```

[Federal Register Volume 78, Number 130 (Monday, July 8, 2013)]
[Rules and Regulations]
[Pages 40921-40933]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-16145]

[[Page 40921]]

Vol. 78

Monday,

No. 130

July 8, 2013

Part IV

Department of State

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22 CFR 120, 121, 123, et al.

Amendment to the International Traffic in Arms Regulations: Continued 
Implementation of Export Control Reform; Final Rule

Federal Register / Vol. 78 , No. 130 / Monday, July 8, 2013 / Rules 
and Regulations

[[Page 40922]]

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DEPARTMENT OF STATE

22 CFR 120, 121, 123, 124, and 125

[Public Notice 8370]
RIN 1400-AD40

Amendment to the International Traffic in Arms Regulations: 
Continued Implementation of Export Control Reform

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: As part of the President's Export Control Reform (ECR) effort, 
the Department of State is amending the International Traffic in Arms 
Regulations (ITAR) to revise four more U.S Munitions List (USML) 
categories and provide new definitions and other changes. The revisions 
contained in this rule are part of the Department of State's 
retrospective plan under E.O. 13563.

DATES: This rule is effective January 6, 2014.

FOR FURTHER INFORMATION CONTACT: Ms. Sarah J. Heidema, Acting Director, 
Office of Defense Trade Controls Policy, Department of State, telephone 
(202) 663-2809; email DDTCResponseTeam@state.gov. ATTN: Regulatory 
Change, Second ECR Final Rule. The Department of State's full 
retrospective plan can be accessed at http://www.state.gov/documents/organization/181028.pdf.

SUPPLEMENTARY INFORMATION: 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'' and ``defense 
services,'' are identified on the ITAR's U.S. Munitions List (USML) (22 
CFR 121.1). With few exceptions, items 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, which 
includes the Commerce Control List (CCL) in Supplement No. 1 to part 
774), administered by the Bureau of Industry and Security (BIS), U.S. 
Department of Commerce. Both the ITAR and the EAR impose license 
requirements on exports, reexports, and retransfers. Items not subject 
to the ITAR or to the exclusive licensing jurisdiction of any other set 
of regulations are subject to the EAR.
    All references to the USML in this rule are to the list of defense 
articles controlled for the purpose of export or temporary import 
pursuant to the ITAR, and not to the defense articles on the USML that 
are controlled by the Bureau of Alcohol, Tobacco, Firearms and 
Explosives (ATF) for the purpose of permanent import under its 
regulations. See 27 CFR part 447. Pursuant to section 38(a)(1) of the 
Arms Export Control Act (AECA), all defense articles controlled for 
export or import are part of the USML under the AECA. For the sake of 
clarity, the list of defense articles controlled by ATF for the purpose 
of permanent import is the U.S. Munitions Import List (USMIL). The 
transfer of defense articles from the ITAR's USML to the EAR's CCL for 
the purpose of export control does not affect the list of defense 
articles controlled on the USMIL under the AECA for the purpose of 
permanent import.

Export Control Reform Update

    Pursuant to the President's Export Control Reform (ECR) initiative, 
the Department has published proposed revisions to twelve USML 
categories and has revised four USML categories to create a more 
positive control list and eliminate where possible ``catch all'' 
controls. The Department, along with the Departments of Commerce and 
Defense, reviewed the public comments the Department received on the 
proposed rules and has, where appropriate, revised the rules. A 
discussion of the comments relevant to the USML categories that are 
part of this rule is included later on in this notice. The Department 
continues to review the remaining USML categories and will publish them 
as proposed rules in the coming months.
    For discussion of public comments relevant to the two USML 
categories that have been published as final rules, please see, 
``Amendment to the International Traffic in Arms Regulations: Initial 
Implementation of Export Control Reform,'' published April 16, 2013 (78 
FR 22740). The aforementioned notice also contains policies and 
procedures regarding the licensing of items moving from the export 
jurisdiction of the Department of State to the Department of Commerce, 
a definition for specially designed, and responses to public comments 
and changes to other sections of the ITAR that affect the categories 
discussed in this rule.
    Pursuant to ECR, the Department of Commerce has been publishing 
revisions to the EAR, including various revisions to the CCL. Revision 
of the USML and CCL are coordinated so there is uninterrupted 
regulatory coverage for items moving from the jurisdiction of the 
Department of State to that of the Department of Commerce. For the 
Department of Commerce's companion to this rule, please see, 
``Revisions to the Export Administration Regulations: Military 
Vehicles; Vessels of War; Submersible Vessels, Oceanographic Equipment; 
Related Items; and Auxiliary and Miscellaneous Items that the President 
Determines No Longer Warrant Control under the United States Munitions 
List,'' elsewhere in this edition of the Federal Register.

Changes in This Rule

    The following changes are made to the ITAR with this final rule: 
(i) Revision of U.S. Munitions List (USML) Categories VI (Surface 
Vessels of War and Special Naval Equipment), VII (Ground Vehicles), 
XIII (Materials and Miscellaneous Articles), and XX (Submersible 
Vessels and Related Articles); (ii) addition of ITAR Sec.  121.4 to 
provide a definition for ``ground vehicles,'' ITAR Sec.  121.14 to 
provide a definition for ``submersible vessels,'' and ITAR Sec.  120.38 
to provide definitions of ``organizational-level maintenance,'' 
``intermediate-level maintenance,'' and ``depot-level maintenance''; 
(iii) revision of the definition of ``surface vessels of war'' at ITAR 
Sec.  121.15; (iv) continued implementation of a new licensing 
procedure for the export of items subject to the EAR that are to be 
exported with defense articles; and (v) related changes to other ITAR 
sections.

Revision of USML Category VI

    This final rule revises USML Category VI, covering surface vessels 
of war and special naval equipment, to establish a clearer line between 
the USML and the CCL regarding controls for these articles.
    The revision narrows the types of surface vessels of war and 
special naval equipment controlled on the USML to only those that 
warrant control under the requirements of the AECA. It removes from 
USML control harbor entrance detection devices formerly controlled 
under USML Category VI(d) and no longer includes submarines, which are 
now controlled in USML Category XX. In addition, articles common to the 
Missile Technology Control Regime (MTCR) Annex and articles in this 
category are identified with the parenthetical ``(MT)'' at the end of 
each section containing such articles.
    The revised USML Category VI does not contain controls on all 
generic parts, components, accessories, and attachments specifically 
designed or modified for a defense article, regardless of their 
significance to maintaining a military advantage for the United States. 
Rather, it contains a positive list of specific types of parts, 
components, accessories, and attachments that continue to warrant 
control on the

[[Page 40923]]

USML. All other parts, components, accessories, and attachments are 
subject to the new 600 series controls in Category 8 of the CCL, 
published separately by the Department of Commerce (see elsewhere in 
this issue of the Federal Register).
    A new ``(x) paragraph'' has been added to USML Category VI, 
allowing ITAR licensing for commodities, software, and technical data 
subject to the EAR provided those commodities, software, and technical 
data are to be used in or with defense articles controlled in USML 
Category VI and are described in the purchase documentation submitted 
with the application.
    This rule also revises ITAR Sec.  121.15 to more clearly define 
``surface vessels of war'' for purposes of the revised USML Category 
VI.
    This revision of USML Category VI was first published as a proposed 
rule (RIN 1400-AC99) on December 23, 2011, for public comment (see 76 
FR 80302). The comment period ended February 6, 2012. Nine parties 
filed comments recommending changes, which were reviewed and considered 
by the Department and other agencies. The Department's evaluation of 
the written comments and recommendations follows.
    The Department received proposals for alternative phrasing of the 
regulatory text in USML Category VI and ITAR Sec.  121.15. When the 
recommended changes added to the clarity of the regulation and were 
congruent with ECR objectives, the Department accepted them.
    Two commenting parties recommended changing the criteria for USML 
control for articles developed as a result of funding from the 
Department of Defense. While the Department agrees that ``mere'' 
funding by the Department of Defense should not automatically designate 
a resulting article as a defense article, the Department also notes 
that, generally, the Department of Defense's interest is in developing 
defense articles. However, the Department has revised paragraph (c) to 
clarify that the control does not apply to developmental vessels 
identified in the relevant Department of Defense contract as being 
developed for both civil and military applications. Additionally, in 
response to public comments, the Department has inserted a delayed 
effective date for this and other developmental article controls so 
that it would not affect contracts or other funding authorizations now 
in effect. The controls would thus apply prospectively and only after 
the affected community has a sufficient opportunity to review and, as 
necessary, modify standard contract or funding authorization terms and 
conditions. The Department did not accept the recommendation of another 
party to limit the coverage of parts, components, accessories, and 
attachments in paragraph (c) to those listed in paragraph (f), as this 
would narrow the coverage in a manner unintended by the Department. The 
Department notes that this response also applies to comments received 
on this matter in the context of other USML categories and provisions 
of the ITAR (e.g., USML Category XX and ITAR Sec.  121.14, elsewhere in 
this rule).
    Three commenting parties recommended the Department address and 
correct for any unintended consequences in revised ITAR Sec.  
121.15(a)(6) providing for the control of surface vessels of war that 
incorporate USML-controlled mission systems, a provision that may 
control vessels the Department intends for the transfer of export 
jurisdiction to the Department of Commerce. While the issue of the 
control of USML items in 600 series end-items will be addressed in a 
future policy statement, the Department has revised the definition of 
``mission systems'' to include only those ``systems'' that are defense 
articles. The Department notes that this response also applies to 
comments received on this matter in the context of other USML 
categories and provisions of the ITAR (e.g., USML Category XX and ITAR 
Sec.  121.14, elsewhere in this rule).
    One commenting party recommended clarifying the regulation to not 
control decommissioned and demilitarized surface vessels of war 
manufactured prior to a certain date to avoid controlling ``historic'' 
vessels, such as the U.S.S. Constitution. The Department has accepted 
this recommendation in part, and has noted in ITAR Sec.  121.15 that 
demilitarized surface vessels of war manufactured prior to 1950 are not 
subject to the USML. Decommissioned vessels may retain their military 
capabilities, and therefore are not excluded from USML control on that 
basis.
    In response to one commenting party's recommendation, the 
Department has clarified that ``hulls'' and ``superstructures'' include 
``support structures.'' The Department notes that unformed steel 
plating would be controlled based on the control of the material itself 
(see USML Category XIII, Materials and Miscellaneous Articles, 
elsewhere in this rule).
    One commenting party recommended clarification of the 12.5% or 
greater damage threshold for hulls or superstructures. The damage 
threshold is a measurement based on length between perpendiculars 
(LBP). The LBP is a standard naval architecture term of reference that 
refers to the length of a vessel along the waterline from the forward 
surface of the stem, or main bow perpendicular member, to the after 
surface of the sternpost, or main stern perpendicular member. The 
regulation covers vessels that are specially designed to survive damage 
defined by a shell opening centered at any point along the hull where 
the longitudinal extent of the shell opening is equivalent to 12.5% of 
LBP or greater.

Revision of USML Category VII

    This final rule revises USML Category VII, covering ground 
vehicles, to more accurately describe the articles within the category 
and to establish a clearer line between the USML and the CCL regarding 
controls over these articles. The revision narrows the types of ground 
vehicles controlled on the USML to only those that warrant control 
under the requirements of the AECA. Changes include the removal of most 
unarmored and unarmed military vehicles, trucks, trailers, and trains 
(unless specially designed as firing platforms for weapons above .50 
caliber), and armored vehicles (either unarmed or with inoperable 
weapons) manufactured before 1956. Engines formerly controlled in 
paragraph (f) are now covered in revised USML Category XIX, published 
April 16, 2013 (see 78 FR 22740) or subject to the EAR in ECCN 0A606 
(see 78 FR 22660). In addition, articles common to the MTCR Annex and 
articles in this category are identified with the parenthetical 
``(MT)'' at the end of each section containing such articles.
    A significant aspect of the revised USML Category VII is that it 
does not contain controls on all generic parts, components, 
accessories, and attachments that are specifically designed or modified 
for a defense article, regardless of their significance to maintaining 
a military advantage for the United States. Rather, it contains a 
positive list of specific types of parts, components, accessories, and 
attachments that continue to warrant control on the USML. All other 
parts, components, accessories, and attachments are subject to the new 
600 series controls in Category 0 of the CCL (see the Department of 
Commerce rule elsewhere in this issue of the Federal Register).
    A new ``(x) paragraph'' has been added to USML Category VII, 
allowing ITAR licensing for commodities, software, and technical data 
subject to the EAR provided those commodities,

[[Page 40924]]

software, and technical data are to be used in or with defense articles 
controlled in USML Category VII and are described in the purchase 
documentation submitted with the application.
    This rule also establishes a definition for ground vehicles in ITAR 
Sec.  121.4.
    This revision of USML Category VII was published as a proposed rule 
(RIN 1400-AC77) on December 6, 2011, for public comment (see 76 FR 
7611). The comment period ended January 20, 2012. Five parties filed 
comments recommending changes, which were thoroughly reviewed and 
considered by the Department and other agencies. The Department's 
evaluation of the written comments and recommendations follows.
    The Department received proposals for alternative phrasing of the 
regulatory text in USML Category VII and ITAR Sec.  121.4. When the 
recommended changes added to the clarity of the regulation and were 
congruent with ECR objectives, the Department accepted them.
    One commenting party recommended providing an explanation of or 
reference for the phrase ``rated class 60 or above'' in paragraph 
(g)(9), to assist the exporter with interpretation. The Department 
notes there are numerous instances in the regulation where technical 
terminology is used. Such terminology is indispensible in the effort to 
provide a more descriptive and ``positive'' U.S. Munitions List. While 
the Department strives for simplicity and clarity in the regulation, 
and acknowledges that some of the terminology may be inscrutable to 
those without the proper knowledge base, the provision of layman's 
explanation of all technical parameters would make for a voluminous and 
unwieldy regulation.
    One commenting party recommended revising paragraph (g)(11) to more 
specifically identify which kits should be controlled on the USML. The 
Department believes it has sufficiently described the articles meant to 
be controlled in that paragraph. For those in the public who disagree 
on the wording of a particular regulation because they believe it does 
not sufficiently describe the article to be controlled, the Department 
urges the submission of alternative text or criteria using the contact 
information in the ``For Further Information'' section. Any such 
comments will be evaluated for possible addition in a future 
rulemaking.

Revision of USML Category XIII

    This final rule revises USML Category XIII, covering materials and 
miscellaneous articles, to more accurately describe the articles within 
the category and to establish a clearer line between the USML and the 
CCL regarding controls over these articles.
    Paragraph (c) is removed and placed in reserve; the articles 
formerly controlled there (i.e., self-contained diving and underwater 
breathing apparatus) are controlled in ECCN 8A620.f. Paragraphs (d), 
(e), (g), and (h) are reorganized and expanded to better describe the 
articles controlled therein. Paragraph (f) is re-designated to cover 
articles that are classified. The articles in the former paragraph (f) 
(i.e., structural materials) are controlled in ECCN 0C617, revised USML 
Categories VI, VII, and VIII, and in paragraphs (d), (e), and new 
paragraph (f) of USML Category XIII. Paragraph (i) is re-designated to 
control signature reduction software, with embrittling agents (formerly 
controlled in paragraph (i)) moving to the CCL under ECCN 0A617.f. 
Paragraph (m) is amended to reflect the revisions made throughout this 
category. In addition, articles common to the MTCR Annex and articles 
in this category are identified with the parenthetical ``(MT)'' at the 
end of each section containing such articles.
    A new ``(x) paragraph'' has been added to USML Category XIII, 
allowing ITAR licensing for commodities, software, and technical data 
subject to the EAR provided those commodities, software, and technical 
data are to be used in or with defense articles controlled in USML 
Category XIII and are described in the purchase documentation submitted 
with the application.
    Although the articles controlled in paragraph (a) (i.e., cameras 
and specialized processing equipment) are to controlled elsewhere on 
the USML and on the CCL, they will remain controlled in paragraph (a) 
until the Department publishes a final rule for USML Category XII and 
the Department of Commerce publishes its companion rule.
    This revision of USML Category XIII was published as a proposed 
rule (RIN 1400-AD13) on May 18, 2012, for public comment (see 77 FR 
29575). The comment period ended July 2, 2012. Ten parties filed 
comments recommending changes, which were reviewed and considered by 
the Department and other agencies. The Department's evaluation of the 
written comments and recommendations follows.
    The Department received proposals for alternative phrasing of the 
regulatory text in USML Category XIII. When the recommended changes 
added to the clarity of the regulation and were congruent with ECR 
objectives, the Department accepted them.
    One commenting party recommended removal of the phrase, ``specially 
designed for military applications,'' from the introduction to 
paragraph (b) because an item should not be controlled on the USML 
merely because the military may be the first entity to purchase or use 
the item. The Department agrees that an item should not be considered a 
defense article based on first use by the military, and believes that 
appropriate application of the specially designed definition will work 
toward the preclusion of this occurrence. But the Department also notes 
that whether an item is specially designed for a military application 
and which sector (military or commercial) has established first 
purchases are two separate matters. Separately, the Department has 
accepted the recommendation to remove the phrase ``specially designed 
for a military application'' because it is superfluous.
    One commenting party suggested that the parenthetical, ``e.g., 
command, control, and communications (C\3\), and government 
intelligence applications,'' in the introduction to paragraph (b) is 
unnecessary, as the regulation lists, or should list, all articles to 
be controlled. The Department has removed the example, but has added 
``intelligence'' as a description of the articles controlled in the 
paragraph.
    Three commenting parties recommended the provision of specific 
criteria for discerning the threshold between military and non-military 
articles in paragraph (b). The Department acknowledges that the control 
of these items requires review, and that this aspect of the regulation 
requires further development, but at this point publishes the 
regulation largely as provided in the proposed rule.
    The Department has revised paragraph (b)(4) by providing criteria 
to clarify the scope of the regulation, as recommended by two 
commenting parties.
    In response to the recommendation of one commenting party for 
clarity of purpose in paragraph (d), the Department has removed the 
word ``ablative'' from the introduction.
    Three commenting parties recommended that developmental armor 
funded by a Department of Defense contract should not be automatically 
controlled under the ITAR. The Department has qualified the regulation 
by stipulating that the USML does not control developmental armor 
determined to be subject to the EAR via a commodity jurisdiction 
determination

[[Page 40925]]

or identified in the relevant Department of Defense contract as being 
developed for both civil and military applications.
    The Department accepted the recommendation of three commenting 
parties for identification of a lower-limit criterion for the provided 
parameter in paragraph (g)(1), and has revised the regulation 
accordingly.
    Four commenting parties recommended control on the CCL as more 
appropriate for energy conversion devices controlled in paragraph (h). 
The Department has not accepted this recommendation, but has narrowed 
the control on thermionic generators covered in that paragraph.
    The Department accepted the recommendation of five commenting 
parties to specifically indicate that the signature reduction software 
controlled in paragraph (i) be directly related to reducing the ability 
to detect a defense article, and has revised the regulation 
accordingly.
    In response to the recommendation of one commenting party, laser 
eye-safe media will be controlled in revised USML Category X rather 
than in paragraph (j), and comments regarding the appropriate control 
criteria for those articles will be discussed in that rule.
    Two commenting parties recommended deletion of paragraph (k), which 
controls certain tooling and equipment, saying it is unnecessary 
(because technical data controls elsewhere in the ITAR would cover the 
items) or too broad in scope (commercial items would be captured). The 
Department believes the regulation is appropriately phrased to control 
only the articles intended to be captured. In addition, the reason for 
the control goes beyond related technical data; the Department wants to 
control these items for their intended function. For these reasons, the 
Department did not accept the recommendation of another commenting 
party to transfer jurisdiction over these articles to the Department of 
Commerce.
    One commenting party recommended the removal from paragraph (m) 
description of the term ``electromagnetic armor,'' as it is not 
included in this category. The Department accepted this recommendation 
in part, and has included a note to USML Category VII(g)(6) to point to 
the definitions in USML Category XIII(m).

Revision of USML Category XX

    This final rule revises USML Category XX, covering submersible 
vessels and related articles. The revision accounts for the movement of 
submarines from USML Category VI and consolidates the controls that 
apply to all submersible vessels in a single category. In addition, 
naval nuclear propulsion power plants for submersible vessels 
controlled under USML Category XX, formerly controlled under USML 
Category VI(e), are now controlled under USML Category XX(b). In 
addition, articles common to the MTCR Annex and articles in this 
category are identified with the parenthetical ``(MT)'' at the end of 
each section containing such articles.
    Revised USML Category XX controls only those parts, components, 
accessories, and attachments that are specially designed for a defense 
article controlled therein. All other parts, components, accessories, 
and attachments become subject to the new 600 series controls in 
Category 8 of the CCL published separately by the Department of 
Commerce (see elsewhere in this issue of the Federal Register).
    A new ``(x) paragraph'' has been added to USML Category XX, 
allowing ITAR licensing for commodities, software, and technical data 
subject to the EAR provided those commodities, software, and technical 
data are to be used in or with defense articles controlled in USML 
Category XX and are described in the purchase documentation submitted 
with the application.
    This rule also creates ITAR Sec.  121.14 to more clearly define 
``submersible vessels and related articles,'' and makes conforming 
edits to ITAR Sec. Sec.  123.20, 124.2, and 125.1 (nuclear related 
controls).
    This revision of USML Category XX was first published as a proposed 
rule (RIN 1400-AD01) on December 23, 2011, for public comment (see 76 
FR 80305). The comment period ended February 6, 2012. Six parties filed 
comments recommending changes, which were reviewed and considered by 
the Department and other agencies. The Department's evaluation of the 
written comments and recommendations follows.
    The Department received proposals for alternative phrasing of the 
regulatory text in USML Category XX and ITAR Sec.  121.14. When the 
recommended changes added to the clarity of the regulation and were 
congruent with ECR objectives, the Department accepted them.
    One commenting party recommended revising paragraph (c) to list the 
parts, components, accessories, attachments, and associated equipment 
controlled therein, rather than provide for the control of these 
articles that are specially designed for the articles in paragraphs (a) 
and (b) of USML Category XX. Because of the specialized and sensitive 
application of the articles controlled in USML Category XX, the 
Department did not enumerate the parts, components, accessories, 
attachments, and associated equipment for these articles.

Definition for Maintenance Levels

    This final rule provides definitions for ``organizational-level 
maintenance,'' ``intermediate-level maintenance,'' and ``depot-level 
maintenance.''
    These definitions were published for public comment on April 13, 
2011, along with a proposed revision of the definition for ``defense 
service'' (RIN 1400-AC80, see 76 FR 20590. Revision of the defense 
service definition was the subject of another proposed rule. Please see 
78 FR 31444). The comment period ended June 13, 2011. Thirty-nine 
parties filed comments recommending changes to the rule, which were 
reviewed and considered by the Department and other agencies. The 
Department's evaluation of the written comments and recommendations 
follows (the Department notes that comments bearing more on the 
definitions of defense service and public domain will be addressed in 
those respective rules).
    Three commenting parties recommended that the definitions of 
maintenance levels proposed in ITAR Sec.  120.38 should be replaced 
with the definitions already established by the Department of Defense 
in DoD Directive 4151.18, ``Maintenance of Military Materiel,'' to 
avoid confusion and maintain consistency. While the Department did not 
accept this recommendation, it notes that the definitions are very 
similar. Certain differences among the two sets of definitions include 
a description of the types of maintenance services in the Department's 
definition for depot-level maintenance, and not providing for the 
manufacturing of unavailable parts in its definition for intermediate-
level maintenance.
    Nine commenting parties recommended revising the definitions to 
focus on the nature or complexity of the service performed or the 
specialized skills and knowledge required in the performance of the 
maintenance rather than specifying where and by whom the service is 
performed. The Department accepted this recommendation in part. While 
the Department believes the nature and complexity of the services are 
distinguished by the three levels, it was not the intent to limit who 
may provide the services or where they may be provided. The Department 
revised the definitions accordingly.
    One commenting party recommended inclusion of the phrase, 
``enhancements that do not improve military capability

[[Page 40926]]

other than to enhance part life-cycle, reliability, or increase time 
between maintenance cycle checks,'' in all three defined maintenance 
levels, to reflect the fact that component improvement programs are 
common for hardware with long lifecycles. The Department accepted this 
comment and revised the definitions accordingly.
    One commenting party recommended defining the terms ``extensive 
equipment'' and ``higher technical skill,'' included in the definition 
for depot-level maintenance, as they are subjective. The Department 
accepted this recommendation in part. To minimize subjectivity, the 
Department replaced ``extensive'' with ``necessary'' and ``higher 
technical'' with ``requisite.''
    One commenting party recommended removal of the phrase ``assigned 
to the inventory of the end-user unit'' in the definition of 
organizational-level maintenance because this would require the 
applicant to verify that equipment is in a foreign military inventory 
before performing the maintenance. The Department accepted this comment 
and has revised the definition accordingly.

Adoption of Proposed Rules and Other Changes

    Having reviewed and evaluated the comments and recommended changes 
for the USML Category VI, USML Category VII, USML Category XIII, and 
USML Category XX proposed rules, and for the definition for maintenance 
levels, the Department has determined that it will, and hereby does, 
adopt them, with changes noted and other edits, and promulgates them in 
final form under this rule.

Regulatory Analysis and Notices

Administrative Procedure Act

    The Department of State is of the opinion that controlling the 
import and export of defense articles and services is a foreign affairs 
function of the United States Government and that rules implementing 
this function are exempt from sections 553 (rulemaking) and 554 
(adjudications) of the Administrative Procedure Act (APA). Although the 
Department is of the opinion that this rule is exempt from the 
rulemaking provisions of the APA, the Department has published this 
rule as separate proposed rules identified as 1400-AC77, 1400-AC80, 
1400-AC99, 1400-AD01, and 1400-AD13, each with a 45- or 60-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 the Department is of the opinion that this rule is exempt 
from the provisions of 5 U.S.C. 553, there is no requirement for an 
analysis under the Regulatory Flexibility Act.

Unfunded Mandates Reform Act of 1995

    This rulemaking 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

    For purposes of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (the ``Act''), a ``major'' rule is a rule that the 
Administrator of the OMB Office of Information and Regulatory Affairs 
finds has resulted or is likely to result in (1) an annual effect on 
the economy of $100,000,000 or more; (2) a major increase in costs or 
prices for consumers, individual industries, federal, state, or local 
government agencies, or geographic regions; or (3) significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and foreign markets.
    The Department does not believe this rulemaking will have an annual 
effect on the economy of $100,000,000 or more. Articles that are being 
removed from coverage in the U.S. Munitions List categories contained 
in this rule will still require licensing for export, but from the 
Department of Commerce. While the licensing regime of the Department of 
Commerce is more flexible than that of the Department of State, it is 
not expected that the change in jurisdiction of these articles will 
result in an export difference of $100,000,000 or more.
    The Department also does not believe that this rulemaking will 
result in a major increase in costs or prices for consumers, individual 
industries, federal, state, or local government agencies, or geographic 
regions, or have significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
United States-based enterprises to compete with foreign-based 
enterprises in domestic and foreign markets.

Executive Orders 12372 and 13132

    This rulemaking 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 rulemaking 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 rulemaking.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributed impacts, and equity). These executive orders 
stress the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
This rulemaking has been designated a ``significant regulatory 
action,'' although not economically significant, under section 3(f) of 
Executive Order 12866. Accordingly, this rule has been reviewed by the 
Office of Management and Budget (OMB).

Executive Order 12988

    The Department of State has reviewed this rulemaking 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 Executive Order 13175 does 
not apply to this rulemaking.

Paperwork Reduction Act

    Following is a listing of approved collections that will be 
affected by revision, pursuant to the President's Export Control Reform 
(ECR) initiative, of the U.S. Munitions List (USML) and the Commerce 
Control List. This final

[[Page 40927]]

rule continues the implementation of ECR. Other final rules will 
follow. The list of collections and the description of the manner in 
which they will be affected pertains to revision of the USML in its 
entirety, not only to the categories published in this rule:
    (1) Statement of Registration, DS-2032, OMB No. 1405-0002. The 
Department estimates that between 3,000 and 5,000 of the currently-
registered persons will not need to maintain registration following 
full revision of the USML. This would result in a burden reduction of 
between 6,000 and 10,000 hours annually, based on a revised time burden 
of two hours to complete a Statement of Registration.
    (2) Application/License for Permanent Export of Unclassified 
Defense Articles and Related Unclassified Technical Data, DSP-5, OMB 
No. 1405-0003. The Department estimates that there will be 35,000 fewer 
DSP-5 submissions annually following full revision of the USML. This 
would result in a burden reduction of 35,000 hours annually. In 
addition, the DSP-5 will allow respondents to select USML Category XIX, 
a newly-established category, as a description of articles to be 
exported.
    (3) Application/License for Temporary Import of Unclassified 
Defense Articles, DSP-61, OMB No. 1405-0013. The Department estimates 
that there will be 200 fewer DSP-61 submissions annually following full 
revision of the USML. This would result in a burden reduction of 100 
hours annually. In addition, the DSP-61 will allow respondents to 
select USML Category XIX, a newly-established category, as a 
description of articles to be temporarily imported.
    (4) Application/License for Temporary Export of Unclassified 
Defense Articles, DSP-73, OMB No. 1405-0023. The Department estimates 
that there will be 800 fewer DSP-73 submissions annually following full 
revision of the USML. This would result in a burden reduction of 800 
hours annually. In addition, the DSP-73 will allow respondents to 
select USML Category XIX, a newly-established category, as a 
description of articles to be temporarily exported.
    (5) Application for Amendment to License for Export or Import of 
Classified or Unclassified Defense Articles and Related Technical Data, 
DSP-6, -62, -74, -119, OMB No. 1405-0092. The Department estimates that 
there will be 2,000 fewer amendment submissions annually following full 
revision of the USML. This would result in a burden reduction of 1,000 
hours annually. In addition, the amendment forms will allow respondents 
to select USML Category XIX, a newly-established category, as a 
description of the articles that are the subject of the amendment 
request.
    (6) Request for Approval of Manufacturing License Agreements, 
Technical Assistance Agreements, and Other Agreements, DSP-5, OMB No. 
1405-0093. The Department estimates that there will be 1,000 fewer 
agreement submissions annually following full revision of the USML. 
This would result in a burden reduction of 2,000 hours annually. In 
addition, the DSP-5, the form used for the purposes of electronically 
submitting agreements, will allow respondents to select USML Category 
XIX, a newly-established category, as a description of articles to be 
exported.
    (7) Maintenance of Records by Registrants, OMB No. 1405-0111. The 
requirement to actively maintain records pursuant to provisions of the 
International Traffic in Arms Regulations (ITAR) will decline 
commensurate with the drop in the number of persons who will be 
required to register with the Department pursuant to the ITAR. As 
stated above, the Department estimates that between 3,000 and 5,000 of 
the currently-registered persons will not need to maintain registration 
following full revision of the USML. This would result in a burden 
reduction of between 60,000 and 100,000 hours annually. However, the 
ITAR does provide for the maintenance of records for a period of five 
years. Therefore, persons newly relieved of the requirement to register 
with the Department may still be required to maintain records.
    (8) Export Declaration of Defense Technical Data or Services, DS-
4071, OMB No. 1405-0157. The Department estimates that there will be 
2,000 fewer declaration submissions annually following full revision of 
the USML. This would result in a burden reduction of 1,000 hours 
annually.

List of Subjects

22 CFR Parts 120, 121, and 125

    Arms and munitions, Classified information, Exports.

22 CFR Part 123

    Arms and munitions, Exports, Reporting and recordkeeping 
requirements.

22 CFR Part 124

    Arms and munitions, Exports, Technical assistance.

    Accordingly, for the reasons set forth above, Title 22, Chapter I, 
Subchapter M, parts 120, 121, 123, 124, and 125 are amended as follows:

PART 120--PURPOSE AND DEFINITIONS

0
1. The authority citation for part 120 continues to read as follows:

    Authority:  Sections 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 
(22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2794; 22 U.S.C. 2651a; Pub. 
L. 105-261, 112 Stat. 1920; Pub. L. 111-266; Section 1261, Pub. L. 
112-239; E.O. 13637, 78 FR 16129.

0
2. Section 120.38 is added to read as follows:

Sec.  120.38  Maintenance levels.

    (a) Organizational-level maintenance (or basic-level maintenance) 
is the first level of maintenance that can be performed ``on-
equipment'' (directly on the defense article or support equipment) 
without specialized training. It consists of repairing, inspecting, 
servicing, calibrating, lubricating, or adjusting equipment, as well as 
replacing minor parts, components, assemblies, and line-replaceable 
spares or units. This includes modifications, enhancements, or upgrades 
that would result in improving only the reliability or maintainability 
of the commodity (e.g., an increased mean time between failure (MTBF)) 
and does not enhance the basic performance or capability of the defense 
article.
    (b) Intermediate-level maintenance is second-level maintenance 
performed ``off-equipment'' (on removed parts, components, or 
equipment) at or by designated maintenance shops or centers, tenders, 
or field teams. It may consist of calibrating, repairing, testing, or 
replacing damaged or unserviceable parts, components, or assemblies. 
This includes modifications, enhancements, or upgrades that would 
result in improving only the reliability or maintainability of the 
commodity (e.g., an increased mean time between failure (MTBF)) and 
does not enhance the basic performance or capability of the defense 
article.
    (c) Depot-level maintenance is third-level maintenance performed 
on- or off-equipment at or by a major repair facility, shipyard, or 
field team, each with necessary equipment and personnel of requisite 
technical skill. It consists of providing evaluation or repair beyond 
unit or organization capability. This maintenance consists of 
inspecting, testing, calibrating, repairing, overhauling, refurbishing, 
reconditioning, and one-to-one replacing of any defective parts, 
components or assemblies. This

[[Page 40928]]

includes modifications, enhancements, or upgrades that would result in 
improving only the reliability or maintainability of the commodity 
(e.g., an increased mean time between failure (MTBF)) and does not 
enhance the basic performance or capability of the defense article.

PART 121--THE UNITED STATES MUNITIONS LIST

0
3. The authority citation for part 121 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. 2651a; Pub. L. 105-261, 112 
Stat. 1920; Section 1261, Pub. L. 112-239; E.O. 13637, 78 FR 16129.

0
4. Section 121.1 is amended by revising U.S. Munitions List Categories 
VI, VII, XIII, and XX to read as follows:

Sec.  121.1  General. The United States Munitions List.

* * * * *

Category VI--Surface Vessels of War and Special Naval Equipment

    * (a) Warships and other combatant vessels (see Sec.  121.15 of 
this subchapter).
    (b) Other vessels not controlled in paragraph (a) of this category 
(see Sec.  121.15 of this subchapter).
    (c) Developmental vessels and specially designed parts, components, 
accessories, and attachments therefor funded by the Department of 
Defense via contract or other funding authorization.

    Note 1 to paragraph (c): This paragraph does not control 
developmental vessels and specially designed parts, components, 
accessories, and attachments therefor (a) in production, (b) 
determined to be subject to the EAR via a commodity jurisdiction 
determination (see Sec.  120.4 of this subchapter), or (c) 
identified in the relevant Department of Defense contract or other 
funding authorization as being developed for both civil and military 
applications.

    Note 2 to paragraph (c): Note 1 does not apply to defense 
articles enumerated on the U.S. Munitions List, whether in 
production or development.

    Note 3 to paragraph (c): This provision is applicable to those 
contracts and funding authorizations that are dated one year or 
later following the publication of the rule, ``Amendment to the 
International Traffic in Arms Regulations: Continued Implementation 
of Export Control Reform,'' RIN 140-AD40.

    (d) [Reserved]
    * (e) Naval nuclear propulsion plants and prototypes, and special 
facilities for construction, support, and maintenance therefor (see 
Sec.  123.20 of this subchapter).
    (f) Vessel and naval equipment, parts, components, accessories, 
attachments, associated equipment, and systems, as follows:
    (1) Hulls or superstructures, including support structures 
therefor, that:
    (i) Are specially designed for any vessels controlled in paragraph 
(a) of this category;
    (ii) Have armor, active protection systems, or developmental armor 
systems; or
    (iii) Are specially designed to survive 12.5% or greater damage 
across the length as measured between perpendiculars;
    (2) Systems that manage, store, create, distribute, conserve, and 
transfer energy, and specially designed parts and components therefor, 
that have:
    (i) Storage exceeding 30MJ;
    (ii) A discharge rate less than 3 seconds; and
    (iii) A cycle time under 45 seconds;
    (3) Shipborne auxiliary systems for chemical, biological, 
radiological, and nuclear (CBRN) compartmentalization, over-
pressurization and filtration systems, and specially designed parts and 
components therefor;
    *(4) Control and monitoring systems for autonomous unmanned vessels 
capable of on-board, autonomous perception and decision-making 
necessary for the vessel to navigate while avoiding fixed and moving 
hazards, and obeying rules-of-the road without human intervention;
    * (5) Any machinery, device, component, or equipment, including 
production, testing and inspection equipment, and tooling, specially 
designed for plants or facilities controlled in paragraph (e) of this 
section (see Sec.  123.20 of this subchapter);
    (6) Parts, components, accessories, attachments, and equipment 
specially designed for integration of articles controlled by USML 
Categories II, IV, or XVIII or catapults for launching aircraft or 
arresting gear for recovering aircraft (MT for launcher mechanisms 
specially designed for rockets, space launch vehicles, or missiles 
capable of achieving a range greater than or equal to 300 km);

    Note to paragraph (f)(6): ``Range'' is the maximum distance that 
the specified rocket system is capable of traveling in the mode of 
stable flight as measured by the projection of its trajectory over 
the surface of the Earth. The maximum capability based on the design 
characteristics of the system, when fully loaded with fuel or 
propellant, will be taken into consideration in determining range. 
The range for rocket systems will be determined independently of any 
external factors such as operational restrictions, limitations 
imposed by telemetry, data links, or other external constraints. For 
rocket systems, the range will be determined using the trajectory 
that maximizes range, assuming International Civil Aviation 
Organization (ICAO) standard atmosphere with zero wind.

    (7) Shipborne active protection systems (i.e., defensive systems 
that actively detect and track incoming threats and launch a ballistic, 
explosive, energy, or electromagnetic countermeasure(s) to neutralize 
the threat prior to contact with a vessel) and specially designed parts 
and components therefor;
    (8) Minesweeping and mine hunting equipment (including mine 
countermeasures equipment deployed by aircraft) and specially designed 
parts and components therefor; or
    * (9) Any part, component, accessory, attachment, equipment, or 
system that:
    (i) Is classified;
    (ii) Contains classified software directly related to defense 
articles in this subchapter or 600 series items subject to the EAR; or
    (iii) Is being developed using classified information. 
``Classified'' means classified pursuant to Executive Order 13526, or 
predecessor order, and a security classification guide developed 
pursuant thereto or equivalent, or to the corresponding classification 
rules of another government or international organization.

    Note 1 to paragraph (f): Parts, components, accessories, 
attachments, associated equipment, and systems specially designed 
for vessels enumerated in this category but not listed in paragraph 
(f) are subject to the EAR under ECCN 8A609.

    Note 2 to paragraph (f): For controls related to ship signature 
management, see also USML Category XIII.
    (g) Technical data (see Sec.  120.10 of this subchapter) and 
defense services (see Sec.  120.9 of this subchapter) directly 
related to the defense articles enumerated in paragraphs (a) through 
(f) of this category and classified technical data directly related 
to items controlled in ECCNs 8A609, 8B609, 8C609, and 8D609 and 
defense services using the classified technical data. (MT for 
technical data and defense services related to articles designated 
as such.)

    (See Sec.  125.4 of this subchapter for exemptions.)
    (h)-(w) [Reserved]
    (x) Commodities, software, and technical data subject to the EAR 
(see Sec.  120.42 of this subchapter) used in or with defense articles 
controlled in this category.

    Note to paragraph (x): Use of this paragraph is limited to 
license applications for defense articles controlled in this 
category where the purchase documentation includes commodities, 
software, or technical data subject to the EAR (see Sec.  123.1(b) 
of this subchapter).

[[Page 40929]]

Category VII--Ground Vehicles

    * (a) Armored combat ground vehicles (see Sec.  121.4 of this 
subchapter) as follows:
    (1) Tanks; or
    (2) Infantry fighting vehicles.
    * (b) Ground vehicles (not enumerated in paragraph (a) of this 
category) and trailers that are armed or are specially designed to 
serve as a firing or launch platform (see Sec.  121.4 of this 
subchapter) (MT if specially designed for rockets, space launch 
vehicles, missiles, drones, or unmanned aerial vehicles capable of 
delivering a payload of at least 500 kg to a range of at least 300 km).
    (c) Ground vehicles and trailers equipped with any mission systems 
controlled under this subchapter (MT if specially designed for rockets, 
space launch vehicles, missiles, drones, or unmanned aerial vehicles 
capable of delivering a payload of at least 500 kg to a range of at 
least 300 km) (see Sec.  121.4 of this subchapter).

    Note to paragraphs (b) and (c): ``Payload'' is the total mass 
that can be carried or delivered by the specified rocket, space 
launch vehicle, missile, drone, or unmanned aerial vehicle that is 
not used to maintain flight. For definition of ``range'' as it 
pertains to aircraft systems, see note to paragraph (a) USML 
Category VIII. For definition of ``range'' as it pertains to rocket 
systems, see note to paragraph (f)(6) of USML Category VI.

    (d) [Reserved]
    * (e) Armored support ground vehicles (see Sec.  121.4 of this 
subchapter).
    (f) [Reserved]
    (g) Ground vehicle parts, components, accessories, attachments, 
associated equipment, and systems as follows:
    (1) Armored hulls, armored turrets, and turret rings;
    (2) Active protection systems (i.e., defensive systems that 
actively detect and track incoming threats and launch a ballistic, 
explosive, energy, or electromagnetic countermeasure(s) to neutralize 
the threat prior to contact with a vehicle) and specially designed 
parts and components therefor;
    (3) Composite armor parts and components specially designed for the 
vehicles in this category;
    (4) Spaced armor components and parts, including slat armor parts 
and components specially designed for the vehicles in this category;
    (5) Reactive armor parts and components;
    (6) Electromagnetic armor parts and components, including pulsed 
power specially designed parts and components therefor;

    Note to paragraphs (g)(3)-(6):  See USML Category XIII(m)(1)-(4) 
for interpretations which explain and amplify terms used in these 
paragraphs.

    (7) Built in test equipment (BITE) to evaluate the condition of 
weapons or other mission systems for vehicles identified in this 
category, excluding equipment that provides diagnostics solely for a 
subsystem or component involved in the basic operation of the vehicle;
    (8) Gun mount, stabilization, turret drive, and automatic elevating 
systems, and specially designed parts and components therefor;
    (9) Self-launching bridge components rated class 60 or above for 
deployment by vehicles in this category;
    (10) Suspension components as follows:
    (i) Rotary shock absorbers specially designed for the vehicles 
weighing more than 30 tons in this category; or
    (ii) Torsion bars specially designed for the vehicles weighing more 
than 50 tons in this category;
    (11) Kits specially designed to convert a vehicle in this category 
into either an unmanned or a driver-optional vehicle. For a kit to be 
controlled by this paragraph, it must, at a minimum, include equipment 
for:
    (i) Remote or autonomous steering;
    (ii) Acceleration and braking; and
    (iii) A control system;
    (12) Fire control computers, mission computers, vehicle management 
computers, integrated core processers, stores management systems, 
armaments control processors, vehicle-weapon interface units and 
computers;
    (13) Test or calibration equipment for the mission systems of the 
vehicles in this category, except those enumerated elsewhere; or
    *(14) Any part, component, accessory, attachment, equipment, or 
system that (MT for those articles designated as such):
    (i) Is classified;
    (ii) Contains classified software directly related to defense 
articles in this subchapter or 600 series items subject to the EAR; or
    (iii) Is being developed using classified information.
    ``Classified'' means classified pursuant to Executive Order 13526, 
or predecessor order, and a security classification guide developed 
pursuant thereto or equivalent, or to the corresponding classification 
rules of another government or international organization.

    Note to paragraph (g):  Parts, components, accessories, 
attachments, associated equipment, and systems specially designed 
for vehicles in this category but not listed in paragraph (g) are 
subject to the EAR under ECCN 0A606.

    (h) Technical data (see Sec.  120.10 of this subchapter) and 
defense services (see Sec.  120.9 of this subchapter) directly related 
to the defense articles enumerated in paragraphs (a) through (g) of 
this category and classified technical data directly related to items 
controlled in ECCNs 0A606, 0B606, 0C606, and 0D606 and defense services 
using the classified technical data. (See Sec.  125.4 of this 
subchapter for exemptions.) (MT for technical data and defense services 
related to articles designated as such.)
    (i)-(w) [Reserved]
    (x) Commodities, software, and technical data subject to the EAR 
(see Sec.  120.42 of this subchapter) used in or with defense articles 
controlled in this category.

    Note to paragraph (x):  Use of this paragraph is limited to 
license applications for defense articles controlled in this 
category where the purchase documentation includes commodities, 
software, or technical data subject to the EAR (see Sec.  123.1(b) 
of this subchapter).

* * * * *

Category XIII-- Materials and Miscellaneous Articles

    (a) Cameras and specialized processing equipment therefor, 
photointerpretation, stereoscopic plotting, and photogrammetry 
equipment which are specifically designed, developed, modified, 
adapted, or configured for military purposes, and components 
specifically designed or modified therefor.
    (b) Information security or information assurance systems and 
equipment, cryptographic devices, software, and components, as follows:
    (1) Military or intelligence cryptographic (including key 
management) systems, equipment, assemblies, modules, integrated 
circuits, components, and software (including their cryptographic 
interfaces) capable of maintaining secrecy or confidentiality of 
information or information systems, including equipment or software for 
tracking, telemetry, and control (TT&C) encryption and decryption;
    (2) Military or intelligence cryptographic (including key 
management) systems, equipment, assemblies, modules, integrated 
circuits, components, and software (including their cryptographic 
interfaces) capable of generating spreading or hopping codes for spread 
spectrum systems or equipment;
    (3) Military or intelligence cryptanalytic systems, equipment, 
assemblies, modules, integrated circuits, components and software;
    (4) Military or intelligence systems, equipment, assemblies, 
modules,

[[Page 40930]]

integrated circuits, components, or software (including all previous or 
derived versions) authorized to control access to or transfer data 
between different security domains as listed on the Unified Cross 
Domain Management Office (UCDMO) Control List (UCL); or
    (5) Ancillary equipment specially designed for the articles in 
paragraphs (b)(1)-(b)(4) of this category.
    (c) [Reserved]
    (d) Materials, as follows:
    *(1) Ablative materials fabricated or semi-fabricated from advanced 
composites (e.g., silica, graphite, carbon, carbon/carbon, and boron 
filaments) specially designed for the articles in USML Category IV (MT 
if usable for nozzles, re-entry vehicles, nose tips, or nozzle flaps 
usable in rockets, space launch vehicles (SLVs), or missiles capable of 
achieving a range greater than or equal to 300 km); or
    (2) Carbon/carbon billets and preforms that are reinforced with 
continuous unidirectional fibers, tows, tapes, or woven cloths in three 
or more dimensional planes (MT if designed for rocket, SLV, or missile 
systems and usable in rockets, SLVs, or missiles capable of achieving a 
range greater than or equal to 300 km).

    Note to paragraph (d):  ``Range'' is the maximum distance that 
the specified rocket system is capable of traveling in the mode of 
stable flight as measured by the projection of its trajectory over 
the surface of the Earth. The maximum capability based on the design 
characteristics of the system, when fully loaded with fuel or 
propellant, will be taken into consideration in determining range. 
The range for rocket systems will be determined independently of any 
external factors such as operational restrictions, limitations 
imposed by telemetry, data links, or other external constraints. For 
rocket systems, the range will be determined using the trajectory 
that maximizes range, assuming International Civil Aviation 
Organization (ICAO) standard atmosphere with zero wind.

    Note to paragraph (d)(2): This paragraph does not control 
carbon/carbon billets and preforms where reinforcement in the third 
dimension is limited to interlocking of adjacent layers only.

    (e) Armor (e.g., organic, ceramic, metallic) and armor materials, 
as follows:
    (1) Spaced armor with Em greater than 1.4 and meeting 
NIJ Level III or better;
    (2) Transparent armor having Em greater than or equal to 
1.3 or having Em less than 1.3 and meeting and exceeding NIJ 
Level III standards with areal density less than or equal to 40 pounds 
per square foot;
    (3) Transparent ceramic plate greater than \1/4\ inch-thick and 
larger than 8 inches x 8 inches, excluding glass, for transparent 
armor;
    (4) Non-transparent ceramic plate or blanks, greater than \1/4\ 
inches thick and larger than 8 inches x 8 inches for transparent armor. 
This includes spinel and aluminum oxynitride (ALON);
    (5) Composite armor with Em greater than 1.4 and meeting 
or exceeding NIJ Level III;
    (6) Metal laminate armor with Em greater than 1.4 and 
meeting or exceeding NIJ Level III; or
    (7) Developmental armor funded by the Department of Defense via 
contract or other funding authorization.

    Note 1 to paragraph (e)(7): This paragraph does not control 
developmental armor (a) in production, (b) determined to be subject 
to the EAR via a commodity jurisdiction determination (see Sec.  
120.4 of this subchapter), or (c) identified in the relevant 
Department of Defense contract or other funding authorization as 
being developed for both civil and military applications.

    Note 2 to paragraph (e)(7): Note 1 does not apply to defense 
articles enumerated on the USML, whether in production or 
development.

    Note 3 to paragraph (e)(7): This provision is applicable to 
those contracts and funding authorizations that are dated one year 
or later following the publication of the rule, ``Amendment to the 
International Traffic in Arms Regulations: Continued Implementation 
of Export Control Reform,'' RIN 140-AD40.

    *(f) Any article enumerated in this category that (MT for those 
articles designated as such):
    (i) Is classified;
    (ii) Contains classified software directly related to defense 
articles in this subchapter or 600 series items subject to the EAR; or
    (iii) Is being developed using classified information.
    ``Classified'' means classified pursuant to Executive Order 13526, 
or predecessor order, and a security classification guide developed 
pursuant thereto or equivalent, or to the corresponding classification 
rules of another government or international organization.
    *(g) Concealment and deception equipment, as follows (MT for 
applications usable for rockets, SLVs, missiles, drones, or unmanned 
aerial vehicles (UAVs) capable of achieving a range greater than or 
equal to 300 km and their subsystems. See note to paragraph (d) of this 
category):
    (1) Polymers loaded with carbonyl iron powder, ferrites, iron 
whiskers, fibers, flakes, or other magnetic additives having a surface 
resistivity of less than 5000 ohms/square and greater than 10 ohms/
square with electrical isotropy of less than 5%;
    (2) Multi-layer camouflage systems specially designed to reduce 
detection of platforms or equipment in the infrared or ultraviolet 
frequency spectrums;
    (3) High temperature (greater than 300[emsp14][deg]F operation) 
ceramic or magnetic radar absorbing material (RAM) specially designed 
for use on defense articles or military items subject to the EAR; or
    (4) Broadband (greater than 30% bandwidth) lightweight (less than 2 
lbs/sq ft) magnetic radar absorbing material (RAM) specially designed 
for use on defense articles or military items subject to the EAR.
    (h) Energy conversion devices not otherwise enumerated in this 
subchapter, as follows:
    (1) Fuel cells specially designed for platforms or soldier systems 
specified in this subchapter;
    (2) Thermal engines specially designed for platforms or soldier 
systems specified in this subchapter;
    (3) Thermal batteries (MT if designed or modified for rockets, 
SLVs, missiles, drones, or UAVs capable of achieving a range equal to 
or greater than 300 km. See note to paragraph (d) of this category); or

    Note to paragraph (h)(3): Thermal batteries are single use 
batteries that contain a solid non-conducting inorganic salt as the 
electrolyte. These batteries incorporate a pyrolitic material that, 
when ignited, melts the electrolyte and activates the battery.

    (4) Thermionic generators specially designed for platforms or 
soldier systems enumerated in this subchapter.
    *(i) Signature reduction software, and technical data as follows 
(MT for software specially designed for reduced observables, for 
applications usable for rockets, SLVs, missiles, drones, or UAVs 
capable of achieving a range (see note to paragraph (d) of this 
category) greater than or equal to 300 km, and their subsystems, 
including software specially designed for analysis of signature 
reduction; MT for technical data for the development, production, or 
use of equipment, materials, or software designated as such, including 
databases specially designed for analysis of signature reduction):
    (1) Software associated with the measurement or modification of 
system signatures for defense articles to reduce detectability or 
observability;
    (2) Software for design of low-observable platforms;
    (3) Software for design, analysis, prediction, or optimization of 
signature management solutions for defense articles;
    (4) Infrared signature measurement or prediction software for 
defense articles

[[Page 40931]]

or radar cross section measurement or prediction software;
    (5) Signature management technical data, including codes and 
algorithms for defense articles to reduce detectability or 
observability;
    (6) Signature control design methodology (see Sec.  125.4(c)(4) of 
this subchapter) for defense articles to reduce detectability or 
observability;
    (7) Technical data for use of micro-encapsulation or micro-spheres 
to reduce infrared, radar, or visual detection of platforms or 
equipment;
    (8) Multi-layer camouflage system technical data for reducing 
detection of platforms or equipment;
    (9) Multi-spectral surface treatment technical data for modifying 
infrared, visual or radio frequency signatures of platforms or 
equipment;
    (10) Technical data for modifying visual, electro-optical, 
radiofrequency, electric, magnetic, electromagnetic, or wake signatures 
(e.g., low probability of intercept (LPI) techniques, methods or 
applications) of defense platforms or equipment through shaping, 
active, or passive techniques; or
    (11) Technical data for modifying acoustic signatures of defense 
platforms or equipment through shaping, active, or passive techniques.
    (j) Equipment, materials, coatings, and treatments not elsewhere 
specified, as follows:
    (1) Specially treated or formulated dyes, coatings, and fabrics 
used in the design, manufacture, or production of personnel protective 
clothing, equipment, or face paints designed to protect against or 
reduce detection by radar, infrared, or other sensors at wavelengths 
greater than 900 nanometers (see USML Category X(a)(2)); or
    *(2) Equipment, materials, coatings, and treatments that are 
specially designed to modify the electro-optical, radiofrequency, 
infrared, electric, laser, magnetic, electromagnetic, acoustic, 
electro-static, or wake signatures of defense articles or 600 series 
items subject to the EAR through control of absorption, reflection, or 
emission to reduce detectability or observability (MT for applications 
usable for rockets, SLVs, missiles, drones, or UAVs capable of 
achieving a range greater than or equal to 300 km, and their 
subsystems. See note to paragraph (d) of this category).
    *(k) Tooling and equipment, as follows:
    (1) Tooling and equipment specially designed for production of low 
observable (LO) components; or
    (2) Portable platform signature field repair validation equipment 
(e.g., portable optical interrogator that validates integrity of a 
repair to a signature reduction structure).
    (l) Technical data (see Sec.  120.10 of this subchapter) directly 
related to the defense articles enumerated in paragraphs (a) through 
(h), (j), and (k) of this category and defense services (see Sec.  
120.9 of this subchapter) directly related to the defense articles 
enumerated in this category. (See also Sec.  123.20 of this 
subchapter.) (MT for technical data and defense services related to 
articles designated as such.)
    (m) The following interpretations explain and amplify terms used in 
this category and elsewhere in this subchapter:
    (1) Composite armor is defined as having more than one layer of 
different materials or a matrix.
    (2) Spaced armors are metallic or non-metallic armors that 
incorporate an air space or obliquity or discontinuous material path 
effects as part of the defeat mechanism.
    (3) Reactive armor employs explosives, propellants, or other 
materials between plates for the purpose of enhancing plate motion 
during a ballistic event or otherwise defeating the penetrator.
    (4) Electromagnetic armor (EMA) employs electricity to defeat 
threats such as shaped charges.
    (5) Materials used in composite armor could include layers of 
metals, plastics, elastomers, fibers, glass, ceramics, ceramic-glass 
reinforced plastic laminates, encapsulated ceramics in a metallic or 
non-metallic matrix, functionally gradient ceramic-metal materials, or 
ceramic balls in a cast metal matrix.
    (6) For this category, a material is considered transparent if it 
allows 75% or greater transmission of light, corrected for index of 
refraction, in the visible spectrum through a 1 mm thick nominal 
sample.
    (7) The material controlled in paragraph (e)(4) of this category 
has not been treated to reach the 75% transmission level referenced in 
(m)(6) of this category.
    (8) Metal laminate armors are two or more layers of metallic 
materials which are mechanically or adhesively bonded together to form 
an armor system.
    (9) Em is the line-of-sight target mass effectiveness 
ratio and provides a measure of the tested armor's performance to that 
of rolled homogenous armor, where Em is defined as follows:
[GRAPHIC] [TIFF OMITTED] TR08JY13.014

Where:

[rho]RHA = density of RHA, (7.85 g/cm\3\)
Po = Baseline Penetration of RHA, (mm)
Pr = Residual Line of Sight Penetration, either positive or negative 
(mm RHA equivalent)
ADTARGET = Line-of-Sight Areal Density of Target (kg/
m\2\)

    (10) NIJ is the National Institute of Justice and Level III refers 
to the requirements specified in NIJ standard 0108.01 Ballistic 
Resistant Protective Materials.
    (n)-(w) [Reserved]
    (x) Commodities, software, and technical data subject to the EAR 
(see Sec.  120.42 of this subchapter) used in or with defense articles 
controlled in this category.

    Note to paragraph (x): Use of this paragraph is limited to 
license applications for defense articles controlled in this 
category where the purchase documentation includes commodities, 
software, or technical data subject to the EAR (see Sec.  123.1(b) 
of this subchapter).

* * * * *

Category XX--Submersible Vessels and Related Articles

    (a) Submersible and semi-submersible vessels (see Sec.  121.14 of 
this subchapter) that are:
    *(1) Submarines;
    (2) Mine countermeasure vehicles;
    (3) Anti-submarine warfare vehicles;
    (4) Armed;
    (5) Swimmer delivery vehicles specially designed for the 
deployment, recovery, or support of swimmers or divers from submarines;
    (6) Vessels equipped with any mission systems controlled under this 
subchapter; or
    (7) Developmental vessels funded by the Department of Defense via 
contract or other funding authorization.

    Note 1 to paragraph (a)(7): This paragraph does not control 
developmental vessels, and specially designed parts, components, 
accessories, attachments, and associated equipment therefor, (a) in 
production, (b) determined to be subject to the EAR via a commodity 
jurisdiction determination (see Sec.  120.4 of this subchapter) or 
(c) identified in the relevant Department of Defense contract or 
other funding authorization as being developed for both civil and 
military applications.

    Note 2 to paragraph (a)(7): Note 1 does not apply to defense 
articles enumerated on the U.S. Munitions List, whether in 
production or development.

    Note 3 to paragraph (a)(7): This provision is applicable to 
those contracts and funding authorizations that are dated one year 
or later following the publication of the rule, ``Amendment to the 
International Traffic in Arms Regulations: Continued

[[Page 40932]]

Implementation of Export Control Reform,'' RIN 140-AD40.

    *(b) Engines, electric motors, and propulsion plants as follows:
    (1) Naval nuclear propulsion plants and prototypes, and special 
facilities for construction, support, and maintenance therefor (see 
Sec.  123.20 of this subchapter);
    (2) Electric motors specially designed for submarines that have the 
following:
    (i) Power output of more than 0.75 MW (1,000 hp);
    (ii) Quick reversing;
    (iii) Liquid cooled; and
    (iv) Totally enclosed.
    (c) Parts, components, accessories, attachments, and associated 
equipment, including production, testing, and inspection equipment and 
tooling, specially designed for any of the articles in paragraphs (a) 
and (b) of this category (MT for launcher mechanisms specially designed 
for rockets, space launch vehicles, or missiles capable of achieving a 
range greater than or equal to 300 km).

    Note to paragraph (c): ``Range'' is the maximum distance that 
the specified rocket system is capable of traveling in the mode of 
stable flight as measured by the projection of its trajectory over 
the surface of the Earth. The maximum capability based on the design 
characteristics of the system, when fully loaded with fuel or 
propellant, will be taken into consideration in determining range. 
The range for rocket systems will be determined independently of any 
external factors such as operational restrictions, limitations 
imposed by telemetry, data links, or other external constraints. For 
rocket systems, the range will be determined using the trajectory 
that maximizes range, assuming International Civil Aviation 
Organization (ICAO) standard atmosphere with zero wind.

    (d) Technical data (see Sec.  120.10 of this subchapter) and 
defense services (see Sec.  120.9 of this subchapter) directly related 
to the defense articles enumerated in paragraphs (a) through (c) of 
this category. (MT for technical data and defense services related to 
articles designated as such.) (See Sec.  125.4 of this subchapter for 
exemptions.)
    (e)-(w) [Reserved]
    (x) Commodities, software, and technical data subject to the EAR 
(see Sec.  120.42 of this subchapter) used in or with defense articles 
controlled in this category.

    Note to paragraph (x):  Use of this paragraph is limited to 
license applications for defense articles controlled in this 
category where the purchase documentation includes commodities, 
software, or technical data subject to the EAR (see Sec.  123.1(b) 
of this subchapter).

* * * * *

0
5. Section 121.4 is added to read as follows:

Sec.  121.4  Ground vehicles.

    (a) In USML Category VII, ``ground vehicles'' are those, whether 
manned or unmanned, that:
    (1) Are armed or are specially designed to be used as a platform to 
deliver munitions or otherwise destroy or incapacitate targets (e.g., 
firing lasers, launching rockets, firing missiles, firing mortars, 
firing artillery rounds, or firing other ammunition greater than .50 
caliber);
    (2) Are armored support vehicles capable of off-road or amphibious 
use specially designed to transport or deploy personnel or materiel, or 
to move with other vehicles over land in close support of combat 
vehicles or troops (e.g., personnel carriers, resupply vehicles, combat 
engineer vehicles, recovery vehicles, reconnaissance vehicles, bridge 
launching vehicles, ambulances, and command and control vehicles); or
    (3) Incorporate any ``mission systems'' controlled under this 
subchapter. ``Mission systems'' are defined as ``systems'' (see Sec.  
121.8(g) of this subchapter) that are defense articles that perform 
specific military functions, such as by providing military 
communication, target designation, surveillance, target detection, or 
sensor capabilities.

    Note 1 to paragraph (a):  Armored ground vehicles are (i) ground 
vehicles that have integrated, fully armored hulls or cabs, or (ii) 
ground vehicles on which add-on armor has been installed to provide 
ballistic protection to level III (National Institute of Justice 
Standard 0108.01, September 1985) or better. Armored vehicles do not 
include those that are merely capable of being equipped with add-on 
armor.

    Note 2 to paragraph (a):  Ground vehicles include any vehicle 
meeting the definitions or control parameters regardless of the 
surface (e.g., highway, off-road, rail) upon which the vehicle is 
designed to operate.

    (b) Ground vehicles specially designed for military applications 
that are not identified in paragraph (a) of this section are subject to 
the EAR under ECCN 0A606, including any unarmed ground vehicles, 
regardless of origin or designation, manufactured prior to 1956 and 
unmodified since 1955. Modifications made to incorporate safety 
features required by law, are cosmetic (e.g., different paint, 
repositioning of bolt holes), or that add parts or components otherwise 
available prior to 1956 are considered ``unmodified'' for the purposes 
of this paragraph. ECCN 0A606 also includes unarmed vehicles derived 
from otherwise EAR99 civilian vehicles that have been modified or 
otherwise fitted with materials to provide ballistic protection, 
including protection to level III (National Institute of Justice 
Standard 0108.01, September 1985) or better and that do not have 
reactive or electromagnetic armor.

0
6. Section 121.14 is added to read as follows:

Sec.  121.14  Submersible vessels.

    (a) In USML Category XX, submersible and semi-submersible vessels 
are those, manned or unmanned, tethered or untethered, that:
    (1) Are submarines specially designed for military use;
    (2) Are armed or are specially designed to be used as a platform to 
deliver munitions or otherwise destroy or incapacitate targets (e.g., 
firing torpedoes, launching rockets, firing missiles, deploying mines, 
deploying countermeasures) or deploy military payloads;
    (3) Are specially designed for the deployment, recovery, or support 
of swimmers or divers from submarines;
    (4) Are integrated with nuclear propulsion systems;
    (5) Incorporate any ``mission systems'' controlled under this 
subchapter. ``Mission systems'' are defined as ``systems'' (see Sec.  
121.8(g) of this subchapter) that are defense articles that perform 
specific military functions such as by providing military 
communication, electronic warfare, target designation, surveillance, 
target detection, or sensor capabilities; or
    (6) Are developmental vessels funded or contracted by the 
Department of Defense.
    (b) Submersible and semi-submersible vessels that are not 
identified in paragraph (a) of this section are subject to the EAR 
under Category 8.

0
7. Section 121.15 is revised to read as follows:

Sec.  121.15  Surface vessels of war.

    (a) In USML Category VI, ``surface vessels of war'' are those, 
manned or unmanned, that:
    (1) Are warships or other combatant vessels (battleships, aircraft 
carriers, destroyers, frigates, cruisers, corvettes, littoral combat 
ships, mine sweepers, mine hunters, mine countermeasure ships, dock 
landing ships, amphibious assault ships), or Coast Guard Cutters (with 
or equivalent to those with U.S. designations WHEC, WMEC, WMSL, or WPB 
for the purpose of this subchapter);
    (2) Are foreign-origin vessels specially designed to provide 
functions equivalent to those of the vessels listed in paragraph (a)(1) 
of this section;
    (3) Are high-speed air cushion vessels for transporting cargo and 
personnel,

[[Page 40933]]

ship-to-shore and across a beach, with a payload over 25 tons;
    (4) Are surface vessels integrated with nuclear propulsion plants 
or specially designed to support naval nuclear propulsion plants;
    (5) Are armed or are specially designed to be used as a platform to 
deliver munitions or otherwise destroy or incapacitate targets (e.g., 
firing lasers, launching torpedoes, rockets, or missiles, or firing 
munitions greater than .50 caliber); or
    (6) Incorporate any mission systems controlled under this 
subchapter. ``Mission systems'' are defined as ``systems'' (see Sec.  
121.8(g) of this subchapter) that are defense articles that perform 
specific military functions such as by providing military 
communication, electronic warfare, target designation, surveillance, 
target detection, or sensor capabilities.
    (b) Vessels specially designed for military use that are not 
identified in paragraph (a) of this section are subject to the EAR 
under ECCN 8A609, including any demilitarized vessels, regardless of 
origin or designation, manufactured prior to 1950 and unmodified since 
1949. Modifications made to incorporate safety features required by 
law, are cosmetic (e.g., different paint), or that add parts or 
components otherwise available prior to 1950 are considered 
``unmodified'' for the purposes of this paragraph.

PART 123--LICENSES FOR THE EXPORT AND TEMPORARY IMPORT OF DEFENSE 
ARTICLES

0
8. 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; 22 U.S.C. 2651a; 22 
U.S.C. 2776; Pub. L. 105-261, 112 Stat. 1920; Sec 1205(a), Pub. L. 
107-228; Sec. 520, Pub. L. 112-55; Section 1261, Pub. L. 112-239; 
E.O. 13637, 78 FR 16129.

0
9. Section 123.20 is amended by revising paragraphs (a) and (c) 
introductory text to read as follows:

Sec.  123.20  Nuclear related controls.

    (a) The provisions of this subchapter do not apply to equipment, 
technical data, or services in Category VI, Category XVI, and Category 
XX of Sec.  121.1 of this subchapter to the extent such equipment, 
technical data, or services are under the export control of the 
Department of Energy or the Nuclear Regulatory Commission pursuant to 
the Atomic Energy Act of 1954, as amended, and the Nuclear Non-
Proliferation Act of 1978, as amended, or is a government transfer 
authorized pursuant to these Acts.
* * * * *
    (c) A license for the export of any machinery, device, component, 
equipment, or technical data relating to equipment referred to in 
Category VI(e) or Category XX(b) of Sec.  121.1 of this subchapter will 
not be granted unless the proposed equipment comes within the scope of 
an existing Agreement for Cooperation for Mutual Defense Purposes 
concluded pursuant to the Atomic Energy Act of 1954, as amended, with 
the government of the country to which the Article is to be exported. 
Licenses may be granted in the absence of such an agreement only:
* * * * *

PART 124--AGREEMENTS, OFF-SHORE PROCUREMENT, AND OTHER DEFENSE 
SERVICES

0
10. The authority citation for part 124 is revised to read as follows:

    Authority:  Sec. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22 
U.S.C. 2752, 2778, 2797); 22 U.S.C. 2651a; 22 U.S.C. 2776; Pub. L. 
105-261; Section 1261, Pub. L. 112-239; E.O. 13637, 78 FR 16129.

0
11. The heading for part 124 is revised to read as set forth above.

0
12. Section 124.2 is amended by revising paragraphs (c)(5)(iv) and 
(xii) to read as follows:

Sec.  124.2  Exemptions for training and military service.

* * * * *
    (c) * * *
    (5) * * *
    (iv) Naval nuclear propulsion equipment listed in USML Category VI 
and USML Category XX;
* * * * *
    (xii) Submersible and semi-submersible vessels and related articles 
covered in USML Category XX; or
* * * * *

PART 125--LICENSES FOR THE EXPORT OF TECHNICAL DATA AND CLASSIFIED 
DEFENSE ARTICLES

0
13. 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); 22 U.S.C. 2651a; E.O. 13637, 78 FR 16129.

0
14. Section 125.1 is amended by revising paragraph (e) to read as 
follows:

Sec.  125.1  Exports subject to this part.

* * * * *
    (e) The provisions of this subchapter do not apply to technical 
data related to articles in Category VI(e), Category XVI, and Category 
XX(b) of Sec.  121.1 of this subchapter. The export of such data is 
controlled by the Department of Energy or the Nuclear Regulatory 
Commission pursuant to the Atomic Energy Act of 1954, as amended, and 
the Nuclear Non-Proliferation Act of 1978, as amended.

Rose E. Gottemoeller,
Acting Under Secretary, Arms Control and International Security, 
Department of State.
[FR Doc. 2013-16145 Filed 7-5-13; 8:45 am]
BILLING CODE 4710-25-P
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