Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Proposed Rules 76935 

working knowledge, consulting services. 

‘‘Technical assistance’’ may involve transfer 

of ‘‘technical data.’’ 

‘‘Technical data.’’—May take forms such as 

blueprints, plans, diagrams, models, 

formulae, tables, engineering designs and 

specifications, manuals and instructions 

written or recorded on other media or 

devices such as disk, tape, read-only 

memories. 

Dated: December 1, 2010. 

Ellen O. Tauscher, 

Under Secretary, Arms Control and 

International Security, Department of State. 

[FR Doc. 2010–31158 Filed 12–8–10; 4:15 pm] 

BILLING CODE 4710–25–P 

DEPARTMENT OF STATE 

22 CFR Part 121 

RIN 1400–AC78 

[Public Notice: 7257] 

Revisions to the United States 

Munitions List 

AGENCY: Department of State. 

ACTION: Advance notice of proposed 

rulemaking. 

SUMMARY: As part of the President’s 

export control reform initiative, the 

Directorate of Defense Trade Controls 

(DDTC) seeks public comment on 

revisions to the United States Munitions 

List (USML) that would make it a 

‘‘positive list’’ of controlled defense 

articles, requests that the public ‘‘tier’’ 

defense articles based on the 

Administration’s three-tier control 

criteria, and identify those current 

defense articles that the public believes 

do not fall within the scope of any of the 

criteria’s tiers. A ‘‘positive list’’ is a list 

that describes controlled items using 

objective criteria rather than broad, 

open-ended, subjective, or design 

intent-based criteria. DDTC is not 

seeking with this advance notice of 

proposed rulemaking (ANPRM) input 

on whether particular defense articles 

should or should not be controlled on 

the USML or whether any defense 

articles should be controlled differently. 

Rather, it is only seeking with this 

ANPRM input on how the USML can be 

revised so that it clearly describes what 

is subject to the jurisdiction of the 

International Traffic in Arms 

Regulations (ITAR), how defense 

articles are identified by tier, and what 

current defense articles do not fall 

within the scope of any of the tiers. 

Guidelines for revision of the USML 

toward this end are provided in this 

ANPRM. Please see the proposed rule 

published elsewhere in this issue of the 

Federal Register for an example of a 

USML Category that has been revised in 

this manner. 

DATES: Comments must be received by 

February 8, 2011. 

ADDRESSES: Interested parties may 

submit comments within 60 days of the 

date of the publication by any of the 

following methods: 

• E-mail: 

DDTCResponseTeam@state.gov with the 

subject line, ‘‘USML—Positive List.’’ 

• Mail: PM/DDTC, SA–1, 12th Floor, 

Directorate of Defense Trade Controls, 

Office of Defense Trade Controls Policy, 

ATTN: USML—Positive List, Bureau of 

Political Military Affairs, U.S. 

Department of State, Washington, DC 

20522–0112. 

• Persons with access to the Internet 

may also view this ANPRM by searching 

for its RIN on the U.S. Government 

regulations Web site at http:// 

regulations.gov/index.cfm. 

FOR FURTHER INFORMATION CONTACT: 

Director Charles B. Shotwell, Office of 

Defense Trade Controls Policy, 

Department of State, Telephone (202) 

663–2792 or Fax (202) 261–8199; E-mail 

DDTCResponseTeam@state.gov, ATTN: 

USML—Positive List. 

SUPPLEMENTARY INFORMATION: 

Existing Controls 

The Directorate of Defense Trade 

Controls (DDTC), U.S. Department of 

State, administers the International 

Traffic in Arms Regulations (ITAR) (22 

CFR parts 120–130). The items subject 

to the jurisdiction of the ITAR, i.e., 

‘‘defense articles,’’ including related 

technical data, and ‘‘defense services,’’ 

are identified on the ITAR’s U.S. 

Munitions List (USML) (22 CFR 121.1). 

With few exceptions, items that are not 

subject to the export control jurisdiction 

of the ITAR are subject to the 

jurisdiction of the Export 

Administration Regulations (EAR), 15 

CFR Parts 730–774. The Bureau of 

Industry and Security (BIS), U.S. 

Department of Commerce, administers 

the EAR, which include the Commerce 

Control List (CCL) (15 CFR part 774). 

The descriptions in many USML 

categories are general and include 

design intent as a reason for an item to 

be controlled. The descriptions in most 

CCL categories are specific and 

generally include technical parameters 

for an item to be controlled. 

Export Control Reform 

A key part of the Administration’s 

Export Control Reform effort is to 

review and revise both the ITAR and the 

CCL to enhance national security so that 

they: (1) Are ‘‘tiered’’ consistent with the 

criteria the U.S. Government has 

established to distinguish the types of 

items that should be controlled at 

different levels for different types of 

destinations, end-uses, and end-users; 

(2) create a ‘‘bright line’’ between the two 

lists to clarify jurisdictional 

determinations and reduce government 

and industry uncertainty about whether 

a particular item is subject to the 

jurisdiction of the ITAR or the EAR; and 

(3) are structurally ‘‘aligned’’ so that they 

can eventually be combined into a 

single control list. 

The Administration has determined 

that these changes are necessary to 

better focus its resources on protecting 

those items that need to be protected, to 

end jurisdictional confusion between 

the ITAR and EAR, and to provide 

clarity to make it easier for exporters to 

comply with the regulations and for the 

U.S. Government to administer and 

enforce them. 

In order to accomplish the three 

above-referenced tasks simultaneously, 

the USML and, to a lesser degree, the 

CCL must be revised so that they are 

aligned into ‘‘positive lists.’’ A ‘‘positive 

list’’ is one that describes controlled 

items using objective criteria such as 

horsepower, microns, wavelength, 

speed, accuracy, hertz or other precise 

descriptions rather than broad, openended, subjective, or design intentbased criteria. 

The U.S. Government has developed 

a methodology to transition the current 

control lists to this new structure. This 

methodology includes guidance on how 

to articulate the parameters for the items 

controlled and criteria to be used to 

screen these items to determine their 

tier of control. The full draft 

methodology that was developed for 

internal use by the U.S. Government 

was provided to the Department of 

State’s Defense Trade Advisory Group 

(DTAG) as well as to the Department of 

Commerce’s Technical Advisory 

Committees as it was being finalized. 

The full text is not included in this 

notice, as aspects are beyond the scope 

of the request for public comment; 

however, the full text is available for 

public review on the DDTC Web page at 

http://www.pmddtc.state.gov/DTAG/ 

index.html. 

This notice provides a summary of the 

full methodology and the full text of its 

guidance for building a ‘‘positive’’ list to 

order to request input from the public 

on this key feature of the control list 

reform. 

Request for Comments 

As the U.S. Government continues its 

work on preparing proposed revisions to 

the USML, it seeks public input on how 

best to describe the USML in a positive 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
76936 Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Proposed Rules 

manner. U.S. companies, trade 

associations, and individuals that 

produce, market, or export USMLcontrolled defense articles are generally 

well positioned to describe their articles 

positively and to provide comments on 

what are and are not clear descriptions 

of controls over the articles. Public 

comment at this stage of the USML 

review process also ensures that affected 

industry sectors have the opportunity to 

contribute and comment on a key 

element of Export Control Reform. 

The U.S. Government is not, at this 

time, seeking public comment on 

whether an item should or should not 

be controlled on the USML; however, 

the public is requested to identify those 

defense articles that it believes do not 

fall within the scope of any of the 

criteria’s tiers. The U.S. Government is 

also not seeking public comment at this 

time on whether an item should be 

controlled differently for export to 

different countries. General comments 

on the overall reform process or the 

other aspects of current export controls 

are outside the scope of this inquiry. In 

order to contribute directly to export 

control reform, all comments are 

strongly encouraged to abide by the 

detailed guidelines provided in this 

notice. 

BIS will publish a separate request for 

public comments on (1) how to describe 

items controlled on CCL more clearly 

and in a more ‘‘positive’’ ‘‘tiered’’ manner 

and (2) the availability of certain items 

outside of certain destinations. 

The following is a summary of the 

specific requests for public comment 

described in this notice: 

• Public comments should be 

provided on a category-by-category 

basis. 

• Within each category, public input 

should be further identified by groups A 

thru E as further described below. 

• Public input should describe 

defense articles in a ‘‘positive’’ way: 

1. Use objective criteria or thresholds, 

such as precise descriptions or technical 

parameters, that do not lend themselves 

to multiple interpretations by 

reasonable people. 

2. Descriptions should not contain 

any (a) controls that use generic labels 

for ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ or ‘‘end-items’’ or (b) 

other types of controls for specific types 

of defense articles because, for example, 

they were ‘‘specifically designed or 

modified’’ for a defense article, but 

should contain identification of those 

‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ or ‘‘end-items’’ that do 

warrant enumerated control on the 

USML. Separately, the use of ‘‘specially 

designed’’ as a control criterion for the 

other ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ ‘‘attachments,’’ or ‘‘enditems’’ should only be applied when 

required by multilateral obligations or 

when no other reasonable option exists. 

3. Items are not to be listed on both 

the CCL and the USML unless there are 

specific technical or other objective 

criteria—regardless of the reason why 

any particular item was designed or 

modified—that distinguish between 

when an item is USML-controlled or 

when it is CCL-controlled. 

4. In cases where technical 

characteristics are classified and need to 

be protected, the objective descriptions 

of the products controlled should be set 

at an unclassified level below the 

classified level. 

5. Public input should include the 

recommended tier of control for the 

defense articles described using the 

tiering criteria in Part IV, Step 4 of the 

Guidelines in this notice. 

6. The public is also requested to 

identify any current defense articles that 

do not fall within the scope of any of the 

criteria’s tiers, and provide an 

explanation why they believe that such 

items are not within the scope of the 

criteria. 

The U.S. Government’s Work on the 

USML 

The U.S. Government has already 

begun reviewing and revising the 

USML. The State Department published 

as a proposed rule elsewhere in this 

issue of the Federal Register a proposed 

revision to USML Category VII, which 

pertains to tanks and military vehicles. 

As members of the public prepare their 

comments on how to revise other USML 

categories into positive lists, they 

should use this revised Category VII as 

a guide for the level and type of detail 

the U.S. Government is seeking to 

develop in the remaining USML 

categories other than Category XVII 

(Classified Articles, Technical Data and 

Defense Services Not Otherwise 

Enumerated) and Category XXI 

(Miscellaneous Articles). 

Guidelines 

I. Introduction 

This notice describes the background 

to and the process by which the U.S. 

Government is reviewing and, as 

appropriate, revising the two primary 

lists of items it controls—the USML and 

the CCL. The review and revision are 

part of Phase II of the broad, threephased Export Control Reform effort. A 

summary of the control list work and 

the three phase reform effort is available 

at the White House Web page at 

http://www.whitehouse.gov/the-pressoffice/2010/08/30/president-obamalays-foundation-a-new-export-controlsystem-strengthen-n. ‘‘Items,’’ for 

purposes of this notice, are (a) physical 

things such as goods, products, 

materials, commodities, end-items, 

parts, components, and defense articles; 

(b) technology and technical data; and 

(c) software. The types of services and 

other transactions, licensing policies, 

and the lists of destinations, end-uses, 

and end-users that are subject to export 

controls, and the efforts to review and 

revise them, will be described in 

separate documents. 

II. Goals of the Phase II Control List 

Review and Revision Effort 

The purpose of the control list review 

effort is to enhance national security by 

reviewing and revising the USML and 

the CCL so that they: 

1. Are ‘‘tiered’’ consistent with the 

criteria the U.S. Government has 

established to distinguish the types of 

items that should be controlled at 

different levels for different types of 

destinations, end-uses, and end-users 

(‘‘Criteria,’’ detailed below); 

2. Create a ‘‘bright line’’ between the 

two lists to clarify jurisdictional 

determinations and reduce government 

and industry uncertainty about whether 

particular items are subject to the 

jurisdiction of the International Traffic 

in Arms Regulations (ITAR) or the 

Export Administration Regulations 

(EAR); and 

3. Are structurally ‘‘aligned’’ so that 

they later can eventually be combined 

into a single control list. 

In order to accomplish these tasks 

simultaneously, the USML and, to a 

lesser degree, the CCL must be revised 

so that they are aligned into ‘‘positive 

lists.’’ A ‘‘positive list’’ is a list that 

describes controlled items using 

objective criteria such as horsepower, 

microns, wavelength, speed, accuracy, 

hertz or other precise descriptions 

rather than broad, open-ended, 

subjective, catch-all, or design intentbased criteria. 

III. Background to the Control List 

Review and Revision Effort 

A key element of Export Control 

Reform is that all items on the USML 

and the CCL must be screened against 

the Criteria the U.S. Government has 

developed to determine new control 

levels consistent with contemporary 

national security threats and other 

issues. 

The basic premise of the effort is that 

if an item type falls within the scope of 

one of the Criteria’s three tiers, the item 

should be controlled for export, 

reexport, and in-country transfer at the 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Proposed Rules 76937 

level set forth in the licensing policy the 

U.S. Government is developing for that 

tier. The licensing policies to be 

assigned to each tier are still under 

development but, generally, the highest 

tier of control will carry the most 

comprehensive license and compliance 

requirements. 

If an item is determined not to be 

within the scope of any of the three 

tiers, it should not be on a control list. 

(Items that do not meet one of the 

primary elements of the tiered criteria, 

such as being significant for maintaining 

a military or intelligence advantage, 

which must nonetheless be controlled 

for a separate foreign policy, statutory, 

or multilateral obligation, will be 

identified as Tier 3 items.) 

The U.S. Government has also 

determined that, during Phase II, the 

USML and the CCL should be revised 

and aligned so that there is a clear 

jurisdictional ‘‘bright line’’ between the 

items subject to the control of the ITAR 

and the control of the EAR. 

The U.S. Government is committed to 

creating a clear jurisdictional ‘‘bright 

line’’ so that exporters and foreign 

parties can more easily and consistently 

determine whether many types of 

commodities, technologies, and 

software—and directly related 

services—are subject to the ITAR or the 

EAR. 

The creation of a ‘‘bright line’’ is also 

a vital interim step in the U.S. 

Government’s plan to have, by the end 

of Phase III, a single list of controlled 

items that is divided into three tiers and 

administered by a single licensing 

agency under a single set of export 

control regulations. The interim ‘‘bright 

line’’ is necessary because the structures 

of the USML and the CCL are 

significantly different. Many of the 

ITAR’s USML controls are based on 

subjective or design-intent criteria. That 

is, regardless of an item’s capability, 

sophistication, age, funding, lethality, 

end-use, or origins, it is, with some 

exceptions, USML-controlled if it was 

originally ‘‘specifically designed, 

modified, or adapted’’ for a military or 

space application, purpose, or use. In 

particular, most USML categories 

contain a non-specific catch-all control 

over every ‘‘part’’ or ‘‘component’’ that 

was ‘‘specifically designed or modified’’ 

for any of the defense articles listed in 

that category. This means, for example, 

that a bolt specifically modified for a 

military vehicle, and all technical data 

and services directly related to the bolt, 

are controlled for almost worldwide 

export in a similar manner to the 

military vehicle itself (and all the 

technical data and services directly 

related to the military vehicle). 

Most of the EAR’s CCL controls are 

based on the technical capabilities and 

specifications of items regardless of 

their intended end-use or the reasons for 

which they were designed. The CCL’s 

controls are also more flexible in that 

different types of items are controlled 

differently to different groups of 

destinations and end-users depending 

on the significance of the item. In other 

words, the CCL is a more ‘‘positive’’ list 

with more flexible controls than the 

USML. The EAR do nonetheless have a 

significant number of export control 

classification numbers (ECCNs) with 

controls on items that are ‘‘specially 

designed’’ for some purpose or end-item. 

The issues involving the definition of 

this term—a term that must remain in 

many ECCNs, at least for now, to remain 

consistent with multilateral 

obligations—are addressed below. 

Because the USML contains many 

broad, general descriptions of the types 

of articles controlled, each USML 

category will need to be ‘‘opened’’ in 

order to further assess whether each 

defense article within its scope still 

warrants control under the USML based 

on national security concerns and to 

screen them against the U.S. 

Government’s Criteria to create a tiered 

‘‘positive list.’’ ‘‘Screening’’ articles 

means determining which items that are 

currently USML-controlled defense 

articles should remain on the USML, 

which items that are currently USML 

controlled defense articles could be 

controlled under the CCL, and which 

items no longer require any control 

beyond EAR99 controls because they do 

not meet the criteria of any of the three 

tiers. ‘‘Opening’’ USML categories means 

identifying and then creating specific, 

positive lists of the specific types of 

articles the U.S. Government wants to 

control rather than relying on broad, 

general descriptions of or subjective 

criteria for determining when something 

is controlled. 

IV. Steps for and Guidelines 

Controlling List Review and Revision 

Effort 

The following are the steps and the 

guidelines that the U.S. Government has 

developed to prepare proposed 

amendments to the USML and the CCL 

so that they are, with rare exceptions, 

aligned ‘‘positive lists’’ that do not 

overlap and are consistent with the 

tiered criteria. The guidelines are set out 

in ordered steps. 

Step 1—Review Each USML Category 

and Related ECCNs Separately 

The USML and the CCL are too big 

and complex to be reviewed in their 

entirety all at once. In order to make the 

project more manageable, USML 

categories (and related ECCNs) are being 

reviewed separately, albeit with an 

awareness to the reviews or planned 

reviews in any other USML category or 

ECCN that could affect the effort. Public 

comments should be provided on a 

category-by-category basis, as further 

described below. 

Step 2 —Provide Input Following the 

New Proposed Structure of the USML 

The U.S. Government is proposing to 

revise the structure of the USML so that 

it tracks the A, B, C, D, E structure of 

the CCL (which also tracks the 

Wassenaar Arrangement dual-use list 

structure) and also has an additional F 

and G ‘‘Group’’ to address ITAR-specific 

defense service and manufacturing 

controls. That is, each revised USML 

category is being divided into seven 

‘‘Groups’’: 

‘‘A,’’ for ‘‘Equipment, Assemblies, and 

Components’’; 

‘‘B,’’ for ‘‘Test, Inspection, and 

Production Equipment’’; 

‘‘C,’’ for ‘‘Materials’’; 

‘‘D,’’ for Software’’; 

‘‘E,’’ for ‘‘Technology’’; 

‘‘F,’’ for ‘‘Defense Services’’; and 

‘‘G,’’ for ‘‘Manufacturing and 

Production Authorizations.’’ 

For purposes of the list review and 

revision effort, the public is requested to 

provide input in sections A thru E. 

Sections F and G at this stage do not 

require input for building the positive 

list. To facilitate public comment, these 

heading terms are defined as follows: 

A. ‘‘Equipment, Assemblies, and 

Components’’ means any tangible item 

that falls within the scope of any one of 

the defined terms in ITAR § 121.8—i.e., 

‘‘end-item,’’ ‘‘accessory,’’ ‘‘attachment,’’ 

‘‘associated equipment,’’ ‘‘component,’’ 

or ‘‘part’’—or ‘‘commodity,’’ as defined in 

EAR § 772.1, and is not ‘‘test, inspection, 

or production equipment,’’ as defined 

for Group B, or ‘‘materials,’’ as defined 

for Group C. 

B. ‘‘Test, Inspection, and Production 

Equipment’’ means any tangible item 

that is ‘‘specially designed’’ to test, 

inspect, produce, or develop any of the 

types of items defined in ITAR § 121.8 

or a ‘‘commodity,’’ as defined in EAR 

§ 772.1. Examples include machine 

tools, measuring equipment, lithography 

equipment, tape lay-up machines, 

templates, jigs, mandrels, moulds, dies, 

fixtures, and alignment mechanisms. 

C. ‘‘Material’’ means any crude or 

processed matter that is not clearly 

identifiable as any of the types of items 

defined in ITAR § 121.8 or a 

‘‘commodity’’ that is more broadly 

defined in EAR § 772.1. Examples 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
76938 Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Proposed Rules 

include the alloys, ceramics, prepregs, 

and raw material out of which parts, 

components, accessories, attachments, 

associated equipment, and end-items 

are made. Examples also include 

chemicals, toxins, and biological 

organisms. 

D. ‘‘Software’’ means a collection of 

one or more programs or microprograms 

fixed in any tangible medium of 

expression. It includes object code, 

source code, system functional design 

logic flows, algorithms, application 

programs, operating systems, and other 

programs to design, implement, test, 

operate, diagnose, or repair other 

software or items. A ‘‘program’’ is a 

sequence of instructions to carry out a 

process in, or convertible into, a form 

executable by an electronic computer. A 

‘‘microprogram’’ is a sequence of 

elementary instructions, maintained in a 

special storage, the execution of which 

is initiated by the introduction of its 

reference instruction into an instruction 

register. 

E. ‘‘Technology’’ means, when 

reviewing items that are or should be on 

the USML, ‘‘technical data’’ as defined in 

ITAR § 120.10(a)(1). ‘‘Technology’’ 

means, when reviewing items that are or 

should be on the CCL, ‘‘technology’’ as 

defined in EAR § 772.1. ‘‘Technology’’ 

does not include any information that 

falls within the scope of ‘‘public 

domain,’’ as defined in ITAR § 120.11, or 

is outside the scope of the EAR or 

‘‘publicly available,’’ as referenced in 

EAR §§ 734.3(b)(2) and (b)(3), 

respectively. 

These definitions are not intended to 

narrow or materially alter any term in 

the ITAR or the EAR. Rather, they are 

combinations of similar terms that are 

used now in the EAR and the ITAR to 

give structure to the tiered, aligned, 

positive list revision effort. The U.S. 

Government is currently preparing 

proposed harmonized terms to be used 

in the ITAR, EAR, and the sanctions 

regulations. This separate task should 

not, however, affect the public’s review 

and input. The scope and meaning of 

and controls over defense services and 

manufacturing and production 

authorizations will be addressed 

separately. 

Step 3—Describe Defense Articles in a 

‘‘Positive’’ Way 

The Department of State requests 

public input on how defense articles 

should be described, to the maximum 

extent possible, in a ‘‘positive’’ way. 

When providing input describing 

defense articles within the A, B, C, D, 

and E Group structure, the Department 

offers the following guidelines to aid the 

public in providing comments that 

make the revised USML a ‘‘positive list’’: 

1. Positive List Guideline #1: The 

public should, to the extent possible, 

use objective criteria or thresholds, such 

as precise descriptions or technical 

parameters, that do not lend themselves 

to multiple interpretations by 

reasonable people. 

Controls on items using technical 

descriptions will be the most effective 

means for all parties involved in the 

export process to clearly and easily 

determine jurisdiction and control 

requirements. For example, USML 

Categories V and XIV are subject to few 

jurisdictional questions because the 

controls are, in the main, based on 

specifically identified chemical 

compounds. 

Category V also illustrates the value of 

using a technical parameter to create 

clear controls. Both the USML and the 

CCL control spherical aluminum 

powder. The controls on the USML are 

limited, however, to a specific technical 

parameter: Spherical aluminum powder 

‘‘in particle sizes of 60 micrometers or 

less.’’ 

By using this guideline for revisions 

to the USML, reliance on subjective or 

discretionary terms such as ‘‘designintent’’ or ‘‘ultimate end-use’’ of an item 

will be eliminated. Such terms have 

historically been difficult for industry 

and government to apply and 

consistently agree upon. 

2. Positive List Guideline #2: When 

providing suggestions for revised USML 

categories, descriptions should avoid 

any (i) controls that use generic labels 

for ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ or ‘‘end-items’’; or (ii) 

other types of controls for specific types 

of defense articles because, for example, 

they were ‘‘specifically designed or 

modified’’ for a defense article. 

This guideline includes a 

recommended prohibition against using 

as standards for in the USML generic 

phrases such as the following: 

• Are ‘‘capable for use with’’ a defense 

article; 

• Are ‘‘equivalent to’’ a defense 

article; 

• Have ‘‘significant military or 

intelligence applicability’’; 

• Have a ‘‘military purpose’’; 

• Have ‘‘military application’’; or 

• Are ‘‘predominately used’’ in 

military applications or end items. 

This instruction does not prohibit the 

control on the USML of items that have, 

by whatever definition, any of these 

characteristics. To the contrary, the 

instruction requests the public describe 

and identify such items without using 

the generic phrases, which are at the 

root of many of the difficulties 

encountered in the current export 

control lists. 

This instruction also does not mean 

that specific models or part numbers of 

components need to be identified. 

Rather, types of items should be listed. 

For example, the parts and components 

controlled under a revised USML 

Category I could be limited to ‘‘barrels, 

receiver, frames, slides, bolts, and bolt 

carriers that fit and function in any of 

the above-listed firearms.’’ All other 

parts and components that fit or 

function in such firearms, even if 

specifically or specially designed or 

modified for them in terms of their size, 

shape or configuration, could be 

controlled in a separate entry that could 

become subject to the EAR. 

The guidelines governing how items 

moved to the jurisdiction of the EAR 

would be controlled will be addressed 

in a separate future Department of 

Commerce notice. The Department of 

State is seeking with this notice 

comments on current defense articles 

that the public does not view meet any 

of the criteria as explained in Step 4 

below. 

This guideline is a critical tool for 

achieving one of the essential goals of 

the list reform effort, which is to ‘‘deconflict’’ the USML and the CCL. At the 

end of the process, the lists should be 

written so that exporters easily and 

consistently can determine the 

jurisdictional status of an article, 

technical data, or software—and 

reasonable parties would reach the same 

conclusion about the nature of the item 

at issue if presented with the same facts. 

This drafting prohibition exists 

because it is necessary to stop using 

terms that do not readily lend 

themselves to objective determinations. 

These terms have been at the core of 

most jurisdictional disputes over the 

decades and have thus been a 

distraction from the larger mission of 

precisely and clearly controlling items 

for national security and foreign policy 

purposes. 

Guideline #2 does not apply to the 

miscellaneous USML Categories XVII or 

XXI. The guidelines, the limitations on 

and requirements for use, and its 

prospective-only characteristics, will be 

described in more detail in a separate 

notice. 

3. Positive List Guideline # 3: Items 

are not to be listed on both the CCL and 

the USML unless there are specific 

technical or other objective criteria— 

regardless of the reason why any 

particular item was designed or 

modified—that distinguish between 

when an item is USML-controlled and 

when it is CCL-controlled. 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Proposed Rules 76939 

An implication of this guideline is 

that if an item is listed on the CCL, an 

exporter is entitled to conclude that it 

is EAR-controlled unless there is a 

specific cross reference in the ECCN to 

the USML stating that such items that 

exceed the technical characteristics 

described in that USML category are 

ITAR-controlled—even if the item was 

specifically designed, modified, or 

intended for use in civil applications. If 

a cross-reference does not exist, one will 

be added to recommend consulting both 

the USML and the CCL for potential 

controls, particularly in situations 

where an item exceeds specific 

technical parameters that could cause it 

to be USML-controlled. 

For example, an integrated circuit that 

falls within the technical description of 

ECCN 3A001 is CCL-controlled 

regardless of whether it was specifically 

designed or modified, in terms of its 

form or fit, to function exclusively in a 

military end-item unless it exceeds the 

radiation tolerances described in USML 

subcategory XV(d). An integrated circuit 

that exceeds such tolerances would be 

USML controlled regardless of why it 

was so designed. This example does not 

preclude the possibility that subcategory 

XV(d) may need to be amended to 

increase the radiation-tolerant 

thresholds. 

An implication of this guideline is 

that all controls in the amended USML 

and CCL on parts and components must 

be at the item-type level, with technical 

characteristics determining whether or 

how the part or component is controlled 

for export, and not at the model or part 

number level by virtue of an item 

having been modified to fit into a 

particular end-item. This approach deemphasizes the significance of ‘‘form’’ or 

‘‘fit’’ in determining whether an item is 

USML-controlled and focuses more on 

its function, capability, performance, or 

characteristics. 

4. Positive List Guideline #4: In cases 

where technical characteristics are 

classified and need to be protected, the 

objective descriptions of the products 

controlled should be set at an 

unclassified level below the classified 

level. 

As a reminder, both the USML and 

CCL list review efforts pertain only to 

unclassified information (e.g., not 

Confidential, Secret, or Top Secret). 

This means that USML Category XVII 

(Classified Articles, Technical Data and 

Defense Services Not Otherwise 

Enumerated) does not need to be 

reviewed or revised. 

5. Positive List Guideline #5: Use 

‘‘Specially Designed’’ as a control 

criterion only when required by 

multilateral obligations or when no 

other reasonable option exists. 

There are specific, identified types of 

end-items and generic ‘‘components’’ 

that are controlled on the Wassenaar 

Munitions List because they are 

‘‘specially designed’’ for another item or 

some purpose. The Wassenaar 

Arrangement does not define the term 

‘‘specially designed.’’ Controls for such 

items should nonetheless carry forward 

to the revised USML or revised CCL 

with as precise of a description as 

possible of what is controlled. Thus, for 

example, the revised USML subcategory 

VII(g) generic, catch-all controls over 

components would read ‘‘Military 

Vehicle components as follows:’’. The 

subcategory would then list the types of 

components controlled by that 

subcategory in that tier using the 

objective criteria set forth above. 

For articles that are not within the 

scope of the Wassenaar Munitions List 

or other multilateral regime, but should 

nonetheless be listed on the USML, the 

term ‘‘specially designed’’ should rarely 

be used as a control parameter. Where 

a revised USML subcategory must use 

‘‘specially designed’’ to remain 

consistent with the Wassenaar 

Arrangement or other multilateral 

regime obligation or when no other 

reasonable option exists to describe the 

control without using the term, the 

public is asked to use the following 

draft definition of the term: 

‘‘For the purposes of this Subchapter, 

the term ‘‘specially designed’’ means 

that the end-item, equipment, accessory, 

attachment, system, component, or part 

(see ITAR § 121.8) has properties that (i) 

distinguish it for certain predetermined 

purposes, (ii) are directly related to the 

functioning of a defense article, and (iii) 

are used exclusively or predominantly 

in or with a defense article identified on 

the USML.’’ 

The Departments of State and 

Commerce will be seeking public 

comment on this draft definition in a 

later notice. 

Step 4: Provide Recommended Tier of 

Control for the Defense Articles 

Identified in Step 3 

The Department of State requests 

public input on screening those items 

the public identifies in a more ‘‘positive’’ 

way in Step 3 against the three tier 

control criteria listed in Section III 

above and described further below, and 

identify the tier of control for items 

within each category and group (A, B, 

C, D, and E). The U.S. Government will 

make the final decisions on what types 

of defense articles are within the scope 

of any of the three tiers and, thus, may 

or may not accept suggestions regarding 

how items should be tiered. 

Nonetheless, the Department of State is 

interested in the public’s views on the 

issue of how defense articles on a 

positive list can be described so that 

they are distinguished with tiered, 

objective criteria. 

Although the U.S. Government retains 

full discretion in deciding how any 

particular type of defense article is 

tiered, or divided by objective criteria 

among different tiers, the public is 

asked to provide input regarding how 

defense articles, or types of defense 

articles with different capabilities, 

should be described within different 

tiers. 

The Criteria and the scope of its three 

tiers are as follows: 

1. A Tier 1 control shall apply to: 

a. A weapon of mass destruction 

(WMD); 

b. A WMD-capable unmanned 

delivery system; 

c. A plant, facility or item specially 

designed for producing, processing, or 

using: 

(i) WMDs; 

(ii) Special nuclear materials; or 

(iii) WMD-capable unmanned 

delivery systems; or 

d. An item almost exclusively 

available from the United States that 

provides a critical military or 

intelligence advantage. 

2. A Tier 2 control shall apply to an 

item that is not in Tier 1, is almost 

exclusively available from Regime 

Partners or Adherents and: 

a. Provides a substantial military or 

intelligence advantage; or 

b. Makes a substantial contribution to 

the indigenous development, 

production, use, or enhancement of a 

Tier 1 or Tier 2 item. 

3. A Tier 3 control shall apply to an 

item not in Tiers 1 or 2 that: 

a. Provides a significant military or 

intelligence advantage; 

b. Makes a significant contribution to 

the indigenous development, 

production, use, or enhancement of a 

Tier 1, 2, or 3 item; or 

c. Is controlled for national security, 

foreign policy, or human rights reasons. 

Tier 1 defense articles are those that 

are almost exclusively available from 

the United States and that provide a 

critical military or intelligence 

advantage. 

Tier 2 defense articles are those that 

are almost exclusively available from 

countries that are members of the 

multilateral export control regimes that 

control such items and (i) provide a 

substantial military or intelligence 

advantage, or (ii) make a substantial 

contribution to the indigenous 

development, production, use, or 

enhancement of a Tier 1 or Tier 2 item. 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
76940 Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Proposed Rules 

Tier 3 defense articles are those that 

provide a significant military or 

intelligence advantage, or make a 

significant contribution to the 

indigenous development, production, 

use, or enhancement of a Tier 1, 2, or 

3 item. 

For defense articles currently 

controlled on the USML, the public is 

asked to identify the items they believe 

do not fall within the scope of any of the 

criteria’s tiers and explain why they 

believe such items are not within the 

scope of the criteria. These items may be 

candidates to be moved to the CCL. 

Items controlled pursuant to 

multilateral agreement, i.e., the 

Wassenaar Arrangement, the Missile 

Technology Control Regime, the 

Australia Group, the Chemical Weapons 

Convention, and the Nuclear Suppliers 

Group, that do not meet the availability 

or ‘‘military or intelligence advantage’’ 

control criteria in Tiers 1, 2 or 3 will be 

identified by the U.S. Government as 

Tier 3 items until and unless their 

control status is adjusted consistent 

with the procedures of the applicable 

multilateral agreement. 

The following are definitions of 

several of the key terms and phrases 

used in the tiered criteria set forth 

above. The term ‘‘almost exclusively 

available’’ means that the item is only 

available from a very small number of 

other countries that have in place 

effective export controls on the item. 

The term ‘‘critical’’ means providing a 

capability with respect to which the 

United States cannot afford to fall to 

parity and that would pose a grave 

threat to national security if not 

controlled (i.e., a ‘‘crown jewel’’). 

Examples of ‘‘grave threat to national 

security’’ include: Armed hostilities 

against the United States or its allies; 

disruption of foreign relations vitally 

affecting the national security; the 

compromise of vital national defense 

plans or complex crypto-logic and 

communications intelligence systems; 

the revelation of sensitive intelligence 

operations; the disclosure of scientific 

or technological developments vital to 

national security; or critical assistance 

to foreign development and/or 

acquisition of WMD. 

The term ‘‘substantial’’ means 

providing a capability with respect to 

which the United States must maintain 

parity and that would pose a serious 

threat to national security if not 

controlled. Examples of a ‘‘serious threat 

to the national security’’ include: 

Disruption of foreign relations 

significantly affecting the national 

security; significant impairment of a 

program or policy directly related to the 

national security; revelation of 

significant military plans or intelligence 

operations; compromise of scientific or 

technological developments relating to 

national security; or substantial 

assistance to foreign development or 

acquisition of a WMD. 

The term ‘‘significant’’ means 

providing a capability that could be 

reasonably expected to cause damage to 

national security if not controlled. 

Dated: November 30, 2010. 

Ellen O. Tauscher, 

Under Secretary, Arms Control and 

International Security, Department of State. 

[FR Doc. 2010–30994 Filed 12–8–10; 4:15 pm] 

BILLING CODE 4710–25–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 1 and 301 

[REG–100194–10] 

RIN 1545–BJ52 

Specified Tax Return Preparers 

Required To File Individual Income Tax 

Returns Using Magnetic Media; 

Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correction to notice of proposed 

rulemaking and notice of public 

hearing. 

SUMMARY: This document contains a 

correction to a notice of proposed 

rulemaking (REG–100194–10) that was 

published in the Federal Register on 

Friday, December 3, 2010 (75 FR 75439). 

The proposed regulations provide 

further guidance relating to the 

requirement for ‘‘specified tax return 

prepares,’’. 

FOR FURTHER INFORMATION CONTACT: 

Keith L. Brau at (202) 622–4940 (not a 

toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

The notice of proposed rulemaking 

that is the subject of this document is 

under section 6011 of the Internal 

Revenue Code. 

Need for Correction 

As published, the notice of proposed 

rulemaking (REG–100194–10) contains 

an error that is misleading and is in 

need of clarification. 

Correction to Publication 

Accordingly, the notice of proposed 

rulemaking which was the subject of FR 

Doc. 2010–30500 is corrected as follows: 

On page 75442, in the preamble, 

column 2, under the heading 

‘‘Comments and Public Hearing’’, line 17 

from the bottom of the page, the 

language ‘‘for Tuesday, January 7, 2011 

at 10 a.m.’’ is corrected to read ‘‘for 

Friday, January 7, 2011 at 10 a.m.’’ 

Guy Traynor, 

Federal Register Liaison, Publications and 

Regulations Branch, Legal Processing 

Division, Associate Chief Counsel (Procedure 

and Administration). 

[FR Doc. 2010–31028 Filed 12–9–10; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 300 

[REG–124018–10] 

RIN 1545–BJ65 

User Fees Relating to Enrolled Agents 

and Enrolled Retirement Plan Agents 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and notice of public hearing. 

SUMMARY: This document contains 

proposed amendments to the 

regulations relating to the imposition of 

user fees for enrolled agents and 

enrolled retirement plan agents. The 

proposed regulations separate the 

enrolled retirement plan agent user fees 

from the enrolled agent user fees and 

lower the initial enrollment and renewal 

of enrollment fees for enrolled agents 

and enrolled retirement plan agents. 

The proposed regulations affect 

individuals who are or apply to become 

enrolled agents or enrolled retirement 

plan agents. The charging of user fees is 

authorized by the Independent Offices 

Appropriations Act of 1952. 

DATES: Written or electronic comments 

must be received by January 10, 2011. 

Outlines of topics to be discussed at the 

public hearing scheduled for January 14, 

2011, at 10 a.m. must be received by 

January 5, 2011. 

ADDRESSES: Send submissions to: 

CC:PA:LPD:PR (REG–124018–10), room 

5205, Internal Revenue Service, PO Box 

7604, Ben Franklin Station, Washington, 

DC 20044. Submissions may be handdelivered Monday through Friday 

between the hours of 8 a.m. and 4 p.m. 

to CC:PA:LPD:PR (REG–124018–10), 

Courier’s Desk, Internal Revenue 

Service, 1111 Constitution Avenue, 

NW., Washington, DC or sent 

electronically via the Federal 

eRulemaking Portal at http:// 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1