28174 Federal Register / Vol. 76, No. 94 / Monday, May 16, 2011 / Rules and Regulations 

Terminal Instrument Procedures 

(TERPS). In developing these changes to 

SIAPs, the TERPS criteria were applied 

only to specific conditions existing at 

the affected airports. All SIAP 

amendments in this rule have been 

previously issued by the FAA in a FDC 

NOTAM as an emergency action of 

immediate flight safety relating directly 

to published aeronautical charts. The 

circumstances which created the need 

for all these SIAP amendments requires 

making them effective in less than 30 

days. 

Because of the close and immediate 

relationship between these SIAPs and 

safety in air commerce, I find that notice 

and public procedure before adopting 

these SIAPs are impracticable and 

contrary to the public interest and, 

where applicable, that good cause exists 

for making these SIAPs effective in less 

than 30 days. 

Conclusion 

The FAA has determined that this 

regulation only involves an established 

body of technical regulations for which 

frequent and routine amendments are 

necessary to keep them operationally 

current. It, therefore—(1) Is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866; (2) is not a 

‘‘significant rule’’ under DOT regulatory 

Policies and Procedures (44 FR 11034; 

February 26, 1979); and (3) does not 

warrant preparation of a regulatory 

evaluation as the anticipated impact is 

so minimal. For the same reason, the 

FAA certifies that this amendment will 

not have a significant economic impact 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

List of Subjects in 14 CFR Part 97 

Air traffic control, Airports, 

Incorporation by reference, and 

Navigation (air). 

Issued in Washington, DC, on April 29, 

2011. 

Ray Towles, 

Deputy Director, Flight Standards Service. 

Adoption of the Amendment 

Accordingly, pursuant to the 

authority delegated to me, Title 14, 

Code of Federal Regulations, part 97, 14 

CFR part 97, is amended by amending 

Standard Instrument Approach 

Procedures, effective at 0901 UTC on 

the dates specified, as follows: 

PART 97—STANDARD INSTRUMENT 

APPROACH PROCEDURES 

■ 1. The authority citation for part 97 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40103, 40106, 

40113, 40114, 40120, 44502, 44514, 44701, 

44719, 44721–44722. 

■ 2. Part 97 is amended to read as 

follows: 

§§ 97.23, 97.25, 97.27, 97.29, 97.31, 97.33, 

97.35 [AMENDED] 

By amending: § 97.23 VOR, VOR/ 

DME, VOR or TACAN, and VOR/DME 

or TACAN; § 97.25 LOC, LOC/DME, 

LDA, LDA/DME, SDF, SDF/DME; 

§ 97.27 NDB, NDB/DME; § 97.29 ILS, 

ILS/DME, MLS, MLS/DME, MLS/RNAV; 

§ 97.31 RADAR SIAPs; § 97.33 RNAV 

SIAPs; and § 97.35 COPTER SIAPs, 

Identified as follows: 

* * * Effective Upon Publication 

AIRAC date State City Airport FDC No. FDC date Subject 

2–Jun–11 ..... IN New Castle ................ New Castle-Henry Co Muni .. 1/5020 4/6/11 NDB RWY 27, Amdt 5A 

2–Jun–11 ..... OH Akron ......................... Akron-Canton Rgnl ................ 1/5370 4/12/11 RNAV (GPS) RWY 5, Orig 

2–Jun–11 ..... OH Akron ......................... Akron-Canton Rgnl ................ 1/5371 4/12/11 VOR RWY 5, Amdt 3 

2–Jun–11 ..... KS Syracuse ................... Syracuse-Hamilton County 

Muni.

1/5584 4/12/11 Takeoff Minimums and Obstacle 

DP, Orig 

2–Jun–11 ..... AR Fort Smith ................. Fort Smith Rgnl ..................... 1/5585 4/12/11 Takeoff Minimums and Obstacle 

DP, Amdt 4 

2–Jun–11 ..... WI Burlington .................. Burlington Muni ..................... 1/6902 4/1/11 VOR RWY 29, Amdt 8 

2–Jun–11 ..... LA Baton Rouge ............. Baton Rouge Metropolitan .... 1/6922 4/19/11 RNAV (GPS) RWY 4L, Amdt 1B 

2–Jun–11 ..... PA Washington ............... Washington County ............... 1/6932 4/19/11 ILS OR LOC RWY 27, Orig 

2–Jun–11 ..... MS Tupelo ....................... Tupelo Rgnl ........................... 1/6935 4/19/11 ILS OR LOC RWY 36, Amdt 9 

2–Jun–11 ..... IL Peoria ........................ General Downing-Peoria Intl 1/9091 4/1/11 ILS OR LOC RWY 31, Amdt 7A 

30–Jun–11 ... MT Missoula .................... Missoula Intl .......................... 1/3515 1/25/11 ILS Z RWY 11, Amdt 12A 

30–Jun–11 ... MT Missoula .................... Missoula Intl .......................... 1/3516 1/25/11 ILS Y RWY 11, Orig-A 

[FR Doc. 2011–11370 Filed 5–13–11; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF STATE 

22 CFR Parts 120, 124, and 126 

RIN 1400–AC68 

[Public Notice: 7428] 

International Traffic in Arms 

Regulations: Dual Nationals and ThirdCountry Nationals Employed by EndUsers 

AGENCY: Department of State. 

ACTION: Final rule. 

SUMMARY: The Department of State is 

amending the International Traffic in 

Arms Regulations (ITAR) to establish a 

policy to address those who are unable 

to implement the exemption for intracompany, intra-organization, and intragovernment transfers of defense articles 

and defense services by approved endusers to dual national and third-country 

nationals who are employees of such 

approved end-users. Prior to making 

transfers to certain dual national and 

third-country national employees under 

this policy, approved end-users must 

screen employees, make an affirmative 

decision to allow access, and maintain 

records of screening procedures to 

prevent diversion of ITAR-controlled 

technology for purposes other than 

those authorized by the applicable 

export license or other authorization. 

DATES: Effective Date: This rule is 

effective August 15, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Director Charles B. Shotwell, Office of 

Defense Trade Controls Policy, 

Department of State, Telephone (202) 

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

DDTCResponseTeam@state.gov. ATTN: 

Regulatory Change, Dual and ThirdCountry Nationals. 

SUPPLEMENTARY INFORMATION: This is 

part of the President’s Export Control 

Reform effort. The Department of State 

is amending parts 124 and 126 of the 

ITAR to reflect new policy regarding 

end-user employment of dual nationals 

and third-country nationals. 

As a part of the President’s Task Force 

on Export Control Reform, the previous 

policy regarding the treatment of dual 

nationals and third-country nationals 

employed by approved end users was 

re-evaluated. A proposed rule to 


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eliminate the separate licensing 

requirement for dual nationals and 

third-country nationals employed by 

licensed end-users was presented for 

public comment. The proposed rule had 

a comment period ending September 10, 

2010. Thirty-two (32) parties filed 

comments 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 

changes noted and minor edits, and 

promulgates it as a final rule. The 

Department’s evaluation of the written 

comments and recommendations 

follows. 

Comment Analysis 

The overwhelming majority of 

commenting parties expressed 

dissatisfaction with the current rule 

regarding dual and third-country 

nationals, citing conflicts with foreign 

human rights laws as well as the burden 

of compliance, and welcomed the 

Directorate of Defense Trade Controls’ 

(DDTC) efforts to reform current 

practice. One commenting party 

asserted that the ‘‘tremendous 

administrative burden’’ imposed on 

foreign end-users is exaggerated. By 

contrast, six inputs, including one from 

a group representing 21 nations, agreed 

with the assessment that current rules 

impose a large administrative burden, 

such as separate accounting and 

licensing of foreign nationals. Four 

commenting parties, including a major 

U.S. industry association, pointed out 

that the current rule is an extensive 

administrative burden for U.S. 

manufacturers and exporters, not just 

foreign end-users, and places U.S. 

companies at a disadvantage with 

foreign competitors. 

One commenting party recommended 

adding language to § 126.18(a) to make 

clear that the exemption applies 

‘‘notwithstanding any other provisions 

of this Part’’ to make clear that the 

limitations of the last sentence of 

§ 126.1(a), which would have conflicted 

with the intent of the proposed rule, did 

not apply. DDTC agreed and adopted 

this change. 

One commenting party argued that 

the current nationality (or place of birth) 

standard should stay in place, citing 

recent prosecutions of Chi Mak, Greg 

Chung, and Noshir Gowadia. We note 

that all three cases involve naturalized 

U.S. citizens, whose prosecutions would 

not have been affected by the proposed 

rule. It should also be pointed out that 

even if the proposed rule had applied to 

them, all three would have failed the 

substantive contacts test and, thus, 

could not have received the defense 

articles at issue under the exemption. 

Another commenting party criticized 

the concept of ‘‘substantive contacts’’ in 

favor of clarifying the definition of ‘‘nonU.S.’’ person or foreign person. We note 

that the current definition of foreign 

person in § 120.16 is consistent with 

both U.S. law and usage in the proposed 

rule. Therefore, we find no need to 

change the definition of foreign person 

and do not adopt the recommendation. 

One commenting party, a large U.S. 

aerospace firm, argued that DDTC 

should return to its pre-1999 rules, 

where there was no additional licensing 

requirement for dual nationals or thirdcountry nationals working for 

authorized end-users. This option was 

explored early on in the development of 

this proposed rule, but DDTC chose not 

to pursue that option any further due to 

policy implications outside of the 

Department of State. 

Ten commenting parties 

recommended that the exemption 

proposed in § 126.18 be expanded to 

include ‘‘defense services.’’ The current 

proposal was limited to ‘‘defense 

articles,’’ which by the definition in 

§ 120.6 includes technical data. We note 

that the rule was intended to address 

concerns about restrictions on dual 

national and third-country national 

employees of licensed end-users and 

consignees who would have access to 

defense articles, which, as noted above, 

includes technical data per § 120.6, 

within the scope of their employment. 

The intent of the rule was to create a 

policy for such transfers in a manner 

that would prevent diversions of such 

articles to unauthorized end-users. 

Thus, the proposed rule was limited to 

use of the defense article within a 

company and within the scope of the 

license in question. Defense services, on 

the other hand, cannot be ‘‘transferred’’ 

within a company in the manner in 

which defense articles can. Rather, 

defense services are rendered to specific 

end-users identified in the license or 

other authorization. As such, the 

defense services are rendered to the 

named company rather than the 

individual employees. In any event, if 

the contemplated defense service 

involves defense articles already 

licensed to the company, the proposed 

exemption would generally cover dual 

and third-country national employees 

receiving the defense service. We deem 

it neither necessary nor prudent to 

specifically add defense services to this 

rule and thus do not adopt the 

recommendation. 

One commenting party asserted that 

there was uncertainty regarding whether 

the exemption applied to academic 

institutions. This proposed rule is an 

incremental change in favor of foreign 

business entities, foreign governmental 

entities, and international organizations, 

recognizing internal incentives for the 

protection of export controlled articles 

and data. The Department of State is not 

prepared to extend the exemption to 

academic institutions at the present 

time. 

Ten commenting parties 

recommended that the current § 124.16 

not be removed. That provision allows 

for a limited exception for access to 

unclassified defense articles exported in 

furtherance of or produced as a result of 

a Technical Assistance Agreement/ 

Manufacturing License Agreement, 

retransfer of technical data and defense 

services to dual national and thirdcountry national employees of licensed 

signatories that are nationals exclusively 

of NATO member states, EU member 

states, Australia, Japan, New Zealand, or 

Switzerland. A major concern was that 

the proposed rule, unlike § 124.16, did 

not include approved sub-licensees. 

After careful consideration, we 

concurred with the recommendation to 

retain § 124.16 and have amended the 

section to include workers who have 

long term employment relationships 

with licensed end-users, per a new 

definition to ‘‘regular employee’’ added 

in part 120. 

One foreign governmental 

commenting party observed that there is 

a need to expand the exemption beyond 

the physical territories of the 

governmental end-user or international 

organization. For example, such would 

be required to facilitate repair of a 

disabled aircraft overseas. This change 

was adopted subject to a requirement 

that such operations are in the conduct 

of official business by the government or 

international organization and provided 

such activities are within the scope of 

the license. 

Nine commenting parties 

recommended the proposed rule apply 

to contract employees, not just ‘‘bona 

fide, regular employees.’’ The intent of 

the proposed rule was to recognize 

vested interests within companies, 

international organizations, and foreign 

governmental entities to carefully screen 

employees for purposes of 

trustworthiness. Full-time employment 

meets that criterion as it indicates a 

higher level of scrutiny and represents 

a long-term relationship with the entity 

at issue, as opposed to the transactional, 

temporary nature of the contractual 

arrangement. Furthermore, companies, 

international organizations, and foreign 

governmental entities bear significantly 

more legal responsibility for the acts of 

their regular employees than they do for 


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28176 Federal Register / Vol. 76, No. 94 / Monday, May 16, 2011 / Rules and Regulations 

the acts of contactors. However, DDTC 

is prepared to narrowly extend this 

policy to workers who have long term 

employment relationships with licensed 

end-users, per a new definition to 

‘‘regular employee’’ added in part 120. 

Several commenting parties 

recommended clarification of the 

meaning of ‘‘substantive contacts.’’ 

Many of the requests for clarification 

center around specific areas discussed 

below. One commenting party 

expressed concern that any employee 

with a family member in a proscribed 

country would automatically be 

disqualified. It is not DDTC’s intent to 

deny access based solely upon 

relationships or contacts with family 

members in a context posing no risk of 

diversion. We note that contacts with 

government officials and agents of 

governments of § 126.1(a) countries, be 

they family or not, would require higher 

scrutiny. 

Another commenting party expressed 

concern that any personal or business 

travel to a country listed in § 126.1 

would disqualify that person from 

access to a defense article. The intent of 

the proposed rule is not to automatically 

disqualify a person on the basis of such 

travel, where the travel does not involve 

contacts with foreign agents or proxies 

likely to lead to diversion of controlled 

data or articles. Instead, full disclosure 

about travel is required, which would be 

the basis of an assessment of diversion 

risk on a case-by-case basis. 

One commenting party objected to the 

limitation of the exemption to the 

country where the end-user is located, 

pointing out that international 

organizations operate in more than one 

country. We note that licenses for 

international organization end-users 

will specify the location(s) and 

country(ies) where the end-item will be 

utilized. Therefore, DDTC believes that 

transfers to locations (and end-users) 

within the scope of the license poses no 

problems. Any contemplated transfers 

beyond the authorized and licensed 

location(s) will require an additional 

license (or an amendment to an existing 

license), and is a prudent limitation on 

the rule. This rule is not intended to 

authorize unlimited transfers around the 

world for end-users with nominal 

connections throughout the globe. 

One commenting party recommended 

that the requirement for screening not 

apply to citizens (including dual 

nationals) and permanent residents of 

the host country. This approach would 

exclude from screening a large group of 

individuals who continue to maintain 

affiliation by citizenship with a third 

country (i.e., different than that of the 

authorized end-user). Though we agree 

that citizens who relinquish citizenship 

of the former country would not require 

screening, the nature of continuing 

relationships with the third country for 

those maintaining citizenship remains 

relevant, especially if the country is 

subject to restrictions in § 126.1. In any 

event, this rule does not present foreign 

citizenship alone as a bar to access to 

ITAR controlled defense articles. 

Several commenting parties 

recommended clarification of whether 

the proposed rule would apply to both 

classified and unclassified data. In the 

absence of explicit inclusion, this rule 

will not apply to classified data. The 

word ‘‘unclassified’’ was added to the 

first sentence in § 126.18(a) as a 

qualifier to make the point clearer. We 

note that the release of classified data to 

foreign persons is governed by separate 

National Disclosure directives and 

policies. To be clear, this rule is not a 

grant of a separate authority for the 

transfer of classified information. 

Several commenting parties expressed 

concern about the record-keeping 

requirements, especially where local 

privacy laws may apply. We note that 

the records in question are intended for 

use by DDTC, a governmental entity for 

governmental use and not for public 

release. DDTC’s function in this 

capacity is analogous to the exchange of 

information with cross-border law 

enforcement agencies that regularly 

receive and have a similar obligation to 

protect information subject to privacy 

laws. 

Regulatory Analysis and Notices 

Administrative Procedure Act 

The Department of State is of the 

opinion that restricting defense article 

exports is a foreign affairs function of 

the United States Government and that 

rules implementing this function are 

exempt from § 553 (Rulemaking) and 

§ 554 (Adjudications) of the 

Administrative Procedure Act. Although 

the Department is of the opinion that 

this rule is exempt from the rulemaking 

provisions of the APA, the Department 

published this rule with a 60-day 

provision for public comment and 

without prejudice to its determination 

that restricting defense article exports is 

a foreign affairs function. 

Regulatory Flexibility Act 

Since this amendment is not subject 

to the provisions of 5 U.S.C. § 553(b), 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 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 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 

The Department of State does not 

consider this rule to be a ‘‘significant 

regulatory action’’ under Executive 

Order 12866, section 3(f), Regulatory 

Planning and Review. The Department 

is of the opinion that restricting defense 

articles exports is a foreign affairs 

function of the United States 

Government and that rules governing 

the conduct of this function are exempt 

from the requirements of Executive 

Order 12866. 

Executive Order 13563 

The Department of State has 

considered this rule in light of Section 

1(b) of Executive Order 13563, dated 

January 18, 2011, and affirms that this 

regulation is consistent with the 

guidance therein. 

Executive Order 12988 

The Department of State has reviewed 

the proposed amendment in light of 

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

Order 12988 to eliminate ambiguity, 

minimize litigation, establish clear legal 

standards, and reduce burden. 


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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 

The Department of State is of the 

opinion that this rule does not impose 

any new reporting or recordkeeping 

requirements subject to the Paperwork 

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

but will provide a separate Federal 

Register notification regarding such 

requirements. 

List of Subjects in 22 CFR Parts 120, 

124, and 126 

Arms and munitions, Exports. 

Accordingly, for the reasons set forth 

above, Title 22, Chapter I, Subchapter 

M, parts 120, 124, and 126 are amended 

as follows: 

PART 120—PURPOSE AND 

DEFINITIONS 

■ 1. The authority citation for part 120 

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. 2794; E.O. 11958, 42 FR 

4311; E.O. 13284, 68 FR 4075; 3 CFR, 1977 

Comp. p. 79; 22 U.S.C. 2651a; Pub. L. 105– 

261, 112 Stat. 1920. 

§§ 120.33 through 120.38 [Reserved] 

■ 2. Add reserved §§ 120.33 through 

120.38 and § 120.39 to read as follows: 

§ 120.39 Regular employee. 

(a) A regular employee means for 

purposes of this subchapter: 

(1) An individual permanently and 

directly employed by the company, or 

(2) An individual in a long term 

contractual relationship with the 

company where the individual works at 

the company’s facilities, works under 

the company’s direction and control, 

works full time and exclusively for the 

company, and executes nondisclosure 

certifications for the company, and 

where the staffing agency that has 

seconded the individual has no role in 

the work the individual performs (other 

than providing that individual for that 

work) and the staffing agency would not 

have access to any controlled 

technology (other than where 

specifically authorized by a license). 

PART 124—AGREEMENTS, OFFSHORE PROCUREMENT AND OTHER 

DEFENSE SERVICES 

■ 3. The authority citation for part 124 

continues to read as follows: 

Authority: Sec. 2, 38, and 71, Pub. L. 90– 

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

2797); E.O. 11958, 42 FR 4311; 3 CFR 1977 

Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 2776; 

Pub. L. 105–261. 

■ 4. In § 124.8, paragraph (5) is revised 

to read as follows: 

§ 124.8 Clauses required both in 

manufacturing license agreements and 

technical assistance agreements. 

* * * * * 

(5) The technical data or defense 

service exported from the United States 

in furtherance of this agreement and any 

defense article which may be produced 

or manufactured from such technical 

data or defense service may not be 

transferred to a foreign person except 

pursuant to §§ 124.16 and 126.18, as 

specifically authorized in this 

agreement, or where prior written 

approval of the Department of State has 

been obtained. 

* * * * * 

■ 5. Section 124.16 is revised to read as 

follows: 

§ 124.16 Special retransfer authorizations 

for unclassified technical data and defense 

services to member states of NATO and the 

European Union, Australia, Japan, New 

Zealand, and Switzerland. 

The provisions of § 124.8(5) of this 

subchapter notwithstanding, the 

Department may approve access to 

unclassified defense articles exported in 

furtherance of or produced as a result of 

a TAA/MLA, and retransfer of technical 

data and defense services to individuals 

who are dual national or third-country 

national employees of the foreign 

signatory or its approved sub-licensees, 

including the transfer to dual nationals 

or third-country nationals who are bona 

fide regular employees, directly 

employed by the foreign signatory or 

approved sub-licensees, provided they 

are nationals exclusively of countries 

that are members of NATO the 

European Union, Australia, Japan, New 

Zealand, and Switzerland and their 

employer is a signatory to the agreement 

or has executed a Non Disclosure 

Agreement. The retransfer must take 

place completely within the physical 

territories of these countries or the 

United States. Permanent retransfer of 

hardware is not authorized. 

PART 126—GENERAL POLICIES AND 

PROVISIONS 

■ 6. The authority citation for part 126 

continues to read as follows: 

Authority: Secs. 2, 38, 40, 42, and 71, Pub. 

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

2780, 2791, and 2797); E.O. 11958, 42 FR 

4311; 3 CFR, 1977 Comp., p.79; 22 U.S.C. 

2651a; 22 U.S.C. 287c; E.O. 12918; 59 FR 

28205, 3 CFR, 1994 Comp. p. 899; Sec. 1225, 

Pub. L. 108–375. 

§§ 126.16 and 126.17 [Reserved] 

■ 7. Add reserved §§ 126.16 and 126.17 

and § 126.18 to read as follows: 

§ 126.18 Exemptions regarding intracompany, intra-organization, and intragovernmental transfers to employees who 

are dual nationals or third-country 

nationals. 

(a) Subject to the requirements of 

paragraphs (b) and (c) of this section 

and notwithstanding any other 

provisions of this part, and where the 

exemption provided in § 124.16 cannot 

be implemented because of applicable 

domestic laws, no approval is needed 

from the Directorate of Defense Trade 

Controls (DDTC) for the transfer of 

unclassified defense articles, which 

includes technical data (see § 120.6), to 

or within a foreign business entity, 

foreign governmental entity, or 

international organization that is an 

authorized end-user or consignee 

(including approved sub-licensees) for 

those defense articles, including the 

transfer to dual nationals or thirdcountry nationals who are bona fide 

regular employees, directly employed 

by the foreign consignee or end-user. 

The transfer of defense articles pursuant 

to this section must take place 

completely within the physical territory 

of the country where the end-user is 

located, where the governmental entity 

or international organization conducts 

official business, or where the consignee 

operates, and be within the scope of an 

approved export license, other export 

authorization, or license exemption. 

(b) The provisions of § 127.1(b) are 

applicable to any transfer under this 

section. As a condition of transferring to 

foreign person employees described in 

paragraph (a) of this section any defense 

article under this provision, any foreign 

business entity, foreign governmental 

entity, or international organization, as 

a ‘‘foreign person’’ within the meaning of 

§ 120.16, that receives a defense article, 

must have effective procedures to 

prevent diversion to destinations, 

entities, or for purposes other than those 

authorized by the applicable export 

license or other authorization (e.g., 

written approval or exemption) in order 

to comply with the applicable 


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28178 Federal Register / Vol. 76, No. 94 / Monday, May 16, 2011 / Rules and Regulations 

provisions of the Arms Export Control 

Act and the ITAR. 

(c) The end-user or consignee may 

satisfy the condition in paragraph (b) of 

this section, prior to transferring defense 

articles, by requiring: 

(1) A security clearance approved by 

the host nation government for its 

employees, or 

(2) The end-user or consignee to have 

in place a process to screen its 

employees and to have executed a NonDisclosure Agreement that provides 

assurances that the employee will not 

transfer any defense articles to persons 

or entities unless specifically authorized 

by the consignee or end-user. The enduser or consignee must screen its 

employees for substantive contacts with 

restricted or prohibited countries listed 

in § 126.1. Substantive contacts include 

regular travel to such countries, recent 

or continuing contact with agents, 

brokers, and nationals of such countries, 

continued demonstrated allegiance to 

such countries, maintenance of business 

relationships with persons from such 

countries, maintenance of a residence in 

such countries, receiving salary or other 

continuing monetary compensation 

from such countries, or acts otherwise 

indicating a risk of diversion. Although 

nationality does not, in and of itself, 

prohibit access to defense articles, an 

employee who has substantive contacts 

with persons from countries listed in 

§ 126.1(a) shall be presumed to raise a 

risk of diversion, unless DDTC 

determines otherwise. End-users and 

consignees must maintain a technology 

security/clearance plan that includes 

procedures for screening employees for 

such substantive contacts and maintain 

records of such screening for five years. 

The technology security/clearance plan 

and screening records shall be made 

available to DDTC or its agents for civil 

and criminal law enforcement purposes 

upon request. 

Dated: April 26, 2011. 

Ellen O. Tauscher, 

Under Secretary, Arms Control and 

International Security, Department of State. 

[FR Doc. 2011–11697 Filed 5–13–11; 8:45 am] 

BILLING CODE 4710–25–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Ocean Energy Management, 

Regulation and Enforcement 

30 CFR Part 285 

[Docket ID: BOEM–2010–0045] 

RIN 1010–AD71 

Renewable Energy Alternate Uses of 

Existing Facilities on the Outer 

Continental Shelf—Acquire a Lease 

Noncompetitively 

AGENCY: Bureau of Ocean Energy 

Management, Regulation and 

Enforcement (BOEMRE), Interior. 

ACTION: Final rule. 

SUMMARY: This final rule revises 

BOEMRE regulations that pertain to 

noncompetitive acquisition of an Outer 

Continental Shelf (OCS) renewable 

energy lease. We are taking this action 

because under the current regulations 

the process for acquiring a lease 

noncompetitively that is initiated by an 

unsolicited request is inconsistent with 

the process for acquiring a lease 

noncompetitively that is initiated by 

BOEMRE. By revising regulations which 

govern the lease acquisition process 

starting with submission of an 

unsolicited request, and regulations 

which govern the lease acquisition 

process starting with BOEMRE issuance 

of a Request for Interest (RFI) or a Call 

for Information and Nomination (Call), 

this rulemaking will make the two 

processes consistent with each other. 

DATES: Effective Date: This final rule is 

effective June 15, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Timothy Redding at (703) 787–1219. 

SUPPLEMENTARY INFORMATION: 

Background 

As originally written, § 285.231 

allowed the award of a noncompetitive 

lease after BOEMRE received an 

unsolicited request for a noncompetitive 

lease if BOEMRE determined that there 

was no competitive interest after 

publishing a single notice of a request 

for interest relating to the unsolicited 

request for a noncompetitive lease. As 

originally written, § 285.232 provided 

that if BOEMRE published an RFI or 

Call resulting in a single expression of 

interest in a discrete portion within the 

RFI or Call area, BOEMRE could offer a 

lease for that area through a 

noncompetitive process only if it also 

issued a notice of request for interest as 

required by § 285.231(b) and 

subsequently determined that there was 

no competitive interest based on 

responses to that notice. 

BOEMRE believes that the 

requirement for another notice 

following an RFI or Call was redundant 

and was at odds with the 

noncompetitive process prescribed for 

cases in which a party submitted an 

unsolicited request for an OCS 

renewable energy lease, where BOEMRE 

is required to publish only a single 

notice. The final rule revises 

§ 285.232(c) to refer to the process 

outlined in § 285.231(d) through (i) 

rather than § 285.231(b) through (i), 

thereby eliminating this discrepancy by 

requiring only one RFI notice for 

determining competitive interest in all 

cases. This will make BOEMRE’s leasing 

processes more streamlined and 

efficient while maintaining BOEMRE’s 

obligations to notify the public of areas 

that may be leased, to solicit public 

input regarding those areas, and to 

determine whether competitive interest 

exists in acquiring leases in those areas. 

Comments on the Proposed Rule 

BOEMRE published a proposed rule 

on February 16, 2011 (76 FR 8962), and 

received a total of 76 comments. 

The Offshore Wind Development 

Coalition, the National Hydropower 

Association, Offshore MW LLC, the 

American Wind Energy Association, 

and the National Wildlife Federation 

expressed support for revising the rule 

as proposed and endorsed BOEMRE’s 

rationale for doing so. 

The Alliance to Protect Nantucket 

Sound (APNS) and the Oceans Public 

Trust Initiative (OPTI) objected to 

revising the rule and objected to 

BOEMRE’s rationale. The APNS stated 

that the proposed rule would promote a 

land rush attitude, diminish 

competition, and marginalize public 

review by shortening the environmental 

review process for OCS wind 

developers. The OPTI stated that it 

appears that the sole purpose for 

revising the regulations appears to be to 

make leasing move more quickly, which 

could be at the expense of more careful 

and balanced review. The OPTI also 

stated that revising the rule as proposed 

promotes collusion among industry 

participants. Defenders of Wildlife did 

not explicitly offer an opinion in favor 

of or in opposition to the proposed rule 

revision. However, it stated that, ‘‘In 

proposing to arbitrarily set a new 

criteria for an expedited accelerated 

permitting process solely on the basis of 

the number of applicants for a lease at 

a particular location, BOEMRE appears 

to ignore in this rulemaking any and all 

parameters that make a particular 

location unique * * *.’’ 

BOEMRE received 68 comments from 

private citizens, 3 that expressed 


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