Federal Register / Vol. 66, No. 33 / Friday, February 16, 2001 / Rules and Regulations 10575

that a hearing is held. Failure to include

such a description and analysis for any

particular objection shall constitute a

waiver of the right to a hearing on the

objection. Three copies of all documents

are to be submitted and are to be

identified with the docket number

found in brackets in the heading of this

document. Any objections received in

response to the regulation may be seen

in the Dockets Management Branch

between 9 a.m. and 4 p.m., Monday

through Friday.

List of Subjects in 21 CFR Part 179

Food additives, Food labeling, Food

packaging, Radiation protection,

Reporting and recordkeeping

requirements, Signs and symbols.

Therefore, under the Federal Food,

Drug, and Cosmetic Act and under

authority delegated to the Commissioner

of Food and Drugs, 21 CFR part 179 is

amended as follows:

PART 179—IRRADIATION IN THE

PRODUCTION, PROCESSING AND

HANDLING OF FOOD

1. The authority citation for 21 CFR

part 179 continues to read as follows:

Authority: 21 U.S.C. 321, 342, 343, 348,

373, 374.

§ 179.45 [Amended]

2. Section 179.45 Packaging materials

for use during the irradiation of

prepackaged foods is amended in the

introductory text of paragraph (b) by

adding the phrase ‘‘, electron beam, or

X-’’ after the word ‘‘gamma’’ and in the

introductory text of paragraph (d) by

adding the phrase ‘‘, electron beam,’’

after the word ‘‘gamma’’.

Dated: January 31, 2001.

Ann M. Witt,

Acting Associate Commissioner for Policy.

[FR Doc. 01–3885 Filed 2–15–01; 8:45 am]

BILLING CODE 4160–01–F

DEPARTMENT OF STATE

22 CFR Part 126

[Public Notice 3575]

Bureau of Political-Military Affairs;

Amendments to the International

Traffic in Arms Regulation: Canadian

Exemption

AGENCY: Department of State.

ACTION: Final rule.

SUMMARY: This rule amends the

Canadian Exemption of the

International Traffic in Arms

Regulations (ITAR) to change the

authorized end-users to Canadian

Federal or Provincial government

authority acting in an official capacity

or a Canadian-registered person. The

amendment also adds a new defense

service exemption. Further, it amends

the list of defense articles requiring a

license.

EFFECTIVE DATE: May 30, 2001.

FOR FURTHER INFORMATION CONTACT:

William J. Lowell, Director, Office of

Defense Trade Controls, Bureau of

Political-Military Affairs, Department of

State, ATTN: Regulatory Change

Canadian Exemption (202) 663–2862 or

(202) 261–8264.

SUPPLEMENTARY INFORMATION: The

United States Government (USG) and

the Government of Canada (GOC) have

completed bilateral discussions on

export controls that have resulted in

each Government making changes to

their respective regulations. The

Government of Canada has made

numerous changes to its export control

system by law and regulation, including

providing coverage for all items of the

type controlled on the United States

Munitions List (USML) on its control

lists. Their changes also involve

establishing a system that identifies and

permits registration of persons who will

be eligible on the basis of Canadian

citizenship or permanent residence and

of risk assessment to have access to

USML articles exported from the United

States or re-transferred within Canada

without a U.S. license. Furthermore, the

GOC promulgated regulations requiring

USG approval prior to any re-export or

retransfer of the International Traffic in

Arms Regulations (‘‘ITAR’’)-controlled

items either within Canada or to a third

country. In response, the USG is

amending Section 126.5 of ITAR to

expand significantly the scope of the

Canadian exemption, specifically by

reflecting the Canadian registration

system. The amendment makes

corresponding changes to permit

specified end users eligible to receive

defense articles exported under this

exemption. Those end users are

Canadian Federal or Provincial

government authorities acting in an

official capacity and Canadianregistered persons. For purposes of this

section only, a Canadian-registered

person is any Canadian national

(including Canadian business entities

organized under the laws of Canada),

dual national, and permanent resident

registered in Canada in accordance with

the Canadian Defence Production Act.

Even where a Canadian business entity

is so registered, this does not qualify

any employee to receive items subject to

this exemption unless the employee is

also a national, dual national or

permanent resident of Canada.

The Government of Canada published

a regulatory change effective April 30,

2001, establishing a registration system

that will permit Canadian firms to be

registered as eligible to receive exports

from the United States on May 30, 2001,

the effective date of this regulatory

change.

Section 126.5 is also amended to add

a new defense service exemption that

provides registered United States and

Canadian-registered persons the ability

to, without obtaining a license, work

together to respond to U.S. and

Canadian Government requests for a

quote or a bid proposal. This

amendment also permits exchanges

necessary to respond to a registered U.S.

company’s request to produce, design,

assemble, maintain or service a defense

article. To utilize this amendment, U.S.

exporters are advised to ensure that they

can meet all the criteria prior to export

and that adequate records of disclosure

are maintained to verify that only the

information exempt is exported.

Also, the list of items requiring a

license prior to export is being amended

to change the coverage. The changes

include a requirement to obtain a

license prior to export to Canada for all

technical data and defense services for

gas turbine engine hot sections covered

by Categories VI(f) and VIII(b)—not to

include hardware; developmental

aircraft, engines and components

identified in Category VIII(f); all

category XII(c), except 1st- and 2ndgeneration image intensification tubes

and 1st- and 2nd-generation image

intensification night sighting equipment

and end items in Category XII(c) and

related technical data limited to basic

operations, maintenance and training

information as authorized under

exemption in Section 125.4(b)(5) when

exported directly to a Canadian

Government; chemical agents listed in

Category XIV(a), biological agents in

Category XIV(b), and equipment listed

in Category XIV(c) for dissemination of

the chemical agents and biological

agents in (a) and (b); nuclear radiationmeasuring devices manufactured to

military specifications listed in XIV(d);

all spacecraft in Category XV(a), except

commercial communications satellites;

XV(c), except end items when for use by

the Federal Government of Canada;

Category XV(d); certain systems,

components and parts included within

the coverage of XV(e); and,

miscellaneous articles covered by

Category XXI.

It remains the responsibility of the

U.S. exporter of record to determine, in

writing, the Canadian end-user, end-use,

10576 Federal Register / Vol. 66, No. 33 / Friday, February 16, 2001 / Rules and Regulations

that the Canadian recipient is registered

with the Canadian Government, and

that the defense articles are for end-use

in Canada and not for reexport or

retransfer to another foreign destination.

Should this information not be available

or the exporter has knowledge or reason

to know that the export would result in

a transfer or sale to a proscribed

destination (see 126.1), this exemption

is not available.

As a general matter, the regulation

does not affect the continuing

application of requirements of this

subchapter to parties utilizing this

exemption, in particular § 126.1(e)

which requires any person who knows

or has reason to know of a prohibited

activity involving a proscribed

destination to immediately inform the

Office of Defense Trade Controls.

Specifically, too, Canadian-registered

persons will be eligible recipients of

ITAR-controlled items under this

exemption for purposes of this

regulation, except where application of

U.S. law may require prohibiting (e.g.,

by treating a transaction as non-exempt

or a Canadian-registered person as

ineligible on a case-by-case basis, or

more broadly) an export, reexport or

transfer of such an item to a person with

citizenship or nationality of a country to

which U.S. defense exports are

prohibited by law.

This amendment involves a foreign

affairs function of the United States and

therefore, is not subject to the

procedures required by 5 U.S.C. 553 and

554. It is exempt from review under

Executive Order 12866 but has been

reviewed internally by the Department

to ensure consistency with the purposes

thereof. This rule does not require

analysis under the Regulatory

Flexibility Act or the Unfunded

Mandates Reform Act. It has been found

not to be a major rule within the

meaning of the Small Business

Regulatory Enforcement Act of 1966. It

will not have substantial direct effects

on the States, 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 § 6 of Executive Order

13132, it is determined that this rule

does not have sufficient federalism

implications to warrant application of

Executive Order Nos. 12372 and 13123.

However, interested parties are invited

to submit written comments to the

Department of State, Office of Defense

Trade Controls, ATTN: Regulatory

Change, Canadian Exemption, 13th

Floor, H1304, 2401 E Street, NW.,

Washington, DC 20037. Such persons

must be so registered with the

Department of State’s Office of Defense

Trade Controls (DTC) pursuant to the

registration requirements of § 38 of the

Arms Export Control Act. Comments are

welcomed and could assist both

governments in joint outreach program

to be conducted following this

publication.

List of Subjects in 22 CFR Part 126

Arms and munitions, Exports.

Accordingly, for the reasons set forth

above, Title 22, chapter I, subchapter M,

part 126, is being amended as follows:

PART 126—GENERAL POLICIES AND

PROVISIONS

1. The authority citation for part 126

continues to reads as follows:

Authority: Secs. 2, 38, 40, 42, and 71, Pub.

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

(as amended by P.L. 106–280), 2780, 2791,

and 2797); 22 U.S.C. 2778; E.O. 11958, 42 FR

4311; 3 CFR, 1977 Comp., p. 79; 22 U.S.C.

2658; 22 U.S.C. 287c; E.O. 12918, 59 FR

28205, 3 CFR 1994 Comp., p 899.

2. Section 126.5 is revised to read as

follows:

§ 126.5 Canadian exemptions.

(a) Temporary import of defense

articles. District Director of Customs and

postmasters shall permit the temporary

import and return to Canada without a

license of any unclassified defense

articles (see § 120.6 of this subchapter)

that originate in Canada for temporary

use in the United States and return to

Canada. All other temporary imports

shall be in accordance with §§ 123.3 and

123.4 of this subchapter.

(b) Permanent and temporary export

of defense articles. Except for the

defense articles and related technical

data, and defense services identified in

paragraph (b) (1) through (20) of this

section for exports that transit third

countries, and provided the

requirements of this subchapter are met,

(to include § 120.1 (c) and (d), parts 122

and 123 (except insofar as exemption

from licensing requirements is herein

authorized) and § 126.1, and the

requirement to obtain non-transfer and

use assurances for all significant

military equipment), District Director of

Customs and postmasters shall permit,

when for end-use in Canada by

Canadian Federal or Provincial

governmental authorities acting in an

official capacity or by a Canadianregistered person or return to the United

States, the permanent and temporary

export to Canada without a license of

defense articles and related technical

data identified in § 121.1 of this

subchapter, except as described in

paragraphs (b)(1) through (20) of this

section and the defense services and

technical data described in paragraph

(c) of this section. For purposes of this

section, ‘‘Canadian-registered person’’ is

any Canadian national (including

Canadian business entities organized

under the laws of Canada), dual

national, and permanent resident

registered in Canada in accordance with

the Canadian Defence Production Act,

and such other Canadian Crown

Corporations as may be identified by the

Department of State. The defense

articles, related technical data, and

defense services identified in § 121.1 of

this subchapter continuing to require a

license are:

(1) All classified articles, technical

data and defense services covered by

§ 121.1 of this subchapter.

(2) All Missile Technology Control

Regime (MTCR) Annex Items.

(3) Defense services covered by part

124 of this subchapter, except for those

in paragraph (c) of this section.

(4) Any transaction involving the

export of defense articles and defense

services for which congressional

notification is required in accordance

with § 123.15 and § 124.11 of this

subchapter.

(5) All technical data and defense

services for gas turbine engine hot

sections covered by Categories VI(f) and

VIII(b). (This does not include

hardware).

(6) Firearms listed in Category I.

(7) Ammunition listed in Category III

for the firearms in Category I.

(8) Nuclear weapons strategic delivery

systems and all components, parts,

accessories and attachments specifically

designed for such systems and

associated equipment.

(9) Naval nuclear propulsion

equipment listed in Category VI(e).

(10) Aircraft listed in Category VIII(a)

and developmental aircraft, engines and

components identified in Category

VIII(f).

(11) All Category XII(c), except any

1st- and 2nd-generation image

intensification tube and 1st- and 2ndgeneration image intensification night

sighting equipment. End items (see

§ 121.8 of this subchapter) in Category

XII(c) and related technical data limited

to basic operations, maintenance and

training information as authorized

under the exemption in § 125.4(b)(5) of

this subchapter may be exported

directly to a Canadian Government

entity (i.e. federal, provincial, territorial,

or municipal) without a license.

(12) Chemical agents listed in

Category XIV(a), biological agents in

Category XIV(b), and equipment listed

in Category XIV(c) for dissemination of

Federal Register / Vol. 66, No. 33 / Friday, February 16, 2001 / Rules and Regulations 10577

the chemical agents and biological

agents listed in Category XIV(a) and (b).

(13) Nuclear radiation measuring

devices manufactured to military

specifications listed in Category XIV(d).

(14) All spacecraft in Category XV(a),

except commercial communications

satellites.

(15) Category XV(c), except end items

(see § 121.8 of this subchapter) for end

use by the Federal Government of

Canada exported directly or indirectly

through a Canadian-registered person.

(16) Category XV(d).

(17) The following systems,

components and parts included within

the coverage of Category XV(e):

(i) Anti-jam systems with the ability

to respond to incoming interference by

adaptively reducing antenna gain

(nulling) in the direction of the

interference.

(ii) Antennas:

(A) With aperture (overall dimension

of the radiating portions of the antenna)

greater than 30 feet; or

(B) With all sidelobes less than or

equal to ¥35dB, relative to the peak of

the main beam; or

(C) Designed, modified, or configured

to provide coverage area on the surface

of the earth less than 200 nautical miles

in diameter, where ‘‘coverage area’’ is

defined as that area on the surface of the

earth that is illuminated by the main

beam width of the antenna (which is the

angular distance between half power

points of the beam).

(iii) Optical intersatellite data links

(cross links) and optical ground satellite

terminals.

(iv) Spaceborne regenerative baseband

processing (direct up and down

conversion to and from baseband)

equipment.

(v) Propulsion systems which permit

acceleration of the satellite on-orbit (i.e.,

after mission orbit injection) at rates

greater than 0.1g.

(vi) Attitude control and

determination systems designed to

provide spacecraft pointing

determination and control or payload

pointing system control better than 0.02

degrees per axis.

(vii) All specifically designed or

modified systems, components, parts,

accessories, attachments, and associated

equipment for all Category XV(a) items,

except when specifically designed or

modified for use in commercial

communications satellites.

(18) Nuclear weapons design and test

equipment listed in Category XVI.

(19) Submersible and oceanographic

vessels and related articles listed in

Category XX(a) through (d).

(20) Miscellaneous articles covered by

Category XXI.

(c) Defense service exemption. A

defense service is exempt from the

licensing requirements of part 124 of

this subchapter, when the following

criteria can be met.

(1) The item, technical data, defense

service and transaction is not identified

in paragraphs (b)(1) through (20) of this

section; and

(2) The transfer of technical data and

provision of defense service is limited to

the following activities:

(i) Canadian-registered person or a

registered and eligible U.S. company (in

accordance with part 122 of this

subchapter) preparing a quote or bid

proposal in response to a written

request from a Department or Agency of

the United States Federal Government

or from a Canadian Federal, Provincial,

or Territorial Government; or

(ii) Produce, design, assemble,

maintain or service a defense article (i.e.

hardware, technical data) for use by a

registered U.S. company; or, a U.S.

Federal Government Program; or for end

use in a Canadian Federal, Provincial, or

Territorial Government Program; and

(iii) The defense services and

technical data are limited to that

defined in paragraph (c)(6) of this

section; and

(3) The Canadian contractor and

subcontractor certify, in writing, to the

U.S. exporter that the technical data and

defense service being exported will be

used only for an activity identified in

paragraph (c)(2) of this section; and

(4) A written arrangement between

the U.S. exporter and the Canadian

recipient (such as a consummated NonDisclosure or other multi-party

agreement, Technology Transfer Control

Plan, contract or purchase order) must:

(i) Limit delivery of the defense

articles being produced directly to an

identified manufacturer in the United

States registered in accordance with part

122 of this subchapter; a Department or

Agency of the United States Federal

Government; a Canadian-registered

person authorized in writing to

manufacture defense articles by and for

the Government of Canada; a Canadian

Federal, Provincial, or Territorial

Government; and

(ii) Prohibit the disclosure of the

technical data to any other contractor or

subcontractor who is not a Canadianregistered person; and

(iii) Provide that any subcontract

contain all the limitations of this

section; and

(iv) Require that the Canadian

contractor, including subcontractors,

destroy or return to the U.S. exporter in

the United States all of the technical

data exported pursuant to the contract

or purchase order upon fulfillment of

the contract, unless for use by a

Canadian or United States Government

entity that requires in writing the

technical data be maintained. The U.S.

exporter must be provided written

certification that the technical data is

being retained or destroyed; and

(v) Include a clause requiring that all

documentation created from U.S.

technical data contain the statement

‘‘This document contains technical data,

the use of which is restricted by the U.S.

Arms Export Control Act. This data has

been provided in accordance with, and

subject to, the limitations specified in

¶126.5 of the International Traffic In

Arms Regulations (ITAR). By accepting

this data, the consignee agrees to honor

the requirements of the ITAR’’; and

(5) The U.S. exporter must provide

the Office of Defense Trade Controls a

semi-annual report of all their on-going

activities authorized under this section.

The report shall include the article(s)

being produced; the end user(s) (i.e.

name of U.S. or Canadian company); the

end item into which the product is to be

incorporated; the intended end use of

the product (e.g., United States or

Canadian Defense contract number and

identification of program); the name and

address of all the Canadian contractors

and subcontractors; and

(6) The defense services and technical

data are limited to those in paragraphs

(c)(6)(i), (ii), (iii) and (iv), and do not

include paragraphs (c)(6)(v), (vi) and

(vii) of this section:

(i) Build-to-Print. Build-to-Print

means that a foreign consignee can

produce a defense article from

engineering drawings without any

technical assistance from a U.S.

exporter. This transaction is based

strictly on a ‘‘hand-off’’ approach

because the foreign consignee is

understood to have the inherent

capability to produce the defense article

and only lacks the necessary drawings.

Supporting documentation such as

acceptance criteria, and specifications,

may be released on an as-required basis

(i.e. ‘‘must have’’) such that the foreign

consignee would not be able to produce

an acceptable defense article without

this additional supporting

documentation. Documentation which

is not absolutely necessary to permit

manufacture of an acceptable defense

article (i.e. ‘‘nice to have’’) is not

considered within the boundaries of a

‘‘Build-to Print’’ data package; and/or

(ii) Build/Design-to-Specification.

‘‘Build/Design-to-Specification’’ means

that a foreign consignee can design and

produce a defense article from

requirement specifications without any

technical assistance from the U.S.

exporter. This transaction is based

10578 Federal Register / Vol. 66, No. 33 / Friday, February 16, 2001 / Rules and Regulations

strictly on a ‘‘hands-off’’ approach since

the foreign consignee is understood to

have the inherent capability to both

design and produce the defense article

and only lacks the necessary

requirement information; and/or

(iii) Basic Research. ‘‘Basic

Research’’—means a systemic study

directed toward greater knowledge or

understanding of the fundamental

aspects of phenomena and observable

facts without specific applications

towards processes or products in mind.

It does not include ‘‘Applied Research’’

(i.e. a systemic study to gain knowledge

or understanding necessary to

determine the means by which a

recognized and specific need may be

met. It is a systematic application of

knowledge toward the production of

useful materials, devices, and systems

or methods, including design,

development, and improvement of

prototypes and new processes to meet

specific requirements.); and

(iv) Maintenance (i.e., inspection,

testing, calibration or repair, including

overhaul, reconditioning and one-to-one

replacement of any defective items,

parts or components, but excluding any

modification, enhancement, upgrade or

other form of alteration or improvement

that changes the basic performance of

the item); and does not include

(v) Design Methodology, such as: The

underlying engineering methods and

design philosophy utilized (i.e., the

‘‘why’’ or information that explains the

rationale for particular design decision,

engineering feature, or performance

requirement); engineering experience

(e.g. lessons learned); and the rationale

and associated databases (e.g. design

allowables, factors of safety, component

life predictions, failure analysis criteria)

that establish the operational

requirements (e.g., performance,

mechanical, electrical, electronic,

reliability and maintainability) of a

defense article. (Final analytical results

and the initial conditions and

parameters may be provided.)

(vi) Engineering Analysis, such as:

Analytical methods and tools used to

design or evaluate a defense article’s

performance against the operational

requirements. Analytical methods and

tools include the development and/or

use of mockups, computer models and

simulations, and test facilities. (Final

analytical results and the initial

conditions and parameters may be

provided.)

(vii) Manufacturing Know-how, such

as: Information that provides detailed

manufacturing processes and techniques

needed to translate a detailed design

into a qualified, finished defense article.

(Information may be provided in a

build-to-print package identified in

paragraph (c)(6)(i) of this section that is

necessary in order to produce an

acceptable defense article.).

(d) Reexports/retransfer. Rexport/retransfer in Canada to another end user

or end use or from Canada to another

destination, except the United States,

must in all instances have the prior

approval of the Office of Defense Trade

Controls. Unless otherwise exempt in

this subchapter, the original exporter is

responsible, upon request from a

Canadian-registered person for

obtaining or providing reexport/

retransfer approval. In any instance

when the U.S. exporter is no longer

available to the Canadian end user the

request for reexport/retransfer may be

made directly to Department of State,

Office of Defense Trade Controls. All

requests must include the information

in § 123.9(c) of this subchapter.

Reexport/retransfer approval is acquired

by:

(1) If the reexport/retransfer being

requested could be made pursuant to

this section (i.e., a retransfer within

Canada to another eligible Canadian

recipient under this section) if exported

directly from the U.S., upon receipt by

the U.S. company of a request by a

Canadian end user, the original U.S.

exporter is authorized to grant on behalf

of the U.S. Government by confirming

in writing to the Canadian requester that

the reexport/retransfer is authorized

subject to the conditions of this section;

or

(2) If the reexport/retransfer is to an

end use or end user that, if directly

exported from the U.S. requires a

license, retransfer must be handled in

accordance with § 123.9 of this

subchapter.

Notes to § 126.5:

1. In any instance when the exporter has

knowledge that the defense article exempt

from licensing is being exported for use other

than by a qualified Canadian-registered

person or for export to another foreign

destination, other than the United States, in

its original form or incorporated into another

item, an export license must be obtained

prior to the transfer to Canada.

2. Additional exemptions exist in

other sections of this subchapter that are

applicable to Canada, for example

§§ 123.9, 125.4 and 124.2 which allows

for the performance of defense services

related to training in basic operations

and maintenance, without a license, for

defense articles lawfully exported,

including those identified in paragraphs

(b)(1) through (20) of this section.

Dated: January 24, 2001.

Colin L. Powell,

Secretary of State.

[FR Doc. 01–3877 Filed 2–15–01; 8:45 am]

BILLING CODE 4710–25–P

DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 210

RIN 1510–AA81

Federal Government Participation in

the Automated Clearing House

AGENCY: Financial Management Service,

Fiscal Service, Treasury.

ACTION: Interim rule with request for

comment.

SUMMARY: This rule amends our

regulation governing the use of the

Automated Clearing House (ACH)

system by Federal agencies. The

regulation adopts, with some

exceptions, the ACH Rules developed

by NACHA—The Electronic Payments

Association (NACHA) as the rules

governing the use of the ACH system by

Federal agencies. We’re issuing this

interim rule to address changes that

NACHA has made to the ACH Rules

during the past year.

DATES: This interim rule is effective

March 19, 2001. The incorporation by

reference of the publication listed in the

rule is approved by the Director of the

Federal Register as of March 19, 2001.

ADDRESSES: You can download this

interim rule at the following website:

http://www.fms.treas.gov/ach/. You may

also inspect and copy this rule at:

Treasury Department Library, Freedom

of Information Act (FOIA) Collection,

Room 1428, Main Treasury Building,

1500 Pennsylvania Avenue, NW,

Washington, DC 20220. Before visiting,

you must call (202) 622–0990 for an

appointment.

You can view Treasury’s procedural

guidelines for ACH payments in the

Green Book at the following website:

http://www.fms.treas.gov/greenbook.

You may also register at this website for

e-mail notification of updates to the

Green Book.

You may send comments

electronically to the following address:

210comments@fms.treas.gov. You may

also mail comments to Cynthia L.

Johnson, Director, Cash Management

Policy and Planning Division, Financial

Management Service, 401 14th Street,

SW, Room 420, Washington, DC 20227.

FOR FURTHER INFORMATION CONTACT: Walt

Henderson, Senior Financial Program