Federal Register / Vol. 73, No. 187 / Thursday, September 25, 2008 / Rules and Regulations 55439 

DEPARTMENT OF STATE 

22 CFR Parts 122 and 129 

[Public Notice 6370] 

RIN 1400–AC50 

Amendment to the International Traffic 

in Arms Regulations: Registration Fee 

Change 

AGENCY: Department of State. 

ACTION: Final rule. 

SUMMARY: The Department of State is 

amending the text of the International 

Traffic in Arms Regulations (ITAR) to 

increase the registration fees, change the 

registration renewal period, and make 

other minor administrative changes. 

DATES: Effective Date: This rule is 

effective September 25, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Patricia Slygh, Directorate of Defense 

Trade Controls, Bureau of PoliticalMilitary Affairs, Department of State 

(202) 663–2830 or FAX (202) 261–8199; 

e-mail DDTCResponseTeam@state.gov, 

ATTN: Regulatory Change, ITAR Parts 

122 and 129. 

SUPPLEMENTARY INFORMATION: On July 

28, 2008, the Department published a 

Notice of Proposed Rulemaking (NPRM) 

to increase the registration fees, change 

the registration renewal period, and 

make other minor administrative 

changes to Parts 122 and 129 of the 

ITAR. Further background is provided 

within the NPRM at 73 FR 43653. 

This rule increases the fee charged to 

those persons required to register with 

the Directorate of Defense Trade 

Controls (DDTC) in accordance with 

Section 38 of the Arms Export Control 

Act (AECA) (22 U.S.C. 2778). ITAR 

registration fees are set forth at 22 CFR 

122.3 and were last adjusted in 2004. 

To align registration fees with the cost 

of licensing, compliance and other 

related activities, the Department is 

adopting a three-tier registration fee 

schedule. The first tier will be a set fee 

of $2,250 per year for registrants who 

are renewing a registration, required to 

register by law, and for whom DDTC has 

not reviewed, adjudicated or issued a 

response to any applications during the 

twelve-month period ending 90 days 

prior to the expiration of their current 

registration. This tier includes those 

registering with the Department for the 

first time. 

The second tier is for registrants for 

whom DDTC has reviewed, adjudicated 

or issued a response to between one and 

ten applications during the twelvemonth period ending 90 days prior to 

the expiration of their current 

registration. For this tier, registrants will 

pay a set fee of $2,750 per year. 

The third tier is for registrants for 

whom DDTC has reviewed, adjudicated 

or issued a response to more than ten 

applications during the twelve month 

period ending 90 days prior to the 

expiration of their current registration. 

For this tier, registrants will pay a fee of 

$2,750 plus an additional fee that is 

based on the number of applications for 

which DDTC has reviewed, adjudicated 

or issued a response during the twelve 

months ending 90 days prior to the 

expiration of their current registration. 

The additional fee will be determined 

by multiplying $250 times the number 

of applications for which DDTC has 

reviewed, adjudicated or issued a 

response during the twelve-month 

period ending 90 days prior to the 

expiration of the current registration. 

Fees for registrants whose total 

registration fee is greater than 3% of the 

total value of applications for which 

DDTC has reviewed, adjudicated or 

issued a response during the 12-month 

period ending 90 days prior to 

expiration of the current registration 

will be reduced to 3% of such total 

application value or $2,750, whichever 

is greater. Fees for registrants, including 

universities, who are exempt from 

income taxation pursuant to 26 U.S.C. 

501(c)(3) may be reduced to the first-tier 

registration fee provided proof of such 

status (i.e., IRS certification) is 

submitted with their registration 

package. 

In addition, 22 CFR 129.4(a) and 22 

CFR 129.4(b) are revised to reflect the 

new registration fee schedule. 

Comment Analysis 

The Department received comments 

from twenty-seven (27) individuals and 

companies. Seventeen (17) commenting 

parties voiced their opposition either to 

DDTC raising registration fees or to the 

collection of registration fees at all. 

Registration fees are collected and 

utilized in accordance with the AECA. 

The President has directed the 

Department of State to implement a 

series of improvements to its export 

licensing system to make it more timely, 

predictable, and transparent. To support 

that effort, the President has required 

that the U.S. Department of State initiate 

a self-financing mechanism so that the 

DDTC’s mission will eventually be at 

least 75% self-financed. Six (6) 

commenting parties offered actions that 

could be taken by DDTC to reduce its 

licensing workload. These comments 

were not considered at this time as they 

are outside the scope of this rule. 

However, the Department remains 

committed to continuing to reform the 

export control process. As DDTC 

continues to reform the export control 

process, the budgetary requirements 

will be reviewed on a regular basis, 

which may result in a revision to the 

registration fee schedule. 

Ten (10) commenting parties 

suggested alternate funding schedules 

for registration fees. Nine of these 

alternates were not adopted as they 

would not have generated the funds 

required by DDTC or appeared to be 

unfair to small businesses that, while 

required to register with DDTC, utilize 

only limited Department resources. The 

tenth proposal recommended several 

flat tiers based on licensing activity. 

While this proposal would provide the 

necessary funds for DDTC, imposing a 

minimal administrative burden upon 

the Department, it was not adopted 

primarily since the incremental cost of 

submitting one more license under this 

proposal could be significant as the total 

cost is recomputed in light of the higher 

fee at the next tier. 

Six (6) commenting parties raised 

concerns that the proposed fee schedule 

would be an administrative burden on 

the Department as well as on industry. 

Four (4) comments regarding 

reinstitution of multi-year registrations 

were received. DDTC has attempted to 

adopt a fee schedule that will result in 

minimal burden to applicants, 

recognizing that any change to the 

current one fee for all registrants will 

impose some additional burden. The 

multi-year registrations have been 

discontinued in order to provide DDTC 

with a revenue stream that reflects its 

costs. The Department will contemplate 

reconsidering multi-year registrations 

after the Department has experience 

with a single-year fee structure. 

Two (2) commenting parties 

recommended reconsideration of 22 

CFR 122.2(a) and 22 CFR 129.4(a) 

regarding Department policy for 

returning incomplete registration 

packages. Discretion will continue to be 

used when determining if it is necessary 

to return an incomplete registration 

package; only those registration 

packages materially incomplete will be 

returned. 

Four (4) commenting parties 

recommended that license amendments 

not be counted when determining the 

registration fee. Since license 

amendments have a material impact on 

the authorized activity and require 

DDTC to review, adjudicate and respond 

to the applicant, they will be counted. 

Activities under 22 CFR parts 123 

through 126 not requiring the 

Department to respond to the applicant 

will not be counted as part of the 

registration fee; examples include 


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55440 Federal Register / Vol. 73, No. 187 / Thursday, September 25, 2008 / Rules and Regulations 

annual submission of sales reports, prior 

notifications, provision of documents 

required by proviso, and submission of 

purchase orders to support offshore 

procurement. Other activities outside of 

22 CFR parts 123 through 126 that 

require DDTC to respond to the 

applicant will not be counted in 

determining registration fees; examples 

of these actions include commodity 

jurisdictions and disclosures. Eight (8) 

commenting parties recommended that 

those license applications ‘‘returned 

without action’’ not be counted when 

determining the level of licensing 

activity. DDTC has adopted this 

recommendation and 22 CFR 122.3(a)(7) 

has been revised accordingly. 

Additionally, the Department will not 

consider denied licenses when 

determining registration fees. 

Regulatory Analysis and Notices 

Administrative Procedure Act: This 

amendment involves a foreign affairs 

function of the United States and, 

therefore, is not subject to the 

procedures contained in 5 U.S.C. 553 

and 554. However, as noted in the 

SUPPLEMENTARY INFORMATION, notice of 

the rule was provided and comments 

were solicited and received on this 

amendment. 

Regulatory Flexibility Act: Because 

this rule is exempt from notice and 

comment rulemaking under 5 U.S.C. 

553, it is exempt from the regulatory 

flexibility analysis requirements set 

forth in sections 603 and 604 of the 

Regulatory Flexibility Act (5 U.S.C. 603 

and 604). 

Unfunded Mandates Reform Act of 

1995: This 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 

amendment is not a major rule within 

the meaning of the Small Business 

Regulatory Enforcement Fairness Act of 

1996. 

Executive Orders 12372 and 13132: 

This amendment will not have 

substantial 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 amendment 

does not have sufficient federalism 

implications to require consultations or 

warrant the preparation of a federalism 

summary impact statement. Executive 

Order 12372, regarding 

intergovernmental consultation on 

Federal programs and activities, does 

not apply to this amendment. 

Executive Order 12866: This 

amendment is exempt from the review 

under Executive Order 12866, but has 

been reviewed internally by the 

Department of State to ensure 

consistency with the purposes thereof. 

Executive Order 12988: The 

Department of State has reviewed the 

proposed regulations in light of sections 

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

12988 to eliminate ambiguity, minimize 

litigation, establish clear legal 

standards, and reduce burden. 

Paperwork Reduction Act: This rule 

does not impose any new reporting or 

recordkeeping requirements subject to 

the Paperwork Reduction Act, 44 U.S.C. 

Chapter 35. 

List of Subjects 

22 CFR Part 122 

Arms and munitions, Exports, 

Reporting and recordkeeping 

requirements. 

22 CFR Part 129 

Arms and munitions, Exports, 

Technical assistance. 

■ Accordingly, for the reasons set forth 

above, Title 22, Chapter I, Subchapter 

M, parts 122 and 129 are amended as 

follows: 

PART 122—REGISTRATION OF 

MANUFACTURERS AND EXPORTERS 

■ 1. The authority citation for part 122 

continues to read as follows: 

Authority: Secs. 2 and 38, Public Law 90– 

629, 90 Stat. 744 (22 U.S.C. 2752, 2778); E.O. 

11958, 42 FR 4311, 1977 Comp. p. 79, 22 

U.S.C. 2651a. 

■ 2. Section 122.2 is amended by 

revising paragraph (a) to read as follows: 

§ 122.2 Submission of registration 

statement. 

(a) General. The Department of State 

Form DS–2032 (Statement of 

Registration) and the transmittal letter 

required by paragraph (b) of this section 

must be submitted by an intended 

registrant with a payment by check 

drawn against the registrant’s account, 

payable to the Department of State of 

the fee prescribed in § 122.3(a) of this 

subchapter. Checks must be in U.S. 

currency, and must be payable through 

a U.S. financial institution. In addition, 

the Statement of Registration and 

transmittal letter must be signed by a 

senior officer (e.g., Chief Executive 

Officer, President, Secretary, Partner, 

Member, Treasurer, General Counsel) 

who has been empowered by the 

intended registrant to sign such 

documents. The intended registrant also 

shall submit documentation that 

demonstrates that it is incorporated or 

otherwise authorized to do business in 

the United States. The Directorate of 

Defense Trade Controls will notify the 

registrant if the Statement of 

Registration is incomplete either by 

notifying the registrant of what 

information is required or through the 

return of the entire registration package. 

Registrants may not establish new 

entities for the purpose of reducing 

registration fees. 

* * * * * 

■ 3. Section 122.3 is amended by 

revising paragraph (a) to read as follows: 

§ 122.3 Registration fees. 

(a) A person who is required to 

register must do so on an annual basis 

upon submission of a completed Form 

DS–2032, transmittal letter, and 

payment of a fee as follows: 

(1) Tier 1: A set fee of $2,250 per year 

is required for new registrants or 

registrants for whom the Directorate of 

Defense Trade Controls has not 

reviewed, adjudicated or issued a 

response to any applications during a 

12-month period ending 90 days prior to 

expiration of the current registration. 

(2) Tier 2: A set fee of $2,750 per year 

is required for registrants for whom the 

Directorate of Defense Trade Controls 

has reviewed, adjudicated or issued a 

response to between one and ten 

applications during a 12-month period 

ending 90 days prior to expiration of the 

current registration. 

(3) Tier 3: The third tier is for 

registrants for whom the Directorate of 

Defense Trade Controls has reviewed, 

adjudicated or issued a response to 

more than ten applications during a 12- 

month period ending 90 days prior to 

expiration of the current registration. 

For this tier, registrants will pay a fee of 

$2,750 plus an additional fee based on 

the number of applications for which 

the Directorate of Defense Trade 

Controls has reviewed, adjudicated or 

issued a response. The additional fee 

will be determined by multiplying $250 

times the number of applications over 

ten for whom the Directorate of Defense 

Trade Controls has reviewed, 

adjudicated or issued a response during 

a 12-month period ending 90 days prior 

to expiration of the current registration. 

(4) For registrants, including 

universities, exempt from income 


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Federal Register / Vol. 73, No. 187 / Thursday, September 25, 2008 / Rules and Regulations 55441 

taxation pursuant to 26 U.S.C. 501(c)(3), 

their fee may be reduced to the Tier 1 

registration fee provided a copy of their 

certification letter from the Internal 

Revenue Service is submitted with their 

registration package. To be eligible, the 

registrant and all of its subsidiaries/ 

affiliates must be exempt from income 

taxation pursuant to 26 U.S.C. 501(c)(3). 

(5) The fee for registrants whose total 

registration fee is greater than 3% of the 

total value of applications for whom the 

Directorate of Defense Trade Controls 

has reviewed, adjudicated or issued a 

response during the 12-month period 

ending 90 days prior to expiration of the 

current registration will be reduced to 

3% of such total application value or 

$2,750, which ever is greater. 

(6) For those renewing a registration, 

notice of the fee due for the next year’s 

registration will be sent to the registrant 

of record at least 60 days prior to its 

expiration date. 

(7) For purposes of this subsection, 

‘‘applications’’ refers to the actions 

enumerated within parts 123 through 

126 of this subchapter that require the 

Directorate of Defense Trade Controls to 

review, adjudicate and issue responses. 

Only those applications that the 

Department has taken final action on 

and provided response to will be 

counted in determining the annual 

registration fee. Those applications that 

are ‘‘returned without action’’ or 

‘‘denied’’ will not be counted. 

* * * * * 

PART 129—REGISTRATION AND 

LICENSING OF BROKERS 

■ 4. The authority citation for part 129 

continues to read as follows: 

Authority: Sec. 38, Pub. L. 104–164, 110 

Stat. 1437 (22 U.S.C. 2778). 

■ 5. Section 129.4 is amended by 

revising paragraph (a) to read as follows: 

§ 129.4 Registration statement and fees. 

(a) General. The Department of State 

Form DS–2032 (Statement of 

Registration) and the transmittal letter 

meeting the requirements of § 122.2(b) 

of this subchapter must be submitted by 

an intended registrant with a payment 

by check, payable to the Department of 

State, of the fees prescribed in Section 

122.3(a) of this subchapter. Foreign 

brokers must submit a check in U.S. 

dollars payable through a U.S. financial 

institution that includes the registrant’s 

legal name and address on the check. 

The Statement of Registration and 

transmittal letter must be signed by a 

senior officer (e.g., Chief Executive 

Officer, President, Secretary, Partner, 

Member, Treasurer, General Counsel) 

who has been empowered by the 

intended registrant to sign such 

documents. The intended registrant 

shall also submit documentation that 

demonstrates that it is incorporated or 

otherwise authorized to do business in 

the United States. The requirement to 

submit a Department of State Form DS– 

2032 and to submit documentation 

demonstrating incorporation or 

authorization to do business in the 

United States does not exclude foreign 

persons from the requirement to 

register. Foreign persons who are 

required to register shall provide 

information that is substantially similar 

in content as that which a U.S. person 

would provide under this provision 

(e.g., foreign business license or similar 

authorization to do business). The 

Directorate of Defense Trade Controls 

will notify the registrant if the 

Statement of Registration is incomplete 

either by notifying the registrant of what 

information is required or through the 

return of the entire registration package 

with payment. Registrants may not 

establish new entities for the purpose of 

reducing registration fees. 

* * * * * 

Dated: September 19, 2008. 

John C. Rood, 

Acting Under Secretary for Arms Control and 

International Security, Department of State. 

[FR Doc. E8–22574 Filed 9–24–08; 8:45 am] 

BILLING CODE 4710–25–P 

DEPARTMENT OF STATE 

22 CFR Part 126 

[Public Notice: 6368] 

Amendment to the International Arms 

Traffic in Arms Regulations: Rwanda 

AGENCY: Department of State. 

ACTION: Final rule. 

SUMMARY: The Department of State is 

removing Rwanda from its regulations 

on prohibited exports and sales to 

certain countries as a result of United 

Nations Security Council (UNSC) 

Resolution 1823, which terminated 

remaining arms sanctions against 

Rwanda. 

DATES: This rule is effective September 

25, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Nicholas Memos, Office of Defense 

Trade Controls Policy, Department of 

State, Telephone (202) 663–2804 or Fax 

(202) 261–8199; e-mail 

DDTCResponseTeam@state.gov. 

SUPPLEMENTARY INFORMATION: On July 

10, 2008, the UNSC adopted Resolution 

1823, which terminated remaining 

prohibitions of defense exports to nongovernmental entities and persons in 

Rwanda, and to such entities and 

persons in states neighboring Rwanda if 

such sale was intended for use within 

Rwanda, and which also terminated the 

prohibition of the resale or retransfer of 

defense items from the Government of 

Rwanda to any state neighboring 

Rwanda, or persons not in the service of 

the Government of Rwanda. 

Regulatory Analysis and Notices 

Administrative Procedure Act 

This amendment involves a foreign 

affairs function of the United States and, 

therefore, is not subject to the 

procedures contained in 5 U.S.C. 553 

and 554. 

Regulatory Flexibility Act 

Since this amendment is not subject 

to the procedures in 5 U.S.C 553, it does 

not require analysis under the 

Regulatory Flexibility Act. 

Unfunded Mandates Act of 1995 

This 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 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 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 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 amendment. 


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