Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations 52625 

PART 129—REGISTRATION AND 

LICENSING OF BROKERS 

■ 8. The authority citation for part 129 

is revised to read as follows: 

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

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

§ 129.7 [Amended] 

■ 9. Section 129.7 is amended by 

removing paragraph (e). 

§ 129.8 [Amended] 

■ 10. Section 129.8 is amended by 

removing paragraph (c). 

Dated: August 18, 2010. 

Ellen O. Tauscher, 

Under Secretary, Arms Control and 

International Security, Department of State. 

[FR Doc. 2010–21451 Filed 8–26–10; 8:45 am] 

BILLING CODE 4710–25–P 

DEPARTMENT OF STATE 

22 CFR Part 125 

[Public Notice: 7135] 

RIN 1400–AC59 

Amendment to the International Traffic 

in Arms Regulations: Export 

Exemption for Technical Data 

AGENCY: Department of State. 

ACTION: Final rule. 

SUMMARY: The Department of State is 

amending the International Traffic in 

Arms Regulations (ITAR) to clarify an 

exemption for technical data. The 

clarification is that the exemption 

covers technical data, regardless of 

media or format, sent or taken by a U.S. 

person who is an employee of a U.S. 

corporation or a U.S. Government 

agency to a U.S. person employed by 

that U.S. corporation or to a U.S. 

Government agency outside the United 

States. 

DATES: Effective Date: This rule is 

effective August 27, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Director Charles 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: 

Regulatory Change, Section 125.4. 

SUPPLEMENTARY INFORMATION: On 

November 24, 2009, the Department 

published a Notice of Proposed 

Rulemaking (NPRM) to add language 

clarifying 22 CFR 125.4(b)(9) to allow 

technical data, including classified 

information, and regardless of media or 

format, sent or taken by a U.S. person 

who is an employee of a U.S. 

corporation or a U.S. Government 

agency, to a U.S. person employed by 

that U.S. corporation or to a U.S. 

Government agency outside the United 

States under certain specified 

circumstances reflected in 22 CFR 

125.4(b)(9)(i) through (iii) (74 FR 

61292). This amendment will add after 

the word ‘‘information’’ the words ‘‘and 

regardless of media or format.’’ Also, the 

words ‘‘sent by a U.S. corporation to a 

U.S. person employed by that 

corporation overseas or to a U.S. 

Government agency’’ has been replaced 

by ‘‘sent or taken by a U.S. person who 

is an employee of a U.S. corporation or 

a U.S. Government agency to a U.S. 

person employed by that corporation or 

to a U.S. Government agency outside the 

United States.’’ Thus, the exemption 

will explicitly allow hand carrying 

technical data by a U.S. person 

employed by a U.S. corporation or a 

U.S. Government agency to a U.S. 

person employed by that U.S. 

corporation or to a U.S. Government 

agency outside the United States, as 

long as certain criteria in §§ 125.4(b)(9) 

and 125.4(b)(9)(i)–(iii) are met. The 

word ‘‘overseas’’ will be replaced by 

‘‘outside the United States’’ at 

§§ 125.4(b)(9), 125.4(b)(9)(i), 

125.4(b)(9)(ii), and 125.4(b)(9)(iii). Also, 

§ 125.4(b)(9)(iii) will be amended to add 

the words ‘‘or taken’’ after the word 

‘‘sent.’’ As stated in 22 CFR 125.4(a), this 

exemption does not apply to exports to 

proscribed destinations under 22 CFR 

126.1. 

The Proposed Rule had a comment 

period ending January 25, 2010. Nine 

parties filed comments by January 25 

recommending changes. Having 

thoroughly reviewed and evaluated the 

comments and the recommended 

changes, the Department has 

determined that it will, and hereby 

does, adopt the Proposed Rule, with 

minor edits, and promulgates it as a 

Final Rule. The Department’s evaluation 

of the written comments and 

recommendations follows: 

Comment Analysis 

One commenting party recommended 

that ‘‘sent or taken’’ be changed to ‘‘sent, 

taken or accessed.’’ This 

recommendation was deemed not 

necessary since it is implied the U.S. 

person who is an employee of a U.S. 

corporation or the U.S. person who is an 

employee of a U.S. Government agency 

taking the technical data outside of the 

United States may access the technical 

data. 

One commenting party inquired 

whether a U.S. corporation 

(manufacturer) could use the exemption 

to send (orally or via e-mail) technical 

data to an employee of a U.S. 

Government agency outside the United 

States, as well as what steps the U.S. 

manufacturer would take to ensure that 

22 CFR 125.4(b)(9)(i)–(ii) are met. The 

U.S. corporation (in compliance with 22 

CFR part 122) is able to use the 

exemption to send (orally or via e-mail) 

technical data to a U.S. person 

employed by a U.S. Government agency 

outside the United States, so long as the 

U.S. company takes reasonable 

precautions to ensure that conditions in 

22 CFR 125.4(b)(9)(i) through (ii) are 

met: 

1. The technical data will be used 

outside of the United States solely by 

U.S. persons; and 

2. The U.S. person outside of the 

United States is employed by a U.S. 

Government agency. 

Two commenting parties 

recommended that it be explicit that the 

technical data could be for ‘‘personal 

use’’ by the U.S. person claiming the 

exemption. That recommendation was 

not adopted since it introduced 

uncertainty about uses beyond those 

related to employment. 

One commenting party pointed out 

that when technical data is exported 

from a U.S. port using an exemption, the 

ITAR does not require the report of such 

an export using the Automated Export 

System (AES); instead, the exporter is to 

provide electronic notification directly 

to the Directorate of Defense Trade 

Controls (DDTC) (see 22 CFR 

123.22(b)(3)(iii)). The commenting party 

recommended that if the system to 

electronically file directly to DDTC is 

not going to be implemented, then 

DDTC should arrange for AES to be the 

reporting mechanism. The commenting 

party also recommended that if 

classified technical data is being 

exported under the provisions of the 

Department of Defense National 

Industrial Security Program Operating 

Manual, an Electronic Export 

Information should be filed within AES. 

For exports of technical data using 

exemptions, there is no system to 

electronically file directly to DDTC. 

DDTC is reviewing carefully the 

possibility of having all exports of 

technical data using an exemption be 

reported using an Electronic Export 

Information within Census Bureau’s 

Automated Export System. 

Two commenting parties 

recommended the exemption at 

§ 125.4(b)(9) be expanded so the 

exporter would be a U.S. person who is 

an employee of any entity, organization, 

or group incorporated or organized to do 

business in the United States. Also, the 

recipient would be a U.S. person 

employed by that entity, organization, 

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52626 Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations 

or group. Consequently, another 

recommendation is to revise 

§ 125.4(b)(9)(ii) to state ‘‘the U.S. person 

outside the United States is an 

employee of the U.S. Government or is 

directly employed by the same U.S. 

entity, organization, or group and not by 

a foreign subsidiary; and * * *.’’ The 

commenting party recommended that 

the exemption include accredited 

institutions of higher learning in the 

United States in order to facilitate 

research. This recommendation was not 

adopted because the Department prefers 

narrowing this exemption to an exporter 

that is a U.S. person who is an employee 

of a U.S. corporation or a U.S. 

Government agency, and a recipient 

outside the United States that is a U.S. 

person employed by that U.S. 

corporation or U.S. Government agency. 

The narrowing of this exemption affords 

more control of the technical data. 

One commenting party recommended 

the exemption be expanded at 

§ 125.4(b)(9) to include recipients that 

are a U.S. prime contractor or U.S. 

subcontractor of that U.S. corporation. 

Consequently, another recommendation 

is to revise § 125.4(b)(9)(ii) to state, ‘‘If 

the U.S. person outside the United 

States is an employee of the U.S. 

Government or is directly employed by 

the U.S. corporation and not by a 

foreign subsidiary, or is directly 

employed by the U.S. corporation’s U.S. 

prime contractor or U.S. subcontractor, 

and not a foreign subsidiary, provided 

the U.S. prime contractor’s or U.S. 

subcontractor’s employee is a U.S. 

person.’’ Expanding the recipients to a 

U.S. person employed by the U.S. 

corporation’s U.S. prime contractor or 

U.S. subcontractor allows the exemption 

to become unwieldy as to the recipient 

responsible for the technical data. 

One commenting party recommended 

the proposed amendment without any 

changes because it explicitly addressed 

technical data that is hand carried 

outside of the United States. 

Regulatory Analysis and Notices 

Administrative Procedure Act 

This amendment involves a foreign 

affairs function of the United States and, 

therefore, is not subject to the 

procedures contained in 5 U.S.C. 553 

and 554. 

Regulatory Flexibility Act 

Since this amendment is not subject 

to 5 U.S.C. 553, it does not require 

analysis under the Regulatory 

Flexibility Act. 

Unfunded Mandates Reform Act of 1995 

This 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. 

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 

levels of government. Therefore, in 

accordance with Executive Order 13132, 

it is determined that this 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 amendment. 

Executive Order 12866 

This proposed amendment is exempt 

from review under Executive Order 

12866, but has been reviewed internally 

by the Department of State to ensure 

consistency with the purposes thereof. 

Executive Order 12988 

The Department of State has reviewed 

the proposed amendments in light of 

sections 3(a) and 3(b)(2) of Executive 

Order 12988 to eliminate ambiguity, 

minimize litigation, establish clear legal 

standards, and reduce burden. 

Executive Order 13175 

The Department of State has 

determined that this rulemaking 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 Section 

5 of Executive Order 13175 does not 

apply to this rulemaking. 

Paperwork Reduction Act 

This proposed rule does not impose 

any new reporting or recordkeeping 

requirements subject to the Paperwork 

Reduction Act, 44 U.S.C. Chapter 35. 

List of Subjects in 22 CFR Part 125 

Arms and munitions, Classified 

information, Exports. 

■ Accordingly, for the reasons set forth 

above, Title 22, Chapter I, Subchapter 

M, part 125 is amended as follows: 

PART 125—LICENSES FOR THE 

EXPORT OF TECHNICAL DATA AND 

CLASSIFIED DEFENSE ARTICLES 

■ 1. The authority citation for part 125 

is revised to read as follows: 

Authority: Secs. 2 and 38, Pub. L. 90–629, 

90 Stat. 744 (22 U.S.C. 2752, 2778); E.O. 

11958, 42 FR 4311; 3 CFR, 1977 Comp. p.79; 

22 U.S.C. 2651a. 

■ 2. Section 125.4 is amended by 

revising paragraphs (b)(9) to read as 

follows: 

§ 125.4 Exemptions of general 

applicability. 

* * * * * 

(b) * * * 

(9) Technical data, including 

classified information, and regardless of 

media or format, sent or taken by a U.S. 

person who is an employee of a U.S. 

corporation or a U.S. Government 

agency to a U.S. person employed by 

that U.S. corporation or to a U.S. 

Government agency outside the United 

States. This exemption is subject to the 

limitations of § 125.1(b) of this 

subchapter and may be used only if: 

(i) The technical data is to be used 

outside the United States solely by a 

U.S. person; 

(ii) The U.S. person outside the 

United States is an employee of the U.S. 

Government or is directly employed by 

the U.S. corporation and not by a 

foreign subsidiary; and 

(iii) The classified information is sent 

or taken outside the United States in 

accordance with the requirements of the 

Department of Defense National 

Industrial Security Program Operating 

Manual (unless such requirements are 

in direct conflict with guidance 

provided by the Directorate of Defense 

Trade Controls, in which case the latter 

guidance must be followed). 

* * * * * 

Dated: August 18, 2010. 

Ellen O. Tauscher, 

Under Secretary, Arms Control and 

International Security, Department of State. 

[FR Doc. 2010–21450 Filed 8–26–10; 8:45 am] 

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