36428 Federal Register / Vol. 77, No. 118 / Tuesday, June 19, 2012 / Proposed Rules 

www.regulations.gov/#!home, you also 

may file a comment through that Web 

site. 

If you file your comment on paper, 

write ‘‘Proposed Amendments to the 

Alternative Fuels Rule, (16 CFR part 

309) (Matter No. R311002)’’ on your 

comment and on the envelope, and mail 

or deliver it to the following address: 

Federal Trade Commission, Office of the 

Secretary, Room H–113 (Annex N), 600 

Pennsylvania Avenue NW., Washington, 

DC 20580. If possible, submit your 

paper comment to the Commission by 

courier or overnight service. 

Visit the Commission Web site at 

http://www.ftc.gov to read this Notice 

and the news release describing it. The 

FTC Act and other laws that the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives on or 

before August 17, 2012. You can find 

more information, including routine 

uses permitted by the Privacy Act, in 

the Commission’s privacy policy, at 

http://www.ftc.gov/ftc/privacy.htm. 

VI. Proposed Rule 

List of Subjects in 16 CFR Part 309 

Alternative fuel, Alternative fueled 

vehicle, Energy conservation, Labeling, 

Reporting and recordkeeping, Trade 

practices. 

The Commission proposes to amend 

16 CFR part 309 as follows: 

PART 309—LABELING 

REQUIREMENTS FOR ALTERNATIVE 

FUELS AND ALTERNATIVE FUELED 

VEHICLES 

1. The authority citation for part 309 

continues to read as follows: 

Authority: 42 U.S.C. 13232(a). 

2. In § 309.1 add new paragraph (f)(3) 

to read as follows: 

§ 309.1 Definitions. 

* * * * * 

(f) * * * 

(3) Any vehicle that is— 

(i) A new qualified fuel cell motor 

vehicle (as defined in 26 U.S.C. 

30B(b)(3)); 

(ii) A new advanced lean burn 

technology motor vehicle (as defined in 

26 U.S.C. 30B(c)(3)); 

(iii) A new qualified hybrid motor 

vehicle (as defined in 26 U.S.C. 

30B(d)(3)); or 

(iv) Any other type of vehicle that the 

Administrator of the Environmental 

Protection Agency demonstrates to the 

Secretary would achieve a significant 

reduction in petroleum consumption. 

* * * * * 

3. In § 309.1, remove paragraphs (dd), 

(ee), and (ff) and redesignate (gg) as (dd). 

4. Revise § 309.20 to read as follows: 

309.20 Labeling requirements for new 

covered vehicles. 

(a) Before offering a new covered 

vehicle for acquisition to consumers, 

manufacturers shall affix or cause to be 

affixed, and new vehicle dealers shall 

maintain or cause to be maintained, fuel 

economy labels as required by under 40 

CFR part 600. For dual fueled vehicles, 

such labels must include driving range 

information for alternative fuel and 

gasoline operation and be otherwise 

consistent with provisions in 40 CFR 

part 600. 

(b) If an aftermarket conversion 

system is installed on a vehicle by a 

person other than the manufacturer 

prior to such vehicle’s being acquired by 

a consumer, the manufacturer shall 

provide that person with the vehicle’s 

fuel economy label prepared pursuant to 

40 CFR part 600 and ensure that new 

fuel economy vehicle labels are affixed 

to such vehicles as required by 

paragraph (a) of this section. 

5. Remove §§ 309.21 and 309.22. 

6. Redesignate § 309.23 as 309.21. 

7. In Appendix A to part 309, remove 

figures 4, 5, 5.1, and 6. 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. 2012–14828 Filed 6–18–12; 8:45 am] 

BILLING CODE 6750–01–P 

DEPARTMENT OF STATE 

22 CFR Part 120 

RIN 1400–AD22 

[Public Notice 7921] 

Amendment to the International Traffic 

in Arms Regulations: Definition for 

‘‘Specially Designed’’ 

AGENCY: Department of State. 

ACTION: Proposed rule. 

SUMMARY: As part of the President’s 

Export Control Reform (ECR) Initiative, 

the Directorate of Defense Trade 

Controls (DDTC) seeks public comment 

on the proposed definition of ‘‘specially 

designed’’ to be adopted in the 

International Traffic in Arms 

Regulations (ITAR). This proposed rule 

is published concurrently with the 

Department of Commerce’s proposed 

revision to the definition of ‘‘specially 

designed’’ in the Export Administration 

Regulations (EAR). 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. The Department of State’s full 

plan can be accessed at http:// 

www.state.gov/documents/organization/ 

181028.pdf. 

DATES: The Department of State will 

accept comments on this proposed rule 

until August 3, 2012. 

ADDRESSES: Interested parties may 

submit comments within 45 days of the 

date of publication by one of the 

following methods: 

• Email: 

DDTCResponseTeam@state.gov with the 

subject line, ‘‘Specially Designed 

Definition.’’ 

• Internet: At www.regulations.gov, 

search for this notice by using this 

notice’s RIN (1400–AD22). 

Comments received after that date 

will be considered if feasible, but 

consideration cannot be assured. Those 

submitting comments should not 

include any personally identifying 

information they do not desire to be 

made public or information for which a 

claim of confidentiality is asserted 

because those comments and/or 

transmittal emails will be made 

available for public inspection and 

copying after the close of the comment 

period via the Directorate of Defense 

Trade Controls Web site at 

www.pmddtc.state.gov. Parties who 

wish to comment anonymously may do 

so by submitting their comments via 

www.regulations.gov, leaving the fields 

that would identify the commenter 

blank and including no identifying 

information in the comment itself. 

Comments submitted via 

www.regulations.gov are immediately 

available for public inspection. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Candace M. J. Goforth, Director, Office 

of Defense Trade Controls Policy, U.S. 

Department of State, telephone (202) 

663–2792, or email 

DDTCResponseTeam@state.gov. ATTN: 

Specially Designed Definition. 

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,’’ 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 


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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 

and reexports. Items not subject to the 

ITAR or to the exclusive licensing 

jurisdiction of any other set of 

regulations are subject to the EAR. 

Export Control Reform Update 

The Departments of State and 

Commerce described in their respective 

Advanced Notices of Proposed 

Rulemaking (ANPRM) in December 

2010 the Administration’s plan to make 

the USML and the CCL positive, tiered, 

and aligned so that eventually they can 

be combined into a single control list 

(see ‘‘Commerce Control List: Revising 

Descriptions of Items and Foreign 

Availability,’’ 75 FR 76664 (December 9, 

2010) and ‘‘Revisions to the United 

States Munitions List,’’ 75 FR 76935 

(December 10, 2010)). The notices also 

called for the establishment of a ‘‘bright 

line’’ between the USML and the CCL to 

reduce government and industry 

uncertainty regarding export 

jurisdiction by clarifying whether 

particular items are subject to the 

jurisdiction of the ITAR or the EAR. 

While these remain the 

Administration’s ultimate Export 

Control Reform objectives, their 

concurrent implementation would be 

problematic in the near term. In order to 

more quickly reach the national security 

objectives of greater interoperability 

with U.S. allies, enhancing the defense 

industrial base, and permitting the U.S. 

Government to focus its resources on 

controlling and monitoring the export 

and reexport of more significant items to 

destinations, end-uses, and end-users of 

greater concern than NATO allies and 

other multi-regime partners, the 

Administration has decided, as an 

interim step, to propose and implement 

revisions to both the USML and the CCL 

that are more positive, but not yet 

tiered. 

Specifically, based in part on a review 

of the comments received in response to 

the December 2010 notices, the 

Administration has determined that 

fundamentally altering the structure of 

the USML by tiering and aligning it on 

a category-by-category basis would 

significantly disrupt the export control 

compliance systems and procedures of 

exporters and reexporters. For example, 

until the entire USML was revised and 

became final, some USML categories 

would follow the legacy numbering and 

control structures while the newly 

revised categories would follow a 

completely different numbering 

structure. In order to allow for the 

national security benefits to flow from 

re-aligning the jurisdictional status of 

defense articles that no longer warrant 

control on the USML on a category-bycategory basis while minimizing the 

impact on exporters’ internal control 

and jurisdictional and classification 

marking systems, the Administration 

plans to proceed with building positive 

lists now and afterward return to 

structural changes. 

Definition for ‘‘Specially Designed’’ 

Although one of the goals of the ECR 

Initiative is to describe USML controls 

without using design intent criteria, a 

few of the controls in the proposed 

revision nonetheless use the term 

‘‘specially designed.’’ It is, therefore, 

necessary for the Department to define 

the term. Two proposed definitions 

have been published to date. 

The Department first provided a draft 

definition for ‘‘specially designed’’ in 

the December 2010 ANPRM (75 FR 

76935) and noted the term would be 

used minimally in the USML, and then 

only to remain consistent with the 

Wassenaar Arrangement or other 

multilateral regime obligations or when 

no other reasonable option exists to 

describe the control without using the 

term. The definition provided at that 

time is as follows: ‘‘For the purposes of 

this Subchapter, the term ‘specially 

designed’ means that the end-item, 

equipment, accessory, attachment, 

system, component, or part (see ITAR 

§ 121.8) has properties that (i) 

distinguish it for certain predetermined 

purposes, (ii) are directly related to the 

functioning of a defense article, and (iii) 

are used exclusively or predominantly 

in or with a defense article identified on 

the USML.’’ 

The Department of Commerce 

subsequently published on July 15, 

2011, for public comment, (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 

Administration’s proposed definition of 

‘‘specially designed’’ that would be 

common to the CCL and the USML. The 

public provided more than 40 

comments on that proposed definition 

on or before the September 13, 2011, 

submission deadline. The Departments 

of State, Commerce, and Defense have 

reviewed those comments and related 

issues. The Department of State’s 

Defense Trade Advisory Group and the 

Department of Commerce’s Technical 

Advisory Committees participated in 

the review. The revised definition 

provided in this proposed rule is, but 

for a few modifications, identical to the 

definition published separately by the 

Department of Commerce (see elsewhere 

in this issue of the Federal Register). 

The overall goal of the definition is to 

differentiate between those articles 

‘‘enumerated’’ on the USML and those 

articles not enumerated but captured in 

‘‘catch-all’’ paragraphs. 

The July 15 rule referenced above 

identified nine objectives for the revised 

‘‘specially designed’’ definition. These 

objectives have not changed and the 

U.S. Government is committed to 

adopting a ‘‘specially designed’’ 

definition under the ITAR and EAR that 

would achieve these nine objectives. 

The nine objectives are to: 

(1) Preclude multiple or overlapping 

controls of similar items within and 

across the two control lists; 

(2) Be easily understood and applied 

by exporters, prosecutors, juries, and the 

U.S. Government—e.g., by using 

objective, knowable, and clear 

requirements that do not rely upon a 

need to investigate and divine the 

intentions of the original designer of a 

part or the predominant market 

applications for such items; 

(3) Be consistent with definitions 

used by the international export control 

regimes; 

(4) Not include any item specifically 

enumerated on either the USML or the 

CCL and, in order to avoid a definitional 

loop, do not use ‘‘specially designed’’ as 

a control criterion; 

(5) Be capable of excluding from 

control simple or multi-use parts such 

as springs, bolts, and rivets, and other 

types of items the U.S. Government 

determines do not warrant significant 

export controls; 

(6) Apply to both descriptions of end 

items that are ‘‘specially designed’’ to 

have particular characteristics and to 

parts and components that were 

‘‘specially designed’’ for particular end 

items; 

(7) Apply to materials and software 

because they are ‘‘specially designed’’ to 

have a particular characteristic or for a 

particular type of end item; 

(8) Not increase the current control 

level to ‘‘600 series’’ control or other 

higher end controls of items (i.e., not 

moving items currently subject to a 

lower control status to a higher level 

control status), particularly current 

EAR99 items, that are now controlled at 

lower levels; and 

(9) Not, merely as a result of the 

definition, cause historically EAR 

controlled items to become ITAR 

controlled. 

The revised ‘‘specially designed’’ 

definition provided in this notice 


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proposes a simplified two paragraph 

structure. Paragraph (a) is to identify 

what commodities, as a result of 

development, are ‘‘specially designed,’’ 

and paragraph (b) is to identify what 

parts, components, accessories, and 

attachments are excluded from 

‘‘specially designed.’’ 

Paragraph (a) begins with the phrase, 

‘‘Except for commodities described in 

(b), a commodity is ‘specially designed’ 

if, as a result of development, it [is 

within the scope of any one of three 

subparagraphs discussed below].’’ It is 

the beginning of the ‘‘catch’’ in the 

‘‘catch and release’’ structure of the 

definition. For U.S. Munitions List 

paragraphs containing the term 

‘‘specially designed,’’ a defense article is 

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

any of the three elements of paragraph 

(a) apply and none of the elements of 

paragraph (b) apply. 

Paragraph (a) is limited by the phrase, 

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

definition would also include a note to 

paragraph (b)(3) that contains the 

following definition of development for 

purposes of the proposed ‘‘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.’’ Thus, 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. Three questions one may ask to 

determine if a defense article is within 

the scope of paragraph (a) are as follows: 

(1) Does the commodity, 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?; (2) Is the 

part or component, as a result of 

development, necessary for an 

enumerated defense article to function 

as designed?; and (3) Is the accessory or 

attachment, as a result of development, 

used with an enumerated defense article 

to enhance its usefulness or 

effectiveness? If the answer to all three 

questions is ‘‘no,’’ then the commodity 

is not ‘‘specially designed’’ and further 

analysis pursuant to paragraph (b) is not 

necessary. If the answer to any one of 

the questions is ‘‘yes,’’ then the exporter 

or reexporter must determine whether 

any one of the five parts of paragraph (b) 

of the definition applies. If any one of 

the five paragraph (b) exclusions apply, 

then the commodity is not ‘‘specially 

designed.’’ If none do, then the 

commodity is ‘‘specially designed.’’ 

Paragraph (a)(1) would capture a 

commodity 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.’’ This criterion is 

essentially the same as was proposed in 

the July 15 proposed definition. Based 

on the comments, the public found this 

part of the definition clear. As an 

example, even if a commodity is capable 

of use with a controlled defense article, 

it is not captured by this part of 

paragraph (a) unless someone did 

something during the commodity’s 

development so that it would achieve or 

exceed the performance levels, 

characteristics, or functions described in 

a referenced USML paragraph. 

Paragraph (a)(2) would capture a part 

or component if it, as a result of 

‘‘development,’’ ‘‘is necessary for an 

enumerated defense article to function 

as designed.’’ The Department realizes 

that this element is similar to paragraph 

(a)(1), but believes that 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. Paragraph (a)(2) thus 

will capture parts and components that 

are necessary for another article on the 

USML to function ‘‘as designed.’’ If an 

article will function ‘‘as designed’’ 

without the part or component at issue, 

then that part or component is not 

captured by paragraph (a)(2). 

Paragraph (a)(3) would capture an 

accessory or attachment if it, as a result 

of ‘‘development,’’ ‘‘is used with an 

enumerated defense article to enhance 

its usefulness or effectiveness.’’ This 

phrase is from the ITAR’s current and 

the EAR’s proposed definitions of 

‘‘accessory,’’ ‘‘attachment,’’ and 

‘‘equipment.’’ 

The July 15 proposed ‘‘specially 

designed’’ definition included two 

exclusion paragraphs (paragraphs (c) 

and (d)) that identified what items 

would not be ‘‘specially designed.’’ 

Many commenting parties requested the 

July 15 definition be simplified and 

shortened, including the exclusion 

paragraphs. The Department has 

addressed these concerns by adopting a 

simplified structure for the exclusion 

paragraph (b) included in this proposed 

rule. Specifically, any part, component, 

accessory, or attachment that is 

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. 

These five exclusions under 

paragraph (b) would play an important 

role in this proposed ‘‘specially 

designed’’ definition. Paragraphs (a)(2) 

and (a)(3) are 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, and 

attachments than is intended. Paragraph 

(b) would work to release from 

inclusion under ‘‘specially designed’’ 

specific and non-specific parts, 

components, accessories, and 

attachments, consistent with existing 

U.S. export control and international 

commitments. The exclusions under 

paragraph (b) as proposed in this rule 

would refine the set of parts, 

components, accessories, and 

attachments that would be subject to the 

‘‘catch-all’’ controls on the USML. In 

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

inextricably linked and are intended to 

work together to identify the parts, 

components, accessories, and 

attachments 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 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, as described in the ‘‘bright line,’’ 

‘‘positive list’’ objectives in the 

December 2010 ANPRM (75 FR 76935). 

An example of an article that would 

not be ‘‘specially designed’’ as a result 

of proposed paragraph (b)(4) is one that 

was or is being developed to be 

interchangeable between an aircraft 

enumerated in USML Category VIII and 

also an aircraft controlled by ECCN 

9A610.a. Such a conclusion for a 

particular article does not necessarily 

mean that the article is not subject to 

export controls. The article may, for 

example, be enumerated on the USML 

and, thus, ITAR controlled. In addition, 

if it is not enumerated on the USML, it 

might fall with the scope of the controls 

at ECCN 9A610.x. The jurisdiction of an 

article must be determined on a case-bycase basis. Proposed paragraph (b)(4) 

merely states that such an article would 

not be within the scope of a ‘‘catch-all’’ 

paragraph of the USML in light of its 


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commonality with non-ITAR controlled 

articles. 

Paragraph (a) would create more 

objective tests for what defense articles, 

as a result of development, would be 

‘‘specially designed’’ based on the 

criteria identified in (a)(1), (a)(2), or 

(a)(3). Paragraph (b) would create more 

objective tests for what parts, 

components, accessories, and 

attachments 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) 

would allow this proposed ‘‘specially 

designed’’ definition to achieve the nine 

stated objectives identified above for the 

definition. 

Request for Comments 

As the U.S. Government works 

through the proposed revisions to the 

USML, some solutions have been 

adopted that were determined to be the 

best of available options. With the 

thought that multiple perspectives 

would be beneficial to the USML 

revision process, the Department 

welcomes the assistance of users of the 

lists and requests input on the 

following: 

(1) The key goal of this rulemaking is 

to establish a definition of ‘‘specially 

designed’’ that provides a ‘‘bright line’’ 

between the commodities controlled by 

the USML and the CCL. The public is 

asked to provide comment on the clarity 

and understanding of the proposed 

definition. 

(2) The key goal of this rulemaking is 

to establish a definition of ‘‘specially 

designed’’ that is applicable to all USML 

categories. The public is asked to 

provide comments on the use of 

‘‘specially designed’’ in proposed rules 

for USML revision where the comment 

period has already closed, as well those 

proposed rules with open comment 

periods. 

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 

is publishing this rule 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. As noted above, and also 

without prejudice to the Department 

position that this proposed rulemaking 

is not subject to the APA, the 

Department previously published a 

related Advance Notice of Proposed 

Rulemaking (RIN 1400–AC78) on 

December 10, 2010 (75 FR 76935), and 

accepted comments for 60 days. 

Regulatory Flexibility Act 

Since the Department is of the 

opinion that this proposed rule is 

exempt from the rulemaking provisions 

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

analysis under the Regulatory 

Flexibility Act. 

Unfunded Mandates Reform Act of 1995 

This proposed amendment does not 

involve a mandate that will result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any year and it will not significantly 

or uniquely affect small governments. 

Therefore, no actions were deemed 

necessary under the provisions of the 

Unfunded Mandates Reform Act of 

1995. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 

This proposed amendment has been 

found not to be a major rule within the 

meaning of the Small Business 

Regulatory Enforcement Fairness Act of 

1996. 

Executive Orders 12372 and 13132 

This proposed amendment will not 

have substantial direct effects on the 

States, on the relationship between the 

national government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. Therefore, in 

accordance with Executive Order 13132, 

it is determined that this proposed 

amendment does not have sufficient 

federalism implications to require 

consultations or warrant the preparation 

of a federalism summary impact 

statement. The regulations 

implementing Executive Order 12372 

regarding intergovernmental 

consultation on Federal programs and 

activities do not apply to this proposed 

amendment. 

Executive Orders 12866 and 13563 

Executive Orders 13563 and 12866 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributed impacts, and equity). 

Executive Order 13563 emphasizes 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, 

the rule has been reviewed by the Office 

of Management and Budget (OMB). 

Executive Order 12988 

The Department of State has reviewed 

the proposed amendment in light of 

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

Order 12988 to eliminate ambiguity, 

minimize litigation, establish clear legal 

standards, and reduce burden. 

Executive Order 13175 

The Department of State has 

determined that this rulemaking will 

not have tribal implications, will not 

impose substantial direct compliance 

costs on Indian tribal governments, and 

will not preempt tribal law. 

Accordingly, Executive Order 13175 

does not apply to this rulemaking. 

Paperwork Reduction Act 

Notwithstanding any other provision 

of law, no person is required to respond 

to, nor is subject to a penalty for failure 

to comply with, a collection of 

information, subject to the requirements 

of the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) (PRA), unless 

that collection of information displays a 

currently valid OMB control number. 

This proposed rule would affect the 

following approved collections: (1) 

Statement of Registration, DS–2032, 

OMB No. 1405–0002; (2) Application/ 

License for Permanent Export of 

Unclassified Defense Articles and 

Related Unclassified Technical Data, 

DSP–5, OMB No. 1405–0003; (3) 

Application/License for Temporary 

Import of Unclassified Defense Articles, 

DSP–61, OMB No. 1405–0013; (4) 

Nontransfer and Use Certificate, DSP– 

83, OMB No. 1405–0021; (5) 

Application/License for Permanent/ 

Temporary Export or Temporary Import 

of Classified Defense Articles and 

Classified Technical Data, DSP–85, 

OMB No. 1405–0022; (6) Application/ 

License for Temporary Export of 

Unclassified Defense Articles, DSP–73, 

OMB No. 1405–0023; (7) Statement of 

Political Contributions, Fees, or 

Commissions in Connection with the 

Sale of Defense Articles or Services, 


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OMB No. 1405–0025; (8) Authority to 

Export Defense Articles and Services 

Sold Under the Foreign Military Sales 

(FMS) Program, DSP–94, OMB No. 

1405–0051; (9) 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; (10) Request for Approval of 

Manufacturing License Agreements, 

Technical Assistance Agreements, and 

Other Agreements, DSP–5, OMB No. 

1405–0093; (11) Maintenance of Records 

by Registrants, OMB No. 1405–0111; 

(12) Annual Brokering Report, DS–4142, 

OMB No. 1405–0141; (13) Brokering 

Prior Approval (License), DS–4143, 

OMB No. 1405–0142; (14) Projected Sale 

of Major Weapons in Support of Section 

25(a)(1) of the Arms Export Control Act, 

DS–4048, OMB No. 1405–0156; (15) 

Export Declaration of Defense Technical 

Data or Services, DS–4071, OMB No. 

1405–0157; (16) Request for Commodity 

Jurisdiction Determination, DS–4076, 

OMB No. 1405–0163; (17) Request to 

Change End-User, End-Use, and/or 

Destination of Hardware, DS–6004, 

OMB No. 1405–0173; (18) Request for 

Advisory Opinion, DS–6001, OMB No. 

1405–0174; (19) Voluntary Disclosure, 

OMB No. 1405–0179; and (20) 

Technology Security/Clearance Plans, 

Screening Records, and Non-Disclosure 

Agreements Pursuant to 22 CFR 126.18, 

OMB No. 1405–0195. The Department 

of State believes there will be minimal 

changes to these collections. The 

Department of State believes the 

combined effect of all rules to be 

published moving commodities from 

the USML to the EAR as part of the 

Administration’s Export Control Reform 

would decrease the number of license 

applications by approximately 30,000 

annually. The Department of State is 

looking for comments on the potential 

reduction in burden. 

List of Subjects in 22 CFR Part 120 

Arms and munitions, Exports. 

Accordingly, for the reasons set forth 

above, Title 22, Chapter I, Subchapter 

M, part 120 is proposed to be amended 

as follows: 

PART 120—PURPOSE AND 

DEFINITIONS 

1. The authority citation for part 120 

continues to read as follows: 

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

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

2797); 22 U.S.C. 2794; E.O. 11958, 42 FR 

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

Comp. p. 79; 22 U.S.C. 2658; Pub. L. 105– 

261, 112 Stat. 1920. 

2. Add § 120.41 to read as follows: 

§ 120.41 Specially designed. 

When applying this definition, follow 

this sequential analysis: Begin with 

paragraph (a)(1) of this section and 

proceed through each subsequent 

paragraph. If a commodity would not be 

controlled as a result of the application 

of the standards in paragraph (a) of this 

section, then it is not necessary to work 

through paragraph (b) of this section. If 

a commodity would be controlled as a 

result of paragraph (a), then it is 

necessary to work through each of the 

elements of paragraph (b). Commodities 

described in any of paragraphs (b)(1) 

through (5) of this section are not 

‘‘specially designed’’ commodities 

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). 

(a) Except for commodities described 

in (b) of this section, a commodity is 

‘‘specially designed’’ if, as a result of 

development, it: 

(1) Has properties peculiarly 

responsible for achieving or exceeding 

the controlled performance levels, 

characteristics, or functions described in 

the relevant U.S. Munitions List 

paragraph; 

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

subchapter) or component (see 

§ 121.8(b) of this subchapter) necessary 

for an enumerated defense article to 

function as designed; or 

(3) Is an accessory or attachment (see 

§ 121.8(c) of this subchapter) used with 

an enumerated defense article to 

enhance its usefulness or effectiveness. 

(b) A part, component, accessory, or 

attachment is not controlled by a U.S. 

Munitions List ‘‘catch-all’’ paragraph if 

it: 

(1) Is enumerated in a U.S. Munitions 

List paragraph; 

(2) Is a single unassembled part that 

is of a type commonly used in multiple 

types of commodities not enumerated 

on the U.S. Munitions List or the 

Commerce Control List, such as 

threaded fasteners (e.g., screws, bolts, 

nuts, nut plates, studs, inserts), other 

fasteners (e.g., clips, rivets, pins), basic 

hardware (e.g., washers, spacers, 

insulators, grommets, bushings, 

springs), wire, and solder; 

(3) Has the same form, fit, and 

performance capabilities as a part, 

component, accessory, or attachment 

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 a 

reasonable expectation of use in or with 

defense articles enumerated on the U.S. 

Munitions List and commodities not on 

the U.S. Munitions List; or 

(5) Was or is being developed with no 

reasonable expectation of use for a 

particular application. 

Note 1: The term ‘‘enumerated’’ refers to 

any article which is identified on the U.S. 

Munitions List or the Commerce Control List. 

Note 2: 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 ‘‘catchall’’ 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 

purposes 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 

capable of being produced on an assembly 

line using the approved, standardized design. 

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

purposes 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 

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

defense article not to be ‘‘specially designed’’ 


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Federal Register / Vol. 77, No. 118 / Tuesday, June 19, 2012 / Proposed Rules 36433 

on the basis of (b)(4) or (b)(5), documents 

contemporaneous with its development, in 

their totality, must establish the elements of 

paragraph (b)(4) or (b)(5). Such documents 

may include concept design information, 

marketing plans, declarations in patent 

applications, or contracts. Absent such 

documents, the commodity may not to be 

excluded from being ‘‘specially designed’’ by 

either paragraph (b)(4) or (b)(5). 

Note to paragraph (b)(5): If you have 

knowledge that the commodity was or is 

being developed for a particular application, 

you may not rely on paragraph (b)(5) to 

conclude that the commodity was or is not 

‘‘specially designed.’’ 

Dated: June 7, 2012. 

Rose E. Gottemoeller, 

Acting Under Secretary, Arms Control and 

International Security, Department of State. 

[FR Doc. 2012–14471 Filed 6–15–12; 11:15 am] 

BILLING CODE 4710–25–P 

DEPARTMENT OF THE TREASURY 

Alcohol and Tobacco Tax and Trade 

Bureau 

27 CFR Part 9 

[Docket No. TTB–2012–0005; Notice No. 

130] 

RIN 1513–AB88 

Proposed Establishment of the Elkton 

Oregon Viticultural Area 

AGENCY: Alcohol and Tobacco Tax and 

Trade Bureau, Treasury. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Alcohol and Tobacco Tax 

and Trade Bureau (TTB) proposes to 

establish the approximately 74,900-acre 

‘‘Elkton Oregon’’ viticultural area in 

Douglas County, Oregon. The proposed 

viticultural area lies totally within the 

Umpqua Valley viticultural area and the 

multi-county Southern Oregon 

viticultural area. TTB designates 

viticultural areas to allow vintners to 

better describe the origin of their wines 

and to allow consumers to better 

identify wines they may purchase. TTB 

invites comments on this proposed 

addition to its regulations. 

DATES: Comments must be received on 

or before August 20, 2012. 

ADDRESSES: Please send your comments 

on this notice to one of the following 

addresses: 

• http://www.regulations.gov (via the 

online comment form for this notice as 

posted within Docket No. TTB–2012– 

0005 at ‘‘Regulations.gov,’’ the Federal 

e-rulemaking portal); 

• U.S. mail: Director, Regulations and 

Rulings Division, Alcohol and Tobacco 

Tax and Trade Bureau, P.O. Box 14412, 

Washington, DC 20044–4412; or 

• Hand delivery/courier in lieu of 

mail: Alcohol and Tobacco Tax and 

Trade Bureau, 1310 G Street NW., Suite 

200–E, Washington, DC 20005. 

See the Public Participation section of 

this notice for specific instructions and 

requirements for submitting comments, 

and for information on how to request 

a public hearing. 

You may view copies of this notice, 

selected supporting materials, and any 

comments TTB receives about this 

proposal at http://www.regulations.gov 

within Docket No. TTB–2012–0005. A 

link to that docket is posted on the TTB 

Web site at http://www.ttb.gov/wine/ 

wine_rulemaking.shtml under Notice 

No. 130. You also may view copies of 

this notice, all related petitions, maps or 

other supporting materials, and any 

comments TTB receives about this 

proposal by appointment at the TTB 

Information Resource Center, 1310 G 

Street NW., Washington, DC 20220. 

Please call 202–453–2270 to make an 

appointment. 

FOR FURTHER INFORMATION CONTACT: 

Karen A. Thornton, Regulations and 

Rulings Division, Alcohol and Tobacco 

Tax and Trade Bureau, 1310 G Street 

NW., Box 12, Washington, DC 20005; 

telephone 202–453–1039, ext. 175. 

SUPPLEMENTARY INFORMATION: 

Background on Viticultural Areas 

TTB Authority 

Section 105(e) of the Federal Alcohol 

Administration Act (FAA Act), 27 

U.S.C. 205(e), authorizes the Secretary 

of the Treasury to prescribe regulations 

for the labeling of wine, distilled spirits, 

and malt beverages. The FAA Act 

provides that these regulations should, 

among other things, prohibit consumer 

deception and the use of misleading 

statements on labels, and ensure that 

labels provide the consumer with 

adequate information as to the identity 

and quality of the product. The Alcohol 

and Tobacco Tax and Trade Bureau 

(TTB) administers the FAA Act 

pursuant to section 1111(d) of the 

Homeland Security Act of 2002, 

codified at 6 U.S.C. 531(d). The 

Secretary has delegated various 

authorities through Treasury 

Department Order 120–01 (Revised), 

dated January 21, 2003, to the TTB 

Administrator to perform the functions 

and duties in the administration and 

enforcement of this law. 

Part 4 of the TTB regulations (27 CFR 

part 4) allows the establishment of 

definitive viticultural areas and the use 

of their names as appellations of origin 

on wine labels and in wine 

advertisements. Part 9 of the TTB 

regulations (27 CFR part 9) contains the 

list of approved American viticultural 

areas. 

Definition 

Section 4.25(e)(1)(i) of the TTB 

regulations (27 CFR 4.25(e)(1)(i)) defines 

a viticultural area for American wine as 

a delimited grape-growing region having 

distinguishing features as described in 

part 9 of the regulations and a name and 

a delineated boundary as established in 

part 9 of the regulations. These 

designations allow vintners and 

consumers to attribute a given quality, 

reputation, or other characteristic of a 

wine made from grapes grown in an area 

to its geographic origin. The 

establishment of viticultural areas 

allows vintners to describe more 

accurately the origin of their wines to 

consumers and helps consumers to 

identify wines they may purchase. 

Establishment of a viticultural area is 

neither an approval nor an endorsement 

by TTB of the wine produced in that 

area. 

Requirements 

Section 4.25(e)(2) of the TTB 

regulations outlines the procedure for 

proposing an American viticultural area 

and provides that any interested party 

may petition TTB to establish a grapegrowing region as a viticultural area. 

Section 9.12 of the TTB regulations 

(27 CFR 9.12) prescribes standards for 

petitions for the establishment or 

modification of American viticultural 

areas. Such petitions must include the 

following— 

• Evidence that the area within the 

proposed viticultural area boundary is 

locally or nationally known by the 

viticultural area name specified in the 

petition; 

• An explanation of the basis for 

defining the boundary of the proposed 

viticultural area; 

• A narrative description of the 

features of the proposed viticultural area 

that affect viticulture, such as climate, 

geology, soil, physical features, and 

elevation, that make the proposed 

viticultural area distinctive and 

distinguish it from adjacent areas 

outside the proposed viticultural area 

boundary; 

• A copy of the appropriate United 

States Geological Survey (USGS) map(s) 

showing the location of the proposed 

viticultural area, with the boundary of 

the proposed viticultural area clearly 

drawn thereon; and 

• A detailed narrative description of 

the proposed viticultural area boundary 

based on USGS map markings. 


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