Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 21523 

3See 17 CFR 39.13(h)(2). 

4 17 CFR 140.72. 

5 5 U.S.C. 553(b). 

6See 5 U.S.C. 553(d). 

7See 5 U.S.C. 601 et seq. 

8 5 U.S.C. 601(2). 9See 44 U.S.C. 3501 et seq. 

members,3 which may necessitate the 

sharing of information by the 

Commission to a DCO on a periodic 

basis. 

In order to mitigate market 

disruptions, ensure the best interests of 

market participants, and to effectuate 

any purpose of the CEA as amended, the 

Commission is revising regulation 

140.72 to permit the provision of critical 

information to all of these registered 

entities. Presently, the delegation of 

authority in regulation 140.72 provides 

certain employees of the Commission 

with the authority to disclose 

confidential information only to any 

contract market, registered futures 

association, or certain self-regulatory 

organizations.4 With this revision of 

regulation 140.72, the present 

delegation of authority will be expanded 

to include all registered entities as 

defined in the CEA and as permitted by 

section 8a(6) of the CEA. 

II. Related Matters 

A. Administrative Procedure Act 

The revisions to the Commission’s 

regulations in this rulemaking do not 

establish any new substantive or 

legislative rules, but rather relate solely 

to rules of agency organization, practice, 

or procedure. Therefore, this rulemaking 

is excepted from the public notice and 

comment provisions of the 

Administrative Procedure Act.5

Additionally, as the revisions to the 

Commission’s regulations in this 

rulemaking will not cause any party to 

undertake efforts to comply with the 

regulations as revised, the Commission 

has determined to make this rulemaking 

effective upon publication in the 

Federal Register.6

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

requires the Commission to consider 

whether the regulations it adopts will 

have a significant economic impact on 

a substantial number of small entities.7

The Commission is obligated to conduct 

a regulatory flexibility analysis for any 

rule for which the agency publishes a 

general notice of proposed rulemaking 

pursuant to section 553(b) of the 

Administrative Procedure Act.8 This 

rulemaking is excepted from the public 

rulemaking provisions of the 

Administrative Procedure Act. 

Accordingly, the Commission is not 

obligated to conduct a regulatory 

flexibility analysis for this rulemaking. 

C. Paperwork Reduction Act 

The Commission may not conduct or 

sponsor, and a respondent is not 

required to respond to, a collection of 

information contained in a rulemaking 

unless the information collection 

displays a currently valid control 

number issued by the Office of 

Management and Budget (‘‘OMB’’) 

pursuant to the Paperwork Reduction 

Act.9 This rulemaking contains no 

collection of information that obligates 

the Commission to obtain a control 

number from OMB. 

List of Subjects in 17 CFR Part 140 

Authority delegations (Government 

agencies), Organization and functions 

(Government agencies). 

For the reasons stated in the 

preamble, the Commission hereby 

amends chapter I of title 17 of the Code 

of Federal Regulations as follows: 

PART 140—ORGANIZATION, 

FUNCTIONS, AND PROCEDURES OF 

THE COMMISSION 

■ 1. The authority citation for part 140 

is revised to read as follows: 

Authority: 7 U.S.C. 2(a)(12) and 12(b). 

§ 140.72 [Amended] 

■ 2. Amend § 140.72 in the section 

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

(f) by removing the words ‘‘contract 

market’’ wherever they appear and 

adding in their place the words 

‘‘registered entity.’’ 

Issued in Washington, DC, on April 5, 

2013, by the Commission. 

Christopher J. Kirkpatrick, 

Deputy Secretary of the Commission. 

[FR Doc. 2013–08440 Filed 4–10–13; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF STATE 

22 CFR Parts 120 and 126 

RIN 1400–AD38 

[Public Notice 8270] 

Implementation of the Defense Trade 

Cooperation Treaty Between the 

United States and Australia 

AGENCY: Department of State. 

ACTION: Final rule. 

SUMMARY: The Department of State is 

amending the International Traffic in 

Arms Regulations (ITAR) to implement 

the Treaty Between the Government of 

the United States of America and the 

Government of Australia Concerning 

Defense Trade Cooperation, identify via 

a supplement to the ITAR the defense 

articles and defense services that cannot 

be exported pursuant to the licensing 

exemption created by the Treaty, and 

make certain other corrections to the 

supplement. 

DATES: This rule is effective upon the 

entry into force of the Treaty Between 

the Government of the United States of 

America and the Government of 

Australia Concerning Defense Trade 

Cooperation. The Department will 

publish a final rule in the Federal 

Register providing the effective date of 

this rule. 

FOR FURTHER INFORMATION CONTACT: 

Sarah Heidema, Office of Defense Trade 

Controls Policy, Department of State, 

telephone (202) 663–2809 or email 

DDTCResponseTeam@state.gov. ATTN: 

Regulatory Change—Treaties. 

SUPPLEMENTARY INFORMATION: The 

Department of State is amending the 

International Traffic in Arms 

Regulations (ITAR) pursuant to the 

Security Cooperation Act of 2010 (Pub. 

L. 111–266), with the inclusion of other 

changes. Title I of the Security 

Cooperation Act, the Defense Trade 

Cooperation Treaties Implementation 

Act of 2010, implements the Treaty 

Between the Government of the United 

States of America and the Government 

of Australia Concerning Defense Trade 

Cooperation (Treaty Doc. 110–10), and 

the Treaty Between the Government of 

the United States of America and the 

Government of the United Kingdom of 

Great Britain and Northern Ireland 

Concerning Defense Trade Cooperation 

(Treaty Doc. 110–7). The U.S.-UK treaty 

entered into force on April 13, 2012. 

(See ‘‘Implementation of the Defense 

Trade Cooperation Treaty Between the 

United States and the United Kingdom,’’ 

77 FR 16592, and ‘‘Announcement of 

Entry Into Force of the Defense Trade 

Cooperation Treaty Between the United 

States and the United Kingdom,’’ 77 FR 

33089.) This rule amends the ITAR with 

regard to the U.S.-Australia treaty (the 

‘‘Treaty’’). 

ITAR § 120.1 is amended to provide 

updated authorities and editorial 

changes. ITAR § 120.33 is added to 

provide a definition of ‘‘Defense Trade 

Cooperation Treaty between the United 

States and Australia.’’ New ITAR 

§ 120.35 defines the Implementing 

Arrangement pursuant to the Treaty. 

ITAR § 126.16 is added to create the 

licensing exemption and provide 

guidance on its use. Supplement No. 1 

to part 126 is amended to identify 


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21524 Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 

defense articles that may not be 

exported and defense services that may 

not be furnished through the exemption. 

In addition, the supplement is 

amended to make the following 

corrections and clarifications: the 

phrase, ‘‘defense articles and services 

related to’’ is removed from the row 

regarding USML Category I articles, and 

the USML citation for armored plates is 

changed from USML Category XIII(c) to 

XIII(e). 

On November 22, 2011 (76 FR 72246, 

RIN 1400–AC95), the Department 

published for public comment a 

proposed rule to amend the ITAR to 

implement the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom and the 

Defense Trade Cooperation Treaty 

between the United States and 

Australia, and to identify, via a 

supplement, the defense articles that 

may not be exported and the defense 

services that may not be furnished 

through use of the licensing exemptions 

created by the treaties. The comment 

period ended December 22, 2011. 

Fifteen parties filed comments that 

applied to the Treaty. The Department’s 

evaluation of the comments and 

recommendations follows. 

The majority of commenting parties 

expressed support for the Treaty’s 

intention of facilitating defense exports 

with one of the United States’ closest 

allies. However, the commenting parties 

expressed concern that the exemption is 

overly complicated and its requirements 

too burdensome to be truly workable. 

The Department appreciates these 

comments and believes the clarifying 

edits made in this final rule make 

application of the exemption clearer. 

Several commenting parties requested 

additional guidance for various aspects 

of the exemption described in ITAR 

§ 126.16. As part of Treaty 

implementation, the Department’s 

Directorate of Defense Trade Controls 

(DDTC) has posted Frequently Asked 

Questions (FAQs) on its Web site 

(www.pmddtc.state.gov). These FAQs 

address these requests for guidance. 

Two commenting parties 

recommended that the Department add 

a definition for defense articles to ITAR 

§ 126.16(a)(1) to clarify that ’’defense 

articles’’ also includes technical data for 

purposes of the exemption. The 

Department does not believe this change 

is necessary as the definition for 

‘‘defense articles’’ in ITAR § 120.6 

clearly identifies technical data as 

within its scope. Unless specifically 

indicated otherwise, the use of the term 

‘‘defense article’’ includes technical 

data. 

One commenting party requested 

clarification of the term ‘‘access’’ as 

used in ITAR § 126.16(a)(1)(iv), 

indicating that it is common for U.S. 

Customs and Border Protection (CBP) to 

authorize a physical manipulation of a 

container, which would seemingly 

result in an intermediate consignee 

having ‘‘access’’ to an item in the 

shipment. The Department believes the 

meaning of ‘‘access’’ is plain, and does 

not include situations such as this, 

where there is a directive from a CBP 

official to open a container for the 

purpose as stated. Another party 

requested that the Department place in 

this section a reference to ITAR 

§ 126.16(k), which discusses 

intermediate consignees. The 

Department accepted this 

recommendation and has revised the 

section accordingly. 

One commenting party expressed 

concern that the process by which the 

U.S. Government would obtain records, 

as provided in ITAR § 126.16(l) and 

other sections of the exemption, is 

unclear. These sections are not intended 

to identify the process by which record 

requests are made, and therefore were 

not revised to provide this information. 

(The records-request process would be 

the same for ITAR § 126.16(l) as for 

requests made pursuant to any other 

section of the ITAR.) 

One commenting party noted that 

ITAR § 126.16(a)(4) seemed to limit 

transfers just to exports to the United 

States. The Department has revised this 

section to clarify that it applies to 

transfers within the Approved 

Community. 

Two commenting parties requested 

that the Department change the word 

‘‘required’’ to ‘‘pursuant to’’ in ITAR 

§ 126.16(a)(4)(iii). This change was not 

accepted because the word ‘‘required’’ is 

a requirement of the Treaty. 

In response to the recommendation of 

two commenting parties, the 

Department revised ITAR § 126.16(a)(5) 

regarding the applicability of this 

exemption to defense articles delivered 

via the Foreign Military Sales program. 

Three commenting parties 

recommended that the Department 

include an explanation of the vetting 

process for the Australian Community 

in ITAR § 126.16(d). The Department 

did not accept this recommendation for 

the rule itself, but notes that the vetting 

requirements are identified in the Treaty 

and Implementing Arrangement, which 

are available on DDTC’s Web site. 

Three commenting parties requested 

that the Department provide additional 

guidance on requesting confirmation of 

Treaty eligibility for operations, 

programs, and projects that cannot be 

publicly identified (i.e., are classified). 

For this information, the Department 

refers inquiries by members of the 

approved community to both the DDTC 

Web site and the appropriate defense 

authority. 

One commenting party inquired 

whether the Department will publish a 

complete list of U.S. Government 

contracts that are Treaty eligible. The 

Department will not do so. The U.S. 

Department of Defense has updated the 

Defense Federal Acquisition Regulation 

Supplement (DFARS) and certain 

contract clauses, which will identify 

Treaty eligibility when incorporated 

into a contract. 

Three commenting parties requested 

that ITAR § 126.16(g)(1) be clarified to 

indicate whether it applies to marketing 

to members of the Approved 

Community, or requested its removal. 

This provision is part of the Treaty’s 

Exempted Technology List, and 

therefore cannot be removed. However, 

the Department revised ITAR 

§ 126.16(g)(1) to indicate that marketing 

to members of the Australian 

Community is covered so long as it is 

for an approved Treaty end-use and 

meets the other requirements of this 

section. 

One commenting party recommended 

removal of ITAR § 126.16(g)(4) or, in the 

alternative, adding the parenthetical 

‘‘(or foreign equivalent)’’ after 

‘‘Milestone B.’’ The Department cannot 

remove this paragraph as it is part of the 

Treaty’s Exempted Technology List. The 

Department also cannot add the 

parenthetical as there is no equivalent 

in Australia to ‘‘Milestone B.’’ 

One commenting party requested 

changes to ITAR § 126.16(g)(5) to allow 

for the export of embedded exempted 

technologies in certain circumstances. 

The Department is not, at this time, 

prepared to broaden this provision to 

include embedded exempted 

technologies. 

Two commenting parties commented 

on the complexity of using ITAR 

§ 126.16(h) with a diverse supply chain 

and requested clarification on the 

applicability of ITAR § 123.9(e) to this 

exemption. The Department appreciates 

the diverse nature of global supply 

chains, but believes the mechanisms 

provided in ITAR § 126.16(h) are no 

more onerous than current retransfer or 

reexport requirements. Further, as 

indicated in ITAR § 126.16(h)(5), any 

retransfer, reexport, or change in enduse under ITAR § 126.16(h) shall be 

made in accordance with ITAR § 123.9. 

In response to the recommendation of 

two commenting parties, the 

Department has deleted ‘‘any citizen of 


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such countries’’ from ITAR 

§ 126.16(h)(8). 

Ten commenting parties commented 

on the marking requirements provided 

in ITAR § 126.16(j). Of most concern 

was a perception that the requirements 

of this section made using the 

exemption overly burdensome and 

costly. Various suggestions were 

provided, ranging from removal of the 

requirement to rewording of certain 

sections. The majority of these 

commenting parties requested removal 

of the requirement in paragraph (j)(2) for 

exporters to remove Treaty markings. 

The Department appreciates these 

comments; however, apart from minor 

clarifying changes, the marking 

requirements have not been removed or 

revised because they are made pursuant 

to the Treaty and its Implementing 

Arrangement. 

One commenting party requested that 

the Department revise the text of the 

statement required by ITAR 

§ 126.16(j)(5) to indicate that the items 

being exported are USML items and 

authorized only for export to Australia 

under the Treaty. The Department 

accepted this suggestion and revised the 

text accordingly. 

One commenting party requested that 

registered brokers be included in ITAR 

§ 126.16(k)(1)(ii). Australian 

intermediate consignees must meet the 

requirements of this section. If a 

registered broker meets these 

requirements, then it may be an 

intermediate consignee for purposes of 

this exemption. However, simply being 

a registered broker does not 

automatically qualify an entity as an 

Australian intermediate consignee. 

One commenting party recommended 

changing ‘‘all exports’’ in ITAR 

§ 126.16(l)(1) to ‘‘their exports’’ to 

acknowledge that the U.S. exporter may 

not be aware or have record of a 

reexport/retransfer request submitted by 

an Australian Community member. The 

Department accepted this 

recommendation and has revised the 

section accordingly. 

One commenting party requested 

clarification of whether ITAR 

§ 126.16(l)(1)(x) referred to the USML 

category or security classification. The 

Department revised this section to make 

clear that it refers to security 

classification. 

The Department accepted the 

recommendation of one commenting 

party to remove reference to ‘‘defense 

services’’ in ITAR § 126.16(l)(2). 

Two commenting parties requested 

that the Department clarify whether 

ITAR § 126.16(m) required exporters to 

submit negative reports. Reporting 

requirements under this section are 

contingent on meeting the requirements 

of ITAR § 130.9. 

Two commenting parties requested 

clarification on whether the 

congressional notification requirement 

under the Treaty is identical to that 

required under normal license 

authorization processes. The 

Department confirms that the 

requirement is the same. 

Ten commenting parties submitted 

comments regarding the scope and text 

of Supplement No. 1 to part 126. In 

particular, comments indicated concern 

that the supplement was too broad and 

possibly excluded too much to make the 

exemption useful. The Department 

appreciates these comments, and has 

made clarifying edits to Supplement No. 

1 to the extent possible within the 

confines of the Treaty, the 

Implementing Arrangement, and the 

Exempted Technology List. 

For clarification, the Department has 

added, ‘‘prior to movement,’’ to the text 

of ITAR § 126.16(j)(1), which is in 

conformance with the requirements of 

the Treaty’s Implementing Arrangement. 

Having thoroughly reviewed and 

evaluated the written comments and 

recommended changes, the Department 

has determined that it will accept, and 

hereby adopt with the noted changes, 

the proposed rule, as it pertained to the 

Treaty, as a final rule, to be effective 

when the Treaty enters into force. 

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). In addition, this 

rulemaking is implementing the 

provisions of a treaty between the 

United States and Australia and related 

amendments to the Arms Export Control 

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 

30-day provision for public comment 

and without prejudice to its 

determination that controlling the 

import and export of defense services is 

a foreign affairs function (RIN 1400– 

AC95). This rule is effective upon the 

entry into force of the Treaty Between 

the Government of the United States of 

America and the Government of 

Australia Concerning Defense Trade 

Cooperation (Treaty Doc. 110–10). Once 

the Treaty is in force, exporters must be 

able to utilize the Treaty for qualifying 

exports of defense articles. 

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. 

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 preempt tribal law. 

Accordingly, the requirement of 

Executive Order 13175 does not apply 

to this rulemaking. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 

This rulemaking is not a major rule 

within the meaning of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996. 

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 all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 


TKELLEY on DSK3SPTVN1PROD with RULES
21526 Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 

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. The Department has 

reviewed this regulation to ensure its 

consistency with the regulatory 

philosophy and principles set forth in 

these executive orders. The Department 

also has determined that this rule is not 

a ‘‘significant regulatory action’’ under 

section 3(f) of Executive Order 12866. 

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. 

Paperwork Reduction Act 

This rule does not impose any new 

reporting or recordkeeping requirements 

subject to the Paperwork Reduction Act, 

44 U.S.C. Chapter 35. 

List of Subjects in 22 CFR Parts 120 and 

126 

Arms and Munitions, Exports. 

Accordingly, for the reasons set forth 

above, Title 22, Chapter I, Subchapter 

M, parts 120 and 126 are amended as 

follows: 

PART 120—PURPOSE AND 

DEFINITIONS 

■ 1. The authority citation for part 120 

is revised to read as follows: 

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

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

2797); 22 U.S.C. 2794; 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. 

■ 2. Section 120.1 is amended by 

revising paragraph (a) to read as follows: 

§ 120.1 General authorities and eligibility. 

(a) Section 38 of the Arms Export 

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

amended, authorizes the President to 

control the export and import of defense 

articles and defense services. The 

statutory authority of the President to 

promulgate regulations with respect to 

exports of defense articles and defense 

services was delegated to the Secretary 

of State by Executive Order 13637. This 

subchapter implements that authority. 

By virtue of delegations of authority by 

the Secretary of State, these regulations 

are primarily administered by the 

Deputy Assistant Secretary of State for 

Defense Trade and Regional Security 

and the Managing Director of the 

Directorate of Defense Trade Controls, 

Bureau of Political-Military Affairs. 

* * * * * 

■ 3. Section 120.33 is added to read as 

follows: 

§ 120.33 Defense Trade Cooperation 

Treaty between the United States and 

Australia. 

Defense Trade Cooperation Treaty 

between the United States and Australia 

means the Treaty between the 

Government of the United States of 

America and the Government of 

Australia Concerning Defense Trade 

Cooperation, done at Sydney, 

September 5, 2007. For additional 

information on making exports pursuant 

to this treaty, see § 126.16 of this 

subchapter. 

■ 4. Section 120.35 is added to read as 

follows: 

§ 120.35 Australia Implementing 

Arrangement. 

Australia Implementing Arrangement 

means the Implementing Arrangement 

Pursuant to the Treaty between the 

Government of the United States of 

America and the Government of 

Australia Concerning Defense Trade 

Cooperation, done at Washington, 

March 14, 2008, as it may be amended. 

PART 126—GENERAL POLICIES AND 

PROVISIONS 

■ 5. The authority citation for part 126 

is revised to read as follows: 

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

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

2780, 2791, and 2797); 22 U.S.C. 2651a; 22 

U.S.C. 287c; E.O. 12918, 59 FR 28205; 3 CFR, 

1994 Comp., p. 899; Sec. 1225, Pub. L. 108– 

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

266; Section 7045, Pub. L. 112–74; Section 

7046, Pub. L. 112–74; E.O. 13637, 78 FR 

16129. 

■ 6. Section 126.16 is added to read as 

follows: 

§ 126.16 Exemption pursuant to the 

Defense Trade Cooperation Treaty between 

the United States and Australia. 

(a) Scope of exemption and required 

conditions. (1) Definitions. (i) An export 

means, for purposes of this section only, 

the initial movement of defense articles 

or defense services from the United 

States Community to the Australian 

Community. 

(ii) A transfer means, for purposes of 

this section only, the movement of a 

previously exported defense article or 

defense service by a member of the 

Australian Community within the 

Australian Community, or between a 

member of the United States 

Community and a member of the 

Australian Community. 

(iii) Retransfer and reexport have the 

meaning provided in § 120.19 of this 

subchapter. 

(iv) Intermediate consignee means, for 

purposes of this section, an entity or 

person who receives, but does not have 

access to, defense articles, including 

technical data, for the sole purpose of 

effecting onward movement to members 

of the Approved Community (see 

paragraph (k) of this section). 

(2) Persons or entities exporting or 

transferring defense articles or defense 

services are exempt from the otherwise 

applicable licensing requirements if 

such persons or entities comply with 

the regulations set forth in this section. 

Except as provided in Supplement No. 

1 to part 126 of this subchapter, Port 

Directors of U.S. Customs and Border 

Protection and postmasters shall permit 

the permanent and temporary export 

without a license from members of the 

United States Community to members of 

the Australian Community (see 

paragraph (d) of this section regarding 

the identification of members of the 

Australian Community) of defense 

articles and defense services not listed 

in Supplement No. 1 to part 126 of this 

subchapter, for the end-uses specifically 

identified pursuant to paragraphs (e) 

and (f) of this section. The purpose of 

this section is to specify the 

requirements to export, transfer, 

reexport, retransfer, or otherwise 

dispose of a defense article or defense 

service pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia. All persons must 

continue to comply with statutory and 

regulatory requirements outside of this 

subchapter concerning the import of 

defense articles and defense services or 

the possession or transfer of defense 

articles, including, but not limited to, 

regulations issued by the Bureau of 

Alcohol, Tobacco, Firearms and 

Explosives found at 27 CFR parts 447, 

478, and 479, which are unaffected by 

the Defense Trade Cooperation Treaty 

between the United States and 

Australia. 

(3) Export. In order for an exporter to 

export a defense article or defense 

service pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia, all of the following 

conditions must be met: 

(i) The exporter must be registered 

with the Directorate of Defense Trade 

Controls (DDTC) and must be eligible, 

according to the requirements and 

prohibitions of the Arms Export Control 

Act, this subchapter, and other 

provisions of United States law, to 

obtain an export license (or other forms 

of authorization to export) from any 

agency of the U.S. Government without 


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Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 21527 

restriction (see paragraphs (b) and (c) of 

this section for specific requirements); 

(ii) The recipient of the export must 

be a member of the Australian 

Community (see paragraph (d) of this 

section regarding the identification of 

members of the Australian Community). 

Australian non-governmental entities 

and facilities that become ineligible for 

such membership will be removed from 

the Australian Community; 

(iii) Intermediate consignees involved 

in the export must not be ineligible, 

according to the requirements and 

prohibitions of the Arms Export Control 

Act, this subchapter, and other 

provisions of United States law, to 

handle or receive a defense article or 

defense service without restriction (see 

paragraph (k) of this section for specific 

requirements); 

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

specified in the Defense Trade 

Cooperation Treaty between the United 

States and Australia and mutually 

agreed to by the U.S. Government and 

the Government of Australia pursuant to 

the Defense Trade Cooperation Treaty 

between the United States and Australia 

and the Implementing Arrangement 

thereto (the Australia Implementing 

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

of this section regarding authorized enduses); 

(v) The defense article or defense 

service is not excluded from the scope 

of the Defense Trade Cooperation Treaty 

between the United States and Australia 

(see paragraph (g) of this section and 

Supplement No. 1 to part 126 of this 

subchapter for specific information on 

the scope of items excluded from export 

under this exemption) and is marked or 

identified, at a minimum, as ‘‘Restricted 

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

for specific requirements on marking 

exports); 

(vi) All required documentation of 

such export is maintained by the 

exporter and recipient and is available 

upon the request of the U.S. 

Government (see paragraph (l) of this 

section for specific requirements); and 

(vii) The Department of State has 

provided advance notification to the 

Congress, as required, in accordance 

with this section (see paragraph (o) of 

this section for specific requirements). 

(4) Transfers. In order for a member 

of the Approved Community (i.e., the 

United States Community and 

Australian Community) to transfer a 

defense article or defense service under 

the Defense Trade Cooperation Treaty 

within the Approved Community, all of 

the following conditions must be met: 

(i) The defense article or defense 

service must have been previously 

exported in accordance with paragraph 

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

a license or other approval in 

accordance with paragraph (i) of this 

section; 

(ii) The transferor and transferee of 

the defense article or defense service are 

members of the Australian Community 

(see paragraph (d) of this section 

regarding the identification of members 

of the Australian Community) or the 

United States Community (see 

paragraph (b) of this section for 

information on the United States 

Community/approved exporters); 

(iii) The transfer is required for an 

end-use specified in the Defense Trade 

Cooperation Treaty between the United 

States and Australia and mutually 

agreed to by the Government of the 

United States and the Government of 

Australia pursuant to the terms of the 

Defense Trade Cooperation Treaty 

between the United States and Australia 

and the Australia Implementing 

Arrangement (see paragraphs (e) and (f) 

of this section regarding authorized enduses); 

(iv) The defense article or defense 

service is not identified in paragraph (g) 

of this section and Supplement No. 1 to 

part 126 of this subchapter as ineligible 

for export under this exemption, and is 

marked or otherwise identified, at a 

minimum, as ‘‘Restricted USML’’ (see 

paragraph (j) of this section for specific 

requirements on marking exports); 

(v) All required documentation of 

such transfer is maintained by the 

transferor and transferee and is available 

upon the request of the U.S. 

Government (see paragraph (l) of this 

section for specific requirements); and 

(vi) The Department of State has 

provided advance notification to the 

Congress in accordance with this 

section (see paragraph (o) of this section 

for specific requirements). 

(5) This section does not apply to the 

export of defense articles or defense 

services from the United States pursuant 

to the Foreign Military Sales program. 

Once such items are delivered to the 

Australian Government, they may be 

treated as if they were exported 

pursuant to the Treaty and then must be 

marked, identified, transmitted, stored 

and handled in accordance with the 

Treaty, the Australia Implementing 

Arrangement, and the provisions of this 

section. 

(b) United States Community. The 

following persons compose the United 

States Community and may export or 

transfer defense articles and defense 

services pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia: 

(1) Departments and agencies of the 

U.S. Government, including their 

personnel acting in their official 

capacity, with, as appropriate, a security 

clearance and a need-to-know; and 

(2) Non-governmental U.S. persons 

registered with DDTC and eligible, 

according to the requirements and 

prohibitions of the Arms Export Control 

Act, this subchapter, and other 

provisions of United States law, to 

obtain an export license (or other forms 

of authorization to export) from any 

agency of the U.S. Government without 

restriction, including their employees 

acting in their official capacity with, as 

appropriate, a security clearance and a 

need-to-know. 

(c) An exporter that is otherwise an 

authorized exporter pursuant to 

paragraph (b) of this section may not 

export or transfer pursuant to the 

Defense Trade Cooperation Treaty 

between the United States and Australia 

if the exporter’s president, chief 

executive officer, any vice-president, 

any other senior officer or official (e.g., 

comptroller, treasurer, general counsel); 

any member of the board of directors of 

the exporter; any party to the export; or 

any source or manufacturer is ineligible 

to receive export licenses (or other 

forms of authorization to export) from 

any agency of the U.S. Government. 

(d) Australian Community. For 

purposes of the exemption provided by 

this section, the Australian Community 

consists of: 

(1) Government of Australia 

authorities with entities identified as 

members of the Approved Community 

through the DDTC Web site at the time 

of a transaction under this section; and 

(2) The non-governmental Australian 

entities and facilities identified as 

members of the Approved Community 

through the DDTC Web site at the time 

of a transaction under this section; nongovernmental Australian entities and 

facilities that become ineligible for such 

membership will be removed from the 

Australian Community. 

(e) Authorized End-uses. The 

following end-uses, subject to paragraph 

(f) of this section, are specified in the 

Defense Trade Cooperation Treaty 

between the United States and 

Australia: 

(1) United States and Australian 

combined military or counter-terrorism 

operations; 

(2) United States and Australian 

cooperative security and defense 

research, development, production, and 

support programs; 

(3) Mutually determined specific 

security and defense projects where the 

Government of Australia is the end-user; 

or 

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


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(f) Procedures for identifying 

authorized end-uses pursuant to 

paragraph (e) of this section: 

(1) Operations, programs, and projects 

that can be publicly identified will be 

posted on the DDTC Web site; 

(2) Operations, programs, and projects 

that cannot be publicly identified will 

be confirmed in written correspondence 

from DDTC; or 

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

identified specifically in a U.S. 

Government contract or solicitation as 

being eligible under the Treaty. 

(4) No other operations, programs, 

projects, or end-uses qualify for this 

exemption. 

(g) Items eligible under this section. 

With the exception of items listed in 

Supplement No. 1 to part 126 of this 

subchapter, defense articles and defense 

services may be exported under this 

section subject to the following: 

(1) An exporter authorized pursuant 

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

market a defense article to members of 

the Australian Community if that 

exporter has been licensed by DDTC to 

export (as defined by § 120.17 of this 

subchapter) the identical type of defense 

article to any foreign person and enduse of the article is for an end-use 

identified in paragraph (e) of this 

section. 

(2) The export of any defense article 

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

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

Government direction always requires 

prior written approval from DDTC. 

(3) U.S.-origin classified defense 

articles or defense services may be 

exported only pursuant to a written 

request, directive, or contract from the 

U.S. Department of Defense that 

provides for the export of the classified 

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

(4) U.S.-origin defense articles 

specific to developmental systems that 

have not obtained written Milestone B 

approval from the U.S. Department of 

Defense milestone approval authority 

are not eligible for export unless such 

export is pursuant to a written 

solicitation or contract issued or 

awarded by the U.S. Department of 

Defense for an end-use identified 

pursuant to paragraph (e)(1), (2), or (4) 

of this section. 

(5) Defense articles excluded by 

paragraph (g) of this section or 

Supplement No. 1 to part 126 of this 

subchapter (e.g., USML Category XI 

(a)(3) electronically scanned array radar 

excluded by Note 2) that are embedded 

in a larger system that is eligible to ship 

under this section (e.g., a ship, an 

aircraft) must separately comply with 

any restrictions placed on that 

embedded defense article under this 

subchapter. The exporter must obtain a 

license or other authorization from 

DDTC for the export of such embedded 

defense articles (for example, USML 

Category XI (a)(3) electronically scanned 

array radar systems that are exempt 

from this section that are incorporated 

in an aircraft that is eligible to ship 

under this section continue to require 

separate authorization from DDTC for 

their export, transfer, reexport, or 

retransfer). 

(6) No liability shall be incurred by or 

attributed to the U.S. Government in 

connection with any possible 

infringement of privately owned patent 

or proprietary rights, either domestic or 

foreign, by reason of an export 

conducted pursuant to this section. 

(7) Sales by exporters made through 

the U.S. Government shall not include 

either charges for patent rights in which 

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

which the U.S. Government has a right 

to use and disclose to others, which is 

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

Government has acquired or is entitled 

to acquire without restrictions upon its 

use and disclosure to others. 

(h) Transfers, retransfers, and 

reexports. (1) Any transfer of a defense 

article or defense service not exempted 

in Supplement No. 1 to part 126 of this 

subchapter by a member of the 

Australian Community (see paragraph 

(d) of this section for specific 

information on the identification of the 

Community) to another member of the 

Australian Community or the United 

States Community for an end-use that is 

authorized by this exemption (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses) is 

authorized under this exemption. 

(2) Any transfer or other provision of 

a defense article or defense service for 

an end-use that is not authorized by the 

exemption provided by this section is 

prohibited without a license or the prior 

written approval of DDTC (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses). 

(3) Any retransfer or reexport, or other 

provision of a defense article or defense 

service by a member of the Australian 

Community to a foreign person that is 

not a member of the Australian 

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

not a member of the United States 

Community, is prohibited without a 

license or the prior written approval of 

DDTC (see paragraph (d) of this section 

for specific information on the 

identification of the Australian 

Community). 

(4) Any change in the use of a defense 

article or defense service previously 

exported, transferred, or obtained under 

this exemption by any foreign person, 

including a member of the Australian 

Community, to an end-use that is not 

authorized by this exemption is 

prohibited without a license or other 

written approval of DDTC (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses). 

(5) Any retransfer, reexport, or change 

in end-use requiring such approval of 

the U.S. Government shall be made in 

accordance with § 123.9 of this 

subchapter. 

(6) Defense articles excluded by 

paragraph (g) of this section or 

Supplement No. 1 to part 126 of this 

subchapter (e.g., USML Category XI 

(a)(3) electronically scanned array radar 

systems) that are embedded in a larger 

system that is eligible to ship under this 

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

separately comply with any restrictions 

placed on that embedded defense article 

unless otherwise specified. A license or 

other authorization must be obtained 

from DDTC for the export, transfer, 

reexport, retransfer, or change in enduse of any such embedded defense 

article (for example, USML Category 

XI(a)(3) electronically scanned array 

radar systems that are excluded from 

this section by Supplement No. 1 to part 

126 of this subchapter, Note 2 that are 

incorporated in an aircraft that is 

eligible to ship under this section 

continue to require separate 

authorization from DDTC for their 

export, transfer, reexport, or retransfer). 

(7) A license or prior approval from 

DDTC is not required for a transfer, 

retransfer, or reexport of an exported 

defense article or defense service under 

this section, if: 

(i) The transfer of defense articles or 

defense services is made by a member 

of the United States Community to 

Australian Department of Defence 

(ADOD) elements deployed outside the 

Territory of Australia and engaged in an 

authorized end-use (see paragraphs (e) 

and (f) of this section regarding 

authorized end-uses) using ADOD 

transmission channels or the provisions 

of this section (Note: For purposes of 

paragraph (h)(7)(i) through (iv) of this 

section, per Section 9(9) of the Australia 

Implementing Arrangement, ‘‘ADOD 

Transmission channels’’ includes 

electronic transmission of a defense 

article and transmission of a defense 

article by an ADOD contracted carrier or 

freight forwarder that merely transports 

or arranges transport for the defense 

article in this instance.); 

(ii) The transfer of defense articles or 

defense services is made by a member 

of the United States Community to an 

Approved Community member (either 


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Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 21529 

United States or Australian) that is 

operating in direct support of ADOD 

elements deployed outside the Territory 

of Australia and engaged in an 

authorized end-use (see paragraphs (e) 

and (f) of this section regarding 

authorized end-uses) using ADOD 

transmission channels or the provisions 

of this section; 

(iii) The reexport is made by a 

member of the Australian Community to 

ADOD elements deployed outside the 

Territory of Australia engaged in an 

authorized end-use (see paragraphs (e) 

and (f) of this section regarding 

authorized end-uses) using ADOD 

transmission channels or the provisions 

of this section; 

(iv) The reexport is made by a 

member of the Australian Community to 

an Approved Community member 

(either United States or Australian) that 

is operating in direct support of ADOD 

elements deployed outside the Territory 

of Australia engaged in an authorized 

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

this section regarding authorized enduses) using ADOD transmission 

channels or the provisions of this 

section; or 

(v) The defense article or defense 

service will be delivered to the ADOD 

for an authorized end-use (see 

paragraphs (e) and (f) of this section 

regarding authorized end-uses); the 

ADOD may deploy the item as necessary 

when conducting official business 

within or outside the Territory of 

Australia. The item must remain under 

the effective control of the ADOD while 

deployed and access may not be 

provided to unauthorized third parties. 

(8) U.S. persons registered, or 

required to be registered, pursuant to 

part 122 of this subchapter and 

members of the Australian Community 

must immediately notify DDTC of any 

actual or proposed sale, retransfer, or 

reexport of a defense article or defense 

service on the U.S. Munitions List 

originally exported under this 

exemption to any of the countries listed 

in § 126.1 of this subchapter or any 

person acting on behalf of such 

countries, whether within or outside the 

United States. Any person knowing or 

having reason to know of such a 

proposed or actual sale, reexport, or 

retransfer shall submit such information 

in writing to the Office of Defense Trade 

Controls Compliance, Directorate of 

Defense Trade Controls. 

(i) Transitions. (1) Any previous 

export of a defense article under a 

license or other approval of the U.S. 

Department of State remains subject to 

the conditions and limitations of the 

original license or authorization unless 

DDTC has approved in writing a 

transition to this section. 

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

transition from an existing license or 

other approval to the use of the 

provisions of this section, the following 

is required: 

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

written request to DDTC, which 

identifies the defense articles or defense 

services to be transitioned, the existing 

license(s) or other authorizations under 

which the defense articles or defense 

services were originally exported, and 

the Treaty-eligible end-use for which 

the defense articles or defense services 

will be used. Any license(s) filed with 

U.S. Customs and Border Protection 

should remain on file until the exporter 

has received approval from DDTC to 

retire the license(s) and transition to this 

section. When this approval is conveyed 

to U.S. Customs and Border Protection 

by DDTC, the license(s) will be returned 

to DDTC by U.S. Customs and Border 

Protection in accord with existing 

procedures for the return of expired 

licenses in § 123.22(c) of this 

subchapter. 

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

Customs and Border Protection must be 

returned to DDTC with a letter citing 

approval by DDTC to transition to this 

section as the reason for returning the 

license(s). 

(3) If a member of the Australian 

Community desires to transition defense 

articles received under an existing 

license or other approval to the 

processes established under the Treaty, 

the Australian Community member 

must submit a written request to the 

Government of Australia. The 

Government of Australia will submit the 

request to DDTC for review and 

approval. The defense article or defense 

service shall remain subject to the 

conditions and limitations of the 

existing license or other approval until 

the Australian Community member has 

received via the Government of 

Australia the approval from DDTC. 

(4) Authorized exporters identified in 

paragraph (b)(2) of this section who 

have exported a defense article or 

defense service that has subsequently 

been placed on the list of exempted 

items in Supplement No. 1 to part 126 

of this subchapter must review and 

adhere to the requirements in the 

relevant Federal Register notice 

announcing such removal. Once 

removed, the defense article or defense 

service will no longer be subject to this 

section, and such defense article or 

defense service previously exported 

shall remain on the U.S. Munitions List 

and be subject to the requirements of 

this subchapter unless the applicable 

Federal Register notice states otherwise. 

Subsequent reexport or retransfer must 

be made pursuant to § 123.9 of this 

subchapter. 

(5) Any defense article or defense 

service transitioned from a license or 

other approval to treatment under this 

section must be marked in accordance 

with the requirements of paragraph (j) of 

this section. 

(j) Marking of exports. (1) All defense 

articles and defense services exported or 

transitioned pursuant to the Defense 

Trade Cooperation Treaty between the 

United States and Australia and this 

section shall be marked or identified 

prior to movement as follows: 

(i) For classified defense articles and 

defense services the standard marking 

or identification shall read 

‘‘//CLASSIFICATION LEVEL USML// 

REL AUS and USA Treaty 

Community//.’’ For example, for defense 

articles classified SECRET, the marking 

or identification shall be ‘‘//SECRET 

USML//REL AUS and USA Treaty 

Community//.’’ 

(ii) Unclassified defense articles and 

defense services exported under or 

transitioned pursuant to this section 

shall be handled while in Australia as 

‘‘Restricted USML’’ and the standard 

marking or identification shall read 

‘‘//RESTRICTED USML//REL AUS and 

USA Treaty Community//.’’ 

(2) Where U.S.-origin defense articles 

are returned to a member of the United 

States Community identified in 

paragraph (b) of this section, any 

defense articles marked or identified 

pursuant to paragraph (j)(1)(ii) of this 

section as ‘‘//RESTRICTED USML//REL 

AUS and USA Treaty Community//’’ 

will be considered unclassified and the 

marking or identification shall be 

removed; and 

(3) The standard marking and 

identification requirements are as 

follows: 

(i) Defense articles (other than 

technical data) shall be individually 

labeled with the appropriate 

identification detailed in paragraphs 

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

such labeling is impracticable (e.g., 

propellants, chemicals), shall be 

accompanied by documentation (such 

as contracts or invoices) clearly 

associating the defense articles with the 

appropriate markings as detailed in 

paragraphs (j)(1)(i) and (j)(1)(ii) of this 

section; 

(ii) Technical data (including data 

packages, technical papers, manuals, 

presentations, specifications, guides and 

reports), regardless of media or means of 

transmission (physical, oral, or 

electronic), shall be individually labeled 

with the appropriate identification 


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21530 Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 

detailed in paragraphs (j)(1) and (j)(2) of 

this section; or, where such labeling is 

impractical shall be accompanied by 

documentation (such as contracts or 

invoices) or verbal notification clearly 

associating the technical data with the 

appropriate markings as detailed in 

paragraphs (j)(1)(i) and (j)(1)(ii) of this 

section; and 

(4) Defense services shall be 

accompanied by documentation 

(contracts, invoices, shipping bills, or 

bills of lading) clearly labeled with the 

appropriate identification detailed in 

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

section. 

(5) The exporter shall incorporate the 

following statement as an integral part 

of the bill of lading and the invoice 

whenever defense articles are to be 

exported: ‘‘These U.S. Munitions List 

commodities are authorized by the U.S. 

Government under the U.S.-Australia 

Defense Trade Cooperation Treaty for 

export only to Australia for use in 

approved projects, programs or 

operations by members of the Australian 

Community. They may not be 

retransferred or reexported or used 

outside of an approved project, program, 

or operation, either in their original 

form or after being incorporated into 

other end-items, without the prior 

written approval of the U.S. Department 

of State.’’ 

(k) Intermediate consignees. (1) 

Unclassified exports under this section 

may only be handled by: 

(i) U.S. intermediate consignees who 

are: 

(A) Exporters registered with DDTC 

and eligible; 

(B) Licensed customs brokers who are 

subject to background investigation and 

have passed a comprehensive 

examination administered by U.S. 

Customs and Border Protection; or 

(C) Commercial air freight and surface 

shipment carriers, freight forwarders, or 

other parties not exempt from 

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

subchapter, that are identified at the 

time of export as being on the U.S. 

Department of Defense Civil Reserve Air 

Fleet (CRAF) list of approved air 

carriers, a link to which is available on 

the DDTC Web site; or 

(ii) Australian intermediate 

consignees who are: 

(A) Members of the Australian 

Community; or 

(B) Freight forwarders, customs 

brokers, commercial air freight and 

surface shipment carriers, or other 

Australian parties that are identified at 

the time of export as being on the list 

of Authorized Australian Intermediate 

Consignees, which is available on the 

DDTC Web site. 

(2) Classified exports must comply 

with the security requirements of the 

National Industrial Security Program 

Operating Manual (DoD 5220.22–M and 

supplements or successors). 

(l) Records. (1) All exporters 

authorized pursuant to paragraph (b)(2) 

of this section who export defense 

articles or defense services pursuant to 

the Defense Trade Cooperation Treaty 

between the United States and Australia 

and this section shall maintain detailed 

records of their exports, imports, and 

transfers. Exporters shall also maintain 

detailed records of any reexports and 

retransfers approved or otherwise 

authorized by DDTC of defense articles 

or defense services subject to the 

Defense Trade Cooperation Treaty 

between the United States and Australia 

and this section. These records shall be 

maintained for a minimum of five years 

from the date of export, import, transfer, 

reexport, or retransfer and shall be made 

available upon request to DDTC or a 

person designated by DDTC (e.g., the 

Diplomatic Security Service) or U.S. 

Immigration and Customs Enforcement, 

or U.S. Customs and Border Protection. 

Records in an electronic format must be 

maintained using a process or system 

capable of reproducing all records on 

paper. Such records when displayed on 

a viewer, monitor, or reproduced on 

paper, must exhibit a high degree of 

legibility and readability. (For the 

purpose of this section, ‘‘legible’’ and 

‘‘legibility’’ mean the quality of a letter 

or numeral that enables the observer to 

identify it positively and quickly to the 

exclusion of all other letters or 

numerals. ‘‘Readable’’ and ‘‘readability’’ 

means the quality of a group of letters 

or numerals being recognized as 

complete words or numbers.). These 

records shall consist of the following: 

(i) Port of entry/exit; 

(ii) Date of export/import; 

(iii) Method of export/import; 

(iv) Commodity code and description 

of the commodity, including technical 

data; 

(v) Value of export; 

(vi) Reference to this section and 

justification for export under the Treaty; 

(vii) End-user/end-use; 

(viii) Identification of all U.S. and 

foreign parties to the transaction; 

(ix) How the export was marked; 

(x) Security classification of the 

export; 

(xi) All written correspondence with 

the U.S. Government on the export; 

(xii) All information relating to 

political contributions, fees, or 

commissions furnished or obtained, 

offered, solicited, or agreed upon as 

outlined in paragraph (m) of this 

section; 

(xiii) Purchase order or contract; 

(xiv) Technical data actually 

exported; 

(xv) The Internal Transaction Number 

for the Electronic Export Information 

filing in the Automated Export System; 

(xvi) All shipping documentation 

(including, but not limited to the airway 

bill, bill of lading, packing list, delivery 

verification, and invoice); and 

(xvii) Statement of Registration (Form 

DS–2032). 

(2) Filing of export information. All 

exporters of defense articles under the 

Defense Trade Cooperation Treaty 

between the United States and Australia 

and this section must electronically file 

Electronic Export Information (EEI) 

using the Automated Export System 

citing one of the four below referenced 

codes in the appropriate field in the EEI 

for each shipment: 

(i) For exports in support of United 

States and Australian combined military 

or counter-terrorism operations identify 

§ 126.16(e)(1) (the name or an 

appropriate description of the operation 

shall be placed in the appropriate field 

in the EEI, as well); 

(ii) For exports in support of United 

States and Australian cooperative 

security and defense research, 

development, production, and support 

programs identify § 126.16(e)(2) (the 

name or an appropriate description of 

the program shall be placed in the 

appropriate field in the EEI, as well); 

(iii) For exports in support of 

mutually determined specific security 

and defense projects where the 

Government of Australia is the end-user 

identify § 126.16(e)(3) (the name or an 

appropriate description of the project 

shall be placed in the appropriate field 

in the EEI, as well); or 

(iv) For exports that will have a U.S. 

Government end-use identify 

§ 126.16(e)(4) (the U.S. Government 

contract number or solicitation number 

(e.g., ‘‘U.S. Government contract 

number XXXXX’’) shall be placed in the 

appropriate field in the EEI, as well). 

Such exports must meet the required 

export documentation and filing 

guidelines, including for defense 

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

of this subchapter. 

(m) Fees and commissions. All 

exporters authorized pursuant to 

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

with respect to each export, transfer, 

reexport, or retransfer, pursuant to the 

Defense Trade Cooperation Treaty 

between the United States and Australia 

and this section, submit a statement to 

DDTC containing the information 

identified in § 130.10 of this subchapter 

relating to fees, commissions, and 

political contributions on contracts or 


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Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 21531 

other instruments valued in an amount 

of $500,000 or more. 

(n) Violations and enforcement. (1) 

Exports, transfers, reexports, and 

retransfers that do not comply with the 

conditions prescribed in this section 

will constitute violations of the Arms 

Export Control Act and this subchapter, 

and are subject to all relevant criminal, 

civil, and administrative penalties (see 

§ 127.1 of this subchapter), and may also 

be subject to penalty under other 

statutes or regulations. 

(2) U.S. Immigration and Customs 

Enforcement and U.S. Customs and 

Border Protection officers may take 

appropriate action to ensure compliance 

with this section as to the export or the 

attempted export of any defense article 

or technical data, including the 

inspection of loading or unloading of 

any vessel, vehicle, or aircraft. 

(3) U.S. Immigration and Customs 

Enforcement and U.S. Customs and 

Border Protection officers have the 

authority to investigate, detain, or seize 

any export or attempted export of 

defense articles or technical data that 

does not comply with this section or 

that is otherwise unlawful. 

(4) DDTC or a person designated by 

DDTC (e.g., the Diplomatic Security 

Service), U.S. Immigration and Customs 

Enforcement, or U.S. Customs and 

Border Protection may require the 

production of documents and 

information relating to any actual or 

attempted export, transfer, reexport, or 

retransfer pursuant to this section. Any 

foreign person refusing to provide such 

records within a reasonable period of 

time shall be suspended from the 

Australian Community and ineligible to 

receive defense articles or defense 

services pursuant to the exemption 

under this section or otherwise. 

(o) Procedures for legislative 

notification. (1) Exports pursuant to the 

Defense Trade Cooperation Treaty 

between the United States and Australia 

and this section by any person 

identified in paragraph (b)(2) of this 

section shall not take place until 30 

days after DDTC has acknowledged 

receipt of a written notification from the 

exporter notifying the Department of 

State if the export involves one or more 

of the following: 

(i) A contract or other instrument for 

the export of major defense equipment 

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

or for defense articles and defense 

services in the amount of $100,000,000 

or more; 

(ii) A contract for the export of 

firearms controlled under Category I of 

the U.S. Munitions List of the 

International Traffic in Arms 

Regulations in an amount of $1,000,000 

or more; 

(iii) A contract, regardless of value, for 

the manufacturing abroad of any item of 

significant military equipment (see 

§ 120.7 of this subchapter); or 

(iv) An amended contract that meets 

the requirements of paragraphs (o)(1)(i) 

through (o)(1)(iii) of this section. 

(2) The written notification required 

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

indicate the item/model number, 

general item description, U.S. 

Munitions List category, value, and 

quantity of items to be exported 

pursuant to the Defense Trade 

Cooperation Treaty between the United 

States and Australia and this section, 

and shall be accompanied by the 

following additional information: 

(i) The information identified in 

§ 130.10 and § 130.11 of this subchapter; 

(ii) A statement regarding whether 

any offset agreement is final to be 

entered into in connection with the 

export and a description of any such 

offset agreement; 

(iii) A copy of the signed contract; and 

(iv) If the notification is for paragraph 

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

what will happen to the weapons in 

their inventory (for example, whether 

the current inventory will be sold, 

reassigned to another service branch, 

destroyed, etc.). 

(3) The Department of State will 

notify the Congress of exports that meet 

the requirements of paragraph (o)(1) of 

this section. 

■ 7. Supplement No. 1 to part 126 is 

revised to read as follows: 

SUPPLEMENT NO. 1 TO PART 126* 

USML Category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

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

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

I–XXI ................. U.S. origin defense articles and services used for marketing purposes and not 

previously licensed for export in accordance with this subchapter.

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

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

supplement as excluded from the Canadian exemption.

X 

I–XXI ................. Any transaction involving the export of defense articles and services for which 

congressional notification is required in accordance with § 123.15 and § 124.11 

of this subchapter.

X 

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

have not obtained written Milestone B approval from the U.S. Department of 

Defense milestone approval authority, unless such export is pursuant to a written solicitation or contract issued or awarded by the U.S. Department of Defense for an end-use identified in paragraph (e)(1), (e)(2), or (e)(4) of § 126.16 

or § 126.17 of this subchapter and is consistent with other exclusions of this 

supplement.

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

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

equipment.

X 

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

with anti-tamper measures, where such measures are readily identifiable, 

made at originating Government direction.

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

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

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

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

I–XXI ................. Defense articles and services specific to sensor fusion beyond that required for 

display or identification correlation. See Note 3.

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

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


TKELLEY on DSK3SPTVN1PROD with RULES
21532 Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 

SUPPLEMENT NO. 1 TO PART 126*—Continued 

USML Category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

I–XXI ................. Nuclear power generating equipment or propulsion equipment (e.g., nuclear reactors), specifically designed for military use and components therefore, specifically designed for military use. See also § 123.20 of this subchapter..................... .................... X 

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

equipment controlled on the USML. See Note 13.

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

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

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

§ 125.4(c)(4) of this subchapter, engineering analysis as defined in 

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

§ 125.4(c)(6) of this subchapter. See Note 12.

X 

I–XXI ................. Defense services other than those required to prepare a quote or bid proposal in 

response to a written request from a department or agency of the United 

States Federal Government or from a Canadian Federal, Provincial, or Territorial Government; or defense services other than those required to produce, 

design, assemble, maintain or service a defense article for use by a registered 

U.S. company, or a U.S. Federal Government Program, or for end-use in a 

Canadian Federal, Provincial, or Territorial Government Program. See Note 14.

X 

I ......................... Firearms, close assault weapons, and combat shotguns ........................................ X 

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

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

III ....................... Ammunition for firearms, close assault weapons, and combat shotguns listed in 

USML Category I.

X 

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

guns and armament controlled in USML Category II.

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

III(e) .................. Manufacturing know-how related to USML Categories III(d)(1) or III(d)(2) and 

their specially designed components. See Note 5.

X X X 

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

4.

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

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

(MANPADS). See Note 6.

X X X 

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

the MTCR Annex).

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

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

IV ...................... Defense articles and services specific to anti-personnel landmines. See Note 15 X X X 

IV ...................... Defense articles and services specific to cluster munitions. See Note 16 .............. X X X 

IV(i) ................... Software source code related to USML Categories IV(a), IV(b), IV(c), or IV(g). 

See Note 4.

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

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

and their specially designed components. See Note 5.

X X X 

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

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

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

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

produced by reduction of iron oxide with hydrogen; 

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

phosphine oxide), and other MAPO derivatives; 

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

Trinitrophenylmethylnitramine (tetryl) (CAS 479–45–8).

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

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

VI ...................... Defense articles specific to cryogenic equipment, and specially designed components or accessories therefor, specially designed or configured to be installed 

in a vehicle for military ground, marine, airborne or space applications, capable 

of operating while in motion and of producing or maintaining temperatures 

below 103 K (¥170°C).

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

VI ...................... Defense Articles specific to superconductive electrical equipment (rotating machinery and transformers) specially designed or configured to be installed in a 

vehicle for military ground, marine, airborne, or space applications and capable 

of operating while in motion. This, however, does not include direct current hybrid homopolar generators that have single-pole normal metal armatures which 

rotate in a magnetic field produced by superconducting windings, provided 

those windings are the only superconducting component in the generator.

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

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

to acoustic spectrum control and awareness. See Note 10.

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

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

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

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

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

See Note 7.

X X X 


TKELLEY on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 21533 

SUPPLEMENT NO. 1 TO PART 126*—Continued 

USML Category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

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

to USML Category VI(f). See Note 8.

X X X 

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

VII ..................... Defense articles specific to cryogenic equipment, and specially designed components or accessories therefor, specially designed or configured to be installed 

in a vehicle for military ground, marine, airborne or space applications, capable 

of operating while in motion and of producing or maintaining temperatures 

below 103 K (¥170°C).

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

VII ..................... Defense articles specific to superconductive electrical equipment (rotating machinery and transformers) specially designed or configured to be installed in a 

vehicle for military ground, marine, airborne, or space applications and capable 

of operating while in motion. This, however, does not include direct current hybrid homopolar generators that have single-pole normal metal armatures which 

rotate in a magnetic field produced by superconducting windings, provided 

those windings are the only superconducting component in the generator.

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

VII ..................... Armored all wheel drive vehicles fitted with, or designed or modified to be fitted 

with, a plough or flail for the purpose of land mine clearance, other than vehicles specifically designed or modified for military use.

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

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

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

Note 8.

X X X 

VIII .................... Defense articles specific to cryogenic equipment, and specially designed components and accessories therefor, specially designed or configured to be installed 

in a vehicle for military ground, marine, airborne or space applications, capable 

of operating while in motion and of producing or maintaining temperatures 

below 103 K (¥170°C).

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

VIII .................... Defense articles specific to superconductive electrical equipment (rotating machinery and transformers) specially designed or configured to be installed in a 

vehicle for military ground, marine, airborne, or space applications and capable 

of operating while in motion. This, however, does not include direct current hybrid homopolar generators that have single-pole normal metal armatures which 

rotate in a magnetic field produced by superconducting windings, provided 

those windings are the only superconducting component in the generator.

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

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

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

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

VIII(f).

X 

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

VIII(i) ................. Technical data and defense services for gas turbine engine hot sections and digital engine controls related to USML Category VIII(b). See Note 8.X X X 

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

and their specially designed components. See Note 5.

X X X 

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

IX ...................... Training or simulation equipment for Man Portable Air Defense Systems 

(MANPADS). See Note 6.

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

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

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

scenarios.

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

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

specially designed components. See Note 5.

X X X 

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

XI(a) .................. High Frequency and Phased Array Microwave Radar systems, with capabilities 

such as search, acquisition, tracking, moving target indication, and imaging 

radar systems. See Note 17.

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

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

to acoustic spectrum control and awareness. See Note 10.

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

XI(b), XI(c), 

XI(d).

Defense articles and services specific to USML Category XI (b) (e.g., communications security (COMSEC) and TEMPEST)..................... X X 

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

XI(d) .................. Manufacturing know-how related to USML Categories XI(a)(3) or XI(a)(4) and 

their specially designed components. See Note 5.

X X X 

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


TKELLEY on DSK3SPTVN1PROD with RULES
21534 Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 

SUPPLEMENT NO. 1 TO PART 126*—Continued 

USML Category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

XII ..................... Defense articles and services specific to USML Category XII(c) articles, except 

any 1st- and 2nd-generation image intensification tubes and 1st- and 2nd-generation image intensification night sighting equipment. End items in XII(c) and 

related technical data limited to basic operations, maintenance, and training information as authorized under the exemption in § 125.4(b)(5) of this subchapter 

may be exported directly to a Canadian Government entity (i.e., federal, provincial, territorial, or municipal) consistent with § 126.5, other exclusions, and 

the provisions of this subchapter.

X 

XII ..................... Technical data or defense services for night vision equipment beyond basic operations, maintenance, and training data. However, the AS and UK Treaty exemptions apply when such export is pursuant to a written solicitation or contract issued or awarded by the U.S. Department of Defense for an end-use 

identified in paragraph (e)(1), (e)(2), or (e)(4) of § 126.16 or § 126.17 of this 

subchapter and is consistent with other exclusions of this supplement.

X X X 

XII(f) .................. Manufacturing know-how related to USML Category XII(d) and their specially designed components. See Note 5.X X X 

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

See Note 4.

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

XIII(b) ................ Defense articles and services specific to USML Category XIII(b) (Military Information Security Assurance Systems)..................... X X 

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

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

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

11.

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

XIII(f) ................. Structural materials specifically designed, developed, modified, configured or 

adapted for defense articles.

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

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

and materials.

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

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

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

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

described in Note 2.

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

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

Category XIII(b).

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

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

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

agents, biological agents, and associated equipment.

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

XIV(a), XIV(b), 

XIV(d).

XIV(e) ................

XIV(f) .................

Chemical agents listed in USML Category XIV(a), (d) and (e), biological agents 

and biologically derived substances in USML Category XIV(b), and equipment 

listed in USML Category XIV(f) for dissemination of the chemical agents and 

biological agents listed in USML Category XIV(a), (b), (d), and (e).

X 

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

have no other type of payload.

X X X 

XV(b) ................. Defense articles and services specific to ground control stations for spacecraft telemetry, tracking, and control. Defense articles and services are not excluded 

under this entry if they do not control the spacecraft. Receivers for receiving 

satellite transmissions are also not excluded under this entry.

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

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

XV(c) ................. Defense articles controlled in USML Category XV(c) except end items for enduse by the Federal Government of Canada exported directly or indirectly 

through a Canadian-registered person.

X 

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

XV(e) ................. Anti-jam systems with the ability to respond to incoming interference by adaptively reducing antenna gain (nulling) in the direction of the interference.X 

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

a. Aperture (overall dimension of the radiating portions of the antenna) greater than 30 feet; 

b. All sidelobes less than or equal to -35 dB relative to the peak of the main 

beam; or 

c. Designed, modified, or configured to provide coverage area on the surface 

of the earth less than 200 nautical miles in diameter, where ‘‘coverage 

area’’ is defined as that area on the surface of the earth that is illuminated 

by the main beam width of the antenna (which is the angular distance between half power points of the beam).

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


TKELLEY on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 21535 

SUPPLEMENT NO. 1 TO PART 126*—Continued 

USML Category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

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

to and from baseband) equipment.

X 

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

mission orbit injection) at rates greater than 0.1 g.

X 

XV(e) ................. Attitude control and determination systems designed to provide spacecraft pointing determination and control or payload pointing system control better than 

0.02 degrees per axis.

X 

XV(e) ................. All specifically designed or modified systems, components, parts, accessories, attachments, and associated equipment for all USML Category XV(a) items, except when specifically designed or modified for use in commercial communications satellites.X 

XV(e) ................. Defense articles and services specific to spacecraft and ground control station 

systems (only for telemetry, tracking and control as controlled in USML Category XV(b)), subsystems, components, parts, accessories, attachments, and 

associated equipment.

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

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

excluded from the exemptions for USML Category XV.

X X X 

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

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

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

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

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

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

and associated equipment.

X X X 

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

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

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

and services are not eligible for export under either the UK or AS Treaty exemptions except when being released pursuant to a U.S. Department of Defense written request, directive, or contract that provides for the export of the defense article or service. 

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

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

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

transmissivity/reflectivity prediction codes and optimization software. 

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

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

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

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

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

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

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

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

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

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

in other applications. It also includes production and test equipment and components specifically designed or modified for MANPAD systems, 

as well as training equipment specifically designed or modified for MANPAD systems. 

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

Note 8: A complete gas turbine engine with embedded hot section components or digital engine controls is eligible for export or transfer under 

the Treaties. Technical data, other than required for routine external maintenance and operation, related to the hot section or digital engine 

controls, as well as individual hot section components are not eligible for the Treaty exemption whether shipped separately or accompanying 

a complete engine. Examples of gas turbine engine hot section exempted defense article components and technology are combustion chambers/liners; high pressure turbine blades, vanes, disks and related cooled structure; cooled low pressure turbine blades, vanes, disks and related cooled structure; advanced cooled augmenters; and advanced cooled nozzles. Examples of gas turbine engine hot section developmental technologies are Integrated High Performance Turbine Engine Technology (IHPTET), Versatile, Affordable Advanced Turbine Engine 

(VAATE), Ultra-Efficient Engine Technology (UEET). 

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

a. IR countermeasures; 

b. Classified techniques and capabilities; 


TKELLEY on DSK3SPTVN1PROD with RULES
21536 Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 

SUPPLEMENT NO. 1 TO PART 126*—Continued 

USML Category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

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

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

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

d. Providing the capability to reprogram; and 

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

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

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

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

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

(d)). 

Note 11: This exclusion does not apply to the platforms (e.g., vehicles) for which the armored plates are applied. For exclusions related to the 

platforms, reference should be made to the other exclusions in this list, particularly for the category in which the platform is controlled. 

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

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

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

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

Note 12: Defense services or technical data specific to applied research (§ 125.4(c)(3) of this subchapter), design methodology (§ 125.4(c)(4) of 

this subchapter), engineering analysis (§ 125.4(c)(5) of this subchapter), or manufacturing know-how (§ 125.4(c)(6) of this subchapter) are not 

eligible for export under the Canadian exemptions. However, this exclusion does not include defense services or technical data specific to 

build-to-print as defined in § 125.4(c)(1) of this subchapter, build/design-to-specification as defined in § 125.4(c)(2) of this subchapter, or basic 

research as defined in § 125.4(c)(3) of this subchapter, or maintenance (i.e., inspection, testing, calibration or repair, including overhaul, reconditioning and one-to-one replacement of any defective items parts or components, but excluding any modification, enhancement, upgrade 

or other form of alteration or improvement that changes the basic performance of the item) of non-excluded defense articles which may be 

exported subject to other exclusions or terms of the Canadian exemptions. 

Note 13: The term ‘‘libraries’’ (parametric technical databases) means a collection of technical information of a military nature, reference to 

which may enhance the performance of military equipment or systems. 

Note 14: In order to utilize the authorized defense services under the Canadian exemption, the following must be complied with: 

(a) The Canadian contractor and subcontractor must certify, in writing, to the U.S. exporter that the technical data and defense services 

being exported will be used only for an activity identified in Supplement No. 1 to part 126 of this subchapter and in accordance with 

§ 126.5 of this subchapter; and 

(b) A written arrangement between the U.S. exporter and the Canadian recipient must: 

1. Limit delivery of the defense articles being produced directly to an identified manufacturer in the United States registered in accordance with part 122 of this subchapter; a department or agency of the United States Federal Government; a Canadian-registered person authorized in writing to manufacture defense articles by and for the Government of Canada; a Canadian Federal, Provincial, or 

Territorial Government; 

2. Prohibit the disclosure of the technical data to any other contractor or subcontractor who is not a Canadian-registered person; 

3. Provide that any subcontract contain all the limitations of § 126.5 of this subchapter; 

4. Require that the Canadian contractor, including subcontractors, destroy or return to the U.S. exporter in the United States all of the 

technical data exported pursuant to the contract or purchase order upon fulfillment of the contract, unless for use by a Canadian or 

United States Government entity that requires in writing the technical data be maintained. The U.S. exporter must be provided written certification that the technical data is being retained or destroyed; and 

5. Include a clause requiring that all documentation created from U.S. origin technical data contain the statement that, ‘‘This document 

contains technical data, the use of which is restricted by the U.S. Arms Export Control Act. This data has been provided in accordance with, and is subject to, the limitations specified in § 126.5 of the International Traffic in Arms Regulations (ITAR). By accepting 

this data, the consignee agrees to honor the requirements of the ITAR.’’ 

(c) The U.S. exporter must provide the Directorate of Defense Trade Controls a semi-annual report of all their on-going activities authorized 

under § 126.5 of this subchapter. The report shall include the article(s) being produced; the end-user(s); the end item into which the product is to be incorporated; the intended end-use of the product; the name and address of all the Canadian contractors and subcontractors. 

Note 15: This exclusion does not apply to demining equipment in support of the clearance of landmines and unexploded ordnance for humanitarian purposes. As used in this exclusion, ‘‘anti-personnel landmine’’ means any mine placed under, on, or near the ground or other surface 

area, or delivered by artillery, rocket, mortar, or similar means or dropped from an aircraft and which is designed to be detonated or exploded 

by the presence, proximity, or contact of a person; any device or material which is designed, constructed, or adapted to kill or injure and 

which functions unexpectedly when a person disturbs or approaches an apparently harmless object or performs an apparently safe act; any 

manually-emplaced munition or device designed to kill, injure, or damage and which is actuated by remote control or automatically after a 

lapse of time. 

Note 16: The cluster munitions that are subject to this exclusion are set forth below: 

The Convention on Cluster Munitions, signed December 3, 2008, and entered into force on August 1, 2010, defines a ‘‘cluster munition’’ as: 

A conventional munition that is designed to disperse or release explosive submunitions each weighing less than 20 kilograms, and includes 

those explosive submunitions. Under the Convention, a ‘‘cluster munition’’ does not include the following munitions: 

(a) A munition or submunition designed to dispense flares, smoke, pyrotechnics or chaff; or a munition designed exclusively for an air defense role; 

(b) A munition or submunition designed to produce electrical or electronic effects; 

(c) A munition that, in order to avoid indiscriminate area effects and the risks posed by unexploded submunitions, has all of the following 

characteristics: 

1. Each munition contains fewer than ten explosive submunitions; 

2. Each explosive submunition weighs more than four kilograms; 

3. Each explosive submunition is designed to detect and engage a single target object; 


TKELLEY on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 78, No. 70 / Thursday, April 11, 2013 / Rules and Regulations 21537 

SUPPLEMENT NO. 1 TO PART 126*—Continued 

USML Category Exclusion (CA) 

§ 126.5 

(AS) 

§ 126.16 

(UK) 

§ 126.17 

4. Each explosive submunition is equipped with an electronic self-destruction mechanism; and 

5. Each explosive submunition is equipped with an electronic self-deactivating feature. 

Pursuant to U.S. law (Pub. L. 111–117, section 7055(b)), no military assistance shall be furnished for cluster munitions, no defense export license for cluster munitions may be issued, and no cluster munitions or cluster munitions technology shall be sold or transferred, unless: 

(a) The submunitions of the cluster munitions, after arming, do not result in more than 1 percent unexploded ordnance across the range of 

intended operational environments; and 

(b) The agreement applicable to the assistance, transfer or sale of such cluster munitions or cluster munitions technology specifies that the 

cluster munitions will only be used against clearly defined military targets and will not be used where civilians are known to be present or 

in areas normally inhabited by civilians. 

Note 17: The radar systems described are controlled in USML Category XI(a)(3)(i) through (v). As used in this entry, the term ‘‘systems’’ includes equipment, devices, software, assemblies, modules, components, practices, processes, methods, approaches, schema, frameworks, 

and models. 

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

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

Dated: April 5, 2013. 

Rose E. Gottemoeller, 

Acting Under Secretary, Arms Control and 

International Security, Department of State. 

[FR Doc. 2013–08506 Filed 4–10–13; 8:45 am] 

BILLING CODE 4710–25–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2013–0183] 

Drawbridge Operation Regulations; 

Upper Mississippi River, Rock Island, 

IL 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of deviation from 

drawbridge regulation. 

SUMMARY: The Coast Guard has issued a 

temporary deviation from the operating 

schedule that governs the Rock Island 

Railroad and Highway Drawbridge 

across the Upper Mississippi River, mile 

482.9, at Rock Island, Illinois. The 

deviation is necessary to allow the Front 

Street 5K Run to cross the bridge. This 

deviation allows the bridge to be 

maintained in the closed-to-navigation 

position for one hour. 

DATES: This deviation is effective from 

7 p.m. to 8 p.m. on June 15, 2013. 

ADDRESSES: The docket for this 

deviation, [USCG–2013–0183] is 

available at http://www.regulations.gov. 

Type the docket number in the 

‘‘SEARCH’’ box and click ‘‘SEARCH.’’ 

Click on Open Docket Folder on the line 

associated with this deviation. You may 

also visit the Docket Management 

Facility in Room W12–140 on the 

ground floor of the Department of 

Transportation West Building, 1200 

New Jersey Avenue SE., Washington, 

DC 20590, between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this temporary 

deviation, call or email Eric A. 

Washburn, Bridge Administrator, 

Western Rivers, Coast Guard; telephone 

314–269–2378, email 

Eric.Washburn@uscg.mil. If you have 

questions on viewing the docket, call 

Barbara Hairston, Program Manager, 

Docket Operations, telephone 202–366– 

9826. 

SUPPLEMENTARY INFORMATION: The U.S. 

Army Rock Island Arsenal requested a 

temporary deviation for the Rock Island 

Railroad and Highway Drawbridge, 

across the Upper Mississippi River, mile 

482.9, at Rock Island, Illinois to remain 

in the closed-to-navigation position for 

a one hour period from 7 p.m. to 8 p.m., 

June 15, 2013, while a 5K run is held 

between the cities of Davenport, IA and 

Rock Island, IL. The Rock Island 

Railroad and Highway Drawbridge 

currently operates in accordance with 

33 CFR 117.5, which states the general 

requirement that drawbridges shall open 

promptly and fully for the passage of 

vessels when a request to open is given 

in accordance with the subpart. 

There are no alternate routes for 

vessels transiting this section of the 

Upper Mississippi River. 

The Rock Island Railroad and 

Highway Drawbridge, in the closed-tonavigation position, provides a vertical 

clearance of 23.8 feet above normal 

pool. Navigation on the waterway 

consists primarily of commercial tows 

and recreational watercraft. This 

temporary deviation has been 

coordinated with waterway users. No 

objections were received. 

In accordance with 33 CFR 117.35(e), 

the drawbridge must return to its regular 

operating schedule immediately at the 

end of the effective period of this 

temporary deviation. This deviation 

from the operating regulations is 

authorized under 33 CFR 117.35. 

Dated: March 21, 2013. 

Eric A. Washburn, 

Bridge Administrator, Western Rivers. 

[FR Doc. 2013–08404 Filed 4–10–13; 8:45 am] 

BILLING CODE 9110–04–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R09–OAR–2013–0103; FRL–9794–4] 

Revisions to the California State 

Implementation Plan, Santa Barbara 

and San Diego County Air Pollution 

Control Districts 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Direct final rule. 

SUMMARY: EPA is taking direct final 

action to approve revisions to the Santa 

Barbara County Air Pollution Control 

District (SBCAPCD) and San Diego 

County Air Pollution Control District 

(SDCAPCD) portions of the California 

State Implementation Plan (SIP). These 

revisions concern volatile organic 

compound (VOC) emissions from 

surface coating of aerospace vehicles 

and components and from wood 

products coating operations. We are 

approving local rules that regulate these 

emission sources under the Clean Air 

Act as amended in 1990 (CAA or the 

Act). 

DATES: This rule is effective on June 10, 

2013 without further notice, unless EPA 

receives adverse comments by May 13, 

2013. If we receive such comments, we 

will publish a timely withdrawal in the 

Federal Register to notify the public 


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