ITAR (2001)

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10 July 2001
Source: http://www.access.gpo.gov/su\_docs/aces/fr-cont.html

[Federal Register: July 10, 2001 (Volume 66, Number 132)]
[Rules and Regulations]
[Page 35899-35900]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10jy01-5]

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DEPARTMENT OF STATE

Bureau of Political-Military Affairs

22 CFR Parts 124, 125, and 126

[Public Notice 3710]

Amendment to the International Traffic in Arms Regulation: Sweden

AGENCY: Department of State.

ACTION: Final rule.

SUMMARY: This rule amends the International Traffic In ArmsRegulations
to extend a recent reform of the U.S. defense trade export control
system, originally intended to benefitNATO, Australia and Japan, to
Sweden. The recent reforms were intended to streamline the U.S. defense
export control licensing process and forge closer industrial linkage
between the U.S. and allied defense suppliers. Part 124 of the
International Traffic In Arms Regulations is now being amended to
permit U.S. companies to perform, using an exemption, certain
maintenance and maintenance training for US-origin defense articles in
the inventory of Sweden. Part 125 is amended to provide authorization,
without a license, to transfer certain technical data to support
procurement of defense articles from defense firms in Sweden for use by
the Department of Defense. In addition, under Part 126, the four
comprehensive export authorizations for use in circumstances where the
full parameters of a commercial export endeavor, including the needed
defense exports, can be well anticipated and described in advance, is
now available for Sweden.

EFFECTIVE DATE: July 10, 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 Sweden at (202) 663-2861
or FAX (202) 261-8264.

SUPPLEMENTARY INFORMATION: On July 21, 2000, the Department published
regulations to implement, effective September 1, 2000, the U.S. Defense
Trade Security Initiative (DTSI) announced at the NATO Ministerial in
Florence, Italy on May 24, 2000 (65 FR 45282). Those reforms of the
U.S. defense trade export control system were made available to NATO
Allies, Japan and Australia. Those initiatives were intended to improve
the efficiency and competition in defense markets with NATO allies,
Japan and Australia. This particular amendment to the International
Traffic in Arms Regulations would make those reforms available with
respect to Sweden. These reforms are intended to streamline the U.S.
defense export control licensing process and forge closer industrial
linkage between the U.S. and allied defense suppliers.
    Section 124.2(c) is amended to add Sweden. Paragraph (c) permits
U.S. companies to provide, without a license, defense services
necessary to perform maintenance on and maintenance training for US-
origin equipment in the inventory of NATO, NATO countries, Australia,
Japan, and Sweden, provided the maintenance and maintenance training
does not result in any modification, enhancement, upgrade or other form
of alteration or improvement that enhances the performance or
capability of the defense article. Also, the export must not include
the transfer of certain technologies; such as, design methodology,
engineering analysis, and manufacturing know-how. Section 125.4(c) is
amended to add Sweden. Paragraph (c) permits the transfer to NATO
countries, Australia, Japan, and Sweden, of technical data necessary to
support offshore procurement of defense articles for use by the
Department of Defense. In addition, section 126.14 is amended to
include Sweden in the four comprehensive export authorizations
developed to limit the number of individual export approvals necessary
to authorize the export of defense articles to NATO countries,
Australia, Japan, and Sweden, which will encourage government-to-
government cooperative research and development, support joint ventures
and teaming arrangements and facilitate a U.S. company's role in a
cooperative project when covered by a government-to-government
Memorandum of Understanding (MOU).
   In implementing these initiatives, parts 124, 125, and 126 are
being amended.
    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 of State 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 section 6 of Executive Order
13132, it is determined that this rule does not have sufficient
federalism implications to warrant application of Executive Orders
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, Sweden, 13th Floor, H1304, 2401 E
Street, NW., Washington, DC20037. Such persons must be so registered
with the Department of State's Office of Defense Trade Controls (DTC)
pursuant to the registration requirements of section 38 of the Arms
Export Control Act.

List of Subjects

22 CFR Part 124

    Arms and munitions, Exports, Technical assistance.

22 CFR Part 125

   Arms and munitions, Classified information, Exports.

22 CFR Part 126

    Arms and munitions, Exports.

   Accordingly, for the reasons set forth above, Title 22, Chapter I,
Subchapter M, Parts 124, 125 and 126, are amended as follows:

PART 124--AGREEMENTS, OFF-SHORE PROCUREMENT AND OTHER DEFENSE
SERVICES

    1. The authority citation for part 124 continues to read as
follows:

    Authority: Sec. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22
U.S.C. 2752, 2778, 2797); E.O. 11958, 42 FR 4311, 3 CFR 1977 Comp.
p. 79; 22 U.S.C. 2658; Pub L. 105-261.

   2. Section 124.2 is amended by revising paragraphs (c) introductory
text, (c)(1), and (c)(6) to read as follows:

Sec. 124.2  Exemptions for training and military service.

* * * * *
   (c) NATO countries, Australia, Japan, and Sweden, in addition to
the basic maintenance training exemption provided in Sec. 124.2(a) and
basic maintenance information exemption in Sec. 125.4(b)(5) of this
subchapter, no technical assistance agreement is required for
maintenance training or the performance of maintenance, including

Page 35900

the export of supporting technical data, when the following criteria
can be met:
   (1) Defense services are for unclassified U.S.-origin defense
articles lawfully exported or authorized for export and owned or
operated by and in the inventory of NATO or the Federal Governments of
NATO countries, Australia, Japan or Sweden.
* * * * *
   (6) Eligibility criteria for foreign persons. Foreign persons
eligible to receive technical data or maintenance training under this
exemption are limited to nationals of the NATO countries, Australia,
Japan, or Sweden.

PART 125--LICENSES FOR THE EXPORT OF TECHNICAL DATA AND CLASSIFIED
DEFENSE ARTICLES

   3. The authority citation for part 125 continues to read as
follows:

   Authority: Sections 2 and 38, Pub. L. 90-629, 90 Stat. 744 (22
U.S.C. 2752, 2778); E.O. 11958, 42 FR 4311, 3 CFR, 1977 Comp. p.79;
22 U.S.C. 2658.

   4. Section 125.4 is amended by revising paragraph (c) introductory
text to read as follows:

Sec. 125.4  Exemptions of general applicability.

* * * * *
   (c) Defense services and related unclassified technical data are
exempt from the licensing requirements of this subchapter, to nationals
of NATO countries, Australia, Japan, and Sweden, for the purposes of
responding to a written request from the Department of Defense for a
quote or bid proposal. Such exports must be pursuant to an official
written request or directive from an authorized official of the U.S.
Department of Defense. The defense services and technical data are
limited to paragraphs (c)(1), (c)(2), and (c)(3) of this section and
must not include paragraphs (c)(4), (c)(5), and (c)(6) of this section
which follow:
* * * * *

PART 126--GENERAL POLICIES AND PROVISIONS

   5. 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, 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.

   6. Section 126.14 is amended by revising paragraphs (a)
introductory text, (a)(1), (a)(2), (a)(3)(i), and (a)(4) to read as
follows:

Sec. 126.14  Special comprehensive export authorizations for NATO,
Australia, Japan, and Sweden.

   (a) With respect to NATO members, Australia, Japan, and Sweden, the
Office of Defense Trade Controls may provide the comprehensive
authorizations described in paragraphs (a) and (b) of this section for
circumstances where the full parameters of a commercial export endeavor
including the needed defense exports can be well anticipated and
described in advance, thereby making use of such comprehensive
authorizations appropriate.
   (1) Major Project Authorization. With respect to NATO members,
Australia, Japan, and Sweden, the Office of Defense Trade Controls may
provide comprehensive authorizations for well circumscribed
commercially developed ``major projects*, where a principal registered*
U.S. exporter/prime contractor identifies in advance the broad
parameters of a commercial project including defense exports needed,
other participants (e.g., exporters with whom they have ``teamed up*,*
subcontractors), and foreign government end users. Projects eligible
for such authorization may include a commercial export of a major
weapons system for a foreign government involving, for example,
multiple U.S. suppliers under a commercial teaming agreement to design,
develop and manufacture defense articles to meet a foreign government's
requirements. U.S. exporters seeking such authorization must provide
detailed information concerning the scope of the project, including
other exporters, U.S. subcontractors, and planned exports (including
re-exports) of defense articles, defense services, and technical data,
and meet the other requirements set forth in paragraph (b) of this
section.
   (2) Major Program Authorization. With respect to NATO members,
Australia, Japan, and Sweden, the Office of Defense Trade Controls may
provide comprehensive authorizations for well circumscribed
commercially developed ``major program*. This variant would be*
available where a single registered U.S. exporter defines in advance
the parameters of a broad commercial program for which the registrant
will be providing all phases of the necessary support (including the
needed hardware, tech data, defense services, development,
manufacturing, and logistic support). U.S. exporters seeking such
authorization must provide detailed information concerning the scope of
the program, including planned exports (including re-exports) of
defense articles, defense services, and technical data, and meet the
other requirements set forth in paragraph (b) of this section.
   (3)(i) Global Project Authorization. With respect to NATO members,
Australia, Japan, and Sweden, the Office of Defense Trade Controls may
provide a comprehensive ``Global Project Authorization *to registered*
U.S. exporters for exports of defense articles, technical data or
defense services in support of government to government cooperative
projects (covering research and development or production) with one of
these countries undertaken pursuant to an agreement between the USG and
the government of such country, or a memorandum of understanding
between the Department of Defense and the country's Ministry of
Defense.
* * * * *
   (4) Technical Data Supporting an Acquisition, Teaming Arrangement,
Merger, Joint Venture Authorization. With respect to NATO member
countries, Australia, Japan, and Sweden, the Office of Defense Trade
Controls may provide a registered U.S. defense company a comprehensive
authorization to export technical data in support of the U.S.
exporter's consideration of entering into a teaming arrangement, joint
venture, merger, acquisition, or similar arrangement with prospective
foreign partners. Specifically the authorization is designed to permit
the export of a broadly defined set of technical data to qualifying
well established foreign defense firms in NATO countries, Australia,
Japan, or Sweden in order to better facilitate a sufficiently in depth
assessment of the benefits, opportunities and other relevant
considerations presented by such prospective arrangements. U.S
exporters seeking such authorization must provide detailed information
concerning the arrangement, joint venture, merger or acquisition,
including any planned exports of defense articles, defense services,
and technical data, and meet the other requirements set forth in
paragraph (b) of this section.
* * * * *

   Dated: June 12, 2001.
John R. Bolton,
Under Secretary, Arms Control and International Security, Department of
State.
[FR Doc. 01-16011 Filed 7-9-01; 8:45 am]
BILLING CODE 4710-25-U

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