22740 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

(v) 8E001—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ or ‘‘production’’ of 

equipment specified by 8A001.b, 

8A001.d, or 8A002.o.3.b. 

(6) Category 9 

(i) 9A011. 

(ii) 9D001—‘‘Software’’ specially 

designed or modified for the 

‘‘development’’ of equipment or 

‘‘technology’’ specified by 9A011, 

9E003.a.1, or 9E003.a.3.a. 

(iii) 9D002—‘‘Software’’ specially 

designed or modified for the 

‘‘production’’ of equipment specified by 

9A011. 

(iv) 9E001—‘‘Technology’’ according 

to the General Technology note for the 

‘‘development’’ of equipment or 

‘‘software’’ specified by 9A011 or this 

Supplement’s description of 9D001 or 

9D002. 

(v) 9E002—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘production’’ of equipment specified by 

9A011. 

(vi) 9E003.a.1. 

(vii) 9E003.a.3.a. 

Kevin J. Wolf, 

Assistant Secretary of Commerce for Export 

Administration. 

[FR Doc. 2013–08352 Filed 4–15–13; 8:45 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF STATE 

22 CFR Parts 120, 121, and 123 

RIN 1400–AD37 

[Public Notice: 8269] 

Amendment to the International Traffic 

in Arms Regulations: Initial 

Implementation of Export Control 

Reform 

AGENCY: Department of State. 

ACTION: Final rule. 

SUMMARY: As part of the President’s 

Export Control Reform (ECR) effort, the 

Department of State is amending the 

International Traffic in Arms 

Regulations (ITAR) to revise four U.S 

Munitions List (USML) categories and 

provide new definitions and other 

changes. Additionally, policies and 

procedures regarding the licensing of 

items moving from the export 

jurisdiction of the Department of State 

to the Department of Commerce are 

provided. The revisions contained in 

this rule are part of the Department of 

State’s retrospective plan under E.O. 

13563 completed on August 17, 2011. 

DATES: This rule is effective October 15, 

2013. 

ADDRESSES: The Department of State’s 

full plan can be accessed at http:// 

www.state.gov/documents/organization/ 

181028.pdf. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Candace M. J. Goforth, Director, Office 

of Defense Trade Controls Policy, 

Department of State, telephone (202) 

663–2792; email 

DDTCResponseTeam@state.gov. ATTN: 

Regulatory Change, First ECR Final 

Rule. 

SUPPLEMENTARY INFORMATION: The 

Directorate of Defense Trade Controls 

(DDTC), U.S. Department of State, 

administers the International Traffic in 

Arms Regulations (ITAR) (22 CFR parts 

120–130). The items subject to the 

jurisdiction of the ITAR, i.e., ‘‘defense 

articles’’ and ‘‘defense services,’’ are 

identified on the ITAR’s U.S. Munitions 

List (USML) (22 CFR 121.1). With few 

exceptions, items not subject to the 

export control jurisdiction of the ITAR 

are subject to the jurisdiction of the 

Export Administration Regulations 

(‘‘EAR,’’ 15 CFR parts 730–774, which 

includes the Commerce Control List 

(CCL) in Supplement No. 1 to part 774), 

administered by the Bureau of Industry 

and Security (BIS), U.S. Department of 

Commerce. Both the ITAR and the EAR 

impose license requirements on exports, 

reexports, and retransfers. Items not 

subject to the ITAR or to the exclusive 

licensing jurisdiction of any other set of 

regulations are subject to the EAR. 

All references to the USML in this 

rule are to the list of defense articles 

controlled for the purpose of export or 

temporary import pursuant to the ITAR, 

and not to the defense articles on the 

USML that are controlled by the Bureau 

of Alcohol, Tobacco, Firearms and 

Explosives (ATF) for the purpose of 

permanent import under its regulations. 

See 27 CFR part 447. Pursuant to section 

38(a)(1) of the Arms Export Control Act 

(AECA), all defense articles controlled 

for export or import are part of the 

USML under the AECA. For the sake of 

clarity, the list of defense articles 

controlled by ATF for the purpose of 

permanent import is the U.S. Munitions 

Import List (USMIL). The transfer of 

defense articles from the ITAR’s USML 

to the EAR’s CCL for the purpose of 

export control does not affect the list of 

defense articles controlled on the 

USMIL under the AECA for the purpose 

of permanent import. 

Export Control Reform Update 

Pursuant to the President’s Export 

Control Reform (ECR) initiative, the 

Department has published proposed 

revisions to twelve USML categories to 

create a more positive control list and 

eliminate where possible ‘‘catch all’’ 

controls. The Department, along with 

the Departments of Commerce and 

Defense, reviewed the public comments 

the Department received on the 

proposed rules and has, where 

appropriate, revised the rules. A 

discussion of the comments is included 

later on in this notice. The Department 

continues to review the remaining 

USML categories and will publish them 

as proposed rules in the coming months. 

The Department intends to publish 

final rules implementing the revised 

USML categories and related ITAR 

amendments periodically, beginning 

with this rule. 

Pursuant to ECR, the Department of 

Commerce, at the same time, has been 

publishing revisions to the EAR, 

including various revisions to the CCL. 

Revision of the USML and CCL are 

coordinated so there is uninterrupted 

regulatory coverage for items moving 

from the jurisdiction of the Department 

of State to that of the Department of 

Commerce. For the Department of 

Commerce’s companion to this rule, 

please see, ‘‘Revisions to the Export 

Administration Regulations: Initial 

Implementation of Export Control 

Reform,’’ elsewhere in this edition of 

the Federal Register. 

Changes in This Rule 

The following changes are made to 

the ITAR with this final rule: (i) 

Revision of USML Categories VIII 

(Aircraft and Related Articles), XVII 

(Classified Articles, Technical Data, and 

Defense Services Not Otherwise 

Enumerated), and XXI (Articles, 

Technical Data, and Defense Services 

Not Otherwise Enumerated); (ii) 

addition of USML Category XIX (Gas 

Turbines Engines and Associated 

Equipment); (iii) establishment of 

definitions for the terms ‘‘specially 

designed’’ and ‘‘subject to the EAR’’; (iv) 

creation of a new licensing procedure 

for the export of items subject to the 

EAR that are to be exported with 

defense articles; and (v) related 

amendments to other ITAR sections. 

Revision of USML Category VIII 

This final rule revises USML Category 

VIII, covering aircraft and related 

articles, to establish a clearer line 

between the USML and the CCL 

regarding controls over these articles. 

The revised USML Category VIII 

narrows the types of aircraft and related 

articles controlled on the USML to only 

those that warrant control under the 

requirements of the AECA. Changes 

include moving similar articles 

controlled in multiple categories into a 

single category, including moving gas 

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turbine engines for articles controlled in 

this category to the newly established 

USML Category XIX, described 

elsewhere in this notice, and CCL 

Export Control Classification Numbers 

(ECCNs) in the 9Y619 format, in a rule 

published separately by the Department 

of Commerce (see elsewhere in this 

issue of the Federal Register.) In 

addition, articles common to the Missile 

Technology Control Regime (MTCR) 

Annex and articles in this category are 

identified with the parenthetical ‘‘(MT)’’ 

at the end of each section containing 

such articles. 

The revised USML Category VIII does 

not contain controls on all generic parts, 

components, accessories, and 

attachments specifically designed or 

modified for a defense article, regardless 

of their significance to maintaining a 

military advantage for the United States. 

Rather, it contains, with one principal 

exception, a positive list of specific 

types of parts, components, accessories, 

and attachments that continue to 

warrant control on the USML. The 

exception pertains to parts, components, 

accessories, and attachments ‘‘specially 

designed’’ (see definition of this term in 

this rule) for the following U.S.-origin 

aircraft that have low observable 

features or characteristics: the B–1B, B– 

2, F–15SE, F/A–18 E/F/G, F–22, F–35, 

and future variants thereof; or the F–117 

or U.S. Government technology 

demonstrators. All other parts, 

components, accessories, and 

attachments specially designed for a 

military aircraft and related articles are 

subject to the new ‘‘600 series’’ controls 

in Category 9 of the CCL. 

This rule also revises ITAR § 121.3 to 

more clearly define ‘‘aircraft’’ for 

purposes of the revised USML Category 

VIII. 

This revision of USML Category VIII 

was first published as a proposed rule 

(RIN 1400–AC96) on November 7, 2011, 

for public comment (see 76 FR 68694). 

The comment period ended December 

22, 2011. Thirty-one parties filed 

comments recommending changes, 

which were reviewed and considered by 

the Department and other agencies. The 

Department’s evaluation of the written 

comments and recommendations 

follows. 

The Department received numerous 

proposals for alternative definitions for 

aircraft and alternative phrasing for 

other sections of USML Category VIII 

and ITAR § 121.3. The Department has 

reviewed these recommendations with 

the objective of realizing the intent of 

the President’s ECR Initiative. In certain 

instances, the regulation was amended 

or otherwise edited for fidelity to ECR 

objectives and for clarity. 

Two commenting parties stated that 

referencing the ITAR § 121.3 definition 

of ‘‘aircraft’’ in USML Category VIII(a) 

while not doing so for USML Category 

VIII(h) is inconsistent and potentially 

confusing to the exporter. The 

Department notes that paragraph (h) is 

to control parts, components, 

accessories, attachments, and associated 

equipment regardless of whether the 

aircraft is controlled on the USML or the 

CCL. Therefore, a reference to ITAR 

§ 121.3 in paragraph (h) would be 

inappropriate. 

Two commenting parties 

recommended removing references to 

specific aircraft in USML Category 

VIII(h), as referencing specific aircraft 

would control parts and components 

common to other unlisted aircraft. The 

Department believes proper application 

of the definition for specially designed 

will avoid this occurrence, and therefore 

did not accept this recommendation. 

Three commenting parties 

recommended removing the sections 

providing USML coverage for parts, 

components, etc., manufactured or 

developed using classified information, 

with the rationale that use of this type 

of information in these stages of 

production should not automatically 

designate these articles as defense 

articles. Upon review, the Department 

revised this section, but for different 

reasons. The Department removed the 

section regarding the use of classified 

information during manufacture 

because this information would not be 

readily available to exporters and other 

parties. The Department, however, did 

not remove the section regarding 

development of such articles using 

classified information because such 

information would be available to 

developers. Additionally, prudence 

dictates that the development stage of 

production using classified information 

be USML controlled, without prejudice 

to the eventual jurisdictional 

designation of the article once it enters 

production. 

To address the concerns of two 

commenting parties that including 

‘‘strategic airlift aircraft’’ in the 

definition of ‘‘aircraft’’ in ITAR § 121.3 

would control on the USML aircraft 

more appropriately controlled on the 

CCL, the Department has added the 

phrase ‘‘with a roll-on/roll-off ramp’’ to 

further focus the control on military 

critical capabilities. 

One commenting party recommended 

enumerating ‘‘tilt rotor aircraft’’ in 

USML Category VIII(a) and providing 

corresponding descriptive and defining 

text in ITAR § 121.3. The Department 

notes that this type aircraft is effectively 

covered in USML Category VIII(a)(11), 

and therefore did not amend the 

regulation to enumerate tilt rotor 

aircraft. 

One commenting party noted that not 

all items in Wassenaar Munitions List 

Category 10, which covers aircraft and 

related items, seem to be specifically 

enumerated in the new regulations. The 

Department has reviewed this matter 

and concludes that all of Wassenaar 

Munitions List Category 10 is captured 

on the USML and the CCL. The 

Department notes, however, that there 

will not be a one-for-one accounting of 

all entries between the Wassenaar 

Munitions List and the USML and CCL, 

as the lists are constructed differently. 

One commenting party recommended 

the term ‘‘armed,’’ as found in ITAR 

§ 121.3(a)(3), be defined, to avoid 

ambiguity and regulatory overreach. 

Examples provided of articles 

potentially captured, but which the 

Department surely would not have 

intended to be captured, are aircraft 

‘‘armed’’ with water cannons or 

paintball guns. While the term ‘‘armed’’ 

is gainfully employed in many contexts, 

it is the Department’s opinion that in 

the context of defense trade, ‘‘armed’’ 

can be understood in its plain English 

meaning. One dictionary consulted by 

the Department defined ‘‘armed’’ as 

‘‘furnished with weapons.’’ Another 

dictionary provides ‘‘having weapons’’ 

as the primary meaning. Yet another 

defined it as ‘‘equipped with weapons.’’ 

The Department notes the consensus on 

the meaning of ‘‘armed,’’ and has no 

quibble or concern with it. 

One commenting party recommended 

the word ‘‘equipped’’ be removed from 

USML Category VIII(a)(11), and the 

terms ‘‘incorporated’’ and ‘‘integrated’’ 

be used in its place, on the grounds that 

‘‘equipped’’ is ‘‘overly expansive’’ and 

inconsistent with terminology used 

elsewhere in the rule. The Department 

accepts this comment and has replaced 

‘‘equipped’’ with ‘‘incorporates,’’ the 

term used in ITAR § 121.3(a)(6). 

One commenting party recommended 

that Optionally Piloted Vehicles (OPV) 

without avionics and software installed 

that would allow the aircraft to be flown 

unmanned should be considered 

manned for purposes of the USML. The 

Department has clarified the control for 

OPVs at USML Category VIII(a)(13) and 

ITAR § 121.3(a)(7). 

One commenting party voiced 

concern over the potential ‘‘chilling 

effect’’ of controlling on the USML the 

products of Department of Defensefunded fundamental research. USML 

Category VIII(f) provides for the control 

of developmental aircraft and specially 

designed parts, components, 

accessories, and attachments therefor 

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developed under a contract with the 

Department of Defense. For the final 

rule, the Department has added a note 

to USML Category VIII(f) providing for 

developmental aircraft to be ‘‘subject to 

the EAR’’ (see definition of this term in 

this rule) if a commodity jurisdiction 

request leads to such a determination or 

if the relevant Department of Defense 

contract stipulates the aircraft is being 

developed for both civil and military 

applications. The Department draws a 

distinction between developmental 

aircraft developed under a contract 

funded by the Department of Defense 

and the conduct of fundamental 

research. ‘‘Fundamental research’’ is 

defined at ITAR § 120.11(a)(8). Pursuant 

to that section, research is not 

‘‘fundamental research’’ if the results 

are restricted for proprietary reasons or 

specific U.S. Government access and 

dissemination controls, the researchers 

accept other restrictions on publication 

of information resulting from the 

activity, or the research is funded by the 

U.S. Government and specific access 

and dissemination controls protecting 

information resulting from the research 

are applicable. Fundamental research— 

i.e., research without the 

aforementioned restrictions—is in the 

public domain, even if funded by the 

U.S. Government. A few other 

commenting parties voiced concerns 

with the scope of this control; the 

Department intends the answer 

provided here to address those 

concerns. 

The Department did not accept the 

recommendation of three commenting 

parties to retain the note to USML 

Category VIII(h) (the ‘‘17(c)’’ note), 

which discussed jurisdiction of certain 

aircraft parts and components, because 

application of the specially designed 

definition will serve that purpose for the 

exporter. 

One commenting party recommended 

that wing folding systems not be 

controlled on the USML, as such a 

system has been developed (but not 

sold) for commercial use and therefore 

is not inherently a military item. 

Similarly, one commenting party 

recommended the removal of short takeoff, vertical landing (STOVL) technology 

from the USML, as it has commercial 

benefits. The Department notes these 

systems and technology have military 

application, but no demonstrated 

commercial application. Therefore, the 

Department did not accept these 

recommendations. 

In response to several comments 

regarding the scope of the control in 

USML Category VIII(h)(16), covering 

computer systems, the Department has 

revised it to specifically capture such 

systems that perform a purely military 

function (e.g., fire control computers) or 

are specially designed for aircraft 

controlled in USML Category VIII or 

ECCN 9A610. 

Three commenting parties 

recommended the defining criteria of 

‘‘aircraft’’ in ITAR § 121.3 be included 

in USML Category VIII. The Department 

notes Category VIII and ITAR § 121.3 

serve different purposes, with the 

former providing the control parameters 

and the latter providing the definition of 

the main articles controlled in Category 

VIII. Therefore, the Department did not 

accept this recommendation. 

One commenting party, noting the 

developing market for civil application 

of unmanned aerial vehicles (UAVs), 

recommended additional specifications 

for their control in USML Category VIII. 

A second commenting party 

recommended criteria be provided to 

establish a ‘‘bright line’’ between UAVs 

controlled on the USML and those 

controlled on the CCL. Two other 

commenting parties recommended 

control on the CCL of UAVs specially 

designed for a military application but 

which do not have a specially designed 

capability controlled on the USML. 

While a few commenting parties did 

respond to the Department’s request for 

input on the provision of criteria for the 

establishment of export jurisdiction that 

would not result in the removal from 

the USML of UAVs that should be 

covered by it, none of them was 

acceptable. In addition, it is the 

Department’s assessment that the 

technical capabilities of UAVs specially 

designed for a military application are 

such as to render ineffective any means 

of differentiating between critical and 

any non-critical military systems. 

Therefore, the Department is publishing 

the UAV controls as first proposed. The 

CCL’s ECCN 9A012 specifies those 

UAVs for export under the Department 

of Commerce’s jurisdiction; in 

conjunction with USML Categories 

VIII(a)(5) and (a)(6), the Department 

believes the controls for UAVs meet the 

needs of U.S. foreign policy and 

national security. 

The Department accepted the 

recommendation of three commenting 

parties to revise USML Category 

VIII(h)(6) to exclude coverage of 

external stores support systems that do 

not have a military application by 

adding the words ‘‘for ordnance or 

weapons.’’ 

The Department accepted the 

recommendation of ten commenting 

parties regarding the broad control of 

lithium-ion batteries in USML Category 

VIII(h)(13) and has limited coverage to 

such batteries that provide greater than 

28 VDC nominal. 

The Department accepted the 

recommendation of one commenting 

party to provide a definition for the term 

‘‘equipment.’’ A proposed definition has 

been published by the Department (see 

‘‘Amendment to the International 

Traffic in Arms Regulations: Revision of 

U.S. Munitions List Category XI and 

Definition for ‘Equipment,’ ’’ 77 FR 

70958). 

The Department does not believe the 

issuance of a patent for thrust vectoring 

on commercial aircraft is sufficient 

justification to change the regulation 

regarding non-surface-based flight 

control systems and effectors. Therefore, 

the Department did not accept this 

recommendation. 

Several commenting parties noted 

changes to USML Category VIII entailing 

the addition of articles previously 

covered in other USML categories. 

Generally, the main intent of these 

changes is to group articles in a sensible 

manner. So, for example, the 

Department believes it is sensible to 

control as aircraft components computer 

systems specially designed for aircraft. 

One commenting party requested 

clarification of the jurisdictional scope 

of the term ‘‘jet powered’’ as used in 

USML Category VIII(a)(3). The 

Department has replaced that term with 

‘‘turbofan- or turbojet-powered’’ to more 

precisely describe the intent of the 

control. 

One commenting party recommended 

retention of the following sentence in 

USML Category VIII(d): ‘‘Fixed landbased arresting gear is not included in 

this paragraph.’’ As this is the intent of 

the regulation, and including the 

sentence would provide clarity to the 

control, the Department accepted this 

recommendation. 

One commenting party recommended 

extending the definition of ‘‘classified’’ 

in USML Category VIII(h) to include 

designations made by ‘‘other collective 

defense organization[s].’’ The 

Department has revised the definition to 

include such designations made by 

‘‘international organizations.’’ 

One commenting party recommended 

the Department allow for public 

comment on a revised USML Category 

VIII again once a final definition of 

specially designed is published because 

analysis of and concerns with USML 

Category VIII were premised on the 

definition of specially designed as 

provided in the proposed rule. Three 

other commenting parties expressed 

similar concerns. The Department 

disagrees with this argument. The extent 

to which articles are controlled on the 

USML pursuant to application of the 

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specially designed definition is 

reflective of the definition itself, and not 

the controls as provided in USML 

Category VIII, or any of the other USML 

categories. Therefore, the Department 

did not accept this recommendation. 

Because of staggered implementation 

of revised USML categories and the 

inter-category movement of some 

articles, the Department has found it 

necessary to establish temporary USML 

entries to avoid lack of appropriate 

controls during the transition. For 

example, although reserved in the 

proposed rule, USML Category VIII(e) 

has been removed from reserved status 

in the final rule. The articles controlled 

therein are to be covered in revised 

USML Category XII. Similarly, USML 

Categories VIII(h)(21) through (h)(26) 

have been added. 

As described in greater detail in the 

section of this notice addressing the 

transition plan, a new ‘‘(x) paragraph’’ 

has been added to USML Category VIII, 

allowing ITAR licensing for 

commodities, software, and technical 

data subject to the EAR provided those 

commodities, software, and technical 

data are to be used in or with defense 

articles controlled in USML Category 

VIII and are described in the purchase 

documentation submitted with the 

application. This same construct will be 

incorporated in other USML categories 

(to include new USML Category XIX in 

this rule). 

In response to public comments on 

the transition plan, the Department has 

added a note to USML Category VIII to 

address USML controlled systems, 

parts, components, accessories, and 

attachments incorporated into 600 series 

items. 

Establishment of USML Category XIX 

for Gas Turbine Engines and Associated 

Equipment 

This rule establishes USML Category 

XIX to cover gas turbine engines and 

associated equipment formerly covered 

in USML Categories IV, VI, VII, and VIII. 

The intent of this change is to make 

clear that gas turbine engines for cruise 

missiles, surface vessels, vehicles, and 

aircraft meeting certain objective 

parameters are controlled on the USML. 

Articles common to the Missile 

Technology Control Regime (MTCR) 

Annex and articles in this category are 

identified with the parenthetical ‘‘(MT)’’ 

at the end of each section containing 

such articles. 

Because of the staggered 

implementation of revised USML 

categories, it would seem that USML 

Category XIX controls gas turbine 

engines still covered in USML 

Categories IV, VI, and VII. However, the 

new Category XIX does in fact 

supersede the controls under USML 

Categories IV, VI, and VII. 

The establishment of USML Category 

XIX (RIN 1400–AC98) was first 

published as a proposed rule on 

December 6, 2011, for public comment 

(see 76 FR 76097). The comment period 

ended January 20, 2012. Ten parties 

filed comments recommending changes, 

which were reviewed and considered by 

the Department and other agencies. The 

Department’s evaluation of the written 

comments and recommendations 

follows. 

Several commenting parties 

recommended including the term 

‘‘military’’ in the category heading to 

avoid controlling on the ITAR engines 

developed for civil application. The 

controls are intended to capture articles 

on the basis of their capabilities, and not 

their intended end-use per se. 

Therefore, the Department did not 

accept this recommendation. The 

Department has, however, in response 

to recommendations in public 

comments, revised the category, in 

particular paragraphs (a) and (b), to 

better focus the control on those engines 

of military significance. 

Two commenting parties stated the 

creation of a separate category for 

engines, rather than controlling them 

under the categories that cover systems 

in which they are placed, adds 

unnecessary complexity to the 

regulations and would be costly for 

industry to implement in its licensing 

and compliance programs. The 

Department understands that revision of 

the categories controlling gas turbine 

engines, as well as the larger ECR effort 

to revise the USML and the CCL, would 

require industry to update its licensing 

and compliance programs, but believes 

the eventual benefits to national 

security of the new ITAR and EAR 

controls will justify any burdens 

imposed on industry to transition to the 

new structure. 

Three commenting parties 

recommended removal of the phrase, 

‘‘whether in development, production, 

or inventory,’’ from USML Categories 

XIX(a), (b), and (c), as it may have the 

unintended effect of not controlling 

certain engines (e.g., those engines 

temporarily removed from active 

service). The Department accepted this 

recommendation, and has removed the 

phrase from the final rule. 

One commenting party noted 

potential confusion between USML 

Categories IV and XIX regarding engine 

controls, and the need to update ITAR 

§ 121.16 to account for changes in those 

controls. In line with a major goal of 

ECR, the Department is revising the 

categories to make clearer which articles 

they control. USML Category IV will, to 

use examples provided by the 

commenting party, control ramjets and 

scramjets. In addition, the Department 

will discontinue identifying those 

articles common to the USML and the 

Missile Technology Control Regime 

Annex in ITAR § 121.16, and instead 

identify those articles with the 

parenthetical ‘‘(MT)’’ at the end of each 

USML category section containing such 

articles. 

One commenting party requested 

clarification of the controls for printed 

circuit boards designed for USML 

articles, and their related designs or 

digital data. Printed circuit boards 

‘‘specially designed’’ (see definition of 

this term in this rule) for articles in 

USML Category XIX, as well as for 

articles in all other USML categories, are 

controlled in USML Category XI and 

their related designs or digital data are 

controlled as technical data, per ITAR 

§ 120.10. However, the Department does 

not consider printed circuit boards 

themselves to be technical data. The 

Department notes that printed circuit 

boards are to be enumerated in the 

revised USML Category XI. In the 

meantime, as noted elsewhere in this 

notice, USML Category VIII and 

Category XIX contain a temporary 

enumeration of printed circuit boards. 

Noting that the phrase ‘‘or capable of’’ 

introduces into the regulation a criterion 

not descriptive of the actual article, four 

commenting parties recommended its 

removal. The Department has accepted 

this recommendation, and has revised 

those sections accordingly, replacing 

‘‘capable of’’ with ‘‘specially designed.’’ 

Five commenting parties disagreed 

with a number of the parameters used 

in USML Categories XIX(a) and (b) to 

distinguish military from commercial 

capabilities, saying commercial articles 

routinely or increasingly have those 

performance criteria. The Department 

has reviewed the criteria and has 

revised some to better describe articles 

requiring control on the USML. Changes 

include increasing the altitude 

threshold for the high altitude 

extraction parameter from 40,000 feet to 

50,000 feet and removing cooled 

pressure turbines from the control. In 

addition, proposed paragraph (a)(6), for 

thrust reversers, has been revised and 

moved to USML Category VIII as 

paragraph (h)(19). 

Three commenting parties 

recommended revising USML Category 

XIX(d) to describe the technologies of 

concern and not list specific engine 

families in the regulation because, over 

time, the listing would capture obsolete 

engines or not include engines that 

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22744 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

merit control as defense articles. The 

Department deems it appropriate to 

enumerate these engines, as they are 

used specifically in USML-controlled 

platforms or share critical technologies 

with such engines. The Department will 

amend the regulations as necessary to 

keep the category updated, and 

therefore did not accept this 

recommendation. 

One commenting party recommended 

the inclusion of a definition for digital 

engine controls, the subject of USML 

Category XIX(e). The Department has 

included a note to paragraph (e) 

describing ‘‘digital electronic control 

systems for gas turbine engines.’’ 

Six commenting parties noted that 

proposed USML Category XIX(f)(2) 

would expand the description of ‘‘hot 

section’’ components, and thereby 

expand controls on these articles. The 

Department has revised paragraph (f)(2) 

for the final rule, and added new 

paragraph (f)(3) and (f)(4) without 

Significant Military Equipment 

designations, to address this matter. 

Four commenting parties 

recommended removal of engine 

monitoring systems from USML 

Category XIX(f) because such systems 

used for commercial engines would also 

be covered. The Department believes 

appropriate application of the specially 

designed definition would preclude this 

occurrence, and therefore did not accept 

this recommendation. The Department 

believes there are engine monitoring 

systems specially designed for USML 

Category XIX engines and therefore did 

not accept one commenting party’s 

recommendation to control all such 

systems on the CCL. And, regarding the 

comment by one party that undefined 

terms in that section would lead to 

overregulation, the Department believes 

appropriate application of the specially 

designed definition will preclude this 

occurrence. 

Pursuant to a recommendation from 

one commenting party, the Department 

corrected its omission of an asterisk 

denoting the designation of Significant 

Military Equipment for classified 

articles controlled in USML Category 

XIX(f)(6). 

Two commenting parties 

recommended revising USML Category 

XIX(g) to control only technical data 

and defense services directly related to 

the ‘‘military functionality’’ of a defense 

article, for otherwise data and services 

common to commercial engines would 

be captured. The Department believes 

the ITAR definitions for ‘‘technical 

data’’ and ‘‘defense service’’ would 

preclude this occurrence, and therefore 

did not accept these recommendations. 

Definition for ‘‘Specially Designed’’ 

Although one of the goals of the ECR 

initiative is to describe USML controls 

without using design intent criteria, 

certain sections in the revised categories 

nonetheless use the term ‘‘specially 

designed.’’ It is, therefore, necessary for 

the Department to define the term. 

The specially designed definition 

provided in this notice has a twoparagraph structure. Paragraph (a) 

identifies which commodities and 

software are specially designed’’ and 

paragraph (b) identifies which parts, 

components, accessories, attachments, 

and software are excluded from 

specially designed. 

Paragraph (a) begins with the phrase, 

‘‘Except for commodities described in 

(b), a commodity is ‘specially designed’ 

if it [is within the scope of any one of 

two subparagraphs discussed below].’’ It 

is the beginning of the ‘‘catch’’ in the 

‘‘catch and release’’ structure of the 

definition. For USML sections 

containing the term ‘‘specially 

designed,’’ a defense article is 

‘‘caught’’—it is ‘‘specially designed’’—if 

any of the two elements of paragraph (a) 

applies and none of the elements of 

paragraph (b) applies. 

Paragraph (a)(1) is limited by the 

phrase, ‘‘if, as a result of development.’’ 

The definition also includes a note to 

paragraph (b)(3) that contains the 

following definition of ‘‘development’’ 

for purposes of the specially designed 

definition: ‘‘ ‘Development’ is related to 

all stages prior to serial production, 

such as: design, design research, design 

analyses, design concepts, assembly and 

testing of prototypes, pilot production 

schemes, design data, process of 

transforming design data into a product, 

configuration design, integration design, 

layouts.’’ Therefore, a defense article is 

caught by the threshold requirement of 

paragraph (a) only if someone is 

engaged in any of these ‘‘development’’ 

activities with respect to the article at 

issue. Thus one may ask the following 

to determine if a defense article is 

within the scope of paragraph (a)(1): 

Does the commodity or software, as a 

result of development, have properties 

peculiarly responsible for achieving or 

exceeding the controlled performance 

levels, characteristics, or functions 

described in the relevant USML 

paragraph? If the answer is ‘‘no,’’ then 

the commodity or software is not 

specially designed and further analysis 

pursuant to paragraph (b) is not 

necessary. If the answer is ‘‘yes,’’ then 

the exporter or reexporter must 

determine whether any one of the five 

exclusions in paragraph (b) of the 

definition applies. If any one of the five 

paragraph (b) exclusions applies, then 

the commodity or software is not 

specially designed. If none does, then 

the commodity or software is specially 

designed. 

Paragraph (a)(1) captures a 

commodity or software if it, as a result 

of ‘‘development,’’ ‘‘has properties 

peculiarly responsible for achieving or 

exceeding the controlled performance 

levels, characteristics, or functions 

described in the relevant U.S. Munitions 

List paragraph.’’ So, even if a 

commodity or software is capable of use 

with a defense article, it is not captured 

by paragraph (a)(1) unless someone did 

something during the commodity’s 

development for it to achieve or exceed 

the performance levels, characteristics, 

or functions described in a referenced 

USML paragraph. 

Paragraph (a)(2) has been revised to 

incorporate the proposed paragraph 

(a)(3) as follows: ‘‘(2) is a part (see 

§ 121.8(d) of this subchapter), 

component (see § 121.8(b) of this 

subchapter), accessory (see § 121.8(c) of 

this subchapter), attachment (see 

§ 121.8(c) of this subchapter), or 

software for use in or with a defense 

article.’’ The Department realizes this 

element is similar to paragraph (a)(1), 

but believes it needs to be listed 

separately because not all descriptions 

of parts and components on the USML 

include performance levels, 

characteristics, or functions as a basis 

for control. Thus one may ask the 

following to determine if a defense 

article is within the scope of paragraph 

(a)(2): Is the part, component, accessory, 

attachment, or software for use in or 

with a defense article? If the answer is 

‘‘no,’’ then the commodity or software is 

not specially designed and further 

analysis pursuant to paragraph (b) is not 

necessary. If the answer is ‘‘yes,’’ then 

the exporter or reexporter must 

determine whether any one of the five 

exclusions in paragraph (b) of the 

definition applies. If any one does 

apply, then the commodity or software 

is not specially designed. If none does, 

then the commodity or software is 

specially designed. 

Paragraph (a)(2) is broad enough to 

capture all the defense articles that 

would be potentially specially designed, 

but in practice would capture a larger 

set of parts, components, accessories, 

attachments, and software than is 

intended. Paragraph (b) works to release 

from inclusion under specially designed 

specific and non-specific parts, 

components, accessories, attachments, 

and software consistent with existing 

U.S. export control and international 

commitments. Specifically, any part, 

component, accessory, attachment, or 

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software described in an exclusion 

paragraph under (b)(1), (b)(2), (b)(3), 

(b)(4), or (b)(5), would not be controlled 

by a USML ‘‘catch-all’’ paragraph. In 

this way, paragraphs (a) and (b) are 

inextricably linked and are intended to 

work together to identify the parts, 

components, accessories, attachments, 

and software that need to be treated as 

specially designed for purposes of the 

‘‘catch-all’’ provisions on the USML. 

Paragraph (b) codifies the principle in 

ITAR § 120.3 that, in general, a 

commodity should not be ITAR 

controlled if it has a predominant civil 

application or has performance 

equivalent (defined by form, fit, and 

function) to a commodity used for civil 

applications. If such a commodity 

warrants control under the ITAR 

because it provides the United States 

with a critical military or intelligence 

advantage or for another reason, then it 

is or should be enumerated on the 

USML. 

Paragraph (a) creates more objective 

tests for what defense articles are 

specially designed based on the criteria 

identified in (a)(1) or (a)(2). Paragraph 

(b) creates more objective tests for 

which parts, components, accessories, 

attachments, and software are excluded 

from specially designed under the 

exclusion criteria identified in (b)(1), 

(b)(2), (b)(3), (b)(4) or (b)(5). The 

objective criteria identified in paragraph 

(a), working with the objective 

exclusion criteria identified in 

paragraph (b), allow this specially 

designed definition to achieve the nine 

objectives for the definition (see 

‘‘Proposed Revisions to the Export 

Administration Regulations (EAR): 

Control of Items the President 

Determines No Longer Warrant Control 

under the United States Munitions List 

(USML),’’ 76 FR 41958). 

The definition for specially designed 

was first published as a proposed rule 

(RIN 1400–AD22) on June 19, 2012, for 

public comment (see 77 FR 36428). The 

comment period ended August 3, 2012. 

Twenty-eight parties filed comments 

during the established comment period 

recommending changes. The 

Department’s evaluation of the written 

comments and recommendations 

follows. 

Many of the commenting parties 

submitted recommendations and 

proposals for the specific wording of the 

specially designed definition, and 

provided analysis of the text of the 

definition provided by the Department. 

The Department carefully reviewed 

these submissions with the objective of 

clarifying and improving the definition. 

In many instances, it has accepted these 

recommendations, as is reflected in the 

definition in this rule. Selections of 

these comments are discussed in the 

following paragraphs. 

One commenting party expressed 

concern with the concurrent existence 

of the terms ‘‘specifically designed’’ 

with ‘‘specially designed’’ in the USML, 

given that the revision of the USML will 

occur in stages. The Department notes 

that where the concept is to be retained, 

the term ‘‘specifically designed’’ will be 

replaced with ‘‘specially designed’’ 

throughout the USML and ITAR, and 

the Department understands that in the 

process of revising the USML, 

application of both concepts will not be 

ideal. 

Six commenting parties expressed 

concern about the relation of specially 

designed with the current text in ITAR 

§ 120.3. The commenting parties 

recommended revising ITAR § 120.3 to 

be consistent with the definition of 

specially designed and the revision of 

the USML into a positive list. The 

Department accepted this 

recommendation and provides a revised 

ITAR § 120.3 as part of this final rule. 

Two commenting parties 

recommended the text and definitions 

regarding ‘‘development’’ be correlated 

to the Defense Department’s acquisition 

milestones in terms of technology 

development phases. The commenting 

parties noted this will improve the 

clarity for defense contractors already 

familiar with Defense Department 

terminology. The Department did not 

accept this recommendation as 

‘‘development’’ is already defined in the 

multilateral regimes and the EAR. 

One commenting party requested 

confirmation of the intention to remove 

any perceived obligation on the part of 

a manufacturer to monitor post-release 

sales, and to confirm that a first sale to 

or predominant use by military endusers will not confer specially designed 

status on an article. The Department 

confirms this intention and has revised 

ITAR § 120.3 accordingly. In addition, 

the Department believes that 

appropriate application of the specially 

designed definition will not capture 

those articles that do not warrant USML 

control. 

One commenting party recommended 

ITAR § 120.41(a) should specify what 

type of commodity (i.e., part, 

component, or end-item) should be 

considered specially designed if it is ‘‘in 

development.’’ The Department 

accepted this recommendation and 

revised ITAR § 120.41(a) accordingly. 

One commenting party recommended 

reconsideration of limiting the term 

‘‘development’’ (and thus ‘‘specially 

designed’’) to the phase prior to serial 

production, noting a manufacturer 

could theoretically design a lesser 

capability item and then institute a postproduction design change to avoid an 

article being defined as specially 

designed. This recommendation was 

accepted in part. The revised Note 3 to 

ITAR § 120.41(b)(3) addresses this 

concern. 

Two commenting parties requested 

clarification of the Department’s policy 

objective for software and the 

applicability of specially designed to it. 

The Department confirms the control of 

software is directly related to its 

applicability to defense articles on the 

USML, and the Department has added 

the term to the definition. In addition, 

the Department confirms that only 

materials specifically enumerated on the 

USML are controlled by the ITAR. 

One commenting party recommended 

the definition of ‘‘commodity’’ should 

include software as well as hardware, to 

parallel the Department of Commerce’s 

definition. The Department did not 

accept this recommendation. Software is 

distinct from the definition of 

commodity in the EAR and is controlled 

separately. 

One commenting party recommended 

the adoption of specially designed 

should be made concurrently with the 

transition policy to avoid jurisdictional 

ambiguity. The Department accepted 

this recommendation. The transition 

guidance is provided in this final rule. 

One commenting party recommended 

a final extended comment period for 

specially designed should be permitted 

following publication of all ‘‘critical 

elements’’ of ECR. The Department did 

not accept this recommendation. The 

regulations, to include the definition of 

specially designed, can be amended if 

necessary. 

Four commenting parties requested 

confirmation that application of 

specially designed will not reverse 

existing commodity jurisdiction (CJ) 

determinations and recommended 

revision of the definition to so stipulate. 

The Department accepted this 

recommendation and has revised ITAR 

§ 120.41(b)(1) accordingly. 

One commenting party recommended 

adding the words ‘‘tooling and test and 

support equipment’’ to both Note 2 and 

the lead-in sentence to paragraph (b) to 

exclude simple tooling and equipment 

(e.g., wrenches, winches, dollies). The 

Department did not accept this 

recommendation. Tooling and test and 

support equipment are only controlled 

if specifically enumerated on the USML. 

The B group of the new 600 series (e.g., 

ECCN 9B610) on the CCL should be 

reviewed for potential controls on 

tooling and test and support equipment. 

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In response to the query of one 

commenting party, the Department 

confirms that, as is noted in Note 1 to 

the definition, if a commodity is 

enumerated on the USML it is ITARcontrolled even if it described on the 

CCL. 

One commenting party requested 

there be a mechanism by which 

industry can provide input for 

determining whether an item is 

specially designed without the need to 

notify Congress or change the definition 

itself. The Department concurs that 

industry may submit a request in order 

to clarify the applicability of specially 

designed. The appropriate mechanism 

would be a CJ request through which 

the Department will determine the 

proper notification requirement. 

One commenting party was concerned 

with the potential inadvertent 

application of specially designed to 

aircraft engines not covered by USML 

Category XIX. The Department confirms 

that the export jurisdiction of a part 

specially designed for an engine is 

determined by the export jurisdiction of 

the engine for which it is specially 

designed, and not the jurisdictional 

status of the aircraft on which it is 

installed. 

One commenting party expressed 

concern that the proposed definition 

will require exporters and original 

equipment manufacturers to engage in 

extensive analyses of the jurisdictional 

and classification status of their parts 

and components, which could result in 

different exporters coming to different 

determinations of the same items and a 

significant increase the number of CJ 

determination requests due to the 

unintended consequences of 

misclassification of items. The 

Department acknowledges this concern, 

but believes the long-term benefits of 

reforming the regulations will outweigh 

the short-term burdens of adjustment 

that inevitably accompany such reforms. 

One commenting party recommended 

that after promulgation of the specially 

designed definition, the agencies 

continue to provide advisories that 

include examples of end-items, parts, 

components, accessories, and 

attachments that meet or do not meet 

the standards of the definition. The 

Department accepts this 

recommendation, and will provide 

further guidance and conduct outreach 

efforts as necessary. 

One commenting party noted the 

application of the ‘‘as a result of 

‘development’ ’’ standard in the 

proposed definition is limited by the 

principle that it will only apply to 

enumerated items. For this reason, it is 

essential for Government and the 

private sector to understand how the ‘‘as 

a result of development’’ standard 

works when applied to the 600 series in 

subparagraph ‘‘.y.’’ The Department 

agrees with this comment and revised 

ITAR § 120.41(a) to apply the ‘‘as a 

result of development’’ standard to 

ITAR § 120.41(a)(1) and not the broader 

‘‘catch-all’’ in ITAR § 120.41(a)(2). 

One commenting party discussed its 

interpretation of the impact the 

specially designed definition will have 

on the control of forgings, castings, 

machined bodies, etc., destined for 

aircraft or other defense articles. ITAR 

§ 121.10 continues to apply in 

determining the appropriate controls for 

these articles. 

One commenting party expressed 

concern that ITAR § 120.41(a) (and its 

‘‘as a result of ‘development’ ’’ standard) 

and ITAR § 120.41(b)(3) of the 

definition, when taken together, appear 

to mean that only commercial off the 

shelf (‘‘COTS’’) items with no changes 

in form or fit are released from the 

definition of specially designed. The 

Department revised the paragraphs in 

question to address this concern 

because the Department did not intend 

such a conclusion to be an implication 

of the definition. 

Two commenting parties 

recommended the Department use the 

phrasing provided in the note to 

paragraph (b) that identifies a ‘‘catch 

all’’ paragraph in all instances of their 

occurrence in USML categories. The 

Department accepts this 

recommendation, and notes that not all 

USML categories will contain ‘‘catchall’’ control paragraphs. 

One commenting party noted the 

definition still reflects an underlying 

focus on design intent rather than a 

focus solely on national security 

interests and the military functionality 

of the item. The commenting party also 

noted regulatory interpretation and 

compliance would be facilitated if the 

definition moved further from the 

concept of design intent towards an 

analysis of the unique characteristics of 

the item that imbue it with its military 

functionality. As noted in the opening 

of this section, the Department 

acknowledges that it has not completely 

ended the practice of determining 

export jurisdiction based on the item’s 

design intent rather than its 

performance levels, characteristics, or 

functions, but it has endeavored to keep 

it to a minimum. 

One commenting party requested 

clarification on the order of review for 

USML jurisdiction determination using 

existing criteria and the specially 

designed definition. The Department 

accepted this recommendation and has 

moved the guidance in the preamble to 

the specially designed definition 

provided in the proposed rule to a 

revised ITAR § 121.1, which is included 

in this final rule. This revised section 

also provides guidance on the 

composition of a category and order of 

review. 

Three commenting parties 

recommended the word ‘‘commodity’’ 

in ITAR § 120.41(a)(1) refer to the same 

universe of items as the word ‘‘item’’ in 

the same section of the Department of 

Commerce’s definition for specially 

designed. The commenting parties 

further requested the term ‘‘commodity’’ 

explicitly include technology, technical 

data and assistance, and software. The 

Department accepted this 

recommendation in part by including 

the term ‘‘software’’ in ITAR § 120.41(a). 

One commenting party recommended 

the addition of a note to ITAR 

§ 120.41(a)(1) that would include 

examples of when an item is not 

covered. The Department did not accept 

this recommendation. The Department 

believes the revised, more ‘‘positive,’’ 

USML categories is the appropriate 

starting point for determining whether 

an article is covered by the USML. The 

provisions of examples in the negative 

would negate the purpose of a positive 

list. 

One commenting party recommended 

that changes in dimension, material, 

coatings, or lubricants to an otherwise 

excluded item (aircraft fasteners in 

particular) that do not result in lowobservable capability should remain 

excluded. The Department did not 

accept this comment. The revisions to 

ITAR § 120.41(b)(2) and (b)(3) should 

provide the necessary clarification. 

The Department has revised ITAR 

§ 120.41(b) and added an additional 

note to ITAR § 120.41(b)(3) in response 

to several commenting parties’ 

recommendations to more specifically 

address the issue of minor modifications 

to a commodity. The concerns centered 

on changes to ‘‘fit’’ and ‘‘form’’ that 

have no bearing on changes to the 

‘‘function’’ of a commodity. The 

Department added the term 

‘‘equivalent’’ to ITAR § 120.41(b)(3) to 

account for a commodity whose form 

was modified solely for fit purposes. 

One commenting party noted that 

limiting ITAR § 120.41(b)(2) to single, 

unassembled parts will result in 

continued ITAR licensing of minor 

components that do not meet the 

requirements for exclusion. The 

commenting party recommended 

including in ITAR § 120.41(b)(2) ‘‘small 

assemblies and components of a type 

commonly used in multiple types of 

commodities.’’ The Department did not 

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accept this recommendation because the 

proposed change would make the 

‘‘release’’ too broad and would create 

the potential for multiple interpretations 

of the same set of facts. 

One commenting party recommended 

removing as a criterion in ITAR 

§ 120.41(b)(3) the issue of whether a 

part, component, accessory, or 

attachment is in production. The 

Department did not accept this 

recommendation. Whether a commodity 

is in development or production is an 

important factor. The inclusion of this 

criterion is meant to implement the 

purpose of ITAR § 120.3 but without 

imposing the ‘‘predominant’’ standard, 

which is difficult or impossible for 

many exporters to know or to stay 

current with as military and civil 

markets change over the lifecycle of a 

product. 

One commenting party recommended 

clarification of the terms ‘‘form’’ and 

‘‘fit.’’ The Department accepted this 

recommendation, and includes a revised 

ITAR § 120.4 addressing this matter in 

this final rule. 

The Department did not accept the 

recommendation of one commenting 

party to remove the term ‘‘serial 

production’’ in Note 1 to ITAR 

§ 120.41(b)(3) because this term is not 

expressly used in that paragraph. The 

definition of ‘‘production’’ in Note 1 is 

the EAR definition, which includes the 

concept of ‘‘serial production.’’ 

‘‘Production’’ is not defined in the ITAR 

therefore the Department is providing 

the EAR definition for the purposes of 

consistency between the USML and CCL 

versions of the term specially designed. 

One commenting party recommended 

the definitions for the terms 

‘‘production’’ and ‘‘development’’ in 

Notes 1 and 2 to ITAR § 120.41(b)(3) 

apply to the entire ITAR and not just to 

the specially designed definition. The 

Department did not accept this 

recommendation. While the adoption of 

the specially designed definition 

necessitated the defining of the terms 

‘‘production’’ and ‘‘development,’’ the 

adoption of the definitions for those 

terms outside of the specially designed 

definition was beyond the scope of this 

review. 

One commenting party stated that 

discriminating between the 

classifications of ‘‘production’’ and 

‘‘development’’ for commodities in 

‘‘production’’ that are undergoing 

‘‘development’’ was unclear, as 

described in Note 3 to ITAR 

§ 120.41(b)(3), and requested 

clarification. The Department has 

accepted this recommendation and has 

revised Note 3. 

One commenting party requested 

clarification that the intent of ITAR 

§ 120.41(b)(3) is to provide the same 

function as the note to USML Category 

VIII (the ‘‘Section 17(c) rule’’) and that 

its scope extends beyond USML 

Category VIII. The Department confirms 

this understanding. 

One commenting party requested 

revision of ITAR § 120.41(b)(4) to 

specifically provide that once an item or 

commodity is determined to be 

excluded from a ‘‘catch-all’’ provision, 

the determination remains effective after 

the item or commodity has entered the 

marketplace. Although the Department 

agrees there is no need to revisit a 

determination made pursuant to ITAR 

§ 120.41(b)(4), it did not revise the 

regulations in this regard. The 

Department believes such a revision is 

unnecessary. 

One commenting party noted the 

difficulty an exporter may have in 

applying ITAR § 120.41(b)(4) because he 

may not have knowledge of what the 

original developer’s market expectations 

were at the time of development. The 

Department notes exporters would 

generally use ITAR § 120.41(b)(3) to 

determine the applicability of specially 

designed in such cases because its 

application does not depend upon 

knowledge of a developer’s intent. 

Developers and manufacturers would 

generally be the parties to use ITAR 

§ 120.41(b)(4), although (b)(4) would not 

preclude a developer or manufacturer 

from informing other exporters of the 

applicability of the (b)(4) exclusion. In 

addition, the Department added a new 

note to ITAR § 120.41(b)(4) and (b)(5) 

regarding ‘‘knowledge’’ to address the 

underlying concern of the comment. 

One commenting party expressed 

concern with the effect the specially 

designed definition would have on the 

control over fundamental research. In 

particular, the concern was with ITAR 

§ 120.41(b)(5), as the commenting party 

believes it is not reasonable for there to 

be development of a part, component, 

accessory, or attachment with no 

reasonable expectation of use for a 

particular application. The definition of 

‘‘fundamental research’’ contained in 

ITAR § 120.11 is not changed by the 

definition of specially designed. The 

Department has revised ITAR 

§ 120.41(b)(5) to more accurately 

describe the intent of that exclusion. In 

particular, it has replaced the phrase 

‘‘reasonable expectation’’ with 

‘‘knowledge’’ and added a definition of 

‘‘knowledge’’ to a new note to ITAR 

§ 120.41(b)(4) and (b)(5). This addresses 

the instance when research or other 

knowledge indicates a potential market 

for an un-enumerated mechanical 

function or electronic function but does 

not indicate whether the future buyers 

will use the function for a civil 

application, a military application, or 

both, which was the concern of another 

commenting party. 

The Department accepted one 

commenting party’s recommendation to 

remove the note to ITAR § 120.41(b)(5), 

agreeing with the observation that it was 

redundant. 

Transition Plan 

With the intention of establishing 

certain necessary licensing procedures 

stemming from ECR implementation 

and mitigating the impact of the changes 

involved in the revision of the USML 

and the CCL on U.S. license holders and 

the defense export industry, the 

Department implements the following 

‘‘Transition Plan,’’ which will describe 

(1) timelines for implementation of 

changes, (2) certain temporary licensing 

procedures for items transitioning from 

the USML to the CCL, and (3) certain 

permanent licensing procedures 

pertaining to the export of any item 

‘‘subject to the EAR’’ (see definition of 

this term in this rule) to be used in or 

with defense articles controlled on the 

USML. 

The Department notes the following 

main points regarding licensing 

procedure during the transition, and 

thereafter: 

• There will be a 180-day transition 

period between the publication of the 

final rule for each revised USML 

category and the effective date of the 

transition to the CCL for items that will 

undergo a change in export jurisdiction. 

This period will allow U.S. license 

holders time to review their current 

authorizations and prepare for the 

transition to the new ECCNs. 

• A license or authorization issued by 

the Department will be effective for up 

to two years from the effective date of 

the revised USML category if all the 

items listed on the license or 

authorization have transitioned to the 

export jurisdiction of the Department of 

Commerce. 

• A license or authorization issued by 

the Department will be valid until its 

expiration if some of the items listed on 

the license or authorization have 

transitioned to the export jurisdiction of 

the Department of Commerce. 

• USML categories will have a new 

(x) paragraph, the purpose of which is 

to allow for ITAR licensing for 

commodities, software, and technical 

data subject to the EAR, provided those 

commodities, software, and technical 

data are to be used in or with defense 

articles controlled on the USML and are 

described in the purchase 

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documentation submitted with the 

application. 

The Department first presented for 

public comment its plan for licensing 

policies and procedures regarding items 

moving from the export jurisdiction of 

the Department of State to the 

Department of Commerce on June 21, 

2012 (see ‘‘Export Control Reform 

Transition Plan,’’ 77 FR 37346). The 

comment period ended August 6, 2012. 

Seventeen parties filed comments 

during the established comment period 

recommending changes. The 

Department’s evaluation of the written 

comments and recommendations 

follows. 

Eight commenting parties stated that 

the 45-day transition period was 

insufficient time to accomplish all that 

was necessary to adapt company 

systems to the changes and 

recommended longer transition periods 

of varying lengths. The Department has 

accepted this recommendation and has 

changed the transition period to 180 

days. 

In response to the recommendation of 

several commenting parties for shared 

licensing authority for items changing 

export jurisdiction, the Department’s 

transition guidance will provide that, 

for 180 days following the effective date 

of a revised USML category, licenses 

will be accepted by both DDTC and BIS 

for items moving from the USML to the 

CCL. In addition, DDTC authorizations 

that pertain wholly to transitioned items 

will expire two years after the effective 

date of the relevant final rule moving 

the items to the CCL. In addition, 

licenses that have some items remaining 

on the USML will be valid for all items 

covered by the license at the time it was 

issued until it expires. Applicants 

should refer to the Department of 

Commerce’s companion to this rule (see 

elsewhere in this issue of the Federal 

Register) for information related to BIS 

licenses adjudicated during the 

transition period. 

Two commenting parties stated that 

dual jurisdiction/licensing will create a 

heavy compliance burden for USML 

end-item manufacturers with 

international supply chains, as each of 

the export authorities has different 

compliance obligations. It will also 

create confusion as foreign parties may 

be party to a USML technical assistance 

agreement and receive items for the 

project under a Department of 

Commerce license or Strategic Trade 

Authorization (STA) license exception. 

The Department acknowledges this 

complexity, but notes that ECR will not 

create a new context in this regard, as 

current projects routinely require both 

defense articles and commercial items 

for completion. Dual compliance 

requirements already exist and the 

Department believes the benefits 

derived from changes implemented 

under ECR outweigh these concerns. 

Two commenting parties 

recommended that license applications 

and agreements submitted after 

publication date of the final rule 

revising the relevant USML category, 

but before the implementation date, 

should be processed as prepublication 

applications and agreements: valid for 

two years, or until amended or returned. 

The Department accepted this 

recommendation and revised the 

guidance accordingly. 

One commenting party requested 

clarification of whether sending to a 

foreign supplier technical data on a 

USML end-item to allow installation of 

a 600 series component is both a USML 

technical data export and CCL 

installation technology export, creating 

dual licensing for most foreign sourced 

commodities. If the technical data is 

directly related to a defense article, the 

technical data will be ITAR controlled. 

If the technical data is for the 

production, development, etc., of a 600 

series or CCL item to be installed in a 

defense article, the technical data 

remains EAR controlled. The 

jurisdiction of the technical data follows 

the jurisdiction of the related 

commodity or item. 

Five commenting parties 

recommended that amendments to 

licenses and authorizations should be 

allowed during the transition period. 

The Department accepted this 

recommendation and revised the 

guidance accordingly. 

Three commenting parties 

recommended allowing temporary 

import and export authorizations to last 

until expired or returned. As the items 

temporarily imported or exported are to 

return to their point of origin, per the 

requirements of the authorizations, 

there is no national security risk in 

maintaining the original authorizations. 

The Department accepted this 

recommendation and revised the 

guidance accordingly. 

One commenting party noted that 

currently approved agreements covering 

dual/third country national employees 

of the foreign party will be affected by 

the need to obtain deemed export 

licenses, and that two years may not be 

sufficient time to fulfill this 

requirement. The Department notes that 

as long as the currently approved 

agreement has been amended to provide 

authority for the transitioned items in 

accordance with the guidance in this 

notice, the dual/third country national 

authority would still apply. 

Five commenting parties 

recommended that existing reexport/ 

retransfer authorizations should be 

grandfathered without expiration. 

Foreign parties who purchased 

transitioned items under authorizations 

that allowed perpetual foreign sales 

should not have to reauthorize those 

sales and the U.S. Government should 

not re-review the authorizations. The 

Department accepted this 

recommendation and revised the 

guidance accordingly. The three 

scenarios for which this applies are: 1) 

reexport/retransfer authority granted 

through a program status DSP–5; 2) the 

sales territory of a manufacturing 

license or warehouse and distribution 

agreement if the agreement continues to 

be the export authority; and 3) any 

stand-alone reexport/retransfer 

authorization received pursuant to ITAR 

§ 123.9(c). 

Two commenting parties 

recommended requiring U.S. exporters 

to identify ECCNs and prior USML 

classifications on export documentation 

for two years following the effective 

date of transitioned items and mandate 

prompt responses to requests for ECCNs 

for legacy items. The Department 

accepted this recommendation in part. 

The Department has revised ITAR 

§ 123.9(b) to require identification of the 

license or other approval to the foreign 

party. 

Seven commenting parties 

recommended that previously issued 

commodity jurisdiction (CJ) 

determinations designating items as not 

subject to the export jurisdiction of the 

Department remain valid. This will 

preserve EAR99 status for items 

previously so designated and would 

relieve exporters who have obtained CJ 

determinations from having to reclassify 

items. The Department accepted this 

recommendation and clarified the 

guidance accordingly. 

One commenting party inquired what 

Automated Export System (AES) entry 

would be required for items that have 

transitioned to control under the CCL 

but are to be exported under a legacy 

DDTC authorization. The AES entry will 

remain the same as is required now for 

a DDTC authorization. 

In response to one commenting 

party’s inquiry on what effect the 

transition will have on recordkeeping 

requirements, the Department notes 

records must be maintained for five 

years following the last transaction, 

regardless of jurisdiction. 

After consideration of the comments 

received, and in furtherance of the 

principles of ECR, the Department has 

decided to institute a new permanent 

licensing procedure that will allow 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22749 

ITAR licensing for commodities, 

software, and technical data subject to 

the EAR, provided those commodities, 

software, and technical data are to be 

used in or with defense articles 

controlled on the USML and are 

described in the purchase 

documentation submitted with the 

application. This procedure is to be 

effected by the exporter by use of ‘‘(x) 

paragraph,’’ added to USML Categories 

VIII and XIX in this rule, and to be 

added to other USML categories as they 

are revised. The Department will begin 

accepting licenses citing a (x) paragraph 

entry once the 180-day transition period 

is effective for the related USML 

category. The President has provided for 

this delegation of authority from the 

Secretary of Commerce to the Secretary 

of State, and Executive Order 13222 has 

been amended accordingly (see 78 FR 

16129). The Department has revised 

various sections of, and added certain 

sections to, the ITAR to accommodate 

this delegation of authority: ITAR 

§ 120.5 to add a new paragraph (b) to 

address the delegation; the addition of 

ITAR § 120.42 to provide a definition of 

‘‘subject to the EAR’’; ITAR § 123.1 to 

provide guidance on how to use the (x) 

paragraph; and ITAR § 123.9(b) to 

identify additional requirements when 

using the (x) paragraph. The Department 

of Commerce will have the authority to 

review ‘‘pre-positioned’’ license 

applications during the 180-day 

transition period for items transitioning 

to EAR jurisdiction. This means the 

Department of Commerce will be able to 

review and process license applications 

for transitioning items. However, these 

Department of Commerce licenses 

would not be issued until on or after the 

effective date of the relevant final rule 

moving items from the USML to the 

CCL. Further guidance is provided in 

the Department of Commerce’s 

companion to this rule (see ‘‘Revision to 

the Export Administration Regulations: 

Initial Implementation of Export Control 

Reform,’’ elsewhere in this edition of 

the Federal Register). 

Transition Plan 

Transition Period 

There will be a 180-day transition 

period between the publication of the 

final rule for each revised U.S. 

Munitions List (USML) category and the 

effective date of the transition to the 

Commerce Control List (CCL) for items 

that will undergo a change in export 

jurisdiction. During this period, license 

applications will be accepted by both 

DDTC and BIS for items moving from 

the USML to the CCL, but BIS will not 

issue approved licenses for such items 

until on or after the applicable effective 

date. 

DSP–5 Licenses 

Licenses for items transitioning to the 

CCL that are issued prior to the effective 

date of the final rule for each revised 

USML category, and that do not include 

any items that will remain on the 

USML, will remain valid until expired, 

returned by the license holder, or for a 

period of two years from the effective 

date of the final rule, whichever occurs 

first, unless otherwise revoked, 

suspended, or terminated. Licenses 

containing both transitioning and nontransitioning items (mixed 

authorizations) will remain valid until 

expired or returned by the license 

holder, unless otherwise revoked, 

suspended, or terminated. Any 

limitation, proviso, or other requirement 

imposed on the DDTC authorization 

will remain in effect if the DDTC 

authorization is relied upon for export. 

License amendment requests (DSP–6) 

received by DDTC during the transition 

period amending licenses affected by 

the transition will be adjudicated on a 

case-by-case basis up until the effective 

date of the relevant rule. 

DSP–61 and DSP–73 Licenses 

All temporary licenses that are issued 

in the period prior to the effective date 

of the final rule for each revised USML 

category will remain valid until expired 

or returned by the license holder, unless 

otherwise revoked, suspended, or 

terminated. Any limitation, proviso, or 

other requirement imposed on the 

DDTC authorization will remain in 

effect if the DDTC authorization is relied 

upon for export. License amendment 

requests (DSP–62 and DSP–74) received 

by DDTC during the transition period 

amending licenses affected by the 

transition will be adjudicated on a caseby-case basis until the effective date of 

the relevant rule. 

License Applications Received After the 

Transition Period 

All license applications, including 

amendments, received after the effective 

date for items that have transitioned to 

the CCL that are not identified in a (x) 

paragraph entry will be Returned 

Without Action with instructions to 

contact the Department of Commerce. 

Technical Assistance Agreements, 

Manufacturing License Agreements, 

Warehouse and Distribution 

Agreements, and Related Reporting 

Requirements 

Agreements and amendments 

containing both USML and CCL items 

will be adjudicated up to the effective 

date of the relevant final rule. 

Agreements containing transitioning 

and non-transitioning items that are 

issued prior to the effective date of the 

relevant final rule will remain valid 

until expired, unless they require an 

amendment, or for a period of two years 

from the effective date of the relevant 

final rule, whichever occurs first, unless 

otherwise revoked, suspended, or 

terminated. In order for an agreement to 

remain valid beyond two years, an 

amendment must be submitted to 

authorize the CCL items using the new 

(x) paragraph from the relevant USML 

category. Any activity conducted under 

an agreement will remain subject to all 

limitations, provisos, and other 

requirements stipulated in the 

agreement. 

Agreements containing solely 

transitioning items that are issued prior 

to the effective date of the final rule will 

remain valid for a period of two years 

from the effective date of the relevant 

USML category, unless revoked, 

suspended, or terminated. After the two 

year period ends, any on-going activity 

must be conducted under the 

appropriate Department of Commerce 

authorization. Agreements and 

agreement amendments solely for items 

moving to the CCL which are received 

after the effective date will be Returned 

Without Action with instructions to 

contact the Department of Commerce. 

All reporting requirements for 

Manufacturing License Agreements 

under ITAR § 124.9(a)(6) and 

Warehouse and Distribution Agreements 

under ITAR § 124.14(c)(6) must be 

complied with and such reports must be 

submitted to the Department of State 

while the agreement is relied upon as an 

export authorization by the exporter. 

ITAR Licensing of Items Subject to the 

EAR 

USML categories will have a new (x) 

paragraph, to be a permanent feature of 

ITAR licensing. The purpose of this 

procedure is to allow for ITAR licensing 

for commodities, software, and 

technical data subject to the Export 

Administration Regulations (EAR) 

provided those commodities, software, 

and technical data are to be used in or 

with defense articles controlled on the 

USML and are described in the 

purchase documentation submitted with 

the application. 

Commodity Jurisdiction Determinations 

Previously issued commodity 

jurisdiction (CJ) determinations for 

items deemed to be subject to the EAR 

shall remain valid. Previously issued CJ 

determinations for items deemed to be 

USML but that are subsequently 

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22750 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

transitioning to the CCL pursuant to a 

published final rule will be superseded 

by the newly revised lists. Exporters are 

encouraged to review each revised 

USML category along with its 

companion CCL category to determine 

whether the items subject to a CJ have 

transitioned to the jurisdiction of the 

Department of Commerce. These CJs are 

limited to the specific commodity 

identified in the final determination 

letter. Consistent with the 

recordkeeping requirements of the ITAR 

and the EAR, licensees and foreign 

persons subject to licenses must 

maintain records reflecting their 

assessments of the proper regulatory 

jurisdiction over their items. License 

holders unable to ascertain the proper 

jurisdiction of their items may request a 

CJ determination from DDTC through 

the established procedure. 

License holders who are certain their 

items have transitioned to the CCL are 

encouraged to review the appropriate 

Export Control Classification Number 

(ECCN) to determine the classification 

of their item. License holders who are 

unsure of the proper ECCN designation 

may submit a Commodity Classification 

Automated Tracking System request 

(CCATS) to the Department of 

Commerce. See 15 CFR 748.3. 

Parties making a classification selfdetermination or submitting a CCATS 

are advised that only a CJ determination 

provides an official and exclusive 

decision on whether or not an item is a 

defense article on the USML. 

Reexport/Retransfer of USML Items 

That Have Transitioned to the CCL 

Following the effective date of 

transition, foreign persons (i.e., endusers, foreign consignees, and foreign 

intermediate consignees) who receive, 

via a Department of State authorization, 

an item that they are certain has 

transitioned to the CCL (e.g., confirmed 

in writing by manufacturer or supplier), 

should treat the item as such and submit 

requests for post-transition reexports or 

retransfers to the Department of 

Commerce, as may be required by the 

EAR. 

If reexport or retransfer was 

previously authorized under a DDTC 

authorization, then that reexport or 

retransfer authority remains valid. The 

three scenarios for which this applies 

are: 1) reexport/retransfer authority 

granted through a program status DSP– 

5; 2) the sales/distribution territory of a 

manufacturing license or warehouse and 

distribution agreement if the agreement 

continues to provide the export 

authority; or 3) any stand-alone 

reexport/retransfer authorization 

received pursuant to ITAR § 123.9. 

Foreign persons or U.S. persons 

abroad that have USML items in their 

inventory at the effective date of 

transition should review both the USML 

and the CCL to determine the proper 

jurisdiction. If the item is controlled by 

the Department of Commerce, any 

reexport or retransfer must comply with 

the requirements of the EAR. If doubt 

exists on jurisdiction of the items, the 

foreign person should contact the 

original exporter or manufacturer. 

Regulatory Oversight Responsibilities 

For those items transitioning from the 

USML to the CCL, the Department of 

Commerce will exercise regulatory 

oversight, as of the effective date, for the 

purposes of licensing and enforcement 

of exports from the United States where 

no Department of State authorization is 

being used. The Department of State 

will continue to exercise regulatory 

oversight concerning all Department of 

State licenses, agreements, and other 

authorizations, including those where 

exporters, temporary importers, 

manufacturers, and brokers continue to 

use previously issued Department of 

State licenses and agreements, until the 

activity is covered by a Department of 

Commerce authorization. 

License holders may decide to apply 

for and use Department of Commerce 

authorizations for export of the newly 

transitioned CCL items rather than 

continue to use previously issued 

Department of State authorizations. In 

such cases, license holders must return 

the Department of State licenses in 

accordance with ITAR § 123.22 after 

they have obtained the required 

Department of Commerce 

authorizations. 

Violations and Voluntary Disclosures of 

Possible Violations 

Exporters, temporary importers, 

manufacturers, and brokers are 

cautioned to closely monitor ITAR and 

EAR compliance concerning 

Department of State licenses and 

agreements for items transitioning from 

the USML to the CCL. 

On the effective date of each rule that 

adds an item to the CCL that was 

previously subject to the ITAR, that item 

will be subject to the EAR. 

Authorizations issued by DDTC before 

the effective date may continue to be 

used as described above by exporters, 

temporary importers, manufacturers, 

and brokers. The violation of a 

previously issued DDTC authorization 

(including any condition of a DDTC 

authorization) that is continued to be 

used as described above is a violation of 

the ITAR. 

With respect to a transitioned item, 

persons who discover a possible 

violation of the ITAR, the EAR, or any 

license or authorization issued 

thereunder, are strongly encouraged to 

disclose this violation to DDTC, BIS, or 

both offices, as appropriate, pursuant to 

established procedures for submitting 

voluntary disclosures. 

License holders and foreign persons 

must obtain Department of State 

authorization before disposing, 

reselling, transshipping, or otherwise 

transferring any item in their possession 

that remains on the USML. 

Registration 

Manufacturers, exporters, and brokers 

are required to register with the 

Department of State if their activities 

involve USML defense articles or 

defense services. 

Registered manufacturers, exporters, 

temporary importers, defense service 

providers and brokers (‘‘registrants’’) are 

reminded of the requirement to notify 

DDTC in writing when they are no 

longer in the business of manufacturing, 

exporting, or brokering USML defense 

articles or defense services. Registrants 

who determine that all of their activities 

involve articles or services that will 

transition from the USML to the CCL 

and therefore are no longer required to 

register with the Department of State 

must provide such written notification 

to the Department of State. Instructions 

for providing such notification are 

accessible on the DDTC Web site 

(www.pmddtc.state.gov). Note that 

DDTC will not cancel or revoke those 

registrations, but will allow the 

registration to expire. Registrants who 

determine that all of their activities will 

be subject to Department of Commerce 

jurisdiction as a result of the transition 

from the USML to the CCL must 

nevertheless maintain registration with 

the Department of State until the 

effective date of the applicable final rule 

transitioning the registrant’s items to the 

CCL. 

Registrants who determine they will 

no longer be required to register with 

the Department of State after the 

effective date of the final rule 

transitioning the registrant’s items to the 

CCL, and who have registration renewal 

dates that occur after publication of the 

final rule but before its effective date, 

may request to have their registration 

expiration date extended to the effective 

date of transition and not be charged a 

registration fee. In those cases, 

registrants must insert the following 

statement as the first paragraph in the 

written notification previously 

mentioned: ‘‘(Insert company name) 

requests DDTC extend our registration 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22751 

expiration date to the effective date of 

transition to CCL for USML Category 

(insert Category number) items and 

waive the registration fee. (insert 

company name) certifies that no 

changes in our eligibility from what is 

represented in our previously submitted 

DS–2032 Statement of Registration has 

occurred (otherwise specify change in 

eligibility status).’’ If a registrant 

subsequently determines that its 

registration with the Department of 

State must instead be renewed, the 

registration renewal fee will be 

recalculated to include any Department 

of State licenses the registrant received 

during the period when the registration 

expiration date was extended. 

Registrants that avail themselves of 

the opportunity to continue using 

previously issued Department of State 

authorizations (licenses and agreements) 

for items that have transitioned to the 

CCL must maintain current registration 

with the Department of State, which 

includes payment of registration fees. 

Additional Required Changes 

As noted in the responses to the 

public comments for specially designed 

and transition guidance, the Department 

has identified the following ITAR 

amendments as necessary and beneficial 

for the implementation of the transition 

plan and the application of the specially 

designed definition. 

The Department has revised ITAR 

§ 120.2 to specify the method by which 

changes are made to the U.S. Munitions 

List. 

The Department has revised ITAR 

§ 120.3 to more accurately describe the 

policy used in completing the revisions 

to the USML categories and to account 

for the definition of specially designed. 

In concert with this change, the 

Department also revised ITAR § 120.4(d) 

to reflect the policy and provide 

instruction on applying the terms 

‘‘form,’’ ‘‘fit,’’ ‘‘function,’’ and 

‘‘performance capability.’’ 

Pursuant to amendment to Executive 

Order 13222 and upon agreement of the 

Secretaries of State and Commerce, the 

Department amended ITAR § 120.5 to 

provide for ITAR licensing of items 

subject to the EAR, provided these items 

meet certain criteria provided in 

amended ITAR § 123.1. In addition, a 

definition for the term ‘‘subject to the 

EAR’’ is established in § 120.42. 

In the revision of the USML 

categories, the Department has added 

specific entries regarding classified 

articles and data. Section 120.10 and 

USML Category XVII have been 

amended to account for classified 

articles and data not clearly enumerated 

on the USML. 

With the adoption of the new 

definition of specially designed, the 

Department has revised USML Category 

XXI and ITAR § 121.8(g) to remove the 

phrases, ‘‘specifically designed, 

developed, configured, adapted, or 

modified for military purposes’’ and 

‘‘specifically designed, modified or 

adapted.’’ 

The Department has revised ITAR 

§ 121.1 to incorporate a portion of the 

instruction included in the specially 

designed definition included in the 

proposed rule in a revised introduction 

to the USML. The revised introduction 

also includes further guidance on use of 

the USML. 

The Department has revised ITAR 

§ 121.10 for forgings, castings, and 

machined bodies for consistency with 

the CCL and the Wassenaar 

Arrangement. 

Sections 120.29 and 121.1(c) are 

revised to update the information 

provided on the Missile Technology 

Control Regime (MTCR) Annex and to 

introduce the new method of identifying 

articles common to the MTCR Annex 

and the USML. Section 121.2 is revised 

to remove reference to ITAR § 121.16. 

Once all revised USML categories are 

published as final rules, ITAR § 121.16 

will be placed in reserve, and the 

parenthetical ‘‘(MT)’’ will be used at the 

end of each USML section containing 

such articles. 

Section 123.1 is revised to provide 

guidance on the use of paragraph (x) in 

USML categories and other 

administrative changes. 

The Department has revised ITAR 

§ 123.9(b) to update the destination 

control statement to require the 

inclusion of the license number or 

exemption citation and clarify the need 

for all parties to the transaction to 

obtain this information. As well, it 

requires applicants using paragraph (x) 

of the revised USML categories to 

provide additional information to the 

foreign parties regarding the jurisdiction 

of items exported pursuant to paragraph 

(x). These changes are necessary to 

ensure industry compliance with the 

correct licensing authority. 

Adoption of Proposed Rules and Other 

Changes 

Having reviewed and evaluated the 

comments and recommended changes 

for the USML Category VIII, USML 

Category XIX, and specially designed 

proposed rules, the Department has 

determined that it will, and hereby 

does, adopt them, with changes noted 

and other edits, and promulgates them 

in final form under this rule. 

Regulatory Analysis and Notices 

Administrative Procedure Act 

The Department of State is of the 

opinion that controlling the import and 

export of defense articles and services is 

a foreign affairs function of the United 

States Government and that rules 

implementing this function are exempt 

from sections 553 (rulemaking) and 554 

(adjudications) of the Administrative 

Procedure Act (APA). Although the 

Department is of the opinion that this 

rule is exempt from the rulemaking 

provisions of the APA, the Department 

has published this rule as separate 

proposed rules identified as 1400– 

AC96, 1400–AC98, and 1400–AD22, 

each with a 45-day provision for public 

comment and without prejudice to its 

determination that controlling the 

import and export of defense services is 

a foreign affairs function. 

Regulatory Flexibility Act 

Since the Department is of the 

opinion that this rule is exempt from the 

provisions of 5 U.S.C. 553, there is no 

requirement for an analysis under the 

Regulatory Flexibility Act. 

Unfunded Mandates Reform Act of 1995 

This rulemaking does not involve a 

mandate that will result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any year and it will not significantly 

or uniquely affect small governments. 

Therefore, no actions were deemed 

necessary under the provisions of the 

Unfunded Mandates Reform Act of 

1995. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 

This rulemaking has been found not 

to be a major rule within the meaning 

of the Small Business Regulatory 

Enforcement Fairness Act of 1996. 

Executive Orders 12372 and 13132 

This 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 

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22752 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

Federal programs and activities do not 

apply to this rulemaking. 

Executive Orders 12866 and 13563 

Executive Orders 12866 and 13563 

direct agencies to assess costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributed impacts, and equity). 

These executive orders stress the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This rule has been 

designated a ‘‘significant regulatory 

action,’’ although not economically 

significant, under section 3(f) of 

Executive Order 12866. Accordingly, 

this rule has been reviewed by the 

Office of Management and Budget 

(OMB). 

Executive Order 12988 

The Department of State has reviewed 

this rulemaking in light of sections 3(a) 

and 3(b)(2) of Executive Order 12988 to 

eliminate ambiguity, minimize 

litigation, establish clear legal 

standards, and reduce burden. 

Executive Order 13175 

The Department of State has 

determined that this rulemaking will 

not have tribal implications, will not 

impose substantial direct compliance 

costs on Indian tribal governments, and 

will not pre-empt tribal law. 

Accordingly, the provisions of 

Executive Order 13175 do not apply to 

this rulemaking. 

Paperwork Reduction Act 

Following is a listing of approved 

collections that will be affected by 

revision, pursuant to the President’s 

Export Control Reform (ECR) initiative, 

of the U.S. Munitions List (USML) and 

the Commerce Control List. This final 

rule begins implementation of ECR. 

Other final rules will follow. The list of 

collections and the description of the 

manner in which they will be affected 

pertains to revision of the USML in its 

entirety, not only to the categories 

published in this rule: 

(1) Statement of Registration, DS– 

2032, OMB No. 1405–0002. The 

Department estimates that 1,000 of the 

currently-registered persons will not 

need to maintain registration following 

full revision of the USML. This would 

result in a burden reduction of 1,000 

hours annually. 

(2) Application/License for Permanent 

Export of Unclassified Defense Articles 

and Related Unclassified Technical 

Data, DSP–5, OMB No. 1405–0003. The 

Department estimates that there will be 

35,000 fewer DSP–5 submissions 

annually following full revision of the 

USML. This would result in a burden 

reduction of 35,000 hours annually. In 

addition, the DSP–5 will allow 

respondents to select USML Category 

XIX, a newly-established category, as a 

description of articles to be exported. 

(3) Application/License for 

Temporary Import of Unclassified 

Defense Articles, DSP–61, OMB No. 

1405–0013. The Department estimates 

that there will be 200 fewer DSP–61 

submissions annually following full 

revision of the USML. This would result 

in a burden reduction of 100 hours 

annually. In addition, the DSP–61 will 

allow respondents to select USML 

Category XIX, a newly-established 

category, as a description of articles to 

be temporarily imported. 

(4) Application/License for 

Temporary Export of Unclassified 

Defense Articles, DSP–73, OMB No. 

1405–0023. The Department estimates 

that there will be 800 fewer DSP–73 

submissions annually following full 

revision of the USML. This would result 

in a burden reduction of 800 hours 

annually. In addition, the DSP–73 will 

allow respondents to select USML 

Category XIX, a newly-established 

category, as a description of articles to 

be temporarily exported. 

(5) Application for Amendment to 

License for Export or Import of 

Classified or Unclassified Defense 

Articles and Related Technical Data, 

DSP–6, –62, –74, –119, OMB No. 1405– 

0092. The Department estimates that 

there will be 2,000 fewer amendment 

submissions annually following full 

revision of the USML. This would result 

in a burden reduction of 1,000 hours 

annually. In addition, the amendment 

forms will allow respondents to select 

USML Category XIX, a newlyestablished category, as a description of 

articles the subject of the amendment 

request. 

(6) Request for Approval of 

Manufacturing License Agreements, 

Technical Assistance Agreements, and 

Other Agreements, DSP–5, OMB No. 

1405–0093. The Department estimates 

that there will be 1,000 fewer agreement 

submissions annually following full 

revision of the USML. This would result 

in a burden reduction of 2,000 hours 

annually. In addition, the DSP–5, the 

form used for the purposes of 

electronically submitting agreements, 

will allow respondents to select USML 

Category XIX, a newly-established 

category, as a description of articles to 

be exported. 

(7) Maintenance of Records by 

Registrants, OMB No. 1405–0111. The 

requirement to actively maintain 

records pursuant to provisions of the 

International Traffic in Arms 

Regulations (ITAR) will decline 

commensurate to the drop in the 

number of persons who will be required 

to register with the Department 

pursuant to the ITAR. As stated above, 

the Department estimates that 1,000 of 

the currently-registered persons will not 

need to maintain registration following 

full revision of the USML. This would 

result in a burden reduction of 20,000 

hours annually. The ITAR does provide, 

though, for the maintenance of records 

for a period of five years. Therefore, 

persons newly relieved of the 

requirement to register with the 

Department may still be required to 

maintain records. 

(8) Export Declaration of Defense 

Technical Data or Services, DS–4071, 

OMB No. 1405–0157. The Department 

estimates that there will be 2,000 fewer 

declaration submissions annually 

following full revision of the USML. 

This would result in a burden reduction 

of 1,000 hours annually. 

List of Subjects in 22 CFR Parts 120, 

121, and 123 

Arms and munitions, Exports. 

Accordingly, for the reasons set forth 

above, Title 22, Chapter I, Subchapter 

M, parts 120, 121, and 123 are amended 

as follows: 

PART 120—PURPOSE AND 

DEFINITIONS 

■ 1. The authority citation for part 

continues to read as follows: 

Authority: Sections 2, 38, and 71, Pub. L. 

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

2797); 22 U.S.C. 2794; 22 U.S.C. 2651a; Pub. 

L. 105–261, 112 Stat. 1920; Pub. L. 111–266; 

Section 1261, Pub. L. 112–239; E.O. 13637, 

78 FR 16129. 

■ 2. Section 120.2 is revised to read as 

follows: 

§ 120.2 Designation of defense articles 

and defense services. 

The Arms Export Control Act (22 

U.S.C. 2778(a) and 2794(7)) provides 

that the President shall designate the 

articles and services deemed to be 

defense articles and defense services for 

purposes of import or export controls. 

The President has delegated to the 

Secretary of State the authority to 

control the export and temporary import 

of defense articles and services. The 

items designated by the Secretary of 

State for purposes of export and 

temporary import control constitute the 

U.S. Munitions List specified in part 

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121 of this subchapter. Defense articles 

on the U.S. Munitions List specified in 

part 121 of this subchapter that are also 

subject to permanent import control by 

the Attorney General on the U.S. 

Munitions Import List enumerated in 27 

CFR part 447 are subject to temporary 

import controls administered by the 

Secretary of State. Designations of 

defense articles and defense services are 

made by the Department of State with 

the concurrence of the Department of 

Defense. The scope of the U.S. 

Munitions List shall be changed only by 

amendments made pursuant to section 

38 of the Arms Export Control Act (22 

U.S.C. 2778). For a designation or 

determination on whether a particular 

item is enumerated on the U.S. 

Munitions List, see § 120.4 of this 

subchapter. 

■ 3. Section 120.3 is revised to read as 

follows: 

§ 120.3 Policy on designating or 

determining defense articles and services 

on the U.S. Munitions List. 

(a) For purposes of this subchapter, a 

specific article or service may be 

designated a defense article (see § 120.6 

of this subchapter) or defense service 

(see § 120.9 of this subchapter) if it: 

(1) Meets the criteria of a defense 

article or defense service on the U.S. 

Munitions List; or 

(2) Provides the equivalent 

performance capabilities of a defense 

article on the U.S. Munitions List. 

(b) For purposes of this subchapter, a 

specific article or service shall be 

determined in the future as a defense 

article or defense service if it provides 

a critical military or intelligence 

advantage such that it warrants control 

under this subchapter. 

Note to paragraphs (a) and (b): An article 

or service determined in the future pursuant 

to this subchapter as a defense article or 

defense service, but not currently on the U.S. 

Munitions List, will be placed in U.S. 

Munitions List Category XXI until the 

appropriate U.S. Munitions List category has 

been amended to provide the necessary 

entry. 

(c) A specific article or service is not 

a defense article or defense service for 

purposes of this subchapter if it: 

(1) Is determined to be under the 

jurisdiction of another department or 

agency of the U.S. Government (see 

§ 120.5 of this subchapter) pursuant to 

a commodity jurisdiction determination 

(see § 120.4 of this subchapter) unless 

superseded by changes to the U.S. 

Munitions List or by a subsequent 

commodity jurisdiction determination; 

or 

(2) Meets one of the criteria of 

§ 120.41(b) of this subchapter when the 

article is used in or with a defense 

article and specially designed is used as 

a control criteria (see § 120.41 of this 

subchapter). 

Note to § 120.3: The intended use of the 

article or service after its export (i.e., for a 

military or civilian purpose), by itself, is not 

a factor in determining whether the article or 

service is subject to the controls of this 

subchapter. 

■ 4. Section 120.4 is amended by 

revising paragraph (d) to read as 

follows: 

§ 120.4 Commodity jurisdiction. 

* * * * * 

(d)(1) [Reserved] 

(2) A designation that an article or 

service meets the criteria of a defense 

article or defense service, or provides 

the equivalent performance capabilities 

of a defense article on the U.S. 

Munitions List set forth in this 

subchapter, is made on a case-by-case 

basis by the Department of State, taking 

into account: 

(i) The form and fit of the article; and 

(ii) The function and performance 

capability of the article. 

(3) A designation that an article or 

service has a critical military or 

intelligence advantage such that it 

warrants control under this subchapter 

is made, on a case-by-case basis, by the 

Department of State, taking into 

account: 

(i) The function and performance 

capability of the article; and 

(ii) The nature of controls imposed by 

other nations on such items (including 

the Wassenaar Arrangement and other 

multilateral controls). 

Note 1 to paragraph (d): The form of a 

commodity is defined by its configuration 

(including the geometrically measured 

configuration), material, and material 

properties that uniquely characterize it. The 

fit of a commodity is defined by its ability to 

physically interface or connect with or 

become an integral part of another 

commodity. The function of a commodity is 

the action or actions it is designed to 

perform. Performance capability is the 

measure of a commodity’s effectiveness to 

perform a designated function in a given 

environment (e.g., measured in terms of 

speed, durability, reliability, pressure, 

accuracy, efficiency). 

Note 2 to paragraph (d): For software, the 

form means the design, logic flow, and 

algorithms. The fit is defined by its ability to 

interface or connect with a defense article. 

The function means the action or actions the 

software performs directly related to a 

defense article or as a standalone application. 

Performance capability means the 

measure of the software’s effectiveness 

to perform a designated function. 

* * * * * 

■ 5. Section 120.5 is revised to read as 

follows: 

§ 120.5 Relation to regulations of other 

agencies. 

(a) If a defense article or service is 

covered by the U.S. Munitions List set 

forth in this subchapter, its export and 

temporary import is regulated by the 

Department of State (see also § 120.2 of 

this subchapter). The President has 

delegated the authority to control 

defense articles and services for 

purposes of permanent import to the 

Attorney General. The defense articles 

and services controlled by the Secretary 

of State and the Attorney General 

collectively comprise the U.S. 

Munitions List under the Arms Export 

Control Act (AECA). As the Attorney 

General exercises independent 

delegated authority to designate defense 

articles and services for purposes of 

permanent import controls, the 

permanent import control list 

administered by the Department of 

Justice has been separately labeled the 

U.S. Munitions Import List (27 CFR part 

447) to distinguish it from the list set 

out in this subchapter. In carrying out 

the functions delegated to the Attorney 

General pursuant to the AECA, the 

Attorney General shall be guided by the 

views of the Secretary of State on 

matters affecting world peace and the 

external security, and foreign policy of 

the United States. The Department of 

Commerce regulates the export, 

reexport, and in-country transfer of 

items on the Commerce Control List 

(CCL) and other items subject to its 

jurisdiction, as well as the provision of 

certain proliferation activities, under the 

Export Administration Regulations 

(EAR) (15 CFR parts 730 through 774). 

For the relationship of this subchapter 

to regulations of the Department of 

Energy and the Nuclear Regulatory 

Commission, see § 123.20 of this 

subchapter. 

(b) A license or other approval from 

the Department of State granted in 

accordance with this subchapter may 

also authorize the export of items 

subject to the EAR (see § 120.42 of this 

subchapter). Separate approval from the 

Department of Commerce is not 

required for these items when approved 

for export under a Department of State 

license or other approval. Those items 

subject to the EAR exported pursuant to 

a Department of State license or other 

approval would remain under the 

jurisdiction of the Department of 

Commerce for any subsequent 

transactions. The inclusion of items 

subject to the EAR on a Department of 

State license or approval does not 

change the jurisdiction of the items. 

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(See § 123.1(b) of this subchapter for 

guidance on identifying items subject to 

the EAR in a license application to the 

Department of State.) 

■ 6. Section 120.10 is amended by 

revising paragraphs (a)(2) through (4) 

and re-designating paragraph (a)(5) as 

paragraph (b) and revising it to read as 

follows: 

§ 120.10 Technical data. 

(a) * * * 

* * * * * 

(2) Classified information relating to 

defense articles and defense services on 

the U.S. Munitions List and 600-series 

items controlled by the Commerce 

Control List; 

(3) Information covered by an 

invention secrecy order; or 

(4) Software as defined in § 121.8(f) of 

this subchapter directly related to 

defense articles. 

(b) The definition in paragraph (a) of 

this section does not include 

information concerning general 

scientific, mathematical or engineering 

principles commonly taught in schools, 

colleges and universities or information 

in the public domain as defined in 

§ 120.11. It also does not include basic 

marketing information on function or 

purpose or general system descriptions 

of defense articles. 

■ 7. Section 120.29 is revised to read as 

follows: 

§ 120.29 Missile Technology Control 

Regime. 

(a) For purposes of this subchapter, 

Missile Technology Control Regime 

(MTCR) means the policy statement 

between the United States, the United 

Kingdom, the Federal Republic of 

Germany, France, Italy, Canada, and 

Japan, announced on April 16, 1987, to 

restrict sensitive missile-relevant 

transfers based on the MTCR Annex, 

and any amendments thereto. 

(b) The term MTCR Annex means the 

MTCR Guidelines and the Equipment, 

Software and Technology Annex of the 

MTCR, and any amendments thereto. 

(c) List of all items on the MTCR 

Annex. Section 71(a) of the Arms Export 

Control Act (22 U.S.C. 2797) refers to 

the establishment as part of the U.S. 

Munitions List of a list of all items on 

the MTCR Annex, the export of which 

is not controlled under Section 6(1) of 

the Export Administration Act of 1979 

(50 U.S.C. App. 2405(1)), as amended. 

MTCR Annex items specified in the U.S. 

Munitions List shall be identified in 

§ 121.16 of this subchapter or annotated 

by the parenthetical ‘‘(MT)’’ at the end 

of each applicable paragraph. 

■ 8. Section 120.41 is added to read as 

follows: 

§ 120.41 Specially designed. 

(a) Except for commodities or 

software described in paragraph (b) of 

this section, a commodity or software 

(see § 121.8(f) of this subchapter) is 

‘‘specially designed’’ if it: 

(1) As a result of development, has 

properties peculiarly responsible for 

achieving or exceeding the controlled 

performance levels, characteristics, or 

functions described in the relevant U.S. 

Munitions List paragraph; or 

(2) Is a part (see § 121.8(d) of this 

subchapter), component (see § 121.8(b) 

of this subchapter), accessory (see 

§ 121.8(c) of this subchapter), 

attachment (see § 121.8(c) of this 

subchapter), or software for use in or 

with a defense article. 

(b) A part, component, accessory, 

attachment, or software is not controlled 

by a U.S. Munitions List ‘‘catch-all’’ or 

technical data control paragraph if it: 

(1) Is subject to the EAR pursuant to 

a commodity jurisdiction determination; 

(2) Is, regardless of form or fit, a 

fastener (e.g., screws, bolts, nuts, nut 

plates, studs, inserts, clips, rivets, pins), 

washer, spacer, insulator, grommet, 

bushing, spring, wire, or solder; 

(3) Has the same function, 

performance capabilities, and the same 

or ‘‘equivalent’’ form and fit as a 

commodity or software used in or with 

a commodity that: 

(i) Is or was in production (i.e., not in 

development); and 

(ii) Is not enumerated on the U.S. 

Munitions List; 

(4) Was or is being developed with 

knowledge that it is or would be for use 

in or with both defense articles 

enumerated on the U.S. Munitions List 

and also commodities not on the U.S. 

Munitions List; or 

(5) Was or is being developed as a 

general purpose commodity or software, 

i.e., with no knowledge for use in or 

with a particular commodity (e.g., a F/ 

A–18 or HMMWV) or type of 

commodity (e.g., an aircraft or machine 

tool). 

Note 1 to paragraph (a): The term 

‘‘enumerated’’ refers to any article on the 

U.S. Munitions List or the Commerce Control 

List and not in a ‘‘catch-all’’ paragraph. 

Note 2 to paragraph (a): The term 

‘‘commodity’’ refers to any article, material, 

or supply, except technology/technical data 

or software. 

Note to paragraph (a)(1): An example of a 

commodity that as a result of development 

has properties peculiarly responsible for 

achieving or exceeding the controlled 

performance levels, functions, or 

characteristics in a U.S. Munitions List 

category would be a swimmer delivery 

vehicle specially designed to dock with a 

submarine to provide submerged transport 

for swimmers or divers from submarines. 

Note to paragraph (b): A ‘‘catch-all’’ 

paragraph is one that does not refer to 

specific types of parts, components, 

accessories, or attachments, but rather 

controls parts, components, accessories, or 

attachments if they were specially designed 

for an enumerated item. For the purposes of 

the U.S. Munitions List, a ‘‘catch-all’’ 

paragraph is delineated by the phrases ‘‘and 

specially designed parts and components 

therefor,’’ or ‘‘parts, components, accessories, 

attachments, and associated equipment 

specially designed for.’’ 

Note 1 to paragraph (b)(3): For the purpose 

of this definition, ‘‘production’’ means all 

production stages, such as product 

engineering, manufacture, integration, 

assembly (mounting), inspection, testing, and 

quality assurance. This includes ‘‘serial 

production’’ where commodities have passed 

production readiness testing (i.e., an 

approved, standardized design ready for large 

scale production) and have been or are being 

produced on an assembly line for multiple 

commodities using the approved, 

standardized design. 

Note 2 to paragraph (b)(3): For the purpose 

of this definition, ‘‘development’’ is related 

to all stages prior to serial production, such 

as: design, design research, design analyses, 

design concepts, assembly and testing of 

prototypes, pilot production schemes, design 

data, process of transforming design data into 

a product, configuration design, integration 

design, layouts. 

Note 3 to paragraph (b)(3): Commodities in 

‘‘production’’ that are subsequently subject to 

‘‘development’’ activities, such as those that 

would result in enhancements or 

improvements only in the reliability or 

maintainability of the commodity (e.g., an 

increased mean time between failure 

(MTBF)), including those pertaining to 

quality improvements, cost reductions, or 

feature enhancements, remain in 

‘‘production.’’ However, any new models or 

versions of such commodities developed 

from such efforts that change the basic 

performance or capability of the commodity 

are in ‘‘development’’ until and unless they 

enter into ‘‘production.’’ 

Note 4 to paragraph (b)(3): With respect to 

a commodity, ‘‘equivalent’’ means its form 

has been modified solely for fit purposes. 

Note 1 to paragraphs (b)(4) and (5): For a 

defense article not to be specially designed 

on the basis of paragraph (b)(4) or (5) of this 

section, documents contemporaneous with 

its development, in their totality, must 

establish the elements of paragraph (b)(4) or 

(5). Such documents may include concept 

design information, marketing plans, 

declarations in patent applications, or 

contracts. Absent such documents, the 

commodity may not be excluded from being 

specially designed by either paragraph (b)(4) 

or (5). 

Note 2 to paragraphs (b)(4) and (5): For the 

purpose of this definition, ‘‘knowledge’’ 

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includes not only the positive knowledge a 

circumstance exists or is substantially certain 

to occur, but also an awareness of a high 

probability of its existence or future 

occurrence. Such awareness is inferred from 

evidence of the conscious disregard of facts 

known to a person and is also inferred from 

a person’s willful avoidance of facts. 

■ 9. Section 120.42 is added to read as 

follows: 

§ 120.42 Subject to the Export 

Administration Regulations (EAR). 

Items ‘‘subject to the EAR’’ are those 

items listed on the Commerce Control 

List in part 774 of the EAR and all other 

items that meet the definition of that 

term in accordance with § 734.3 of the 

EAR. The EAR is found at 15 CFR parts 

730 through 774. 

PART 121—THE UNITED STATES 

MUNITIONS LIST 

■ 10. The authority citation for part 121 

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. 2651a; Pub. L. 105–261, 112 

Stat. 1920; Section 1261, Pub. L. 112–239; 

E.O. 13637, 78 FR 16129. 

■ 11. Section 121.1 is amended by 

revising paragraphs (a) through (c), U.S. 

Munitions List Category VIII, Category 

XVII, Category XIX, and Category XXI, 

and adding paragraphs (d) and (e), to 

read as follows: 

§ 121.1 General. The United States 

Munitions List. 

(a) The following articles, services, 

and related technical data are 

designated as defense articles and 

defense services pursuant to sections 38 

and 47(7) of the Arms Export Control 

Act. Changes in designations will be 

published in the Federal Register. 

Information and clarifications on 

whether specific items are defense 

articles and services under this 

subchapter may appear periodically 

through the Internet Web site of the 

Directorate of Defense Trade Controls. 

(b)(1) Order of review. In order to 

classify your article on the U.S. 

Munitions List, you should begin with 

a review of the general characteristics of 

your item. This will usually guide you 

to the appropriate category on the U.S. 

Munitions List. Once the appropriate 

category is identified, you should match 

the particular characteristics and 

functions of your article to a specific 

entry within the appropriate category. 

(2) Composition of an entry. Within 

each U.S. Munitions List category, 

defense articles are enumerated by an 

alpha paragraph designation. These 

designations may include 

subparagraph(s) to further define the 

enumerated defense article. Each U.S. 

Munitions List category starts with endplatform designations followed by major 

systems and equipment, and parts, 

components, accessories, and 

attachments. Most U.S. Munitions List 

categories contain an entry on technical 

data (see § 120.10 of this subchapter) 

and defense services (see § 120.9 of this 

subchapter) related to the enumerated 

defense articles of that U.S. Munitions 

List category. 

(3) Significant Military Equipment. An 

asterisk may precede an entry in a U.S. 

Munitions List category. The asterisk 

means the enumerated defense article is 

deemed to be ‘‘Significant Military 

Equipment’’ to the extent specified in 

§ 120.7 of this subchapter. The asterisk 

is placed as a convenience to help 

identify such defense articles. Note that 

technical data directly related to the 

manufacture or production of any 

defense articles enumerated in any 

category designated as Significant 

Military Equipment (SME) is also 

designated as SME. 

(c) Missile Technology Control Regime 

(MTCR) Annex. Inclusion in § 121.16 of 

this subchapter, or annotation with the 

parenthetical ‘‘(MT)’’ at the end of a 

U.S. Munitions List paragraph, indicates 

those defense articles and defense 

services that are on the MTCR Annex. 

See § 120.29 of this subchapter. 

(d) Specially Designed. When 

applying the definition of specially 

designed (see § 120.41 of this 

subchapter), follow the sequential 

analysis set forth as follows: 

(1) if your commodity or software is 

controlled for reasons other than having 

a specially designed control parameter 

on the U.S. Munitions List, no further 

review of the definition of specially 

designed is required. 

(2) if your commodity or software is 

not enumerated on the U.S. Munitions 

List, it may be controlled because of a 

specially designed control parameter. If 

so, begin any analysis with § 120.41(a) 

and proceed through each subsequent 

paragraph. If a commodity or software 

would not be controlled as a result of 

the application of the standards in 

§ 120.41(a), then it is not necessary to 

work through § 120.41(b). 

(3) if a commodity or software is 

controlled as a result of § 120.41(a), then 

it is necessary to continue the analysis 

and to work through each of the 

elements of § 120.41(b). 

(4) commodities or software described 

in any § 120.41(b) subparagraph are not 

specially designed commodities or 

software controlled on the U.S. 

Munitions List, but may be subject to 

the jurisdiction of another U.S. 

Government regulatory agency (see 

§ 120.5 of this subchapter). 

(e) Classified. For the purpose of this 

subchapter, ‘‘classified’’ means 

classified pursuant to Executive Order 

13526, or predecessor order, and a 

security classification guide developed 

pursuant thereto or equivalent, or to the 

corresponding classification rules of 

another government or international 

organization. 

* * * * * 

Category VIII—Aircraft and Related 

Articles 

(a) Aircraft (see § 121.3 of this 

subchapter) as follows: 

*(1) Bombers; 

*(2) Fighters, fighter bombers, and 

fixed-wing attack aircraft; 

*(3) Turbofan- or turbojet-powered 

trainers used to train pilots for fighter, 

attack, or bomber aircraft; 

*(4) Attack helicopters; 

*(5) Unarmed military unmanned 

aerial vehicles (UAVs) (MT if the UAV 

has a ‘‘range’’ equal to or greater than 

300km); 

*(6) Armed unmanned aerial vehicles 

(UAVs) (MT if the UAV has a ‘‘range’’ 

equal to or greater than 300km); 

*(7) Military intelligence, 

surveillance, and reconnaissance 

aircraft; 

*(8) Electronic warfare, airborne 

warning and control aircraft; 

(9) Air refueling aircraft and strategic 

airlift aircraft; 

(10) Target drones (MT if the drone 

has a ‘‘range’’ equal to or greater than 

300km); 

(11) Aircraft incorporating any 

mission system controlled under this 

subchapter; 

(12) Aircraft capable of being refueled 

in flight including hover-in-flight 

refueling (HIFR); or 

*(13) Optionally Piloted Vehicles 

(OPV) (MT if the OPV has a ‘‘range’’ 

equal to or greater than 300km). 

Note 1 to paragraph (a): ‘‘Range’’ is the 

maximum distance that the specified aircraft 

system is capable of traveling in the mode of 

stable flight as measured by the projection of 

its trajectory over the surface of the Earth. 

The maximum capability based on the design 

characteristics of the system, when fully 

loaded with fuel or propellant, will be taken 

into consideration in determining ‘‘range.’’ 

The ‘‘range’’ for aircraft systems will be 

determined independently of any external 

factors such as operational restrictions, 

limitations imposed by telemetry, data links, 

or other external constraints. For aircraft 

systems, the ‘‘range’’ will be determined for 

a one-way distance using the most fuelefficient flight profile (e.g., cruise speed and 

altitude), assuming International Civil 

Aviation Organization (ICAO) standard 

atmosphere with zero wind. 

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(b) [Reserved] 

(c) [Reserved] 

(d) Ship-based launching and 

recovery equipment specially designed 

for defense articles described in 

paragraph (a) of this category and landbased variants thereof (MT if the shipbased launching and recovery 

equipment is for an unmanned aerial 

vehicle, drone, or missile that has a 

‘‘range’’ equal to or greater than 300 

km). 

Note to paragraph (d): Fixed land-based 

arresting gear is not included in this 

paragraph. 

*(e) Inertial navigation systems (INS), 

aided or hybrid inertial navigation 

systems, Inertial Measurement Units 

(IMUs), and Attitude and Heading 

Reference Systems (AHRS) specially 

designed for aircraft controlled in this 

category or controlled in ECCN 9A610 

and all specially designed components, 

parts, and accessories therefor (MT if 

the INS, IMU, or AHRS is for an 

unmanned aerial vehicle, drone, or 

missile that has a ‘‘range’’ equal to or 

greater than 300 km). For other inertial 

reference systems and related 

components refer to USML Category 

XII(d). 

(f) Developmental aircraft and 

specially designed parts, components, 

accessories, and attachments therefor 

funded by the Department of Defense. 

Note 1 to paragraph VIII(f): Paragraph 

VIII(f) does not control developmental 

aircraft and specially designed parts, 

components, accessories, and attachments 

therefor (a) determined to be subject to the 

EAR via a commodity jurisdiction 

determination (see § 120.4 of this subchapter) 

or (b) identified in the relevant Department 

of Defense contract as being developed for 

both civil and military applications. 

Note 2 to paragraph VIII(f): Note 1 does 

not apply to defense articles enumerated on 

the U.S. Munitions List, whether in 

production or development. 

(g) [Reserved] 

(h) Aircraft parts, components, 

accessories, attachments, associated 

equipment and systems, as follows: 

(1) Parts, components, accessories, 

attachments, and equipment specially 

designed for the following U.S.-origin 

aircraft: the B–1B, B–2, F–15SE, F/A–18 

E/F/G, F–22, F–35 and future variants 

thereof; or the F–117 or U.S. 

Government technology demonstrators. 

Parts, components, accessories, 

attachments, and equipment of the F– 

15SE and F/A–18 E/F/G that are 

common to earlier models of these 

aircraft, unless listed in paragraph (h) of 

this category, are subject to the EAR; 

(2) Face gear gearboxes, split-torque 

gearboxes, variable speed gearboxes, 

synchronization shafts, interconnecting 

drive shafts, or rotorcraft gearboxes with 

internal pitch line velocities exceeding 

20,000 feet per minute and able to 

operate 30 minutes with loss of 

lubrication and specially designed parts 

and components therefor; 

(3) Tail boom, stabilator and 

automatic rotor blade folding systems 

and specially designed parts and 

components therefor; 

(4) Wing folding systems and 

specially designed parts and 

components therefor; 

(5) Tail hooks and arresting gear and 

specially designed parts and 

components therefor; 

(6) Bomb racks, missile launchers, 

missile rails, weapon pylons, pylon-tolauncher adapters, unmanned aerial 

vehicle (UAV) launching systems, 

external stores support systems for 

ordnance or weapons, and specially 

designed parts and components therefor 

(MT if the bomb rack, missile launcher, 

missile rail, weapon pylon, pylon-tolauncher adapter, UAV launching 

system, or external stores support 

system is for a UAV, drone, or missile 

that has a ‘‘range’’ equal to or greater 

than 300 km); 

(7) Damage or failure-adaptive flight 

control systems specially designed for 

aircraft controlled in this category or 

controlled in ECCN 9A610; 

(8) Threat-adaptive autonomous flight 

control systems; 

(9) Non-surface-based flight control 

systems and effectors (e.g., thrust 

vectoring from gas ports other than main 

engine thrust vector); 

(10) Radar altimeters with output 

power management or signal 

modulation (i.e., frequency hopping, 

chirping, direct sequence-spectrum 

spreading) LPI (low probability of 

intercept) capabilities (MT if for an 

unmanned aerial vehicle, drone, or 

missile that has a ‘‘range’’ equal to or 

greater than 300 km); 

(11) Air-to-air refueling systems and 

hover-in-flight refueling (HIFR) systems 

and specially designed parts and 

components therefor; 

(12) Unmanned aerial vehicle (UAV) 

flight control systems and vehicle 

management systems with swarming 

capability (i.e., UAVs interact with each 

other to avoid collisions and stay 

together, or, if weaponized, coordinate 

targeting) (MT if for a UAV, drone or 

missile that has a ‘‘range’’ equal to or 

greater than 300 km); 

(13) Lithium-ion batteries that provide 

greater than 28 VDC nominal; 

(14) Lift fans, clutches, and roll posts 

for short take-off, vertical landing 

(STOVL) aircraft and specially designed 

parts and components for such lift fans 

and roll posts; 

(15) Integrated helmets incorporating 

optical sights or slewing devices, which 

include the ability to aim, launch, track, 

or manage munitions (e.g., Helmet 

Mounted Cueing Systems, Joint Helmet 

Mounted Cueing Systems (JHMCS), 

Helmet Mounted Displays, Display and 

Sight Helmets (DASH)); 

(16) Fire control computers, stores 

management systems, armaments 

control processors, aircraft-weapon 

interface units and computers (e.g., 

AGM–88 HARM Aircraft Launcher 

Interface Computer (ALIC)); 

(17) Mission computers, vehicle 

management computers, and integrated 

core processers specially designed for 

aircraft controlled in this category or 

controlled in ECCN 9A610; 

(18) Drive systems and flight control 

systems specially designed to function 

after impact of a 7.62mm or larger 

projectile; 

(19) Thrust reversers specially 

designed to be deployed in flight for 

aircraft controlled in this category or 

controlled in ECCN 9A610; 

*(20) Any part, component, accessory, 

attachment, equipment, or system that: 

(i) is classified; 

(ii) contains classified software; or 

(iii) is being developed using 

classified information. 

‘‘Classified’’ means classified 

pursuant to Executive Order 13526, or 

predecessor order, and a security 

classification guide developed pursuant 

thereto or equivalent, or to the 

corresponding classification rules of 

another government or international 

organization; 

(21) Printed circuit boards or 

patterned multichip modules for which 

the layout is specially designed for 

defense articles in this category; 

(22) Radomes or electromagnetic 

antenna windows specially designed for 

aircraft or UAVs that: 

(i) incorporate radio frequency 

selective surfaces; 

(ii) operate in multiple or more nonadjacent radar bands; 

(iii) incorporate a structure that is 

specially designed to provide ballistic 

protection from bullets, shrapnel, or 

blast; 

(iv) have a melting point greater than 

1,300°C and maintain a dielectric 

constant less than 6 at temperatures 

greater than 500 °C; 

(v) are manufactured from ceramic 

materials with a dielectric constant less 

than 6 at any frequency from 100 MHz 

to 100 GHz; 

(vi) maintain structural integrity at 

stagnation pressures greater than 6,000 

pounds per square foot; or 

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(vii) withstand a combined thermal 

shock greater than 4.184 x 106 J/m2

accompanied by a peak overpressure of 

greater than 50 kPa (MT for radomes 

meeting this criteria); 

(23) Fuel cells specially designed for 

aircraft controlled in this category or 

controlled in ECCN 9A610; 

(24) Thermal engines specially 

designed for aircraft controlled in this 

category or controlled in ECCN 9A610; 

(25) Thermal batteries specially 

designed for aircraft controlled in this 

category or controlled in ECCN 9A610 

(MT if the thermal battery is for an 

unmanned aerial vehicle, drone, or 

missile that has a ‘‘range’’ equal to or 

greater than 300 km); or 

(26) Thermionic generators specially 

designed for aircraft controlled in this 

category or controlled in ECCN 9A610. 

(i) Technical data (see § 120.10 of this 

subchapter) and defense services (see 

§ 120.9 of this subchapter) directly 

related to the defense articles 

enumerated in paragraphs (a) through 

(h) of this category and classified 

technical data directly related to items 

controlled in ECCNs 9A610, 9B610, 

9C610, and 9D610 and defense services 

using classified technical data. (See 

§ 125.4 of this subchapter for 

exemptions.) (MT for technical data and 

defense services related to articles 

designated as such.) 

(j)–(w) [Reserved] 

(x) Commodities, software, and 

technical data subject to the EAR (see 

§ 120.42 of this subchapter) used in or 

with defense articles controlled in this 

category. 

Note to paragraph (x): Use of this 

paragraph is limited to license applications 

for defense articles controlled in this category 

where the purchase documentation includes 

commodities, software, or technical data 

subject to the EAR (see § 123.1(b) of this 

subchapter). 

Note: Inertial navigation systems, aided or 

hybrid inertial navigation systems, Inertial 

Measurement Units, and Attitude and 

Heading Reference Systems in paragraph (e) 

and parts, components, accessories, and 

attachments in paragraphs (h)(2)–(5), (7), 

(13), (14), (17)–(19), and (21)–(26) are 

licensed by the Department of Commerce 

when incorporated in a military aircraft 

subject to the EAR and classified under 

ECCN 9A610. Replacement systems, parts, 

components, accessories and attachments are 

subject to the controls of the ITAR. 

* * * * * 

Category XVII—Classified Articles, 

Technical Data, and Defense Services 

Not Otherwise Enumerated 

*(a) All articles, and technical data 

(see § 120.10 of this subchapter) and 

defense services (see § 120.9 of this 

subchapter) relating thereto, that are 

classified in the interests of national 

security and that are not otherwise 

enumerated on the U.S. Munitions List. 

* * * * * 

Category XIX—Gas Turbine Engines 

and Associated Equipment 

*(a) Turbofan and Turbojet engines 

(including technology demonstrators) 

capable of 15,000 lbf (66.7 kN) of thrust 

or greater that have any of the following: 

(1) with or specially designed for 

thrust augmentation (afterburner); 

(2) thrust or exhaust nozzle vectoring; 

(3) parts or components controlled in 

paragraph (f)(6) of this category; 

(4) specially designed for sustained 30 

second inverted flight or negative g 

maneuver; or 

(5) specially designed for high power 

extraction (greater than 50 percent of 

engine thrust at altitude) at altitudes 

greater than 50,000 feet. 

*(b) Turboshaft and Turboprop 

engines (including technology 

demonstrators) capable of 1500 

mechanical shp (1119 kW) or greater 

and are specially designed with oil 

sump sealing when the engine is in the 

vertical position. 

*(c) Engines (including technology 

demonstrators) specially designed for 

armed or military unmanned aerial 

vehicle systems, cruise missiles, or 

target drones (MT if for an engine used 

in an unmanned aerial vehicle, drone, 

or missile that has a ‘‘range’’ equal to or 

greater than 300 km). 

*(d) GE38, AGT1500, CTS800, TF40B, 

T55, TF60, and T700 engines. 

*(e) Digital engine control systems 

(e.g., Full Authority Digital Engine 

Controls (FADEC) and Digital Electronic 

Engine Controls (DEEC)) specially 

designed for gas turbine engines 

controlled in this category (MT if the 

digital engine control system is for an 

unmanned aerial vehicle, drone, or 

missile that has a ‘‘range’’ equal to or 

greater than 300 km). 

Note to paragraph (e): Digital electronic 

control systems autonomously control the 

engine throughout its whole operating range 

from demanded engine start until demanded 

engine shut-down, in both normal and fault 

conditions. 

(f) Parts, components, accessories, 

attachments, associated equipment, and 

systems as follows: 

(1) Parts, components, accessories, 

attachments, and equipment specially 

designed for the following U.S.-origin 

engines (and military variants thereof): 

AE1107C, F101, F107, F112, F118, 

F119, F120, F135, F136, F414, F415, 

J402, GE38, TF40B, and TF60; 

*(2) Hot section components (i.e., 

combustion chambers and liners; high 

pressure turbine blades, vanes, disks 

and related cooled structure; cooled low 

pressure turbine blades, vanes, disks 

and related cooled structure; cooled 

augmenters; and cooled nozzles) 

specially designed for gas turbine 

engines controlled in this category; 

(3) Uncooled turbine blades, vanes, 

disks, and tip shrouds specially 

designed for gas turbine engines 

controlled in this category; 

(4) Combustor cowls, diffusers, 

domes, and shells specially designed for 

gas turbine engines controlled in this 

category; 

(5) Engine monitoring systems (i.e., 

prognostics, diagnostics, and health) 

specially designed for gas turbine 

engines and components controlled in 

this category; 

*(6) Any part, component, accessory, 

attachment, equipment, or system that: 

(i) is classified; 

(ii) contains classified software; or 

(iii) is being developed using 

classified information. 

‘‘Classified’’ means classified 

pursuant to Executive Order 13526, or 

predecessor order, and a security 

classification guide developed pursuant 

thereto or equivalent, or to the 

corresponding classification rules of 

another government or international 

organization; or 

(7) Printed circuit boards or patterned 

multichip modules for which the layout 

is specially designed for defense articles 

in this category. 

(g) Technical data (see § 120.10 of this 

subchapter) and defense services (see 

§ 120.9 of this subchapter) directly 

related to the defense articles 

enumerated in paragraphs (a) through (f) 

of this category and classified technical 

data directly related to items controlled 

in ECCNs 9A619, 9B619, 9C619, and 

9D619 and defense services using the 

classified technical data. (See § 125.4 of 

this subchapter for exemptions.) (MT for 

technical data and defense services 

related to articles designated as such.) 

(h)–(w) [Reserved] 

(x) Commodities, software, and 

technical data subject to the EAR (see 

§ 120.42 of this subchapter) used in or 

with defense articles controlled in this 

category. 

Note to paragraph (x): Use of this 

paragraph is limited to license applications 

for defense articles controlled in this category 

where the purchase documentation includes 

commodities, software, or technical data 

subject to the EAR (see § 123.1(b) of this 

subchapter). 

* * * * * 

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22758 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

Category XXI—Articles, Technical 

Data, and Defense Services Not 

Otherwise Enumerated 

*(a) Any article not enumerated on 

the U.S. Munitions List may be included 

in this category until such time as the 

appropriate U.S. Munitions List 

category is amended. The decision on 

whether any article may be included in 

this category, and the designation of the 

defense article as not Significant 

Military Equipment (see § 120.7 of this 

subchapter), shall be made by the 

Director, Office of Defense Trade 

Controls Policy. 

(b) Technical data (see § 120.10 of this 

subchapter) and defense services (see 

§ 120.9 of this subchapter) directly 

related to the defense articles covered in 

paragraph (a) of this category. 

■ 12. Section 121.2 is revised to read as 

follows: 

§ 121.2 Interpretations of the U.S. 

Munitions List 

The following interpretations explain 

and amplify the terms used in § 121.1 of 

this subchapter. These interpretations 

have the same force as if they were a 

part of the U.S. Munitions List category 

to which they refer. 

■ 13. Section 121.3 is revised to read as 

follows: 

§ 121.3 Aircraft. 

(a) In Category VIII, except as 

described in paragraph (b) below, 

‘‘aircraft’’ means aircraft that: 

(1) Are U.S.-origin aircraft that bear an 

original military designation of A, B, E, 

F, K, M, P, R, or S; 

(2) Are foreign-origin aircraft specially 

designed to provide functions 

equivalent to those of the aircraft listed 

in paragraph (a)(1) of this section; 

(3) Are armed or are specially 

designed to be used as a platform to 

deliver munitions or otherwise destroy 

targets (e.g., firing lasers, launching 

rockets, firing missiles, dropping bombs, 

or strafing); 

(4) Are strategic airlift aircraft with a 

roll-on/roll-off ramp and capable of 

airlifting payloads over 35,000 lbs to 

ranges over 2,000 nm without being 

refueled in-flight into short or 

unimproved airfields; 

(5) Are capable of being refueled inflight; 

(6) Incorporate any ‘‘mission system’’ 

controlled under this subchapter. 

‘‘Mission system’’ is defined as a 

‘‘system’’ (see § 121.8(g) of this 

subchapter) that is a defense article that 

performs specific military functions 

beyond airworthiness, such as by 

providing military communication, 

radar, active missile counter measures, 

target designation, surveillance, or 

sensor capabilities; or 

(7) Are Optionally Piloted Vehicles 

(OPV) (i.e., aircraft specially designed to 

operate with and without a pilot 

physically located in the aircraft). 

(b) Aircraft specially designed for 

military applications that are not 

identified in paragraph (a) of this 

section are subject to the EAR and 

classified as ECCN 9A610, including 

any unarmed military aircraft, 

regardless of origin or designation, 

manufactured prior to 1956 and 

unmodified since manufacture. 

Modifications made to incorporate 

safety of flight features or other FAA or 

NTSB modifications such as 

transponders and air data recorders are 

considered ‘‘unmodified’’ for the 

purposes of this paragraph. 

■ 14. Section 121.8 is amended by 

revising the section heading and 

paragraph (g) to read as follows: 

§ 121.8 End-items, components, 

accessories, attachments, parts, firmware, 

software, and systems. 

* * * * * 

(g) A system is a combination of enditems, parts, components, accessories, 

attachments, firmware, or software that 

operate together to perform a 

specialized military function. 

■ 15. Section 121.10 is revised to read 

as follows: 

§ 121.10 Forgings, castings, and machined 

bodies. 

The U.S. Munitions List controls as 

defense articles those forgings, castings, 

and other unfinished products, such as 

extrusions and machined bodies, that 

have reached a stage in manufacturing 

where they are clearly identifiable by 

mechanical properties, material 

composition, geometry, or function as 

defense articles. 

PART 123—LICENSES FOR THE 

EXPORT AND TEMPORARY IMPORT 

OF DEFENSE ARTICLES 

■ 16. The authority citation for part 123 

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. 2753; 22 U.S.C. 2651a; 22 

U.S.C. 2776; Pub. L. 105–261, 112 Stat. 1920; 

Sec. 1205(a), Pub. L. 107–228; Section 1261, 

Pub. L. 112–239; E.O. 13637, 78 FR 16129. 

■ 17. The heading for part 123 is revised 

to read as set forth above. 

■ 18. Section 123.1 is amended by 

revising paragraphs (a), (b), and (c) to 

read as follows: 

§ 123.1 Requirement for export or 

temporary import licenses. 

(a) Any person who intends to export 

or to import temporarily a defense 

article must obtain the approval of the 

Directorate of Defense Trade Controls 

prior to the export or temporary import, 

unless the export or temporary import 

qualifies for an exemption under the 

provisions of this subchapter. The 

applicant must be registered with the 

Directorate of Defense Trade Controls 

pursuant to part 122 of this subchapter 

prior to submitting an application. 

Applications for unclassified exports 

and temporary imports must be 

submitted electronically. Applications 

for classified exports and classified 

temporary imports must be submitted 

via paper. Further guidance is provided 

on the Internet Web site of the 

Directorate of Defense Trade Controls. 

The application forms for export or 

temporary import are as follows: 

(1) Unclassified permanent exports 

must be made on Form DSP–5; 

(2) Unclassified temporary exports 

must be made on Form DSP–73; 

(3) Unclassified temporary imports 

must be made on Form DSP–61; or 

(4) Classified exports or temporary 

imports must be made on Form DSP–85. 

(b) Applications for Department of 

State export or temporary import 

licenses for proposed exports or 

temporary imports of defense articles, 

including technical data, may include 

commodities, software, and technical 

data subject to the EAR (see § 120.42 of 

this subchapter) if: 

(1) The purchase documentation (e.g., 

purchase order, contract, letter of intent, 

or other appropriate documentation) 

includes both defense articles 

enumerated on the U.S. Munitions List 

and items on the Commerce Control 

List; 

(2) The commodities, software, and 

technical data subject to the EAR are for 

end-use in or with the U.S. Munitions 

List defense article(s) proposed for 

export; and 

(3) The license application separately 

enumerates the commodities, software, 

and technical data subject to the EAR in 

a U.S. Munitions List ‘‘(x)’’ paragraph 

entry. 

(c) As a condition to the issuance of 

a license or other approval, the 

Directorate of Defense Trade Controls 

may require all pertinent documentation 

regarding the proposed transaction and 

proper completion of the application 

form as follows: 

(1) Form DSP–5, DSP–61, DSP–73, 

and DSP–85 applications must have an 

entry in each block where space is 

provided for an entry. All requested 

information must be provided. Stating 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22759 

‘‘Not Applicable’’ or ‘‘See Attached’’ is 

not acceptable. See the Directorate of 

Defense Trade Controls Internet Web 

site for additional guidance on the 

completion of a license application 

form; 

(2) Attachments and supporting 

technical data or brochures should be 

submitted with the license application. 

All freight forwarders and U.S. 

consignors must be listed in the license 

application. See the Directorate of 

Defense Trade Controls Internet Web 

site for instructions and limitations on 

attaching documentation; 

(3) Certification by an empowered 

official must accompany all application 

submissions (see § 126.13 of this 

subchapter); 

(4) An application for a license for the 

permanent export of defense articles 

sold commercially must be 

accompanied by purchase 

documentation (e.g., purchase order, 

contract, letter of intent, or other 

appropriate documentation). In cases 

involving the Foreign Military Sales 

program, a copy of the relevant Letter of 

Offer and Acceptance is required, unless 

the procedures of § 126.4(c) or § 126.6 of 

this subchapter are followed; 

(5) Form DSP–83, duly executed, 

must accompany all license applications 

for the permanent export of significant 

military equipment, including classified 

defense articles or classified technical 

data (see §§ 123.10 and 125.3 of this 

subchapter); and 

(6) A statement concerning the 

payment of political contributions, fees, 

and commissions must accompany a 

permanent export application if the 

export involves defense articles or 

defense services valued in an amount of 

$500,000 or more and is being sold 

commercially to or for the use of the 

armed forces of a foreign country or 

international organization (see part 130 

of this subchapter). 

* * * * * 

■ 19. Section 123.9 is amended by 

revising paragraph (b) to read as follows: 

§ 123.9 Country of ultimate destination 

and approval of reexports or retransfers. 

* * * * * 

(b) The exporter, U.S. or foreign, must 

inform the end-user and all consignees 

that the defense articles being exported 

are subject to U.S. export laws and 

regulations as follows: 

(1) The exporter, U.S. or foreign, must 

incorporate the following statement as 

an integral part of the bill of lading, air 

waybill, or other shipping document, 

and the purchase documentation or 

invoice whenever defense articles are to 

be exported, retransferred, or reexported 

pursuant to a license or other approval 

under this subchapter: ‘‘These 

commodities are authorized by the U.S. 

Government for export only to [country 

of ultimate destination] for use by [enduser] under [license or other approval 

number or exemption citation]. They 

may not be resold, diverted, transferred, 

or otherwise be disposed of, to any other 

country or to any person other than the 

authorized end-user or consignee(s), 

either in their original form or after 

being incorporated into other end-items, 

without first obtaining approval from 

the U.S. Department of State or use of 

an applicable exemption.’’; and 

(2) When exporting items subject to 

the EAR (see §§ 120.42 and 123.1(b)) on 

a Department of State license or other 

approval, the U.S. exporter must 

provide to the end-user and consignees 

in the purchase documentation or other 

support documentation the appropriate 

EAR classification information for each 

item exported pursuant to a U.S. 

Munitions List ‘‘(x)’’ paragraph. This 

includes the appropriate ECCN or 

EAR99 designation. 

* * * * * 

Rose E. Gottemoeller, 

Acting Under Secretary, Arms Control and 

International Security, Department of State. 

[FR Doc. 2013–08351 Filed 4–15–13; 8:45 am] 

BILLING CODE 4710–25–P 

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