Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 30361 

List of Subjects in 48 CFR Part 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 252 is 

amended as follows: 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 1. The authority citation for 48 CFR 

part 252 continues to read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

252.225–7017 [Amended] 

■ 2. Section 252.225–7017 is amended 

by— 

■ a. In paragraph (a), in the definition of 

‘‘Designated country,’’ paragraph (ii), by 

removing ‘‘Australia, Bahrain, Canada, 

Chile, Costa Rica’’ and adding 

‘‘Australia, Bahrain, Canada, Chile, 

Columbia, Costa Rica’’ in its place; and 

■ b. In paragraph (a) in the definition of 

‘‘Free Trade Agreement country’’ 

removing ‘‘Australia, Bahrain, Canada, 

Chile, Costa Rica’’ and adding 

‘‘Australia, Bahrain, Canada, Chile, 

Columbia, Costa Rica’’ in its place. 

252.225–7021 [Amended] 

■ 3. Section 252.225–7021 is amended 

in paragraph (a), in the definition of 

‘‘Designated country,’’ paragraph (ii), by 

removing ‘‘Australia, Bahrain, Canada, 

Chile, Costa Rica’’ and adding 

‘‘Australia, Bahrain, Canada, Chile, 

Columbia, Costa Rica’’ in its place. 

252.225–7045 [Amended] 

■ 4. Section 252.225–7045 is amended 

in paragraph (a), in the definition of 

‘‘Designated country,’’ paragraph (2), by 

removing ‘‘Australia, Bahrain, Canada, 

Chile, Costa Rica’’ and adding 

‘‘Australia, Bahrain, Canada, Chile, 

Columbia, Costa Rica’’ in its place. 

[FR Doc. 2012–11559 Filed 5–21–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisitions Regulations 

System 

48 CFR Parts 225 and 252 

RIN 0750–AH70 

Defense Federal Acquisition 

Regulation Supplement; Defense Trade 

Cooperation Treaty With the United 

Kingdom (DFARS 2012–D034) 

AGENCY: Defense Acquisition 

Regulations System; Department of 

Defense (DoD). 

ACTION: Interim rule. 

SUMMARY: DoD is issuing an interim rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement requirements of 

the Treaty Between the Government of 

the United States of America and the 

Government of the United Kingdom of 

Great Britain and Northern Ireland 

Concerning Defense Trade Cooperation 

(the Treaty) and the Security 

Cooperation Act of 2010 regarding 

export control regulations between the 

United States and the United Kingdom. 

The Treaty and statute establish an 

Approved Community that includes 

members of the U.S. Government and 

the government of the United Kingdom. 

DATES: Effective Date: May 22, 2012. 

Comment date: Comments on the 

interim rule should be submitted in 

writing to the address shown below on 

or before July 23, 2012, to be considered 

in the formation of the final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2012–D034, 

using any of the following methods: 

• Regulations.gov: http:// 

www.regulations.gov. Submit comments 

via the Federal eRulemaking portal by 

entering ‘‘DFARS Case 2012–D034’’ 

under the heading ‘‘Enter keyword or 

ID’’ and selecting ‘‘Search.’’ Select the 

link ‘‘Submit a Comment’’ that 

corresponds with ‘‘DFARS Case 2012– 

D034.’’ Follow the instructions provided 

at the ‘‘Submit a Comment’’ screen. 

Please include your name, company 

name (if any), and ‘‘DFARS Case 2012– 

D034’’ on your attached document. 

• Email: dfars@osd.mil. Include 

DFARS Case 2012–D034 in the subject 

line of the message. 

• Fax: 571–372–6094. 

• Mail: Defense Acquisition 

Regulations System, Attn: (Insert case 

manager’s name), OUSD (AT&L) DPAP/ 

DARS, Room 3B855, 3060 Defense 

Pentagon, Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check www.regulations.gov, 

approximately two to three days after 

submission to verify posting (except 

allow 30 days for posting of comments 

submitted by mail). 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Williams, Defense Acquisition 

Regulations System, OUSD (AT&L) 

DPAP/DARS, Room 3B855, 3060 

Defense Pentagon, Washington, DC 

20301–3060. Telephone 571–372–6106; 

facsimile 571–372–6101. 

SUPPLEMENTARY INFORMATION: 

I. Background 

This rule streamlines the export 

control regulations between the United 

States and the United Kingdom under 

specified circumstances. 

The U.S. Government controls exports 

of defense articles, technical data, and 

defense services. The governing law is 

the Arms Export Control Act (AECA) (22 

U.S.C. 2778 et seq.) and implementing 

regulations in the International Traffic 

in Arms Regulations (ITAR) (22 CFR 

120–130). 

Under the ITAR, the Department of 

State manages an export licensing 

system in which numerous government 

approvals are often necessary for 

companies to hold discussions about 

potential projects, pursue joint 

activities, ship hardware, or transfer 

know-how to one another, and even 

sometimes to transfer engineers and 

other company employees from one 

country to another. This process can be 

challenging and time consuming for 

U.S. exporters and for foreign firms in 

their supply chains. 

The U.S. concluded the Treaty with 

the United Kingdom to enable their 

militaries, security authorities, and their 

approved industries to exchange 

defense articles, technical information, 

and defense services more freely. The 

Treaty establishes exemptions for 

certain exports and transfers that meet 

the Treaty requirements. Other exports 

and transfers remain governed by AECA 

and the ITAR. 

The Treaty and implementing 

arrangements with the United Kingdom 

may be accessed at http:// 

www.state.gov/t/pm/rls/othr/misc/ 

92770.htm. 

The implementing legislation is in 

Title I of Pub. L. 111–266, the Security 

Cooperation Act of 2010. 

The Senate conditions upon 

ratification are at http:// 

www.govtrack.us/congress/ 

billtext.xpd?bill=s111-3847. 


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30362 Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 

The U.S. Department of State 

regulations implementing the Treaty 

with the United Kingdom are at 22 CFR 

part 120. 

The Treaty establishes an Approved 

Community that includes members of 

the U.S. Government and the 

government of the United Kingdom, 

including various Ministries, 

Departments, and Agencies, as well as 

selected defense and security companies 

and facilities. Exports of most U.S. 

defense articles, including technical 

data and defense services, are generally 

permitted to enter and to move freely 

within this community, without the 

need for government approvals and 

licenses—provided that all persons 

comply with all other statutory and 

regulatory requirements concerning the 

import of defense articles and defense 

services or the possession or transfer of 

defense articles,—when in support of— 

• Combined U.S.-U.K. military or 

counterterrorism operations; 

• U.S.-U.K. cooperative security and 

defense research, development, 

production, and support programs; 

• Mutually agreed to security and 

defense projects that are for U.K. 

Government use only; and 

• U.S. Government end use. 

Under the Treaty, instead of a U.S. 

exporter preparing and requesting U.S. 

Department of State approval of an 

export license or Technical Assistance 

Agreement for a project, which would 

normally take around 45–60 days, the 

exporter will verify information on the 

U.S. Department of State Web site that— 

• The U.K. industry member is a 

member of the Approved Community; 

• The project is on the list of 

approved projects and items are for U.S. 

Government end use; and 

• The defense article is not on the 

Exempted Technology List. 

If the members of the United States 

Community and United Kingdom 

Community, the project, and the 

technology are verified, then the U.S. 

exporter and the U.K. member may 

proceed without export licenses. 

In addition to checking the above 

three lists, an exporter using the Treaty 

also must comply with any applicable 

related ITAR requirements and 22 CFR 

126.17(g) and other applicable U.S. laws 

and regulations. These requirements 

include marking and recordkeeping to 

ensure that export-controlled items are 

recognized as such and handled 

accordingly. Similarly, DFARS 225.7902 

implements requirements that relate to 

exports that, for example, a prospective 

contractor may make under a DoD 

solicitation or that a contractor may 

make in performance of a DoD contract. 

II. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is a significant 

regulatory action and, therefore, was 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

III. Regulatory Flexibility Act 

DoD does not expect this interim rule 

to have a significant economic impact 

on a substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq., 

because the rule does not impose 

burdens on small businesses. Small 

businesses that are exporters will 

benefit from being able to use the 

streamlined treaty process to make 

exports that are associated with 

responding to DoD solicitations and 

performance of DoD contracts. However, 

an initial regulatory flexibility analysis 

has been performed and is summarized 

as follows: 

The objective of the rule is to 

streamline the export control 

regulations between the United States 

and the United Kingdom under 

specified circumstances. The legal basis 

for the rule is the Security Cooperation 

Act of 2010 (Pub. L. 111–266), enacted 

October 8, 2010. 

Although this rule adds a 

representation that requires the 

approval of the Office of Management 

and Budget under 44 U.S.C. chapter 35, 

the net effect will be to significantly 

streamline and reduce paperwork 

requirements between the United States 

and the United Kingdom under the 

process set forth in the Treaty as 

implemented by the ITAR by no longer 

requiring individual export control 

licenses in certain circumstances within 

the Approved Community. In short, one 

representation per offeror will 

streamline the current process. 

The great majority of industry 

members that comprise the Approved 

Community are not small businesses 

due to the specialized knowledge of 

export control regulations and the cost 

involved in compliance. Therefore, the 

cost is anticipated to be less than five 

million dollars, but will accrue a net 

cost savings by streamlining the 

requirements of industry compared to 

the present export control licensing 

procedures. 

The rule does not duplicate, overlap, 

or conflict with any other Federal rules. 

This rule implements the Treaty and 

statute and DoD is not aware of any 

alternative methods of achieving the 

objectives of the rule. Furthermore, the 

net impact of the rule is expected to be 

beneficial to small businesses. 

DoD invites comments from small 

business concerns and other interested 

parties on the expected impact of this 

rule on small entities. 

DoD will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by this rule in accordance with 5 U.S.C. 

610. Interested parties must submit such 

comments separately and should cite 5 

U.S.C. 610 (DFARS Case 2012–D034), in 

correspondence. 

IV. Paperwork Reduction Act 

The rule contains information 

collection requirements that require the 

approval of the Office of Management 

and Budget under the Paperwork 

Reduction Act (44 U.S.C. chapter 35). 

OMB has cleared this information 

collection requirement under OMB 

Control Number 0704–0488, titled: 

Defense Trade Cooperation Treaty with 

the United Kingdom (DFARS 252.225). 

The annual reporting burden is 

estimated as follows: 

Respondents: 110. 

Responses per respondent: 1. 

Total annual responses: 110. 

Preparation hours per response: 0.1. 

Total response burden hours: 11. 

This rule will result in a significantly 

streamlined process and reduced 

paperwork requirements overall 

between the United States and the 

United Kingdom under the process set 

forth in the Treaty as implemented by 

the ITAR by no longer requiring 

individual export licenses within the 

Approved Community. In short, one 

representation per offeror will 

streamline the current process. 

B. Request for Comments Regarding 

Paperwork Burden 

Written comments and 

recommendations on the information 

collection, including suggestions for 

reducing this burden, should be sent not 

later than July 23, 2012 to Ms. Jasmeet 

Seehra at the Office of Management and 

Budget, Desk Officer for DoD, Room 

10236, New Executive Office Building, 

Washington, DC 20503, or email 

Jasmeet_K._Seehra@omb.eop.gov, with a 


srobinson on DSK4SPTVN1PROD with RULES2
Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 30363 

copy to the Defense Acquisition 

Regulations System, Attn: (Ms. Amy 

Williams), OUSD(AT&L)DPAP/DARS, 

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Comments can be received from 30 to 60 

days after the date of this notice, but 

comments to OMB will be most useful 

if received by OMB within 30 days after 

the date of this notice. 

Public comments are particularly 

invited on: whether this collection of 

information is necessary for the proper 

performance of functions of the DFARS, 

and will have practical utility; whether 

our estimate of the public burden of this 

collection of information is accurate, 

and based on valid assumptions and 

methodology; ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and ways in 

which we can minimize the burden of 

the collection of information on those 

who are to respond, through the use of 

appropriate technological collection 

techniques or other forms of information 

technology. 

To request more information on this 

information collection or to obtain a 

copy of the information collection and 

associated collection instruments, 

please write to the Defense Acquisition 

Regulations System, Attn: (Ms. Amy 

Williams), OUSD(AT&L)DPAP/DARS, 

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060, or email 

dfars@osd.mil. Include DFARS Case 

2012–D034 in the subject line of the 

message. Requesters may obtain a copy 

of the supporting statement from the 

point of contact specified herein. Please 

cite OMB Control Number 0704–0488, 

Defense Trade Cooperation Treaty with 

the United Kingdom (DFARS 252.225), 

in all correspondence. 

VI. Determination To Issue an Interim 

Rule 

A determination has been made under 

the authority of the Secretary of Defense 

that urgent and compelling reasons exist 

to promulgate this interim rule without 

prior opportunity for public comment. 

This action is necessary because the 

Department of State final rule 

implementing the Treaty between the 

Government of the United States of 

America and the Government of the 

United Kingdom of Great Britain and 

Northern Ireland Concerning Defense 

Trade Cooperation (Treaty Doc. 110–7) 

and making other updates to the ITAR 

became effective on April 13, 2012 (77 

FR 23538 dated April 19, 2012). 

Expedited implementation of an interim 

DFARS rule is based upon the DFARS’ 

integral ties with the ITAR and the 

National Industrial Security Program 

Operating Manual (NISPOM). The 

NISPOM and DFARS regulations 

operationalize the ITAR guidance for 

members of the United States 

Community and United Kingdom 

Community in the Approved 

Community responsible for most of the 

operational functions. 

However, pursuant to 41 U.S.C. 1707 

and FAR 1.501–3(b), DoD will consider 

public comments received in response 

to this interim rule in the formation of 

the final rule. 

List of Subjects in 48 CFR Parts 225 and 

252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 225 and 252 

are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 225 and 252 continues to read as 

follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

PART 225—FOREIGN ACQUISITION 

■ 2. Add subpart 225.79 to read as 

follows: 

Subpart 225.79—EXPORT CONTROL 

Sec. 

225.7900 Scope of subpart. 

225.7901 [Reserved] 

225.7902 Defense Trade Cooperation Treaty 

with the United Kingdom. 

225.7902–1 Definitions. 

225.7902–2 Purpose. 

225.7902–3 Policy. 

225.7902–4 Procedures. 

225.7902–5 Solicitation provision and 

contract clause. 

Subpart 225.79—EXPORT CONTROL 

225.7900 Scope of subpart. 

This subpart implements the 

requirements of the Security 

Cooperation Act of 2010 (Pub. L. 111– 

266) and the Treaty Between the 

Government of the United States of 

America and the Government of the 

United Kingdom of Great Britain and 

Northern Ireland Concerning Defense 

Trade Cooperation (the Treaty) 

regarding export control. See PGI 

225.7902 for additional information. 

225.7901 [Reserved] 

225.7902 Defense Trade Cooperation 

Treaty with the United Kingdom. 

This section implements the Treaty 

and the Implementing Arrangement for 

DoD solicitations and contracts that 

authorize prospective contractors and 

contractors to use the Treaty to respond 

to DoD solicitations and in the 

performance of DoD contracts. 

225.7902–1 Definitions. 

Approved Community, defense 

articles, export, Implementing 

Arrangement, qualifying defense 

articles, transfer, Treaty, and U.S. DoD 

Treaty-eligible requirements are defined 

in DFARS clause 252.225–7047, Exports 

by Approved Community Members in 

Performance of the Contract. 

225.7902–2 Purpose. 

The Treaty permits the export of 

certain U.S. defense articles, technical 

data, and defense services, without U.S. 

export licenses or other written 

authorization under the International 

Traffic in Arms Regulations (ITAR) into 

and within the Approved Community, 

as long as the exports are in support of 

purposes specified in the Treaty. All 

persons must continue to comply with 

statutory and regulatory requirements 

outside of DFARS and ITAR concerning 

the import of defense articles and 

defense services or the possession or 

transfer of defense articles, including, 

but not limited to, regulations issued by 

the Bureau of Alcohol, Tobacco, 

Firearms and Explosives found at 27 

CFR Parts 447, 478, and 479, which are 

unaffected by the Defense Trade 

Cooperation Treaty between the United 

States and the United Kingdom. The 

Approved Community consists of U.S. 

entities that are registered with the 

Department of State and are eligible 

exporters, the U.S. Government, and 

certain governmental and commercial 

facilities in the United Kingdom that are 

approved and listed by the U.S. 

Government. See PGI 225.7902–2 for 

additional information. 

225.7902–3 Policy. 

DoD will facilitate maximum use of 

the Treaty by prospective contractors 

responding to DoD solicitations and by 

contractors eligible to export qualifying 

defense articles under DoD contracts in 

accordance with 22 CFR 126.17(g). 

225.7902–4 Procedures. 

(a) For all solicitations and contracts 

eligible for Treaty coverage (see PGI 

225.7902–4(1)), the program manager 

shall identify in writing and submit to 

the contracting officer prior to issuance 

of a solicitation and prior to award of a 

contract— 

(1) The qualifying Treaty Scope 

paragraph (Article 3(1)(a), 3(1)(b), or 

3(1)(d)); and 

(2) The qualifying defense article(s) 

using the categories described in 22 CFR 

126.17(g). 

(b) If applicable, the program manager 

shall also identify in writing and submit 

to the contracting officer any specific 

Part C, Treaty-exempted technology list 


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30364 Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 

items, terms, and conditions for 

applicable contract line item numbers 

(See PGI 225.7902–4(2)). 

225.7902–5 Solicitation provision and 

contract clause. 

(a) Use the provision at 252.225–7046, 

Exports by Approved Community 

Members in Response to the 

Solicitation, in solicitations containing 

the clause at 252.225–7047. 

(b)(1) Use the clause at 252.225–7047, 

Exports by Approved Community 

Members in Performance of the 

Contract, in solicitations and contracts 

when— 

(i) Export-controlled items are 

expected to be involved in the 

performance of the contract and the 

clause at 252.204–7008 is used; and 

(ii) At least one contract line item is 

intended to satisfy a U.S. DoD Treatyeligible requirement. 

(2) The contracting officer shall 

complete paragraph (b) of the clause 

using information the program manager 

provided as required by 225.7902–4(a). 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 3. Add section 252.225–7046 to read 

as follows: 

252.225–7046 Exports by Approved 

Community Members in Response to the 

Solicitation. 

As prescribed in 225.7902–5(a), use 

the following provision: 

EXPORTS BY APPROVED COMMUNITY 

MEMBERS IN RESPONSE TO THE 

SOLICITATION (MAY 2012) 

(a) Definitions. The definitions of 

Approved Community, defense articles, 

export, Implementing Arrangement, 

qualifying defense articles, transfer, Treaty, 

and U.S. DoD Treaty-eligible requirements in 

DFARS clause 252.225–7047 apply to this 

provision. 

(b) All contract line items in the 

contemplated contract, except any identified 

in this paragraph, are intended to satisfy U.S. 

DoD Treaty-eligible requirements. Specific 

defense articles exempt from Treaty 

eligibility will be identified in those contract 

line items that are otherwise Treaty-eligible. 

CONTRACT LINE ITEMS NOT INTENDED 

TO SATISFY U.S. DoD TREATY-ELIGIBLE 

REQUIREMENTS: 

lllllllllllllllllllll

[Enter Contract Line Item Number(s) or enter 

‘‘None’’] 

(c) Approved Community members 

responding to the solicitation may only 

export or transfer defense articles that 

specifically respond to the stated 

requirements of the solicitation. 

(d) Subject to the other terms and 

conditions of the solicitation and the 

contemplated contract that affect the 

acceptability of foreign sources or foreign end 

products, components, parts, or materials, 

Approved Community members are 

permitted, but not required, to use the Treaty 

for exports or transfers of qualifying defense 

articles in preparing a response to this 

solicitation. 

(e) Any conduct by an offeror responding 

to this solicitation that falls outside the scope 

of the Treaty, the Implementing 

Arrangement, and the implementing 

regulations of the Department of State in 22 

CFR 126.17 (United Kingdom), and 22 CFR 

126 Supplement No. 1 (exempted 

technologies list) is subject to all applicable 

International Traffic in Arms Regulations 

(ITAR) requirements, including any criminal, 

civil, and administrative penalties or 

sanctions, as well as all other United States 

statutory and regulatory requirements outside 

of ITAR. 

(f) If the offeror uses the procedures 

established pursuant to the Treaty, the offeror 

agrees that, with regard to the export or 

transfer of a qualifying defense article 

associated with responding to the 

solicitation, the offeror shall— 

(1) Comply with the requirements and 

provisions of the Treaty, the Implementing 

Arrangement, and corresponding regulations 

(including the ITAR) of the U.S. Government 

and the government of the United Kingdom; 

(2) Prior to the export or transfer of a 

qualifying defense article— 

(i) Mark, identify, transmit, store, and 

handle any defense articles provided for the 

purpose of responding to such solicitations, 

as well as any defense articles provided with 

or developed pursuant to their responses to 

such solicitations, in accordance with the 

Treaty, the Implementing Arrangement, and 

corresponding United States Government and 

the government of the United Kingdom 

regulations including, but not limited to, the 

marking and classification requirements 

described in the applicable regulations; 

(ii) Comply with the re-transfer or re-export 

provisions of the Treaty, the Implementing 

Arrangement, and corresponding United 

States Government and the government of the 

United Kingdom regulations, including, but 

not limited to, the re-transfer and re-export 

requirements described in the applicable 

regulations; and 

(iii) Acknowledge that any conduct that 

falls outside or in violation of the Treaty, 

Implementing Arrangement, and 

implementing regulations of the applicable 

government including, but not limited to, 

unauthorized re-transfer or re-export in 

violation of the procedures established in the 

applicable Implementing Arrangement and 

implementing regulations, remains subject to 

applicable licensing requirements of the 

government of the United Kingdom and the 

United States Government, including any 

criminal, civil, and administrative penalties 

or sanctions contained therein; and 

(3) Flow down the substance of this 

provision, including this paragraph (f)(3), to 

any subcontractor at any tier intending to use 

the Treaty in responding to this solicitation. 

(g) Representation. The offeror shall check 

one of the following boxes and sign the 

representation: 

b The offeror represents that export(s) or 

transfer(s) of qualifying defense articles were 

made in preparing its response to this 

solicitation and that such export(s) or 

transfer(s) complied with the requirements of 

this provision. 

lllllllllllllllllllll

Name/Title of Duly Authorized 

Representative 

lllllllllllllllllllll

Date 

b The offeror represents that no export(s) 

or transfer(s) of qualifying defense articles 

were made in preparing its response to this 

solicitation. 

lllllllllllllllllllll

Name/Title of Duly Authorized 

Representative 

lllllllllllllllllllll

Date 

(End of provision) 

■ 4. Add section 252.225–7047 to read 

as follows: 

252.225–7047 Exports by Approved 

Community Members in Performance of the 

Contract. 

As prescribed in 225.7902–5(b), use 

the following clause: 

EXPORTS BY APPROVED COMMUNITY 

MEMBERS IN PERFORMANCE OF THE 

CONTRACT (MAY 2012) 

(a) Definitions. As used in this clause— 

Approved Community means the U.S. 

Government, U.S. entities that are registered 

and eligible exporters, and certain 

government and industry facilities in the 

United Kingdom that are approved and listed 

by the U.S. Government. 

Defense articles means articles, services, 

and related technical data, including 

software, in tangible or intangible form, listed 

on the United States Munitions List of the 

International Traffic in Arms Regulations 

(ITAR), as modified or amended. 

Export means the initial movement of 

defense articles from the United States 

Community to the United Kingdom 

Community. 

Implementing Arrangement means the 

Implementing Arrangement Pursuant to the 

Treaty between the Government of the 

United States of America and the government 

of the United Kingdom of Great Britain and 

Northern Ireland Concerning Defense Trade 

Cooperation signed on February 14, 2008. 

Qualifying defense articles means defense 

articles that are not exempt from the scope 

of the Treaty as defined in 22 CFR 126.17(g). 

Transfer means the movement of 

previously exported defense articles within 

the Approved Community. 

Treaty means the Treaty between the 

Government of the United States of America 

and the government of the United Kingdom 

of Great Britain and Northern Ireland 

Concerning Defense Trade Cooperation 

signed at Washington and London on June 21 

and 26, 2007. 

United Kingdom Community member 

means a United Kingdom government 

authority or nongovernmental entity or 

facility on the United Kingdom Community 

list accessible at http://pmddtc.state.gov. 

United States Community means— 

(1) Departments and agencies of the U.S. 

Government, including their personnel, with, 


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Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 30365 

as appropriate, security accreditation and a 

need-to-know; and 

(2) Nongovernmental U.S. entities 

registered with the Department of State and 

eligible to export defense articles under U.S. 

law and regulation, including their 

employees, with, as appropriate, security 

accreditation and a need-to-know. 

U.S. DoD Treaty-eligible requirements 

means any defense article acquired by DoD 

for use in a combined military or 

counterterrorism operation, cooperative 

research, development, production, or 

support program, or DoD end use, as 

described in Article 3 of the Treaty and 

Sections 2 and 3 of the Implementing 

Arrangement. 

(b) All contract line items in this contract, 

except any identified in this paragraph, are 

intended to satisfy U.S. DoD Treaty-eligible 

requirements. Specific defense articles 

exempt from Treaty eligibility will be 

identified in those contract line items that are 

otherwise Treaty-eligible. 

CONTRACT LINE ITEMS NOT INTENDED 

TO SATISFY U.S. DoD TREATY-ELIGIBLE 

REQUIREMENTS: 

lllllllllllllllllllll

[Enter Contract Line Item Number(s) or enter 

‘‘None’’] 

(c) Subject to the other terms and 

conditions of this contract that affect the 

acceptability of foreign sources or foreign end 

products, components, parts, or materials, 

Approved Community members are 

permitted, but not required, to use the Treaty 

for exports or transfers of qualifying defense 

articles in performance of the contract. 

(d) Any conduct by the Contractor that falls 

outside the scope of the Treaty, the 

Implementing Arrangement, and 22 CFR 

126.17(g) is subject to all applicable ITAR 

requirements, including any criminal, civil, 

and administrative penalties or sanctions, as 

well as all other United States statutory and 

regulatory requirements outside of ITAR, 

including, but not limited to, regulations 

issued by the Bureau of Alcohol, Tobacco, 

Firearms and Explosives found at 27 CFR 

Parts 447, 478, and 479, which are unaffected 

by the Treaty. 

(e) If the Contractor is an Approved 

Community member, the Contractor agrees 

that— 

(1) The Contractor shall comply with the 

requirements of the Treaty, the Implementing 

Arrangement, the ITAR, and corresponding 

regulations of the U.S. Government and the 

government of the United Kingdom; and 

(2) Prior to the export or transfer of a 

qualifying defense article, the Contractor— 

(i) Shall mark, identify, transmit, store, and 

handle any defense articles provided for the 

purpose of responding to such solicitations, 

as well as any defense articles provided with 

or developed pursuant to their responses to 

such solicitations, in accordance with the 

Treaty, the Implementing Arrangement, and 

corresponding United States Government and 

the government of the United Kingdom 

regulations including, but not limited to, the 

marking and classification requirements 

described in the applicable regulations; 

(ii) Shall comply with the re-transfer or reexport provisions of the Treaty, this 

Implementing Arrangement, and 

corresponding United States Government and 

the government of the United Kingdom 

regulations, including, but not limited to, the 

re-transfer and re-export requirements 

described in the applicable regulations; and 

(iii) Shall acknowledge that any conduct 

that falls outside or in violation of the Treaty, 

Implementing Arrangement, and 

implementing regulations of the applicable 

government including, but not limited to, 

unauthorized re-transfer or re-export in 

violation of the procedures established in the 

applicable Implementing Arrangement and 

implementing regulations, remains subject to 

applicable licensing requirements of the 

government of the United Kingdom and the 

United States Government, including any 

criminal, civil, and administrative penalties 

or sanctions contained therein. 

(f) The contractor shall include the 

substance of this clause, including this 

paragraph (f), in all subcontracts that may 

require exports or transfers of qualifying 

defense articles in connection with deliveries 

under the contract. 

(End of clause) 

[FR Doc. 2012–11560 Filed 5–21–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 225 

RIN 0750–AH68 

Defense Federal Acquisition 

Regulation Supplement: Report on 

Waiver of Prohibition on Acquisition 

From Communist Chinese Military 

Companies (DFARS Case 2012–D023) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement the requirement 

in the National Defense Authorization 

Act for Fiscal Year 2012 to report to the 

congressional defense committees 

before issuing a waiver of the 

prohibition on acquisition of United 

States Munitions List items from 

Communist Chinese military 

companies. 

DATES: Effective Date: May 22, 2012. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy G. Williams, Defense Acquisition 

Regulations System, OUSD (AT&L) 

DPAP/DARS, Room 3B855, 3060 

Defense Pentagon, Washington, DC 

20301–3060. Telephone 571–372–6106; 

facsimile 571–372–6094. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 1243 of the National Defense 

Authorization Act for Fiscal Year 2012 

(Pub. L. 112–81) requires a report to the 

congressional defense committees not 

less than 15 days before issuing a waiver 

to the requirements of section 1211 of 

the National Defense Authorization Act 

for Fiscal Year 2006 (Pub. L. 109–163), 

implemented at DFARS 225.770, 

Prohibition on acquisition of United 

States Munitions List items from 

Communist Chinese military 

companies. The prior requirement was 

for a report within 30 days after the date 

of the waiver. The final rule also adds 

the requirement to send a copy of the 

report to Defense Procurement and 

Acquisition Policy. 

II. Publication of This Final Rule for 

Public Comment Is Not Required by 

Statute 

‘‘Publication of proposed 

regulations,’’ 41 U.S.C. 1707, is the 

statute which applies to the publication 

of the Federal Acquisition Regulation. 

Paragraph (a)(1) of the statute requires 

that a procurement policy, regulation, 

procedure, or form (including an 

amendment or modification thereof) 

must be published for public comment 

if it relates to the expenditure of 

appropriated funds, and has either a 

significant effect beyond the internal 

operating procedures of the agency 

issuing the policy, regulation, 

procedure, or form, or has a significant 

cost or administrative impact on 

contractors or offerors. This final rule is 

not required to be published for public 

comment because the rule merely alters 

the timing of the report to the 

congressional defense committees when 

issuing a waiver of the prohibition on 

acquisition of United States Munitions 

List items from Communist Chinese 

military companies, adds the 

requirement to send a copy of the report 

to Defense Procurement and Acquisition 

Policy, and further specifies the 

required contents of the report. These 

requirements affect only the internal 

operating procedures of the 

Government. 

III. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 


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