```

[Federal Register Volume 78, Number 116 (Monday, June 17, 2013)]
[Rules and Regulations]
[Pages 36108-36113]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14298]

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DEPARTMENT OF DEFENSE

Defense Acquisitions Regulations System

48 CFR Parts 204, 225, 235, and 252

RIN 0750-AH70

Defense Federal Acquisition Regulation Supplement; Defense Trade 
Cooperation Treaties With Australia and the United Kingdom (DFARS 2012-
D034)

AGENCY: Defense Acquisition Regulations System; Department of Defense 
(DoD).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD has adopted as final, with changes, the 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 U.S.-U.K. DTC Treaty) and the Security Cooperation Act of 2010 
regarding export control regulations between the United States and the 
United Kingdom. The final rule also implements the Treaty Between the 
Government of the United States of America and the Government of 
Australia Concerning Defense Trade Cooperation.

DATES: Effective Date: June 17, 2013.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Telephone 571-372-
6106.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published an interim rule in the Federal Register at 77 FR 
30361 on May 22, 2012, 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 U.S.-U.K. DTC Treaty) and the Security 
Cooperation Act of 2010 regarding export control regulations between 
the United States and the United Kingdom. The public comment period 
ended on July 23, 2012. Two respondents submitted comments.
    The Treaty Between the Government of the United States of America 
and the Government of Australia Concerning Defense Trade Cooperation 
(the U.S.-Australia DTC Treaty) was approved by Congress simultaneously 
with the U.S.-U.K. DTC Treaty in Title I of the Security Trade 
Cooperation Act of 2010. The Department of State implementing 
regulation was published in the Federal Register on April 11, 2013, at 
78 FR 21523, effective when the U.S.-Australia DTC Treaty entered into 
force on May 16, 2013. This final rule also implements the U.S.-
Australia DTC Treaty, the associated Implementing Arrangement, and the 
Department of State implementing regulations, which all have provisions 
that generally parallel the provisions of the U.S.-U.K. DTC Treaty and 
its implementing arrangements and regulations.
    This rule streamlines the export control regulations between the 
United States and Australia and 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 (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

[[Page 36109]]

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 DTC Treaties with Australia and 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 DTC Treaties 
establish certain exemptions from ITAR requirements. Other exports and 
transfers remain governed by the Arms Export Control Act and the ITAR.
    The DTC Treaties, Implementing Arrangements, and other useful 
resources may be accessed at http://pmddtc.state.gov/treaties/index.html.
    The implementing legislation is in Title I of Pub. L. 111-266, the 
Security Cooperation Act of 2010.
    The U.S. Department of State regulations implementing the Treaties 
with Australia and the United Kingdom are at 22 CFR parts 120 and 126.

II. Discussion and Analysis of the Public Comments

    DoD reviewed the public comments in the development of the final 
rule. DoD responses are applicable to both treaties. A discussion of 
the comments and the changes made to the rule as a result of those 
comments are provided as follows:

A. Summary of Significant Changes From the Interim Rule

    The final rule has added implementation of the U.S.-Australia DTC 
Treaty, the associated Implementing Arrangement, and the Department of 
State implementing regulations, comparable to the implementation of the 
U.S.-U.K. DTC Treaty.

B. Analysis of Public Comments

1. Support the Intent of the Interim Rule
    Comment: Both respondents support the Defense Cooperation Treaty 
with the United Kingdom and the intent to facilitate trade by 
streamlining the export of defense articles. One respondent commended 
the Defense Acquisition Regulations (DAR) Council on recognizing the 
importance of the implementation of the U.S.-U.K DTC Treaty. The 
respondent also commended the DAR Council on designating portions of 
the solicitations that are (or are not) subject to the Treaty. This 
provides offerors with a common understanding of the export control 
requirements of a particular acquisition. Second, the respondent views 
the interim rule as heightening awareness of export controls.
    Response: Noted.
2. Identification of Line Items That Are U.S. DoD Treaty-Eligible 
Requirements
    Comment: The same respondent, however, was of the opinion that DoD 
does not have legal authority to make de facto jurisdictional 
determinations regarding whether a particular product is a U.S. DoD 
Treaty-eligible requirement. According to the respondent, contractors 
do have the right to self-classify, but the only Government entity that 
can make a definitive determination is the Department of State, 
Directorate of Defense Trade Controls. The respondent recommended that 
the final rule establish a process for program managers and contracting 
officers to coordinate with the Directorate of Defense Trade Controls 
with respect to determinations regarding solicitations and contract 
line items that would be suitable for U.S.-U.K. DTC Treaty treatment, 
so that companies can rely on the determination.
    Response: DoD and the U.K. Ministry of Defence have jointly 
established a Management Board to resolve such issues, adopted a 
detailed management plan, and conducted Pathfinder Exercises to test 
the process with industry participants.
    DoD slightly revised the wording of the final rule at DFARS 
225.7902-4 to address the concern that the program manager and 
contracting officer do not have the authority to determine Treaty 
eligibility.
3. Representation
    Comment: One respondent questioned the need for the representation, 
because a failure to comply with the ITAR provides an independent basis 
for regulatory enforcement against an offending contractor by the 
Department of State or the Department of Justice, and neither the 
Treaty nor the ITAR suggest the need for additional representations or 
certifications.
    Another respondent recommended changing the contractor's 
representation in the provision at 252.225-7046, which requires the 
offeror to check one of two boxes (that exports or transfers were made 
and complied with the Treaty, or no such exports or transfers were 
made) to a more general statement requiring the contractor to 
acknowledge the contractor's obligation to comply with all treaty 
provisions. The respondent's rationale for this change was that large 
DoD contractors with separate departments responsible for Government 
contracting and ITAR compliance will need to establish complex 
procedures to gather the necessary data to support an affirmative or 
negative representation.
    Response: DoD has retained the representation in the final rule 
without change. The clause at DFARS 252.225-7047, Exports by Approved 
Community Members in Performance of the Contract, applies only to 
performance after contract award. The provision at DFARS 252.225-7046, 
Exports by Approved Community Members in Response to the Solicitation, 
including the representation, is necessary in order to ensure 
compliance by offerors prior to contract award.
    It is not apparent how an offeror could accurately respond to the 
representation that it has complied with all Treaty provisions, as 
proposed by the respondent, without gathering an equal amount of data 
as that required by the representation in the interim rule, to know 
whether any exports or transfers of qualifying defense articles were 
made, and that any such exports or transfers were made in accordance 
with the Treaty.

C. Other Changes

    1. The final rule uses the correct full title of the Treaty at 
225.7900(b) and then refers to the Treaty as ``the U.S.-U.K. DTC 
Treaty,'' in order to more specifically identify the Treaty and to 
distinguish it from the U.S.-Australia DTC Treaty.
    2. The final rule reflects changes in the wording of the clauses 
252.225-7046 and 252.225-7047 to use the term ``Treaty-eligible'' and 
``not Treaty-eligible'' consistently in the rule, in order to avoid 
possible confusion that introduction of the term ``exemption'' invited.
    3. DFARS 225.79, Export Control, and the associated clause at DFARS 
252.204-7008, Export-Controlled Items, are moved to DFARS 225.7901 and 
252.225-7048, respectively, to co-locate related coverage on export 
control in one subpart. A conforming change was made to DFARS 235.071.

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

[[Page 36110]]

flexibility. This is not a significant regulatory action and, 
therefore, was not 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 final 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, a final 
regulatory flexibility analysis has been performed and is summarized as 
follows:
    This rule implements requirements of--
    The Treaty Between the Government of the United States of America 
and the Government of Australia Concerning Defense Trade Cooperation 
(U.S.-Australia DTC Treaty); 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 U.S.-U.K. DTC 
Treaty).
    The objective of the rule is to streamlines the export control 
regulations between the United States and Australia and 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.
    There were no significant issues raised by the public in response 
to the initial regulatory flexibility analysis. The Chief Counsel for 
Advocacy of the Small Business Administration did not file any comments 
in response to the rule.
    The great majority of industry members of the Approved Community 
are not small businesses due to the specialized knowledge of export 
control regulations and the cost involved in compliance. 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.
    Although the interim rule added a representation that required the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq., the net effect will be to significantly streamline and reduce 
paperwork requirements under the systems set forth in the DTC Treaties 
and regulated by the ITAR by no longer requiring individual export 
control licenses within the Approved Community. In short, one 
representation per offeror will replace multiple requirements under the 
present system.
    This rule implements Treaties 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.

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.
    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 under the processes set forth in 
the DTC Treaties 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.

List of Subjects in 48 CFR Parts 204, 225, 235, and 252

    Government procurement.

Kortnee Stewart,
Editor, Defense Acquisition Regulations System.

    Therefore, DoD amends 48 CFR parts 204, 225, 235, and 252 as 
follows:

0
1. The authority citation for parts 204, 225, 235, and 252 continues to 
read as follows:

    Authority:  41 U.S.C. 1303 and 48 CFR Chapter 1.

PART 204--ADMINISTRATIVE MATTERS

Subpart 204.73--[Removed]

0
2. Remove subpart 204.73.

PART 225--FOREIGN ACQUISITION

0
3. Subpart 225.79 is revised to read as follows:

225.7900  Scope of subpart.

    This subpart implements--
    (a) Section 890(a) of the National Defense Authorization Act for 
Fiscal Year 2008 (Pub. L. 110-181); and
    (b) The requirements regarding export control of Title I of the 
Security Cooperation Act of 2010 (Pub. L. 111-266); the Treaty Between 
the Government of the United States of America and the Government of 
Australia Concerning Defense Trade Cooperation (the U.S.-Australia DTC 
Treaty); and the Treaty Between the Government of the United States of 
America and the Government the United Kingdom of Great Britain and 
Northern Ireland Concerning Defense Trade Cooperation (the U.S.-U.K. 
DTC Treaty). See PGI 225.7902 for additional information.

225.7901  Export-controlled items.

    This section implements section 890(a) of the National Defense 
Authorization Act for Fiscal Year 2008 (Pub. L. 110-181).

225.7901-1  Definitions.

    ``Export-controlled items,'' as used in this section, is defined in 
the clause at 252.225-7048.

225.7901-2  General.

    Certain types of items are subject to export controls in accordance 
with the Arms Export Control Act (22 U.S.C. 2751, et seq.), the 
International Traffic in Arms Regulations (22 CFR parts 120-130), the 
Export Administration Act of 1979, as amended (50 U.S.C. App. 2401 et 
seq.), and the Export Administration Regulations (15 CFR parts 730-
774). See PGI 225.7901-2 for additional information.

225.7901-3  Policy.

    (a) It is in the interest of both the Government and the contractor 
to be aware of export controls as they apply to the performance of DoD 
contracts.
    (b) It is the contractor's responsibility to comply with all 
applicable laws and regulations regarding export-controlled items. This 
responsibility exists independent of, and is not established or limited 
by, this section.

225.7901-4  Contract clause.

    Use the clause at 252.225-7048, Export-Controlled Items, in all 
solicitations and contracts.

[[Page 36111]]

225.7902  Defense Trade Cooperation Treaties.

    This section implements the Defense Trade Cooperation (DTC) 
Treaties with Australia and the United Kingdom and the associated 
Implementing Arrangements for DoD solicitations and contracts that 
authorize prospective contractors and contractors to use the DTC 
Treaties to respond to DoD solicitations and in the performance of DoD 
contracts.

225.7902-1  Definitions.

    ``Approved community,'' ``defense articles,'' ``Defense Trade 
Cooperation (DTC) Treaty'', ``export,'' ``Implementing Arrangement,'' 
``qualifying defense articles,'' ``transfer,'' and ``U.S. DoD Treaty-
eligible requirements'' are defined in contract clause DFARS 252.225-
7047, Exports by Approved Community Members in Performance of the 
Contract.

225.7902-2  Purpose.

    The DTC Treaties permit 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 Regulation (ITAR) into and within the Approved Community, as 
long as the exports are in support of purposes specified in the DTC 
Treaties. 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 DTC Treaties. 
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 
Australia and 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 DTC Treaties by prospective 
contractors responding to DoD solicitations and by contractors eligible 
to export qualifying defense articles under DoD contracts in accordance 
with 22 CFR 126.16(g) and 22 CFR 126.17(g).

225.7902-4  Procedures.

    (a) For all solicitations and contracts that may be eligible for 
DTC 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 DTC Treaty Scope paragraph (Article 3(1)(a), 
3(1)(b), or 3(1)(d) of the U.S.-Australia DTC Treaty or Article 
(3)(1)(a), (3(1)(b), or 3(1)(d) of the U.S.-U.K. DTC Treaty); and
    (2) The qualifying defense article(s) using the categories 
described in 22 CFR 126.16(g) and 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, DTC 
Treaty-exempted technology list 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 Treaty-eligible 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 235--RESEARCH AND DEVELOPMENT CONTRACTING

235.071  [Amended]

0
4. Section 235.071 is amended by removing ``Subpart 204.73'' and adding 
``225.7901'' in its place.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

252.204-7008  [Removed and Reserved]

0
5. Remove and reserve section 252.204-7008.
0
6. Section 252.225-7046 is revised 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 
(June 2013)

    (a) Definitions. The definitions of ``Approved Community'', 
``defense articles'', ``Defense Trade Cooperation (DTC) Treaty'', 
``export'', ``Implementing Arrangement'', ``qualifying defense 
articles'', ``transfer'', 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 that are not 
U.S. DoD Treaty-eligible will be identified as such in those 
contract line items that are otherwise U.S. DoD Treaty-eligible.

CONTRACT LINE ITEMS NOT INTENDED TO SATISFY U.S. DoD TREATY-ELIGIBLE 
REQUIREMENTS:
-----------------------------------------------------------------------
[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 DTC Treaties 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 DTC Treaties, the Implementing 
Arrangements, and the implementing regulations of the Department of 
State in 22 CFR 126.16 (Australia), 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 DTC Treaties, 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 
applicable DTC Treaties, the Implementing Arrangements, and 
corresponding regulations (including the ITAR) of the U.S. 
Government and the government of Australia or of the United Kingdom, 
as applicable; and
    (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

[[Page 36112]]

DTC Treaties, the Implementing Arrangements, and corresponding 
regulations of the United States Government and the government of 
Australia or the government of the United Kingdom, as applicable, 
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 
DTC Treaties, the Implementing Arrangements, and corresponding 
regulations of the United States Government and the government of 
Australia or the government of the United Kingdom, as applicable, 
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 DTC Treaties, Implementing Arrangements, 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 Australia, 
the government of the United Kingdom, and the United States 
Government, as applicable, including any criminal, civil, and 
administrative penalties or sanctions contained therein.
    (g) Representation. The offeror shall check one of the following 
boxes and sign the representation:
    [squ] 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.
-----------------------------------------------------------------------
Name/Title of Duly Authorized Representative Date

    [squ] The offeror represents that no export(s) or transfer(s) of 
qualifying defense articles were made in preparing its response to 
this solicitation.
-----------------------------------------------------------------------
Name/Title of Duly Authorized Representative Date

    (h) Subcontracts. The offeror shall flow down the substance of 
this provision, including this paragraph (h), but excluding the 
representation at paragraph (g), to any subcontractor at any tier 
intending to use the DTC Treaties in responding to this 
solicitation.

(End of provision)

0
7. Section 252.225-7047 is revised 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 
(June 2013)

    (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 Australia or the United Kingdom that are 
approved and listed by the U.S. Government.
    ``Australia Community member'' means an Australian government 
authority or nongovernmental entity or facility on the Australia 
Community list accessible at http://pmddtc.state.gov/treaties/index.html.
    ``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.
    ``Defense Trade Cooperation (DTC) Treaty'' means--
    (1) 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; or
    (2) The Treaty Between the Government of the United States of 
America and the Government of Australia Concerning Defense Trade 
Cooperation, signed at Sydney on September 5, 2007].
    ``Export'' means the initial movement of defense articles from 
the United States Community to the United Kingdom Community.
    ``Implementing Arrangement'' means--
    (1) 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; or
    (2) The Implementing Arrangement Pursuant to the Treaty between 
the Government of the United States of America and the Government of 
Australia Concerning Defense Trade Cooperation, signed on March 14, 
2008.
    ``Qualifying defense articles'' means defense articles that are 
not exempt from the scope of the DTC Treaties as defined in 22 CFR 
126.16(g) and 22 CFR 126.17(g).
    ``Transfer'' means the movement of previously exported defense 
articles within the Approved Community.
    ``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, 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 the 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 U.S.-U.K. DTC Treaty and sections 2 and 3 of the 
associated Implementing Arrangement; and Article 3 of the U.S.-
Australia DTC Treaty and sections 2 and 3 of the associated 
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 that are not 
U.S. DoD Treaty-eligible will be identified as such in those 
contract line items that are otherwise U.S. DoD Treaty-eligible.

CONTRACT LINE ITEMS NOT INTENDED TO SATISFY U.S. DoD TREATY-ELIGIBLE 
REQUIREMENTS:
-----------------------------------------------------------------------
[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 DTC Treaties 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 DTC Treaties, the Implementing Arrangements, and 22 CFR 
126.16(g) 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 DTC Treaties.
    (e) If the Contractor is an Approved Community member, the 
Contractor agrees that--
    (1) The Contractor shall comply with the requirements of the DTC 
Treaties, the Implementing Arrangements, the ITAR, and corresponding 
regulations of the U.S. Government and the government of Australia 
or the government of the United Kingdom, as applicable; 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 DTC Treaties, the Implementing Arrangements, and 
corresponding regulations of the United States Government and the 
government of Australia or the government of the United Kingdom, as 
applicable, including, but not limited to, the marking and 
classification requirements described in the applicable regulations;
    (ii) Shall comply with the re-transfer or re-export provisions 
of the DTC Treaties, the Implementing Arrangements, and 
corresponding regulations of the United States Government and the 
government of Australia or the government of the United

[[Page 36113]]

Kingdom, as applicable, 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 DTC Treaties, Implementing Arrangements, 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 Australia, 
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.

0
8. Add section 252.225-7048 to read as follows:

252.225-7048  Export-Controlled Items.

    As prescribed in 225.7901-4, use the following clause:

Export-Controlled Items (June 2013)

    (a) Definition. ``Export-controlled items,'' as used in this 
clause, means items subject to the Export Administration Regulations 
(EAR) (15 CFR Parts 730-774) or the International Traffic in Arms 
Regulations (ITAR) (22 CFR Parts 120-130). The term includes--
    (1) ``Defense items,'' defined in the Arms Export Control Act, 
22 U.S.C. 2778(j)(4)(A), as defense articles, defense services, and 
related technical data, and further defined in the ITAR, 22 CFR Part 
120; and
    (2) ``Items,'' defined in the EAR as ``commodities'', 
``software'', and ``technology,'' terms that are also defined in the 
EAR, 15 CFR 772.1.
    (b) The Contractor shall comply with all applicable laws and 
regulations regarding export-controlled items, including, but not 
limited to, the requirement for contractors to register with the 
Department of State in accordance with the ITAR. The Contractor 
shall consult with the Department of State regarding any questions 
relating to compliance with the ITAR and shall consult with the 
Department of Commerce regarding any questions relating to 
compliance with the EAR.
    (c) The Contractor's responsibility to comply with all 
applicable laws and regulations regarding export-controlled items 
exists independent of, and is not established or limited by, the 
information provided by this clause.
    (d) Nothing in the terms of this contract adds, changes, 
supersedes, or waives any of the requirements of applicable Federal 
laws, Executive orders, and regulations, including but not limited 
to--
    (1) The Export Administration Act of 1979, as amended (50 U.S.C. 
App. 2401, et seq.);
    (2) The Arms Export Control Act (22 U.S.C. 2751, et seq.);
    (3) The International Emergency Economic Powers Act (50 U.S.C. 
1701, et seq.);
    (4) The Export Administration Regulations (15 CFR Parts 730-
774);
    (5) The International Traffic in Arms Regulations (22 CFR Parts 
120-130); and
    (6) Executive Order 13222, as extended.
    (e) The Contractor shall include the substance of this clause, 
including this paragraph (e), in all subcontracts.

(End of clause)

[FR Doc. 2013-14298 Filed 6-14-13; 8:45 am]
BILLING CODE 5001-06-P
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