as follows: 

§ 126.7 Denial, revocation, suspension, or 

amendment of licenses and other 

approvals. 

(a) * * * 

(3) An applicant is the subject of a 

criminal complaint, other criminal 

charge (e.g., an information), or 

indictment for a violation of any of the 

U.S. criminal statutes enumerated in 

§ 120.27 of this subchapter; or 

* * * * * 

(7) An applicant has failed to include 

any of the information or 

documentation expressly required to 

support a license application, 

exemption, or other request for approval 

under this subchapter, or as required in 

the instructions in the applicable 

Department of State form or has failed 

to provide notice or information as 

required under this subchapter; or 

* * * * * 

(e) Special definition. For purposes of 

this subchapter, the term ‘‘Party to the 

Export’’ means: 

* * * * * 

24. Section 126.13 is amended by 

revising paragraphs (a) introductory 

text, (a)(1), and (a)(4) to read as follows: 

§ 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, and all requests for 

other written authorizations (including 

requests for retransfer or reexport 

pursuant to § 123.9 of this subchapter) 

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, vicepresidents, other senior officers or 

officials (e.g., comptroller, treasurer, 

general counsel) or any member of the 

board of directors is the subject of a 

criminal complaint, other criminal 

charge (e.g., an information), or 

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); 

* * * * * 

(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 lawful permanent 

residence status 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, 

or is a foreign person making a request 

pursuant to § 123.9 of this subchapter. 

* * * * * 

25. Section 126.16 is added to read as 

follows: 

§ 126.16 Exemption pursuant to the 

Defense Trade Cooperation Treaty between 

the United States and Australia. 

(a) Scope of exemption and required 

conditions. 

(1) Definitions. 

(i) An export means, for purposes of 

this section only, the initial movement 

of defense articles or defense services 

from the United States Community to 

the Australian Community. 

(ii) A transfer means, for purposes of 

this section only, the movement of a 

defense article or defense service, 

previously exported, by a member of the 

Australian Community within the 

Australian Community, or between a 

member of the United States 

Community and a member of the 

Australian Community. 

(iii) Retransfer and reexport have the 

meaning provided in § 120.19 of this 

subchapter. 

(iv) Intermediate consignee means, for 

purposes of this section, an entity or 

person who receives defense articles, 

including technical data, but who does 

not have access to such defense articles, 

for the sole purpose of effecting onward 

movement to members of the Approved 

Community. 

(2) Persons or entities exporting or 

transferring defense articles or defense 

services are exempt from the otherwise 

applicable licensing requirements if 

such persons or entities comply with 

the regulations set forth in this section. 

Except as provided in Supplement No. 

1 to part 126 of this subchapter, Port 

Directors of U.S. Customs and Border 

Protection and postmasters shall permit 

the permanent and temporary export 

without a license to members of the 

Australian Community (see paragraph 

(d) of this section regarding the 

identification of members of the 

Australian Community) of defense 

articles and defense services not listed 

in Supplement No. 1 to part 126, for the 

end-uses specifically identified 

pursuant to paragraphs (e) and (f) of this 

section. The purpose of this section is 

to specify the requirements to export, 

transfer, reexport, retransfer, or 

otherwise dispose of a defense article or 

defense service pursuant to the Defense 

Trade Cooperation Treaty between the 

United States and Australia. 

(3) Export. In order for an exporter to 

export a defense article or defense 

service pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia, all of the following 

conditions must be met: 

(i) The exporter must be registered 

with the Directorate of Defense Trade 

Controls and must be eligible, according 

to the requirements and prohibitions of 

the Arms Export Control Act, this 

subchapter, and other provisions of 

United States law, to obtain an export 

license (or other forms of authorization 

to export) from any agency of the U.S. 

Government without restriction (see 

paragraphs (b) and (c) of this section for 

specific requirements); 

(ii) The recipient of the export must 

be a member of the Australian 

Community (see paragraph (d) of this 

section regarding the identification of 

members of the Australian Community). 

Australian entities and facilities that 

become ineligible for such membership 

will be removed from the Australian 

Community; 

(iii) Intermediate consignees involved 

in the export must be eligible, according 

to the requirements and prohibitions of 

the Arms Export Control Act, this 

subchapter, and other provisions of 

United States law, to handle or receive 

a defense article or defense service 

without restriction (see paragraph (k) of 

this section for specific requirements); 

(iv) The export must be for an end-use 

specified in the Defense Trade 


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Cooperation Treaty between the United 

States and Australia and mutually 

agreed to by the U.S. Government and 

the Government of Australia pursuant to 

the Defense Trade Cooperation Treaty 

between the United States and Australia 

and the Implementing Arrangement 

thereto (the Australia Implementing 

Arrangement) (see paragraphs (e) and (f) 

of this section regarding authorized enduses); 

(v) The defense article or defense 

service is not excluded from the scope 

of the Defense Trade Cooperation Treaty 

between the United States and Australia 

(see paragraph (g) of this section and 

Supplement No. 1 to part 126 of this 

subchapter for specific information on 

the scope of items excluded from export 

under this exemption) and is marked or 

identified, at a minimum, as ‘‘Restricted 

USML’’ (see paragraph (j) of this section 

for specific requirements on marking 

exports); 

(vi) All required documentation of 

such export is maintained by the 

exporter and recipient and is available 

upon the request of the U.S. 

Government (see paragraph (l) of this 

section for specific requirements); and 

(vii) The Department of State has 

provided advance notification to the 

Congress, as required, in accordance 

with this section (see paragraph (o) of 

this section for specific requirements). 

(4) Transfers. In order for a member 

of the Australian Community to transfer 

a defense article or defense service 

under the Defense Trade Cooperation 

Treaty between the United States and 

Australia, all of the following conditions 

must be met: 

(i) The defense article or defense 

service must have been previously 

exported in accordance with paragraph 

(a)(3) of this section or transitioned from 

a license or other approval in 

accordance with paragraph (i) 

Transitions of this section; 

(ii) The transferor and transferee of 

the defense article or defense service are 

members of the Australian Community 

(see paragraph (d) of this section 

regarding the identification of members 

of the Australian Community) or the 

United States Community (see 

paragraph (b) for information on the 

United States Community/approved 

exporters); 

(iii) The transfer is required for an 

end-use specified in the Defense Trade 

Cooperation Treaty between the United 

States and Australia and mutually 

agreed to by the United States and the 

Government of Australia pursuant to the 

terms of the Defense Trade Cooperation 

Treaty between the United States and 

Australia and the Australia 

Implementing Arrangement (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses); 

(iv) The defense article or defense 

service is not identified in paragraph (g) 

of this section and Supplement No. 1 to 

part 126 of this subchapter as ineligible 

for export under this exemption, and is 

marked or otherwise identified, at a 

minimum, as ‘‘Restricted USML’’ (see 

paragraph (j) of this section for specific 

requirements on marking exports); 

(v) All required documentation of 

such transfer is maintained by the 

transferor and transferee and is available 

upon the request of the U.S. 

Government (see paragraph (l) of this 

section for specific requirements); and 

(vi) The Department of State has 

provided advance notification to the 

Congress in accordance with this 

section (see paragraph (o) of this section 

for specific requirements). 

(5) This section does not apply to the 

export of defense articles or defense 

services from the United States pursuant 

to the Foreign Military Sales program. 

(b) Authorized exporters. The 

following persons compose the United 

States Community and may export 

defense articles and defense services 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia: 

(1) Departments and agencies of the 

U.S. Government, including their 

personnel, with, as appropriate, a 

security clearance and a need-to-know; 

and 

(2) Nongovernmental U.S. persons 

registered with the Directorate of 

Defense Trade Controls and eligible, 

according to the requirements and 

prohibitions of the Arms Export Control 

Act, this subchapter, and other 

provisions of United States law, to 

obtain an export license (or other forms 

of authorization to export) from any 

agency of the U.S. Government without 

restriction, including their employees 

acting in their official capacity with, as 

appropriate, a security clearance and a 

need-to-know. 

(c) An exporter that is otherwise an 

authorized exporter pursuant to 

subsection (b) above may not export 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia if the exporter’s 

president, chief executive officer, any 

vice-president, any other senior officer 

or official (e.g., comptroller, treasurer, 

general counsel); any member of the 

board of directors of the exporter; any 

party to the export; or any source or 

manufacturer is ineligible to receive 

export licenses (or other forms of 

authorization to export) from any 

agency of the U.S. Government. 

(d) Australian Community. For 

purposes of the exemption provided by 

this section, the Australian Community 

consists of the Australian entities and 

facilities identified as members of the 

Approved Community through the 

Directorate of Defense Trade Controls 

Web site at the time of a transaction 

under this section; Australian entities 

and facilities that become ineligible for 

such membership will be removed from 

the Australian Community. 

(e) Authorized End-uses. The 

following end-uses, subject to 

subsection (f), are specified in the 

Defense Trade Cooperation Treaty 

between the United States and 

Australia: 

(1) United States and Australian 

combined military or counter-terrorism 

operations; 

(2) United States and Australian 

cooperative security and defense 

research, development, production, and 

support programs; 

(3) Mutually determined specific 

security and defense projects where the 

Government of Australia is the end-user; 

or 

(4) U.S. Government end-use. 

(f) Procedures for identifying 

authorized end-uses pursuant to 

paragraph (e) of this section: 

(1) Operations, programs, and projects 

that can be publicly identified will be 

posted on the Directorate of Defense 

Trade Controls’ Web site; 

(2) Operations, programs, and projects 

that cannot be publicly identified will 

be confirmed in written correspondence 

from the Directorate of Defense Trade 

Controls; or 

(3) U.S. Government end-use will be 

identified specifically in a U.S. 

Government contract or solicitation as 

being eligible under the Treaty. 

(4) No other operations, programs, 

projects, or end-uses qualify for this 

exemption. 

(g) Items eligible under this section. 

With the exception of items listed in 

Supplement No. 1 to part 126 of this 

subchapter, defense articles and defense 

services may be exported under this 

section subject to the following: 

(1) An exporter authorized pursuant 

to paragraph (b)(2) of this section may 

market a defense article to the 

Government of Australia if that exporter 

has been licensed by the Directorate of 

Defense Trade Controls to export (as 

defined by § 120.17 of this subchapter) 

the identical type of defense article to 

any foreign person. 

(2) The export of any defense article 

specific to the existence of (e.g., reveals 

the existence of or details of) antitamper measures made at U.S. 

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prior written approval from the 

Directorate of Defense Trade Controls. 

(3) U.S.-origin classified defense 

articles or defense services may be 

exported only pursuant to a written 

request, directive, or contract from the 

U.S. Department of Defense that 

provides for the export of the classified 

defense article(s) or defense service(s). 

(4) Defense articles specific to 

developmental systems that have not 

obtained written Milestone B approval 

from the Department of Defense 

milestone approval authority are not 

eligible for export unless such export is 

pursuant to a written solicitation or 

contract issued or awarded by the 

Department of Defense for an end-use 

identified pursuant to paragraphs (e)(1), 

(2), or (4) of this section. 

(5) Defense articles excluded by 

paragraph (g) of this section or 

Supplement No. 1 to part 126 of this 

subchapter (e.g., USML Category 

XI(a)(3) electronically scanned array 

radar) that are embedded in a larger 

system that is eligible to ship under this 

section (e.g., a ship or aircraft) must 

separately comply with any restrictions 

placed on that embedded defense article 

under this subsection. The exporter 

must obtain a license or other 

authorization from the Directorate of 

Defense Trade Controls for the export of 

such embedded defense articles (for 

example, USML Category XI(a)(3) 

electronically scanned array radar 

systems that are exempt from this 

section that are incorporated in an 

aircraft that is eligible to ship under the 

this section continue to require separate 

authorization from the Directorate of 

Defense Trade Controls for their export, 

transfer, reexport, or retransfer). 

(6) No liability shall be incurred by or 

attributed to the U.S. Government in 

connection with any possible 

infringement of privately owned patent 

or proprietary rights, either domestic or 

foreign, by reason of an export 

conducted pursuant to this section. 

(7) Sales by exporters made through 

the U.S. Government shall not include 

either charges for patent rights in which 

the U.S. Government holds a royaltyfree license, or charges for information 

which the U.S. Government has a right 

to use and disclose to others, which is 

in the public domain, or which the U.S. 

Government has acquired or is entitled 

to acquire without restrictions upon its 

use and disclosure to others. 

(h) Transfers, Retransfers, and 

Reexports. 

(1) Any transfer of a defense article or 

defense service not exempted in 

Supplement No. 1 to part 126 of this 

subchapter by a member of the 

Australian Community (see paragraph 

(d) of this section for specific 

information on the identification of the 

Community) to another member of the 

Australian Community or the United 

States Community for an end-use that is 

authorized by this exemption (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses) is 

authorized under this exemption. 

(2) Any transfer or other provision of 

a defense article or defense service for 

an end-use that is not authorized by the 

exemption provided by this section is 

prohibited without a license or the prior 

written approval of the Directorate of 

Defense Trade Controls (see paragraphs 

(e) and (f) of this section regarding 

authorized end-uses). 

(3) Any retransfer or reexport, or other 

provision of a defense article or defense 

service by a member of the Australian 

Community to a foreign person that is 

not a member of the Australian 

Community, or to a U.S. person that is 

not a member of the United States 

Community, is prohibited without a 

license or the prior written approval of 

the Directorate of Defense Trade 

Controls (see paragraph (d) of this 

section for specific information on the 

identification of the Australian 

Community). 

(4) Any change in the use of a defense 

article or defense service previously 

exported, transferred, or obtained under 

this exemption by any foreign person, 

including a member of the Australian 

Community, to an end-use that is not 

authorized by this exemption is 

prohibited without a license or other 

written approval of the Directorate of 

Defense Trade Controls (see paragraphs 

(e) and (f) of this section regarding 

authorized end-uses). 

(5) Any retransfer, reexport, or change 

in end-use requiring such approval of 

the U.S. Government shall be made in 

accordance with § 123.9 of this 

subchapter. 

(6) Defense articles excluded by 

paragraph (g) of this section or 

Supplement No. 1 to part 126 of this 

subchapter (e.g., USML Category 

XI(a)(3) electronically scanned array 

radar) that are embedded in a larger 

system that is eligible to ship under this 

section (e.g., a ship or aircraft) must 

separately comply with any restrictions 

placed on that embedded defense article 

unless otherwise specified. A license or 

other authorization must be obtained 

from the Directorate of Defense Trade 

Controls for the retransfer, reexport or 

change in end-use of any such 

embedded defense article (for example, 

USML Category XI(a)(3) electronically 

scanned radar systems that are exempt 

from this section that are incorporated 

in an aircraft that is eligible to ship 

under the this section continue to 

require separate authorization from the 

Directorate of Defense Trade Controls 

for their export, transfer, reexport, or 

retransfer). 

(7) A license or prior approval from 

the Directorate of Defense Trade 

Controls is not required for a transfer, 

retransfer, or reexport of an exported 

defense article or defense service under 

this section, if: 

(i) The transfer of defense articles or 

defense services is made by a member 

of the United States Community to 

Australian Department of Defense 

(ADOD) elements deployed outside the 

Territory of Australia and engaged in an 

authorized end-use (see paragraphs (e) 

and (f) of this section regarding 

authorized end-uses) using ADOD 

transmission channels or the provisions 

of this section (Note: For purposes of 

paragraph (h)(7)(i)–(iv), per Section 9(9) 

of the Australia Implementing 

Arrangement, ‘‘ADOD Transmission 

channels’’ includes electronic 

transmission of a defense article and 

transmission of a defense article by an 

ADOD contracted carrier or freight 

forwarder that merely transports or 

arranges transport for the defense article 

in this instance.); 

(ii) The transfer of defense articles or 

defense services is made by a member 

of the United States Community to an 

Approved Community member (either 

U.S. or Australian) that is operating in 

direct support of Australian Department 

of Defense elements deployed outside 

the Territory of Australia and engaged 

in an authorized end-use (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses) using 

ADOD transmission channels or the 

provisions of this section; 

(iii) The reexport is made by a 

member of the Australian Community to 

Australian Department of Defense 

elements deployed outside the Territory 

of Australia engaged in an authorized 

end-use (see paragraphs (e) and (f) of 

this section regarding authorized enduses) using ADOD transmission 

channels or the provisions of this 

section; 

(iv) The retransfer or reexport is made 

by a member of the Australian 

Community to an Approved Community 

member (either United States or 

Australian) that is operating in direct 

support of Australian Department of 

Defense elements deployed outside the 

Territory of Australia engaged in an 

authorized end-use (see paragraphs (e) 

and (f) of this section regarding 

authorized end-uses) using ADOD 

transmission channels or the provisions 

of this section; or 


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(v) The defense article or defense 

service will be delivered to the 

Australian Department of Defense for an 

authorized end-use (see paragraphs (e) 

and (f) of this section regarding 

authorized end-uses); the Australian 

Department of Defense may deploy the 

item as necessary when conducting 

official business within or outside the 

Territory of Australia. The item must 

remain under the effective control of the 

Australian Department of Defense while 

deployed and access may not be 

provided to unauthorized third parties. 

(8) U.S. persons registered, or 

required to be registered, pursuant to 

part 122 of this subchapter and 

Members of the Australian Community 

must immediately notify the Directorate 

of Defense Trade Controls of any actual 

or proposed sale, retransfer, or reexport 

of a defense article or defense service on 

the U.S. Munitions List originally 

exported under this exemption to any of 

the countries listed in § 126.1 of this 

subchapter, any citizen of such 

countries, or any person acting on 

behalf of such countries, whether within 

or outside the United States. Any person 

knowing or having reason to know of 

such a proposed or actual sale, reexport, 

or retransfer shall submit such 

information in writing to the Office of 

Defense Trade Controls Compliance, 

Directorate of Defense Trade Controls. 

(i) Transitions. 

(1) Any previous export of a defense 

article under a license or other approval 

of the U.S. Department of State remains 

subject to the conditions and limitations 

of the original license or authorization 

unless the Directorate of Defense Trade 

Controls has approved in writing a 

transition to this section. 

(2) If a U.S. exporter desires to 

transition from an existing license or 

other approval to the use of the 

provisions of this section, the following 

is required: 

(i) The U.S. exporter must submit a 

written request to the Directorate of 

Defense Trade Controls, which 

identifies the defense articles or defense 

services to be transitioned, the existing 

license(s) or other authorizations under 

which the defense articles or defense 

services were originally exported; and 

the Treaty-eligible end-use for which 

the defense articles or defense services 

will be used. Any license(s) filed with 

U.S. Customs and Border Protection 

should remain on file until the exporter 

has received approval from the 

Directorate of Defense Trade Controls to 

retire the license(s) and transition to this 

section. When this approval is conveyed 

to U.S. Customs and Border Protection 

by the Directorate of Defense Trade 

Controls, the license(s) will be returned 

to the Directorate of Defense Trade 

Controls by U.S. Customs and Border 

Protection in accordance with existing 

procedures for the return of expired 

licenses in § 123.22(c) of this 

subchapter. 

(ii) Any license(s) not filed with U.S. 

Customs and Border Protection must be 

returned to the Directorate of Defense 

Trade Controls with a letter citing the 

Directorate of Defense Trade Controls’ 

approval to transition to this section as 

the reason for returning the license(s). 

(3) If a member of the Australian 

Community desires to transition defense 

articles received under an existing 

license or other approval to the 

processes established under the Treaty, 

the Australian Community member 

must submit a written request to the 

Directorate of Defense Trade Controls, 

either directly or through the original 

U.S. exporter, which identifies the 

defense articles or defense services to be 

transitioned, the existing license(s) or 

other authorizations under which the 

defense articles or defense services were 

received, and the Treaty-eligible enduse (see paragraphs (e) and (f) of this 

section regarding authorized end-uses) 

for which the defense articles or defense 

services will be used. The defense 

article or defense service shall remain 

subject to the conditions and limitations 

of the existing license or other approval 

until the Australian Community 

member has received approval from the 

Directorate of Defense Trade Controls to 

transition to this section. 

(4) Authorized exporters identified in 

paragraph (b)(2) of this section who 

have exported a defense article or 

defense service that has subsequently 

been placed on the list of exempted 

items in Supplement No. 1 to part 126 

of this subchapter must review and 

adhere to the requirements in the 

relevant Federal Register notice 

announcing such removal. Once 

removed, the defense article or defense 

service will no longer be subject to this 

section, such defense article or defense 

service previously exported shall 

remain on the U.S. Munitions List and 

be subject to the International Traffic in 

Arms Regulations unless the applicable 

Federal Register notice states otherwise. 

Subsequent reexport or retransfer must 

be made pursuant to § 123.9 of this 

subchapter. 

(5) Any defense article or defense 

service transitioned from a license or 

other approval to treatment under this 

section must be marked in accordance 

with the requirements of paragraph (j) of 

this section. 

(j) Marking of Exports. 

(1) All defense articles and defense 

services exported or transitioned 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia and this section 

shall be marked or identified as follows: 

(i) For classified defense articles and 

defense services the standard marking 

or identification shall read: ‘‘// 

CLASSIFICATION LEVEL USML//REL 

AUS and USA Treaty Community//.’’ 

For example, for defense articles 

classified SECRET, the marking or 

identification shall be ‘‘//SECRET 

USML//REL AUS and USA Treaty 

Community//.’’ 

(ii) Unclassified defense articles and 

defense services exported under or 

transitioned pursuant to this section 

shall be AUS classified as ‘‘Restricted 

USML’’ and, the standard marking or 

identification shall read ‘‘// 

RESTRICTED USML//REL AUS and 

USA Treaty Community//.’’ 

(2) Where defense articles are 

returned to a member of the United 

States Community identified in 

paragraph (b) of this section, any 

defense articles AUS classified and 

marked or identified pursuant to 

paragraph j(1)(ii) of this section as ‘‘// 

RESTRICTED USML//REL AUS and 

USA Treaty Community//’’ shall no 

longer be AUS classified and such 

marking or identification shall be 

removed; and 

(3) The standard marking and 

identification requirements are as 

follows: 

(i) Defense articles (other than 

technical data) shall be individually 

labeled with the appropriate 

identification detailed in paragraphs 

(j)(1) and (j)(2) of this section; or, where 

such labeling is impracticable (e.g., 

propellants, chemicals), shall be 

accompanied by documentation (such 

as contracts or invoices) clearly 

associating the defense articles with the 

appropriate markings as detailed above; 

(ii) Technical data (including data 

packages, technical papers, manuals, 

presentations, specifications, guides and 

reports), regardless of media or means of 

transmission (physical or electronic), 

shall be individually labeled with the 

appropriate identification detailed in 

paragraphs (j)(1) and (j)(2) of this 

section; or, where such labeling is 

impracticable (oral presentations), shall 

have a verbal notification clearly 

associating the technical data with the 

appropriate markings as detailed above; 

and 

(4) Contracts and agreements for the 

provision of defense services shall be 

identified with the appropriate 

identification detailed in paragraphs 

(j)(1) and (j)(2) of this section. 

(5) The exporter shall incorporate the 

following statement as an integral part 


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of all shipping documentation (airway 

bill, bill of lading, manifest, packing 

documents, delivery verification, 

invoice, etc.) whenever defense articles 

are to be exported: 

‘‘These commodities are authorized 

by the U.S. Government for export only 

to Australia for use in approved 

projects, programs or operations by 

members of the Australian Community. 

They may not be retransferred or 

reexported or used outside of an 

approved project, program or operation, 

either in their original form or after 

being incorporated into other end-items, 

without the prior written approval of 

the U.S. Department of State.’’ 

(k) Intermediate Consignees. 

(1) Unclassified exports under this 

section may only be handled by: 

(i) U.S. intermediate consignees who 

are: 

(A) Exporters registered with the 

Directorate of Defense Trade Controls 

and eligible; 

(B) Licensed customs brokers who are 

subject to background investigation and 

have passed a comprehensive 

examination administered by U.S. 

Customs and Border Protection; or 

(C) Commercial air freight and surface 

shipment carriers, freight forwarders, or 

other parties not exempt from 

registration under § 129.3(b)(3) of this 

subchapter that are identified at the 

time of export as being on the list of 

Authorized U.S. Intermediate 

Consignees, which is available on the 

Directorate of Defense Trade Controls’ 

Web site. 

(ii) Australian intermediate 

consignees who are: 

(A) Members of the Australian 

Community; or 

(B) Freight forwarders, customs 

brokers, commercial air freight and 

surface shipment carriers, or other 

Australian parties that are identified at 

the time of export as being on the list 

of Authorized Australian Intermediate 

Consignees, which is available on the 

Directorate of Defense Trade Controls’ 

Web site. 

(2) Classified exports must comply 

with the security requirements of the 

National Industrial Security Program 

Operating Manual (DoD 5220.22–M and 

supplements or successors). 

(l) Records. 

(1) All exporters authorized pursuant 

to paragraph (b)(2) of this section who 

export pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia and this section 

shall maintain detailed records of all 

exports, imports, and transfers made by 

that exporter of defense articles or 

defense services subject to the Defense 

Trade Cooperation Treaty between the 

United States and Australia and the 

requirements of this section. Exporters 

shall also maintain detailed records of 

any reexports and retransfers approved 

or otherwise authorized by the 

Directorate of Defense Trade Controls of 

defense articles or defense services 

subject to the Defense Trade 

Cooperation Treaty between the United 

States and Australia and the 

requirements of this section. These 

records shall be maintained for a 

minimum of five years from the date of 

export, import, transfer, reexport, or 

retransfer and shall be made available 

upon request to the Directorate of 

Defense Trade Controls, U.S. 

Immigration and Customs Enforcement, 

or U.S. Customs and Border Protection, 

or any other authorized U.S. law 

enforcement officer. 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.) These records shall consist of 

the following: 

(i) Port of entry/exit; 

(ii) Date/time of export/import; 

(iii) Method of export/import; 

(iv) Commodity code and description 

of the commodity, including technical 

data; 

(v) Value of export; 

(vi) Reference to this section and 

justification for export under the Treaty; 

(vii) End-user/end-use; 

(viii) Identification of all U.S. and 

foreign parties to the transaction; 

(ix) How the export was marked; 

(x) Classification of the export; 

(xi) All written correspondence with 

the U.S. Government on the export; 

(xii) All information relating to 

political contributions, fees, or 

commissions furnished or obtained, 

offered, solicited, or agreed upon as 

outlined in paragraph (m) of this 

section; 

(xiii) Purchase order or contract; 

(xiv) Technical data actually 

exported; 

(xv) The Internal Transaction Number 

for the Electronic Export Information 

filing in the Automated Export System; 

(xvi) All shipping documentation 

(airway bill, bill of lading, manifest, 

packing documents, delivery 

verification, invoice, etc.); and 

(xvii) Statement of Registration (Form 

DS–2032). 

(2) Filing of export information. All 

exporters of defense articles and defense 

services under the Defense Trade 

Cooperation Treaty between the United 

States and Australia and the 

requirements of this section must 

electronically file Electronic Export 

Information (EEI) using the Automated 

Export System citing one of the four 

below referenced codes in the 

appropriate field in the EEI for each 

shipment: 

(i) 126.16(e)(1): used for exports in 

support of United States and Australian 

combined military or counter-terrorism 

operations (the name or an appropriate 

description of the operation shall be 

placed in the appropriate field in the 

EEI, as well); 

(ii) 126.16(e)(2): used for exports in 

support of United States and Australian 

cooperative security and defense 

research, development, production, and 

support programs (the name or an 

appropriate description of the program 

shall be placed in the appropriate field 

in the EEI, as well); 

(iii) 126.16(e)(3): used for exports in 

support of mutually determined specific 

security and defense projects where the 

Government of Australia is the end-user 

(the name or an appropriate description 

of the project shall be placed in the 

appropriate field in the EEI, as well); or 

(iv) 126.16(e)(4): used for exports that 

will have a U.S. Government end-use 

(the U.S. Government contract number 

or solicitation number (e.g., ‘‘U.S. 

Government contract number XXXXX’’) 

shall be placed in the appropriate field 

in the EEI, as well). 

Such exports must meet the required 

export documentation and filing 

guidelines, including for defense 

services, of § 123.22(a), (b)(1), and (b)(2) 

of this subchapter. 

(m) Fees and Commissions. All 

exporters authorized pursuant to 

paragraph (b)(2) of this section shall, 

with respect to each export, transfer, 

reexport, or retransfer, pursuant to the 

Defense Trade Cooperation Treaty 

between the United States and Australia 

and this section, submit a statement to 

the Directorate of Defense Trade 

Controls containing the information 

identified in § 130.10 of this subchapter 

relating to fees, commissions, and 

political contributions on contracts or 

other instruments valued in an amount 

of $500,000 or more. 

(n) Violations and Enforcement. 

(1) Exports, transfers, reexports, and 

retransfers that do not comply with the 

conditions prescribed in this section 

will constitute violations of the Arms 

Export Control Act and this subchapter, 


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and are subject to all relevant criminal, 

civil, and administrative penalties (see 

§ 127.1 of this subchapter), and may also 

be subject to other statutes or 

regulations. 

(2) U.S. Immigration and Customs 

Enforcement and U.S. Customs and 

Border Protection officers have the 

authority to investigate, detain, or seize 

any export or attempted export of 

defense articles that does not comply 

with this section or that is otherwise 

unlawful. 

(3) The Directorate of Defense Trade 

Controls, U.S. Immigration and Customs 

Enforcement, U.S. Customs and Border 

Protection, and other authorized U.S. 

law enforcement officers may require 

the production of documents and 

information relating to any actual or 

attempted export, transfer, reexport, or 

retransfer pursuant to this section. Any 

foreign person refusing to provide such 

records within a reasonable period of 

time shall be suspended from the 

Australian Community and ineligible to 

receive defense articles or defense 

services pursuant to the exemption 

under this section or otherwise. 

(o) Procedures for Legislative 

Notification. 

(1) Exports pursuant to the Defense 

Trade Cooperation Treaty between the 

United States and Australia and this 

section by any person identified in 

paragraph (b)(2) of this section shall not 

take place until 30 days after the 

Directorate of Defense Trade Controls 

has acknowledged receipt of a Form 

DS–4048 (entitled, ‘‘Projected Sales of 

Major Weapons in Support of Section 

25(a)(1) of the Arms Export Control 

Act’’) from the exporter notifying the 

Department of State if the export 

involves one or more of the following: 

(i) A contract or other instrument for 

the export of major defense equipment 

in the amount of $25,000,000 or more, 

or for defense articles and defense 

services in the amount of $100,000,000 

or more; 

(ii) A contract or other instrument for 

the export of firearms controlled under 

Category I of the U.S. Munitions List of 

the International Traffic in Arms 

Regulations in an amount of $1,000,000 

or more; 

(iii) A contract or other instrument, 

regardless of value, for the 

manufacturing abroad of any item of 

significant military equipment; or 

(iv) An amended contract or other 

instrument that meets the requirements 

of paragraphs (o)(1)(i)–(o)(1)(iii) of this 

section. 

(2) The Form DS–4048 required in 

paragraph (o)(1) of this section shall be 

accompanied by the following 

additional information: 

(i) The information identified in 

§ 130.10 and § 130.11 of this subchapter; 

(ii) A statement regarding whether 

any offset agreement is proposed to be 

entered into in connection with the 

export and a description of any such 

offset agreement; 

(iii) A copy of the signed contract or 

other instrument; and 

(iv) If the notification is for paragraph 

(o)(1)(ii) of this section, a statement of 

what will happen to the weapons in 

their inventory (for example, whether 

the current inventory will be sold, 

reassigned to another service branch, 

destroyed, etc.). 

(3) The Department of State will 

notify the Congress of exports that meet 

the requirements of paragraph (o)(1) of 

this section. 

26. Section 126.17 is added to read as 

follows: 

§ 126.17 Exemption pursuant to the 

Defense Trade Cooperation Treaty between 

the United States and the United Kingdom. 

(a) Scope of exemption and required 

conditions. 

(1) Definitions. 

(i) An export means, for purposes of 

this section only, the initial movement 

of defense articles or defense services 

from the United States to the United 

Kingdom Community. 

(ii) A transfer means, for purposes of 

this section only, the movement of a 

defense article or defense service, 

previously exported, by a member of the 

United Kingdom Community within the 

United Kingdom Community, or 

between a member of the United States 

Community and a member of the United 

Kingdom Community. 

(iii) Retransfer and reexport have the 

meaning provided in § 120.19 of this 

subchapter. 

(iv) Intermediate consignee means, for 

purposes of this section, an entity or 

person who receives defense articles, 

including technical data, but who does 

not have access to such defense articles, 

for the sole purpose of effecting onward 

movement to members of the Approved 

Community. 

(2) Persons or entities exporting or 

transferring defense articles or defense 

services are exempt from the otherwise 

applicable licensing requirements if 

such persons or entities comply with 

the regulations set forth in this section. 

Except as provided in Supplement No. 

1 to part 126 of this subchapter, Port 

Directors of U.S. Customs and Border 

Protection and postmasters shall permit 

the permanent and temporary export 

without a license to members of the 

United Kingdom Community (see 

paragraph (d) of this section regarding 

the identification of members of the 

United Kingdom Community) of defense 

articles and defense services not listed 

in Supplement No. 1 to part 126, for the 

end-uses specifically identified 

pursuant to paragraphs (e) and (f) below. 

The purpose of this section is to specify 

the requirements to export, transfer, 

reexport, retransfer, or otherwise 

dispose of a defense article or defense 

service pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom. 

(3) Export. In order for an exporter to 

export a defense article or defense 

service pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom, all of 

the following conditions must be met: 

(i) The exporter must be registered 

with the Directorate of Defense Trade 

Controls and must be eligible, according 

to the requirements and prohibitions of 

the Arms Export Control Act, this 

subchapter, and other provisions of 

United States law, to obtain an export 

license (or other forms of authorization 

to export) from any agency of the U.S. 

Government without restriction (see 

paragraphs (b) and (c) of this section for 

specific requirements); 

(ii) The recipient of the export must 

be a member of the United Kingdom 

Community (see paragraph (d) of this 

section regarding the identification of 

members of the United Kingdom 

Community). United Kingdom entities 

and facilities that become ineligible for 

such membership will be removed from 

the United Kingdom Community; 

(iii) Intermediate consignees involved 

in the export must be eligible, according 

to the requirements and prohibitions of 

the Arms Export Control Act, this 

subchapter, and other provisions of 

United States law, to handle or receive 

a defense article or defense service 

without restriction (see paragraph (k) of 

this section for specific requirements); 

(iv) The export must be for an end-use 

specified in the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom and 

mutually agreed to by the U.S. 

Government and the Government of the 

United Kingdom pursuant to the 

Defense Trade Cooperation Treaty 

between the United States and the 

United Kingdom and the Implementing 

Arrangement thereto (United Kingdom 

Implementing Arrangement) (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses); 

(v) The defense article or defense 

service is not excluded from the scope 

of the Defense Trade Cooperation Treaty 

between the United States and the 

United Kingdom (see paragraph (g) of 

this section and Supplement No. 1 to 

part 126 of this subchapter for specific 


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information on the scope of items 

excluded from export under this 

exemption) and is marked or identified, 

at a minimum, as ‘‘Restricted USML’’ 

(see paragraph (j) of this section for 

specific requirements on marking 

exports); 

(vi) All required documentation of 

such export is maintained by the 

exporter and recipient and is available 

upon the request of the U.S. 

Government (see paragraph (l) of this 

section for specific requirements); and 

(vii) The Department of State has 

provided advance notification to the 

Congress, as required, in accordance 

with this section (see paragraph (o) of 

this section for specific requirements). 

(4) Transfers. In order for a member 

of the United Kingdom Community to 

transfer a defense article or defense 

service under the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom, all of 

the following conditions must be met: 

(i) The defense article or defense 

service must have been previously 

exported in accordance with paragraph 

(a)(3) of this section or transitioned from 

a license or other approval in 

accordance with paragraph (i) Transfers 

of this section; 

(ii) The transferor and transferee of 

the defense article or defense service are 

members of the United Kingdom 

Community (see paragraph (d) of this 

section regarding the identification of 

members of the United Kingdom 

Community) or the United States 

Community (see paragraph (b) of this 

section for information on the United 

States Community/approved exporters); 

(iii) The transfer is required for an 

end-use specified in the Defense Trade 

Cooperation Treaty between the 

United States and the United Kingdom 

and mutually agreed to by the United 

States and the Government of United 

Kingdom pursuant to the terms of the 

Defense Trade Cooperation Treaty 

between the United States and the 

United Kingdom and the United 

Kingdom Implementing Arrangement 

(see paragraphs (e) and (f) of this section 

regarding authorized end-uses); 

(iv) The defense article or defense 

service is not identified in paragraph (g) 

of this section and Supplement No. 1 to 

part 126 of this subchapter as ineligible 

for export under this exemption, and is 

marked or otherwise identified, at a 

minimum, as ‘‘Restricted USML’’ (see 

paragraph (j) of this section for specific 

requirements on marking exports); 

(v) All required documentation of 

such transfer is maintained by the 

transferor and transferee and is available 

upon the request of the U.S. 

Government (see paragraph (l) of this 

section for specific requirements); and 

(vi) The Department of State has 

provided advance notification to the 

Congress in accordance with this 

section (see paragraph (o) of this section 

for specific requirements). 

(5) This section does not apply to the 

export of defense articles or defense 

services from the United States pursuant 

to the Foreign Military Sales program. 

(b) Authorized exporters. The 

following persons compose the United 

States Community and may export 

defense articles and defense services 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom: 

(1) Departments and agencies of the 

U.S. Government, including their 

personnel, with, as appropriate, a 

security clearance and a need-to-know; 

and 

(2) Nongovernmental U.S. persons 

registered with the Directorate of 

Defense Trade Controls and eligible, 

according to the requirements and 

prohibitions of the Arms Export Control 

Act, this subchapter, and other 

provisions of United States law, to 

obtain an export license (or other forms 

of authorization to export) from any 

agency of the U.S. Government without 

restriction, including their employees 

acting in their official capacity with, as 

appropriate, a security clearance and a 

need-to-know. 

(c) An exporter that is otherwise an 

authorized exporter pursuant to 

subsection (b) above may not export 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom if the 

exporter’s president, chief executive 

officer, any vice-president, any other 

senior officer or official (e.g., 

comptroller, treasurer, general counsel); 

any member of the board of directors of 

the exporter; any party to the export; or 

any source or manufacturer is ineligible 

to receive export licenses (or other 

forms of authorization to export) from 

any agency of the U.S. Government. 

(d) United Kingdom Community. For 

purposes of the exemption provided by 

this section, the United Kingdom 

Community consists of the United 

Kingdom entities and facilities 

identified as members of the Approved 

Community through the Directorate of 

Defense Trade Controls’ Web site at the 

time of a transaction under this section; 

non-governmental United Kingdom 

entities and facilities that become 

ineligible for such membership will be 

removed from the United Kingdom 

Community. 

(e) Authorized End-uses. The 

following end-uses, subject to 

subsection (f), are specified in the 

Defense Trade Cooperation Treaty 

between the United States and the 

United Kingdom: 

(1) United States and United Kingdom 

combined military or counter-terrorism 

operations; 

(2) United States and United Kingdom 

cooperative security and defense 

research, development, production, and 

support programs; 

(3) Mutually determined specific 

security and defense projects where the 

Government of the United Kingdom is 

the end-user; or 

(4) U.S. Government end-use. 

(f) Procedures for identifying 

authorized end-uses pursuant to 

paragraph (e) of this section: 

(1) Operations, programs, and projects 

that can be publicly identified will be 

posted on the Directorate of Defense 

Trade Controls’ Web site; 

(2) Operations, programs, and projects 

that cannot be publicly identified will 

be confirmed in written correspondence 

from the Directorate of Defense Trade 

Controls; or 

(3) U.S. Government end-use will be 

identified specifically in a U.S. 

Government contract or solicitation as 

being eligible under the Treaty. 

(4) No other operations, programs, 

projects, or end-uses qualify for this 

exemption. 

(g) Items eligible under this section. 

With the exception of items listed in 

Supplement No. 1 to part 126 of this 

subchapter, defense articles and defense 

services may be exported under this 

section subject to the following: 

(1) An exporter authorized pursuant 

to paragraph (b)(2) of this section may 

market a defense article to the 

Government of the United Kingdom if 

that exporter has been licensed by the 

Directorate of Defense Trade Controls to 

export (as defined by § 120.17 of this 

subchapter) the identical type of defense 

article to any foreign person. 

(2) The export of any defense article 

specific to the existence of (e.g., reveals 

the existence of or details of) antitamper measures made at U.S. 

Government direction always requires 

prior written approval from the 

Directorate of Defense Trade Controls. 

(3) U.S.-origin classified defense 

articles or defense services may be 

exported only pursuant to a written 

request, directive, or contract from the 

U.S. Department of Defense that 

provides for the export of the classified 

defense article(s) or defense service(s). 

(4) Defense articles specific to 

developmental systems that have not 

obtained written Milestone B approval 

from the Department of Defense 

milestone approval authority are not 


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eligible for export unless such export is 

pursuant to a written solicitation or 

contract issued or awarded by the 

Department of Defense for an end-use 

identified pursuant to paragraphs (e)(1), 

(2), or (4) of this section. 

(5) Defense articles excluded by 

paragraph (g) of this section or 

Supplement No. 1 to part 126 of this 

subchapter (e.g., USML Category XI 

(a)(3) electronically scanned array radar) 

that are embedded in a larger system 

that is eligible to ship under this section 

(e.g., a ship or aircraft) must separately 

comply with any restrictions placed on 

that embedded defense article under 

this subsection. The exporter must 

obtain a license or other authorization 

from the Directorate of Defense Trade 

Controls for the export of such 

embedded defense articles (for example, 

USML Category XI (a)(3) electronically 

scanned array radar systems that are 

exempt from this section that are 

incorporated in an aircraft that is 

eligible to ship under the this section 

continue to require separate 

authorization from the Directorate of 

Defense Trade Controls for their export, 

transfer, reexport, or retransfer). 

(6) No liability shall be incurred by or 

attributed to the U.S. Government in 

connection with any possible 

infringement of privately owned patent 

or proprietary rights, either domestic or 

foreign, by reason of an export 

conducted pursuant to this section. 

(7) Sales by exporters made through 

the U.S. Government shall not include 

either charges for patent rights in which 

the U.S. Government holds a royaltyfree license, or charges for information 

which the U.S. Government has a right 

to use and disclose to others, which is 

in the public domain, or which the U.S. 

Government has acquired or is entitled 

to acquire without restrictions upon its 

use and disclosure to others. 

(8) Defense articles and services 

specific to items that appear on the 

European Union Dual Use List (as 

described in Annex 1 to EC Council 

Regulation No. 428/2009) are not 

eligible for export under the Defense 

Trade Cooperation Treaty between the 

United States and the United Kingdom. 

(h) Transfers, Retransfers, and 

Reexports. 

(1) Any transfer of a defense article or 

defense service not exempted in 

Supplement No.1 to part 126 of this 

subchapter by a member of the United 

Kingdom Community (see paragraph (d) 

of this section for specific information 

on the identification of the Community) 

to another member of the United 

Kingdom Community or the United 

States Community for an end-use that is 

authorized by this exemption (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses) is 

authorized under this exemption. 

(2) Any transfer or other provision of 

a defense article or defense service for 

an end-use that is not authorized by the 

exemption provided by this section is 

prohibited without a license or the prior 

written approval of the Directorate of 

Defense Trade Controls (see paragraphs 

(e) and (f) of this section regarding 

authorized end-uses). 

(3) Any retransfer or reexport, or other 

provision of a defense article or defense 

service by a member of the United 

Kingdom Community to a foreign 

person that is not a member of the 

United Kingdom Community, or to a 

U.S. person that is not a member of the 

United States Community, is prohibited 

without a license or the prior written 

approval of the Directorate of Defense 

Trade Controls (see paragraph (d) of this 

section for specific information on the 

identification of the United Kingdom 

Community). 

(4) Any change in the use of a defense 

article or defense service previously 

exported, transferred, or obtained under 

this exemption by any foreign person, 

including a member of the United 

Kingdom Community, to an end-use 

that is not authorized by this exemption 

is prohibited without a license or other 

written approval of the Directorate of 

Defense Trade Controls (see paragraphs 

(e) and (f) of this section regarding 

authorized end-uses). 

(5) Any retransfer, reexport, or change 

in end-use requiring such approval of 

the U.S. Government shall be made in 

accordance with § 123.9 of this 

subchapter. 

(6) Defense articles excluded by 

paragraph (g) of this section or 

Supplement No. 1 to part 126 of this 

subchapter (e.g., USML Category XI 

(a)(3) electronically scanned array radar 

systems) that are embedded in a larger 

system that is eligible to ship under this 

section (e.g., a ship or aircraft) must 

separately comply with any restrictions 

placed on that embedded defense article 

unless otherwise specified. A license or 

other authorization must be obtained 

from the Directorate of Defense Trade 

Controls for the retransfer, reexport or 

change in end-use of any such 

embedded defense article (for example, 

USML Category XI(a)(3) electronically 

scanned array radar systems that are 

exempt from this section that are 

incorporated in an aircraft that is 

eligible to ship under the this section 

continue to require separate 

authorization from the Directorate of 

Defense Trade Controls for their export, 

transfer, reexport, or retransfer). 

(7) A license or prior approval from 

the Directorate of Defense Trade 

Controls is not required for a transfer, 

retransfer, or reexport of an exported 

defense article or defense service under 

this section, if: 

(i) The transfer of defense articles or 

defense services is made by a member 

of the United States Community to 

United Kingdom Ministry of Defense 

elements deployed outside the Territory 

of the United Kingdom and engaged in 

an authorized end-use (see paragraphs 

(e) and (f) of this section regarding 

authorized end-uses) using United 

Kingdom Armed Forces transmission 

channels or the provisions of this 

section; 

(ii) The transfer of defense articles or 

defense services is made by a member 

of the United States Community to an 

Approved Community member (either 

U.S. or U.K.) that is operating in direct 

support of United Kingdom Ministry of 

Defense elements deployed outside the 

Territory of the United Kingdom and 

engaged in an authorized end-use (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses) using 

United Kingdom Armed Forces 

transmission channels or the provisions 

of this section; 

(iii) The reexport is made by a 

member of the United Kingdom 

Community to United Kingdom 

Ministry of Defense elements deployed 

outside the Territory of the United 

Kingdom engaged in an authorized enduse (see paragraphs (e) and (f) of this 

section regarding authorized end-uses) 

using United Kingdom Armed Forces 

transmission channels or the provisions 

of this section; 

(iv) The retransfer or reexport is made 

by a member of the United Kingdom 

Community to an Approved Community 

member (either U.S. or U.K.) that is 

operating indirect support of United 

Kingdom Ministry of Defense elements 

deployed outside the Territory of the 

United Kingdom engaged in an 

authorized end-use (see paragraphs (e) 

and (f) of this section regarding 

authorized end-uses) using United 

Kingdom Armed Forces transmission 

channels or the provisions of this 

section; or 

(v) The defense article or defense 

service will be delivered to the United 

Kingdom Ministry of Defense for an 

authorized end-use (see paragraphs (e) 

and (f) of this section regarding 

authorized end-uses); the United 

Kingdom Ministry of Defense may 

deploy the item as necessary when 

conducting official business within or 

outside the Territory of the United 

Kingdom. The item must remain under 

the effective control of the United 


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Kingdom Ministry of Defense while 

deployed and access may not be 

provided to unauthorized third parties. 

(8) U.S. persons registered, or 

required to be registered, pursuant to 

part 122 of this subchapter and 

Members of the United Kingdom 

Community must immediately notify 

the Directorate of Defense Trade 

Controls of any actual or proposed sale, 

retransfer, or reexport of a defense 

article or defense service on the U.S. 

Munitions List originally exported 

under this exemption to any of the 

countries listed in § 126.1 of this 

subchapter, any citizen of such 

countries, or any person acting on 

behalf of such countries, whether within 

or outside the United States. Any person 

knowing or having reason to know of 

such a proposed or actual sale, reexport, 

or retransfer shall submit such 

information in writing to the Office of 

Defense Trade Controls Compliance, 

Directorate of Defense Trade Controls. 

(i) Transitions. 

(1) Any previous export of a defense 

article under a license or other approval 

of the U.S. Department of State remains 

subject to the conditions and limitations 

of the original license or authorization 

unless the Directorate of Defense Trade 

Controls has approved in writing a 

transition to this section. 

(2) If a U.S. exporter desires to 

transition from an existing license or 

other approval to the use of the 

provisions of this section, the following 

is required: 

(i) The U.S. exporter must submit a 

written request to the Directorate of 

Defense Trade Controls, which 

identifies the defense articles or defense 

services to be transitioned, the existing 

license(s) or other authorizations under 

which the defense articles or defense 

services were originally exported; and 

the Treaty-eligible end-use for which 

the defense articles or defense services 

will be used. Any license(s) filed with 

U.S. Customs and Border Protection 

should remain on file until the exporter 

has received approval from the 

Directorate of Defense Trade Controls to 

retire the license(s) and transition to this 

section. When this approval is conveyed 

to U.S. Customs and Border Protection 

by the Directorate of Defense Trade 

Controls, the license(s) will be returned 

to the Directorate of Defense Trade 

Controls by U.S. Customs and Border 

Protection in accord with existing 

procedures for the return of expired 

licenses in § 123.22(c) of this 

subchapter. 

(ii) Any license(s) not filed with U.S. 

Customs and Border Protection must be 

returned to the Directorate of Defense 

Trade Controls with a letter citing the 

Directorate of Defense Trade Controls’ 

approval to transition to this section as 

the reason for returning the license(s). 

(3) If a member of the United 

Kingdom Community desires to 

transition defense articles received 

under an existing license or other 

approval to the processes established 

under the Treaty, the United Kingdom 

Community member must submit a 

written request to the Directorate of 

Defense Trade Controls, either directly 

or through the original U.S. exporter, 

which identifies the defense articles or 

defense services to be transitioned, the 

existing license(s) or other 

authorizations under which the defense 

articles or defense services were 

received, and the Treaty-eligible enduse (see paragraphs (e) and (f) of this 

section regarding authorized end-uses) 

for which the defense articles or defense 

services will be used. The defense 

article or defense service shall remain 

subject to the conditions and limitations 

of the existing license or other approval 

until the United Kingdom Community 

member has received approval from the 

Directorate of Defense Trade Controls to 

transition to this section. 

(4) Authorized exporters identified in 

paragraph (b)(2) of this section who 

have exported a defense article or 

defense service that has subsequently 

been placed on the list of exempted 

items in Supplement No. 1 to part 126 

of this subchapter must review and 

adhere to the requirements in the 

relevant Federal Register notice 

announcing such removal. Once 

removed, the defense article or defense 

service will no longer be subject to this 

section, such defense article or defense 

service previously exported shall 

remain on the U.S. Munitions List and 

be subject to the International Traffic in 

Arms Regulations unless the applicable 

Federal Register notice states otherwise. 

Subsequent reexport or retransfer must 

be made pursuant to § 123.9 of this 

subchapter. 

(5) Any defense article or defense 

service transitioned from a license or 

other approval to treatment under this 

section must be marked in accordance 

with the requirements of paragraph (j) of 

this section. 

(j) Marking of Exports. 

(1) All defense articles and defense 

services exported or transitioned 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom and this 

section shall be marked or identified as 

follows: 

(i) For classified defense articles and 

defense services the standard marking 

or identification shall read: ‘‘// 

CLASSIFICATION LEVEL USML//REL 

UK and USA Treaty Community//.’’ For 

example, for defense articles classified 

SECRET, the marking or identification 

shall be ‘‘//SECRET USML//REL UK and 

USA Treaty Community//.’’ 

(ii) Unclassified defense articles and 

defense services exported under or 

transitioned pursuant to this section 

shall be UK classified as ‘‘Restricted 

USML’’ and, the standard marking or 

identification shall read ‘‘// 

RESTRICTED USML//REL UK and USA 

Treaty Community//.’’ 

(2) Where defense articles are 

returned to a member of the United 

States Community identified in 

paragraph (b) of this section, any 

defense articles UK classified and 

marked or identified pursuant to 

paragraph j(1)(ii) as ‘‘//RESTRICTED 

USML//REL UK and USA Treaty 

Community//’’ no longer be UK 

classified and such marking or 

identification shall be removed; and 

(3) The standard marking and 

identification requirements are as 

follows: 

(i) Defense articles (other than 

technical data) shall be individually 

labeled with the appropriate 

identification detailed in paragraphs 

(j)(1) and (j)(2) of this section; or, where 

such labeling is impracticable (e.g., 

propellants, chemicals), shall be 

accompanied by documentation (such 

as contracts or invoices) clearly 

associating the defense articles with the 

appropriate markings as detailed above; 

(ii) Technical data (including data 

packages, technical papers, manuals, 

presentations, specifications, guides and 

reports), regardless of media or means of 

transmission (physical or electronic), 

shall be individually labeled with the 

appropriate identification detailed in 

paragraphs (j)(1) and (j)(2) of this 

section; or, where such labeling is 

impracticable (oral presentations), shall 

have a verbal notification clearly 

associating the technical data with the 

appropriate markings as detailed above; 

and 

(4) Contracts and agreements for the 

provision of defense services shall be 

identified with the appropriate 

identification detailed in paragraphs 

(j)(1) and (j)(2) of this section. 

(5) The exporter shall incorporate the 

following statement as an integral part 

of all shipping documentation (airway 

bill, bill of lading, manifest, packing 

documents, delivery verification, 

invoice, etc.) whenever defense articles 

are to be exported: 

‘‘These commodities are authorized 

by the U.S. Government for export only 

to United Kingdom for use in approved 

projects, programs or operations by 

members of the United Kingdom 


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Community. They may not be 

retransferred or reexported or used 

outside of an approved project, program, 

or operation, either in their original 

form or after being incorporated into 

other end-items, without the prior 

written approval of the U.S. Department 

of State.’’ 

(k) Intermediate Consignees. 

(1) Unclassified exports under this 

section may only be handled by: 

(i) U.S. intermediate consignees who 

are: 

(A) Exporters registered with the 

Directorate of Defense Trade Controls 

and eligible; 

(B) Licensed customs brokers who are 

subject to background investigation and 

have passed a comprehensive 

examination administered by U.S. 

Customs and Border Protection; or 

(C) Commercial air freight and surface 

shipment carriers, freight forwarders, or 

other parties not exempt from 

registration under § 129.3(b)(3) of this 

subchapter that are identified at the 

time of export as being on the list of 

Authorized U.S. Intermediate 

Consignees, which is available on the 

Directorate of Defense Trade Controls’ 

Web site. 

(ii) United Kingdom intermediate 

consignees who are: 

(A) Members of the United Kingdom 

Community; or 

(B) Freight forwarders, customs 

brokers, commercial air freight and 

surface shipment carriers, or other 

United Kingdom parties that are 

identified at the time of export as being 

on the list of Authorized United 

Kingdom Intermediate Consignees, 

which is available on the Directorate of 

Defense Trade Controls’ Web site. 

(2) Classified exports must comply 

with the security requirements of the 

National Industrial Security Program 

Operating Manual (DoD 5220.22–M and 

supplements or successors). 

(l) Records. 

(1) All exporters authorized pursuant 

to paragraph (b)(2) of this section who 

export pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom and this 

section shall maintain detailed records 

of all exports, imports, and transfers 

made by that exporter of defense articles 

or defense services subject to the 

Defense Trade Cooperation Treaty 

between the United States and the 

United Kingdom and this section. 

Exporters shall also maintain detailed 

records of any reexports and retransfers 

approved or otherwise authorized by the 

Directorate of Defense Trade Controls of 

defense articles or defense services 

subject to the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom and this 

section. These records shall be 

maintained for a minimum of five years 

from the date of export, import, transfer, 

reexport, or retransfer and shall be made 

available upon request to the Directorate 

of Defense Trade Controls, U.S. 

Immigration and Customs Enforcement, 

or U.S. Customs and Border Protection, 

or any other authorized U.S. law 

enforcement officer. 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.) These records shall consist of 

the following: 

(i) Port of entry/exit; 

(ii) Date/time of export/import; 

(iii) Method of export/import; 

(iv) Commodity code and description 

of the commodity, including technical 

data; 

(v) Value of export; 

(vi) Reference to this section and 

justification for export under the Treaty; 

(vii) End-user/end-use; 

(viii) Identification of all U.S. and 

foreign parties to the transaction; 

(ix) How the export was marked; 

(x) Classification of the export; 

(xi) All written correspondence with 

the U.S. Government on the export; 

(xii) All information relating to 

political contributions, fees, or 

commissions furnished or obtained, 

offered, solicited, or agreed upon as 

outlined in subsection (m) below; 

(xiii) Purchase order or contract; 

(xiv) Technical data actually 

exported; 

(xv) The Internal Transaction Number 

for the Electronic Export Information 

filing in the Automated Export System; 

(xvi) All shipping documentation 

(airway bill, bill of lading, manifest, 

packing documents, delivery 

verification, invoice, etc.); and 

(xvii) Statement of Registration (Form 

DS–2032). 

(2) Filing of export information. All 

exporters of defense articles and defense 

services under the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom and this 

section must electronically file 

Electronic Export Information (EEI) 

using the Automated Export System 

citing one of the four below referenced 

codes in the appropriate field in the EEI 

for each shipment: 

(i) 126.16(e)(1): Used for exports in 

support of United States and United 

Kingdom combined military or counterterrorism operations (the name or an 

appropriate description of the operation 

shall be placed in the appropriate field 

in the EEI, as well); 

(ii) 126.16(e)(2): Used for exports in 

support of United States and United 

Kingdom cooperative security and 

defense research, development, 

production, and support programs (the 

name or an appropriate description of 

the program shall be placed in the 

appropriate field in the EEI, as well); 

(iii) 126.16(e)(3): Used for exports in 

support of mutually determined specific 

security and defense projects where the 

Government of the United Kingdom is 

the end-user (the name or an 

appropriate description of the project 

shall be placed in the appropriate field 

in the EEI, as well); or 

(iv) 126.16(e)(4): Used for exports that 

will have a U.S. Government end-use 

(the U.S. Government contract number 

or solicitation number (e.g., ‘‘U.S. 

Government contract number XXXXX’’) 

shall be placed in the appropriate field 

in the EEI, as well). 

Such exports must meet the required 

export documentation and filing 

guidelines, including for defense 

services, of § 123.22(a), (b)(1), and (b)(2) 

of this subchapter. 

(m) Fees and Commissions. All 

exporters authorized pursuant to 

paragraph (b)(2) of this section shall, 

with respect to each export, transfer, 

reexport, or retransfer, pursuant to the 

Defense Trade Cooperation Treaty 

between the United States and the 

United Kingdom and this section, 

submit a statement to the Directorate of 

Defense Trade Controls containing the 

information identified in § 130.10 of this 

subchapter relating to fees, 

commissions, and political 

contributions on contracts or other 

instruments valued in an amount of 

$500,000 or more. 

(n) Violations and Enforcement. 

(1) Exports, transfers, reexports, and 

retransfers that do not comply with the 

conditions prescribed in this section 

will constitute violations of the Arms 

Export Control Act and this subchapter, 

and are subject to all relevant criminal, 

civil, and administrative penalties (see 

§ 127.1 of this subchapter), and may also 

be subject to other statutes or 

regulations. 

(2) U.S. Immigration and Customs 

Enforcement and U.S. Customs and 

Border Protection officers have the 

authority to investigate, detain, or seize 


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any export or attempted export of 

defense articles that does not comply 

with this section or that is otherwise 

unlawful. 

(3) The Directorate of Defense Trade 

Controls, U.S. Immigration and Customs 

Enforcement, U.S. Customs and Border 

Protection, and other authorized U.S. 

law enforcement officers may require 

the production of documents and 

information relating to any actual or 

attempted export, transfer, reexport, or 

retransfer pursuant to this section. Any 

foreign person refusing to provide such 

records within a reasonable period of 

time shall be suspended from the 

United Kingdom Community and 

ineligible to receive defense articles or 

defense services pursuant to the 

exemption under this section or 

otherwise. 

(o) Procedures for Legislative 

Notification. 

(1) Exports pursuant to the Defense 

Trade Cooperation Treaty between the 

United States and the United Kingdom 

and this section by any person 

identified in paragraph (b)(2) of this 

section shall not take place until 30 

days after the Directorate of Defense 

Trade Controls has acknowledged 

receipt of a Form DS–4048 (entitled, 

‘‘Projected Sales of Major Weapons in 

Support of Section 25(a)(1) of the Arms 

Export Control Act’’) from the exporter 

notifying the Department of State if the 

export involves one or more of the 

following: 

(i) A contract or other instrument for 

the export of major defense equipment 

in the amount of $25,000,000 or more, 

or for defense articles and defense 

services in the amount of $100,000,000 

or more; 

(ii) A contract or other instrument for 

the export of firearms controlled under 

Category I of the U.S. Munitions List of 

the International Traffic in Arms 

Regulations in an amount of $1,000,000 

or more; 

(iii) A contract or other instrument, 

regardless of value, for the 

manufacturing abroad of any item of 

significant military equipment; or 

(iv) An amended contract or other 

instrument that meets the requirements 

of paragraphs (o)(1)(i)–(o)(1)(iii) of this 

section. 

(2) The Form DS–4048 required in 

paragraph (o)(1) of this section shall be 

accompanied by the following 

additional information: 

(i) The information identified in 

§ 130.10 and § 130.11 of this subchapter; 

(ii) A statement regarding whether 

any offset agreement is proposed to be 

entered into in connection with the 

export and a description of any such 

offset agreement; 

(iii) A copy of the signed contract or 

other instrument; and 

(iv) If the notification is for paragraph 

(o)(1)(ii) of this section, a statement of 

what will happen to the weapons in 

their inventory (for example, whether 

the current inventory will be sold, 

reassigned to another service branch, 

destroyed, etc.). 

(3) The Department of State will 

notify the Congress of exports that meet 

the requirements of paragraph (o)(1) of 

this section. 

27. Supplement No. 1 is added to Part 

126 read as follows: 

SUPPLEMENT NO. 1 * 

USML category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

I–XXI .......................... Classified defense articles and services. See Note 1 ................................................. X X X 

I–XXI .......................... Defense articles listed in the Missile Technology Control Regime (MTCR) Annex ... X X X 

I–XXI .......................... U.S. origin defense articles and services used for marketing purposes and not previously licensed for export in accordance with this subchapter................. X X 

I–XXI .......................... Defense services for or technical data related to defense articles identified in this 

supplement as excluded from the Canadian exemption.

X ................ ................

I–XXI .......................... Any transaction involving the export of defense articles and services for which congressional notification is required in accordance with § 123.15 and § 124.11 of 

this subchapter.

X ................ ................

I–XXI .......................... U.S. origin defense articles and services specific to developmental systems that 

have not obtained written Milestone B approval from the U.S. Department of Defense milestone approval authority, unless such export is pursuant to a written 

solicitation or contract issued or awarded by the U.S. Department of Defense for 

an end use identified in subsections (e)(1), (2), or (4) of § 126.16 or § 126.17 of 

this subchapter and is consistent with other exclusions of this supplement.

................ X X 

I–XXI .......................... Nuclear weapons strategic delivery systems and all components, parts, accessories, and attachments specifically designed for such systems and associated 

equipment.

X ................ ................

I–XXI .......................... Defense articles and services specific to the existence or method of compliance 

with anti-tamper measures made at U.S. Government direction.

................ X X 

I–XXI .......................... Defense articles and services specific to reduced observables or counter low 

observables in any part of the spectrum. See Note 2.

................ X X 

I–XXI .......................... Defense articles and services specific to sensor fusion beyond that required for display or identification correlation. See Note 3................. X X 

I–XXI .......................... Defense articles and services specific to the automatic target acquisition or recognition and cueing of multiple autonomous unmanned systems................. X X 

I–XXI .......................... Nuclear power generating equipment or propulsion equipment (e.g. nuclear reactors), specifically designed for military use and components therefore, specifically 

designed for military use. See also § 123.20 of this subchapter.

................ ................ X 

I–XXI .......................... Libraries (parametric technical databases) specially designed for military use with 

equipment controlled on the USML.

................ ................ X 

I–XXI .......................... Defense services or technical data specific to applied research as defined in 

§ 125.4(c)(3) of this subchapter, design methodology as defined in § 125.4(c)(4) 

of this subchapter, engineering analysis as defined in § 125.4(c)(5) of this subchapter, or manufacturing know-how as defined in § 125.4(c)(6) of this subchapter.

X ................ ................


erowe on DSK2VPTVN1PROD with PROPOSALS2
Federal Register / Vol. 76, No. 225 / Tuesday, November 22, 2011 / Proposed Rules 72263 

SUPPLEMENT NO. 1 *—Continued 

USML category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

I–XXI .......................... Defense services that are not based on a written arrangement (between the U.S. 

exporter and the Canadian recipient) that includes a clause requiring that all documentation created from U.S. origin technical data contain the statement that 

‘‘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’’.

X ................ ................

I .................................. Defense articles and services related to firearms, close assault weapons, and combat shotguns.X ................ ................

II(k) ............................ Software source code related to Categories II(c), II(d), or II(i). See Note 4 .............. ................ X X 

II(k) ............................ Manufacturing know-how related to Category II(d). See Note 5 ................................ X X X 

III ................................ Defense articles and services related to ammunition for firearms, close assault 

weapons, and combat shotguns listed in Category I.

X ................ ................

III ................................ Defense articles and services specific to ammunition and fuse setting devices for 

guns and armament controlled in Category II.

................ ................ X 

III(e) ........................... Manufacturing know-how related to Categories III(d)(1) or III(d)(2) and their specially designed components. See Note 5.X X X 

III(e) ........................... Software source code related to Categories III(d)(1) or III(d)(2). See Note 4 ............ ................ X X 

IV ............................... Defense articles and services specific to man-portable air defense systems 

(MANPADS). See Note 6.

X X X 

IV ............................... Defense articles and services specific to rockets, designed or modified for non-military applications that do not have a range of 300 km (i.e., not controlled on the 

MTCR Annex).

................ ................ X 

IV ............................... Defense articles and services specific to torpedoes ................................................... ................ X X 

IV ............................... Defense articles and services specific to anti-personnel landmines .......................... ................ ................ X 

IV(i) ............................ Software source code related to Categories IV(a), IV(b), IV(c), or IV(g). See Note 4 ................ X X 

IV(i) ............................ Manufacturing know-how related to Categories IV(a), IV(b), IV(d), or IV(g) and their 

specially designed components. See Note 5.

X X X 

V ................................ The following energetic materials and related substances: ........................................ ................ ................ X 

a. TATB (triaminotrinitrobenzene) (CAS 3058–38–6) 

b. Explosives controlled in USML Category V(a)(32) or V(a)(33) 

c. Iron powder (CAS 7439–89–6) with particle size of 3 micrometers or less 

produced by reduction of iron oxide with hydrogen 

d. BOBBA–8 (bis(2-methylaziridinyl)2-(2-hydroxypropanoxy) propylamino 

phosphine oxide), and other MAPO derivatives 

e. N-methyl-p-nitroaniline (CAS 100–15–2) 

f. Trinitrophenylmethyl-nitramine (tetryl) (CAS 479–45–8) 

V(c)(7) ........................ Pyrotechnics and pyrophorics specifically formulated for military purposes to enhance or control radiated energy in any part of the IR spectrum................. ................ X 

V(d)(3) ....................... Bis-2, 2-dinitropropylnitrate (BDNPN) .......................................................................... ................ ................ X 

VI ............................... Defense Articles specific to equipment specially designed or configured to be installed in a vehicle for military ground, marine, airborne or space applications, 

capable of operating while in motion and of producing or maintaining temperatures below 103 K (¥170 °C).

................ ................ X 

VI ............................... Defense Articles specific to superconductive electrical equipment (rotating machinery and transformers) specially designed or configured to be installed in a vehicle for military ground, marine, airborne, or space applications and capable of 

operating while in motion. This, however, does not include direct current hybrid 

homopolar generators that have single-pole normal metal armatures which rotate 

in a magnetic field produced by superconducting windings, provided those 

windings are the only superconducting component in the generator.

................ ................ X 

VI ............................... Defense articles and services specific to naval technology and systems relating to 

acoustic spectrum control and awareness. See Note 10.

................ X X 

VI(a) ........................... Nuclear powered vessels ............................................................................................ X X X 

VI(c) ........................... Defense articles and services specific to submarine combat control systems ........... ................ X X 

VI(d) ........................... Harbor entrance detection devices .............................................................................. ................ ................ X 

VI(e) ........................... Defense articles and services specific to naval nuclear propulsion equipment. See 

Note 7.

X X X 

VI(g) ........................... Technical data and defense services for gas turbine engine hot sections related to 

Category VI(f). See Note 8.

X X X 

VI(g) ........................... Software source code related to Categories VI(a) or VI(c). See Note 4 .................... ................ X X 

VII .............................. Defense articles specific to equipment specially designed or configured to be installed in a vehicle for military ground, marine, airborne, or space applications, 

capable of operating while in motion and of producing or maintaining temperatures below 103 K (¥170 °C).

................ ................ X 


erowe on DSK2VPTVN1PROD with PROPOSALS2
72264 Federal Register / Vol. 76, No. 225 / Tuesday, November 22, 2011 / Proposed Rules 

SUPPLEMENT NO. 1 *—Continued 

USML category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

VII .............................. Defense articles specific to superconductive electrical equipment (rotating machinery and transformers) specially designed or configured to be installed in a vehicle for military ground, marine, airborne, or space applications and capable of 

operating while in motion. This, however, does not include direct current hybrid 

homopolar generators that have single-pole normal metal armatures which rotate 

in a magnetic field produced by superconducting windings, provided those 

windings are the only superconducting component in the generator.

................ ................ X 

VII .............................. Armored all wheel drive vehicles, other than vehicles specifically designed or modified for military use, fitted with, or designed or modified to be fitted with, a plough 

or flail for the purpose of land mine clearance.

................ ................ X 

VII(e) .......................... Amphibious vehicles .................................................................................................... ................ ................ X 

VII(f) ........................... Technical data and defense services for gas turbine engine hot sections. See Note 

8.

X X X 

VIII ............................. Defense articles specific to equipment specially designed or configured to be installed in a vehicle for military ground, marine, airborne, or space applications, 

capable of operating while in motion and of producing or maintaining temperatures below 103 K (¥170 °C).

................ ................ X 

VIII ............................. Defense articles specific to superconductive electrical equipment (rotating machinery and transformers) specially designed or configured to be installed in a vehicle for military ground, marine, airborne, or space applications and capable of 

operating while in motion. This, however, does not include direct current hybrid 

homopolar generators that have single-pole normal metal armatures which rotate 

in a magnetic field produced by superconducting windings, provided those 

windings are the only superconducting component in the generator.

................ ................ X 

VIII(a) ......................... All Category VIII(a) items ............................................................................................ X ................ ................

VIII(b) ......................... Defense articles and services specific to gas turbine engine hot section components and digital engine controls. See Note 8................. X X 

VIII(f) .......................... Developmental aircraft, engines and components identified in Category VIII(f) ......... X ................ ................

VIII(g) ......................... Ground Effect Machines (GEMS) ................................................................................ ................ ................ X 

VIII(i) .......................... Technical data and defense services for gas turbine engine hot sections related to 

Category VIII(b). See Note 8.

X X X 

VIII(i) .......................... Manufacturing know-how related to Categories VIII(a), VIII(b), or VIII(e) and their 

specially designed components. See Note 5.

X X X 

VIII(i) .......................... Software source code related to Categories VIII(a) or VIII(e). See Note 4 ................ ................ X X 

IX ............................... Training or simulation equipment for MANPADS. See Note 6 ................................... ................ ................ X 

IX(e) ........................... Software source code related to Categories IX(a) or IX(b). See Note 4 .................... ................ X X 

IX(e) ........................... Software that is both specifically designed or modified for military use and specifically designed or modified for modeling or simulating military operational scenarios................. ................ X 

X(e) ............................ Manufacturing know-how related to Categories X(a)(1) or X(a)(2) and their specially 

designed components. See Note 5.

X X X 

XI(a) ........................... Defense articles and services specific to countermeasures and counter-countermeasures See Note 9................. X X 

XI ............................... Defense articles and services specific to naval technology and systems relating to 

acoustic spectrum control and awareness. See Note 10.

................ X X 

XI(b) XI(c) XI(d) ......... Defense articles and services specific to communications security (e.g., COMSEC 

and TEMPEST).

................ X X 

XI(d) ........................... Software source code related to Category XI(a). See Note 4 .................................... ................ X X 

XI(d) ........................... Manufacturing know-how related to Categories XI(a)(3) or XI(a)(4) and their specially designed components. See Note 5.X X X 

XII .............................. Defense articles and services specific to countermeasures and counter-countermeasures. See Note 9................. X X 

XII(c) .......................... Defense articles and services specific to XII(c) articles, except any 1st- and 2ndgeneration image intensification tubes and 1st- and 2nd-generation image intensification night sighting equipment. End items in 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.

X ................ ................

XII(c) .......................... Technical data or defense services for night vision equipment beyond basic operations, maintenance, and training data. However, the AS and UK Treaty exemptions apply when such export is pursuant to a written solicitation or contract 

issued or awarded by the U.S. Department of Defense for an end use identified 

in subsections (e)(1), (2), or (4) of § 126.16 or § 126.17 of this subchapter and is 

consistent with other exclusions of this supplement.

X X X 

XII(f) ........................... Manufacturing know-how related to Category XII(d) and their specially designed 

components. See Note 5.

X X X 

XII(f) ........................... Software source code related to Categories XII(a), XII(b), XII(c), or XII(d). See Note 

4.

................ X X 

XIII(b) ......................... Defense articles and services specific to Military Information Security Assurance 

Systems.

................ X X 


erowe on DSK2VPTVN1PROD with PROPOSALS2
Federal Register / Vol. 76, No. 225 / Tuesday, November 22, 2011 / Proposed Rules 72265 

SUPPLEMENT NO. 1 *—Continued 

USML category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

XIII(c) ......................... Defense articles and services specific to armored plate manufactured to comply 

with a military standard or specification or suitable for military use. See Note 11.

................ ................ X 

XIII(d) ......................... Carbon/carbon billets and performs which are reinforced in three or more dimensional planes, specifically designed, developed, modified, configured or adapted 

for defense articles.

................ ................ X 

XIII(f) .......................... Structural materials ...................................................................................................... ................ ................ X 

XIII(g) ......................... Defense articles and services related to concealment and deception equipment and 

materials.

................ ................ X 

XIII(h) ......................... Energy conversion devices other than fuel cells ......................................................... ................ ................ X 

XIII(i) .......................... Metal embrittling agents .............................................................................................. ................ ................ X 

XIII(j) .......................... Defense articles and services related to hardware associated with the measurement or modification of system signatures for detection of defense articles as described in Note 2................. X X 

XIII(k) ......................... Defense articles and services related to tooling and equipment specifically designed or modified for the production of defense articles identified in Category 

XIII(b).

................ X X 

XIII(l) .......................... Software source code related to Category XIII(a). See Note 4 .................................. ................ X X 

XIV ............................. Defense articles and services related to toxicological agents, including chemical 

agents, biological agents, and associated equipment.

................ X X 

XIV(a) XIV(b) XIV(d) 

XIV(e) XIV(f).

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).

X ................ ................

XV(a) ......................... Defense articles and services specific to spacecraft/satellites. However, the Canadian exemption may be used for commercial communications satellites that have 

no other type of payload.

X X X 

XV(b) ......................... Defense articles and services specific to ground control stations for spacecraft telemetry, tracking, and control................. X X 

XV(c) .......................... Defense articles and services specific to GPS/PPS security modules ....................... ................ X X 

XV(c) .......................... Defense articles controlled in XV(c) except end items for end use by the Federal 

Government of Canada exported directly or indirectly through a Canadian-registered person.

X ................ ................

XV(d) ......................... Defense articles and services specific to radiation-hardened microelectronic circuits X X X 

XV(e) ......................... Anti-jam systems with the ability to respond to incoming interference by adaptively 

reducing antenna gain (nulling) in the direction of the interference.

X ................ ................

XV(e) ......................... Antennas having any of the following: 

(a) Aperture (overall dimension of the radiating portions of the antenna) greater 

than 30 feet; 

(b) All sidelobes less than or equal to ¥35 dB 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).

X ................ ................

XV(e) ......................... Optical intersatellite data links (cross links) and optical ground satellite terminals .... X ................ ................

XV(e) ......................... Spaceborne regenerative baseband processing (direct up and down conversion to 

and from baseband) equipment.

X ................ ................

XV(e) ......................... Propulsion systems which permit acceleration of the satellite on-orbit (i.e., after 

mission orbit injection) at rates greater than 0.1 g.

X ................ ................

XV(e) ......................... 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.

X ................ ................

XV(e) ......................... 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.

X ................ ................

XV(e) ......................... Defense articles and services specific to spacecraft and ground control station systems (only for telemetry, tracking and control as controlled in XV(b)), subsystems, components, parts, accessories, attachments, and associated equipment................. X X 

XV(f) .......................... Technical data and defense services directly related to the other defense articles 

excluded from the exemptions for Category XV.

X X X 

XVI ............................. Defense articles and services specific to design and testing of nuclear weapons .... X X X 

XVI(c) ......................... Nuclear radiation measuring devices manufactured to military specifications ........... X ................ ................

XVI(e) ........................ Software source code related to Category XVI(c). See Note 4 .................................. ................ X X 

XVII ............................ Classified articles and defense services not elsewhere enumerated. See Note 1 .... X X X 

XVIII ........................... Defense articles and services specific to directed energy weapon systems .............. ................ X X 

XX .............................. Defense articles and services related to submersible vessels, oceanographic, and 

associated equipment.

X X X 

XXI ............................. Miscellaneous defense articles and services .............................................................. X X X 


erowe on DSK2VPTVN1PROD with PROPOSALS2
72266 Federal Register / Vol. 76, No. 225 / Tuesday, November 22, 2011 / Proposed Rules 

SUPPLEMENT NO. 1 *—Continued 

USML category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

Note 1: Classified defense articles and services are not eligible for export under the Canadian exemptions. U.S. origin defense articles and 

services controlled in Category XVII are not eligible for export under the UK Treaty exemption. U.S. origin classified defense articles and 

services are not eligible for export under either the UK or AS Treaty exemptions except when being released pursuant to a U.S. Department 

of Defense written request, directive or contract that provides for the export of the defense article or service. 

Note 2: The phrase ‘‘any part of the spectrum’’ includes radio frequency (RF), infrared (IR), electro-optical, visual, ultraviolet (UV), acoustic, and 

magnetic. Defense articles related to reduced observables or counter reduced observables are defined as: 

a. Signature reduction (radio frequency (RF), infrared (IR), Electro-Optical, visual, ultraviolet (UV), acoustic, magnetic, RF emissions) of defense platforms, including systems, subsystems, components, materials, (including dual-purpose materials used for Electromagnetic Interference (EM) reduction) technologies, and signature prediction, test and measurement equipment and software and material 

transmissivity/reflectivity prediction codes and optimization software. 

b. Electronically scanned array radar, high power radars, radar processing algorithms, periscope-mounted radar systems (PATRIOT), 

LADAR, multistatic and IR focal plane array-based sensors, to include systems, subsystems, components, materials, and technologies. 

Note 3: Defense Articles related to sensor fusion beyond that required for display or identification correlation is defined as techniques designed 

to automatically combine information from two or more sensors/sources for the purpose of target identification, tracking, designation, or passing of data in support of surveillance or weapons engagement. Sensor fusion involves sensors such as acoustic, infrared, electro optical, frequency, etc. Display or identification correlation refers to the combination of target detections from multiple sources for assignment of common target track designation. 

Note 4: Software source code beyond that source code required for basic operation, maintenance, and training for programs, systems, and/or 

subsystems is not eligible for use of the UK or AS Treaty Exemptions, unless such export is pursuant to a written solicitation or contract 

issued or awarded by the U.S. Department of Defense for an end use identified in subsections (e)(1), (2), or (4) of § 126.16 or § 126.17 of this 

subchapter and is consistent with other exclusions of this supplement. 

Note 5: Manufacturing know-how, as defined in § 125.4(c)(6) of this subchapter, is not eligible for use of the UK or AS Treaty Exemptions, unless such export is pursuant to a written solicitation or contract issued or awarded by the U.S. Department of Defense for an end use identified in subsections (e)(1), (2), or (4) of § 126.16 or § 126.17 of this subchapter and is consistent with other exclusions of this supplement. 

Note 6: Defense Articles specific to Man Portable Air Defense Systems (MANPADS) includes missiles which can be used without modification 

in other applications. It also includes production equipment specifically designed or modified for MANPAD systems, as well as training equipment specifically designed or modified for MANPAD systems. 

Note 7: Naval nuclear propulsion plants includes all of USML Category VI(e). Naval nuclear propulsion information is technical data that concerns the design, arrangement, development, manufacture, testing, operation, administration, training, maintenance, and repair of the propulsion plants of naval nuclear-powered ships and prototypes, including the associated shipboard and shore-based nuclear support facilities. Examples of defense articles covered by this exclusion include nuclear propulsion plants and nuclear submarine technologies or systems; nuclear powered vessels (see USML Categories VI and XX). 

Note 8: Examples of gas turbine engine hot section exempted defense article components and technology are combustion chambers/liners; 

high pressure turbine blades, vanes, disks and related cooled structure; cooled low pressure turbine blades, vanes, disks and related cooled 

structure; advanced cooled augmenters; and advanced cooled nozzles. Examples of gas turbine engine hot section developmental technologies are Integrated High Performance Turbine Engine Technology (IHPTET), Versatile, Affordable Advanced Turbine Engine (VAATE), 

Ultra-Efficient Engine Technology (UEET). 

Note 9: Examples of countermeasures and counter-countermeasures related to defense articles not exportable under the AS or UK Treaty exemptions are: 

a. IR countermeasures; 

b. Classified techniques and capabilities; 

c. Exports for precision radio frequency location that directly or indirectly supports fire control and is used for situation awareness, target 

identification, target acquisition, and weapons targeting and Radio Direction Finding (RDF) capabilities. Precision RF location is defined 

as angle of arrival accuracy of less than five degrees (RMS) and RF emitter location of less than ten percent range error; 

d. Providing the capability to reprogram; and 

e. Acoustics (including underwater), active and passive countermeasures, and counter-countermeasures 

Note 10: Examples of defense articles covered by this exclusion include underwater acoustic vector sensors; acoustic reduction; off-board, underwater, active and passive sensing, propeller/propulsor technologies; fixed mobile/floating/powered detection systems which include in-buoy 

signal processing for target detection and classification; autonomous underwater vehicles capable of long endurance in ocean environments 

(manned submarines excluded); automated control algorithms embedded in on-board autonomous platforms which enable (a) group behaviors for target detection and classification, (b) adaptation to the environment or tactical situation for enhancing target detection and classification; ‘‘intelligent autonomy’’ algorithms which define the status, group (greater than 2) behaviors, and responses to detection stimuli by autonomous, underwater vehicles; and low frequency, broad-band ‘‘acoustic color,’’ active acoustic ‘‘fingerprint’’ sensing for the purpose of long 

range, single pass identification of ocean bottom objects, buried or otherwise. (Controlled under Category XI(a), (1) and (2) and in (b), (c), 

and (d)). 

Note 11: The defense articles include constructions of metallic or non-metallic materials or combinations thereof specially designed to provide 

protection for military systems. The phrase ‘‘suitable for military use’’ applies to any articles or materials which have been tested to level IIIA 

or above IAW NIJ standard 0108.01 or comparable national standard. This exclusion does not include military helmets, body armor, or other 

protective garments which may be exported IAW the terms of the AS or UK Treaties. 

* An ‘‘X’’ in the chart indicates that the item is excluded from use under the exemption referenced in the top of the column. An item excluded in 

any one row is excluded regardless of whether other rows may contain a description that would include the item. 

PART 127—VIOLATIONS AND 

PENALTIES 

28. The authority citation for part 127 

is revised to read to as follows: 

Authority: Secs. 2, 38, and 42, Public Law 

90–629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 

2791); E.O. 11958, 42 FR 4311; 3 CFR, 1977 

Comp., p. 79; 22 U.S.C. 401; 22 U.S.C. 2651a; 

22 U.S.C. 2779a; 22 U.S.C. 2780; Pub. L. 111– 

266. 

29. Section 127.1 is revised to read as 

follows: 

§ 127.1 Violations. 

(a) Without first obtaining the 

required license or other written 


erowe on DSK2VPTVN1PROD with PROPOSALS2
Federal Register / Vol. 76, No. 225 / Tuesday, November 22, 2011 / Proposed Rules 72267 

approval from the Directorate of Defense 

Trade Controls, it is unlawful: 

(1) To export or attempt to export 

from the United States any defense 

article or technical data or to furnish or 

attempt to furnish any defense service 

for which a license or written approval 

is required by this subchapter; 

(2) To reexport or retransfer or 

attempt to reexport or retransfer any 

defense article, technical data, or 

defense service from one foreign enduser, end-use, or destination to another 

foreign end-user, end-use, or destination 

for which a license or written approval 

is required by this subchapter, 

including, as specified in § 126.16(h) 

and § 126.17(h) of this subchapter, any 

defense article, technical data, or 

defense service that was exported from 

the United States without a license 

pursuant to any exemption under this 

subchapter; 

(3) To import or attempt to import any 

defense article whenever a license is 

required by this subchapter; 

(4) To conspire to export, import, 

reexport, retransfer, furnish or cause to 

be exported, imported, reexported, 

retransferred or furnished, any defense 

article, technical data, or defense service 

for which a license or written approval 

is required by this subchapter. 

(b) It is unlawful: 

(1) To violate any of the terms or 

conditions of a license or approval 

granted pursuant to this subchapter, any 

exemption contained in this subchapter, 

or any rule or regulation contained in 

this subchapter. 

(2) To engage in the business of 

brokering activities for which 

registration and a license or written 

approval is required by this subchapter 

without first registering or obtaining the 

required license or written approval 

from the Directorate of Defense Trade 

Controls. For the purposes of this 

subchapter, engaging in the business of 

brokering activities requires only one 

occasion of engaging in an activity as 

reflected in § 129.2(b) of this 

subchapter. 

(3) To engage in the United States in 

the business of either manufacturing or 

exporting defense articles or furnishing 

defense services without complying 

with the registration requirements. For 

the purposes 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. 

(c) Any person who is granted a 

license or other approval or who acts 

pursuant to an exemption under this 

subchapter is responsible for the acts of 

employees, agents, and all authorized 

persons to whom possession of the 

defense article or technical data has 

been entrusted regarding the operation, 

use, possession, transportation, and 

handling of such defense article or 

technical data abroad. All persons 

abroad subject to U.S. jurisdiction who 

obtain temporary or permanent custody 

of a defense article exported from the 

United States or produced under an 

agreement described in part 124 of this 

subchapter, and irrespective of the 

number of intermediate transfers, are 

bound by the regulations of this 

subchapter in the same manner and to 

the same extent as the original owner or 

transferor. 

(d) A person with knowledge that 

another person is then ineligible 

pursuant to §§ 120.1(c) or 126.7 of this 

subchapter may not, directly or 

indirectly, in any manner or capacity, 

without prior disclosure of the facts to, 

and written authorization from, the 

Directorate of Defense Trade Controls: 

(1) Apply for, obtain, or use any 

export control document as defined in 

§ 127.2(b) of this subchapter for such 

ineligible person; or 

(2) Order, buy, receive, use, sell, 

deliver, store, dispose of, forward, 

transport, finance, or otherwise service 

or participate in any transaction which 

may involve any defense article or the 

furnishing of any defense service for 

which a license or approval is required 

by this subchapter or an exemption is 

available under this subchapter for 

export, where such ineligible person 

may obtain any benefit therefrom or 

have any direct or indirect interest 

therein. 

(e) No person may knowingly or 

willfully cause, or aid, abet, counsel, 

demand, induce, procure, or permit the 

commission of, any act prohibited by, or 

the omission of any act required by, 22 

U.S.C. 2778 and 2779, or any regulation, 

license, approval, or order issued 

thereunder. 

30. Section 127.2 is amended by 

revising paragraphs (a), (b) introductory 

text, (b)(1), (b)(2), and adding (b)(14), to 

read as follows: 

§ 127.2 Misrepresentation and omission of 

facts. 

(a) It is unlawful to use or attempt to 

use any export or temporary import 

control document containing a false 

statement or misrepresenting or 

omitting a material fact for the purpose 

of exporting, transferring, reexporting, 

retransferring, obtaining, or furnishing 

any defense article, technical data, or 

defense service. Any false statement, 

misrepresentation, or omission of 

material fact in an export or temporary 

import control document will be 

considered as made in a matter within 

the jurisdiction of a department or 

agency of the United States for the 

purposes of 18 U.S.C. 1001, 22 U.S.C. 

2778, and 22 U.S.C. 2779. 

(b) For the purpose of this subchapter, 

export or temporary import control 

documents include the following: 

(1) An application for a permanent 

export, reexport, retransfer, or a 

temporary import license and 

supporting documents. 

(2) Shipper’s Export Declaration or an 

Electronic Export Information filing. 

* * * * * 

(14) Any other shipping document 

that has information related to the 

export of the defense article or defense 

service. 

31. Section 127.3 is revised to read as 

follows: 

§ 127.3 Penalties for violations. 

Any person who willfully: 

(a) Violates any provision of § 38 or 

§ 39 of the Arms Export Control Act (22 

U.S.C. 2778 and 2779) or any rule or 

regulation issued under either § 38 or 

§ 39 of the Act, or any undertaking 

specifically required by part 124 of this 

subchapter; or 

(b) In a registration, license 

application, or report required by § 38 or 

§ 39 of the Arms Export Control Act (22 

U.S.C. 2778 and 2779) or by any rule or 

regulation issued under either section, 

makes any untrue statement of a 

material fact or omits a material fact 

required to be stated therein or 

necessary to make the statements 

therein not misleading, shall upon 

conviction be subject to a fine or 

imprisonment, or both, as prescribed by 

22 U.S.C. 2778(c). 

32. Section 127.4 is amended by 

revising paragraphs (a) and (c), and 

adding paragraph (d), to read as follows: 

§ 127.4 Authority of U.S. Immigration and 

Customs Enforcement and U.S. Customs 

and Border Protection officers. 

(a) U.S. Immigration and Customs 

Enforcement and U.S. Customs and 

Border Protection officers may take 

appropriate action to ensure observance 

of this subchapter as to the export or the 

attempted export of any defense article 

or technical data, including the 

inspection of loading or unloading of 

any vessel, vehicle, or aircraft. This 

applies whether the export is authorized 

by license or by written approval issued 

under this subchapter or by exemption. 

* * * * * 

(c) Upon the presentation to a U.S. 

Customs and Border Protection Officer 

of a license or written approval, or claim 

of an exemption, authorizing the export 


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72268 Federal Register / Vol. 76, No. 225 / Tuesday, November 22, 2011 / Proposed Rules 

of any defense article, the customs 

officer may require the production of 

other relevant documents and 

information relating to the proposed 

export. This includes an invoice, order, 

packing list, shipping document, 

correspondence, instructions, and the 

documents otherwise required by the 

U.S. Customs and Border Protection or 

U.S. Immigration and Customs 

Enforcement. 

(d) If an exemption under this 

subchapter is used or claimed to export, 

transfer, reexport or retransfer, furnish, 

or obtain a defense article, technical 

data, or defense service, law 

enforcement officers may rely upon the 

authorities noted above, additional 

authority identified in the language of 

the exemption, and any other lawful 

means to investigate such a matter. 

33. Section 127.7 is amended by 

revising paragraph (a) to read as follows: 

§ 127.7 Debarment. 

(a) Debarment. In implementing § 38 

of the Arms Export Control Act, the 

Assistant Secretary of State for PoliticalMilitary Affairs may prohibit any person 

from participating directly or indirectly 

in the export, reexport and retransfer of 

defense articles, including technical 

data, or in the furnishing of defense 

services for any of the reasons listed 

below and publish notice of such action 

in the Federal Register. Any such 

prohibition is referred to as a debarment 

for purposes of this subchapter. The 

Assistant Secretary of State for PoliticalMilitary Affairs shall determine the 

appropriate period of time for 

debarment, which shall generally be for 

a period of three years. However, 

reinstatement is not automatic and in all 

cases the debarred person must submit 

a request for reinstatement and be 

approved for reinstatement before 

engaging in any export or brokering 

activities subject to the Arms Export 

Control Act or this subchapter. 

* * * * * 

34. Section 127.10 is amended by 

revising paragraph (a) to read as follows: 

§ 127.10 Civil penalty. 

(a) The Assistant Secretary of State for 

Political-Military Affairs is authorized 

to impose a civil penalty in an amount 

not to exceed that authorized by 22 

U.S.C. 2778, 2779a, and 2780 for each 

violation of 22 U.S.C. 2778, 2779a, and 

2780, or any regulation, order, license, 

or written approval issued thereunder. 

This civil penalty may be either in 

addition to, or in lieu of, any other 

liability or penalty which may be 

imposed. 

* * * * * 

35. Section 127.12 is amended by 

adding paragraph (b)(5), and revising 

paragraph (d), to read as follows: 

§ 127.12 Voluntary disclosures. 

* * * * * 

(b) * * * 

(5) Nothing in this section shall be 

interpreted to negate or lessen the 

affirmative duty pursuant to §§ 126.1(e), 

126.16(h)(5), and 126.17(h)(5) of this 

subchapter upon persons to inform the 

Directorate of Defense Trade Controls of 

the actual or proposed sale, export, 

transfer, reexport, or retransfer of a 

defense article, technical data, or 

defense service to any country referred 

to in § 126.1 of this subchapter, any 

citizen of such country, or any person 

acting on its behalf. 

* * * * * 

(d) Documentation. The written 

disclosure should be accompanied by 

copies of substantiating documents. 

Where appropriate, the documentation 

should include, but not be limited to: 

(1) Licensing documents (e.g., license 

applications, export licenses, and enduser statements), exemption citation, or 

other authorization description, if any; 

(2) Shipping documents (e.g., 

Shipper’s Export Declarations; 

Electronic Export Information filing, 

including the Internal Transaction 

Number), air waybills, and bills of 

laden, invoices, and any other 

associated documents); 

(3) Any other relevant documents 

must be retained by the person making 

the disclosure until the Directorate of 

Defense Trade Controls requests them or 

until a final decision on the disclosed 

information has been made. 

* * * * * 

PART 129—REGISTRATION AND 

LICENSING OF BROKERS 

36. The authority citation for part 129 

continues to read as follows: 

Authority: Sec. 38, Pub. L. 104–164, 110 

Stat. 1437, (22 U.S.C. 2778). 

37. Section 129.6 is amended by 

revising paragraph (b)(2) to read as 

follows: 

§ 129.6 Requirements for License/ 

Approval. 

* * * * * 

(b) * * * 

(2) Brokering activities that are 

arranged wholly within and destined 

exclusively for the North Atlantic Treaty 

Organization, any member country of 

that Organization, Australia, Israel, 

Japan, New Zealand, or the Republic of 

Korea, except in the case of the defense 

articles or defense services specified in 

§ 129.7(a) of this subchapter, for which 

prior approval is always required. 

38. Section 129.7 is amended by 

revising paragraphs (a)(1)(vii) and (a)(2) 

to read as follows: 

§ 129.7 Prior Approval (License). 

(a) * * * 

(1) * * * 

(vii) Foreign defense articles or 

defense services (other than those that 

are arranged wholly within and 

destined exclusively for the North 

Atlantic Treaty Organization, any 

member country of that Organization, 

Australia, Israel, Japan, New Zealand, or 

the Republic of Korea (see §§ 129.6(b)(2) 

and 129.7(a)). 

(2) Brokering activities involving 

defense articles or defense services 

covered by, or of a nature described by 

part 121, of this subchapter, in addition 

to those specified in § 129.7(a), that are 

designated as significant military 

equipment under this subchapter, for or 

from any country not a member of the 

North Atlantic Treaty Organization, 

Australia, Israel, Japan, New Zealand, or 

the Republic of Korea whenever any of 

the following factors are present: 

* * * * * 

Dated: November 7, 2011. 

Ellen O. Tauscher, 

Under Secretary, Arms Control and 

International Security, Department of State. 

[FR Doc. 2011–29328 Filed 11–21–11; 8:45 am] 

BILLING CODE 4710–25–P 


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