Amendment to the International Traffic in Arms Regulations: The United States Munitions List Category VIII, 47523-47526 [E8-18844]
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Rules and Regulations
Federal Register
Vol. 73, No. 158
Thursday, August 14, 2008
This section of the FEDERAL REGISTER
contains regulatory documents having general
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are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
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REGISTER issue of each week.
will not have a significant economic
impact on a substantial number of small
entities.’’
Dated: August 8, 2008.
Jeffrey Shuren,
Associate Commissioner for Policy and
Planning.
[FR Doc. E8–18792 Filed 8–13–08; 8:45 am]
BILLING CODE 4160–01–S
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
DEPARTMENT OF STATE
Food and Drug Administration
[Public Notice 6316]
21 CFR Part 892
RIN 1400–AC47
[Docket No. FDA–2005–N–0346] (formerly
2005N–0467)
Amendment to the International Traffic
in Arms Regulations: The United
States Munitions List Category VIII
22 CFR Part 121
Medical Devices; Radiology Devices;
Reclassification of Bone Sonometers
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Final rule; correction.
SUMMARY: The Food and Drug
Administration (FDA) is correcting a
final rule that appeared in the Federal
Register of July 17, 2008 (73 FR 40967).
The final rule reclassified bone
sonometer devices from class III into
class II, subject to special controls. The
document contained an inadvertent
error regarding the impact of the final
rule on small businesses. This
document corrects that error.
FOR FURTHER INFORMATION CONTACT:
Domini Cassis, Center for Devices and
Radiological Health (HFZ–215), Food
and Drug Administration, 1350 Piccard
Dr., Rockville, MD 20850, 240–276–
2342.
In FR Doc.
E8–16354, appearing on page 40969 in
the Federal Register of Thursday, July
17, 2008, there was an error regarding
the impact of the final rule on small
businesses. Specifically, language
certifying that the final rule meets the
requirements of the Regulatory
Flexibility Act (5 U.S.C. 601–612) was
inadvertently omitted during document
preparation. Accordingly, the following
correction is made:
1. On page 40969, in the middle
column, under section ‘‘VI. Analysis of
Impacts,’’ in the second full paragraph,
the third sentence is revised to read:
‘‘The agency certifies that the final rule
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SUPPLEMENTARY INFORMATION:
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Department of State.
Final rule.
AGENCY:
ACTION:
SUMMARY: The Department of State is
amending the text of the International
Traffic in Arms Regulations (ITAR), Part
121 to add language clarifying how the
criteria of Section 17(c) of the Export
Administration Act of 1979 (‘‘EAA’’) are
implemented in accordance with the
Department of State’s obligations under
the Arms Export Control Act (‘‘AECA’’),
and restating the Department’s
longstanding policy and practice of
implementing the criteria of this
provision.
DATES: Effective Date: This rule is
effective August 14, 2008.
FOR FURTHER INFORMATION CONTACT:
Director Ann Ganzer, Office Defense
Trade Controls Policy, Department of
State, Telephone (202) 663–2792 or Fax
(202) 261–8199; e-mail
DDTCResponseTeam@state.gov. ATTN:
Regulatory Change, ITAR Part 121.
SUPPLEMENTARY INFORMATION: On April
11, 2008, the Department published a
Notice of Proposed Rulemaking (NPRM)
to add language clarifying how the
criteria of Section 17(c) of the Export
Administration Act of 1979 are
implemented in accordance with the
Arms Export Control Act by amending
Category VIII *(b), (h), and the Note.
Further background is provided with
the NPRM at 73 FR 19778.
This rule reinstates the Section 17(c)
reference in the ITAR to assist exporters
in understanding the scope and
application of the Section 17(c) criteria
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to parts and components for civil
aircraft. It also clarifies that any part or
component that (a) is standard
equipment; (b) is covered by a civil
aircraft type certificate (including
amended type certificates and
supplemental type certificates) issued
by the Federal Aviation Administration
for civil, non-military aircraft (this
expressly excludes military aircraft
certified as restricted and any type
certification of Military Commercial
Derivative Aircraft, defined by FAA
Order 8110.101 effective date September
7, 2007 as ‘‘civil aircraft procured or
acquired by the military’’); and (c) is an
integral part of such civil aircraft, is
subject to the jurisdiction of the Export
Administrative Regulations (EAR).
Where such part or component is not
Significant Military Equipment
(‘‘SME’’), no Commodity Jurisdiction
(CJ) determination is required to
determine whether the item meets these
criteria for exclusion under the United
States Munitions List (USML), unless
doubt exists as to whether these criteria
have been met. However, where the part
or component is SME, a CJ
determination is always required,
except where a SME part or component
was integral to civil aircraft prior to the
effective date of this rule.
Additionally, this proposed rule adds
language in a new Note after Category
VIII(h) to provide guidelines concerning
the parts or components meeting these
criteria. The change to Category VIII*(b)
also identifies and designates certain
sensitive military items, heretofore
controlled under Category VIII(h), as
SME. Previous and current
authorizations concerning the
manufacturer of these items will not
require notification in accordance with
§ 124.11, and will not require a
‘‘Nontransfer and Use Certificate’’ DSP–
83, unless they are amended, modified,
or renewed.
This requirement for a CJ
determination by the Department of
State helps ensure the U.S. Government
is made aware of, and can reach an
informed decision regarding, any
sensitive military item proposed for
standardization in the commercial
aircraft industry before the item or
technology is actually applied to a
commercial aircraft program, whether
such item is integral to the aircraft, and,
if so, whether the development,
production, and use of the technology
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associated with the item should
nevertheless be controlled on the
USML. It will also ensure the
Department of State fulfills the
requirements of section 38(f) of the
Arms Export Control Act.
This regulation is intended to clarify
the control of aircraft parts and
components, and does not remove any
items from the USML, nor does it
change any CJ determinations. Should
there be an apparent conflict between
this regulation and a CJ determination
issued prior to this date, the holder of
the determination should seek
reconsideration, citing this Federal
Register Notice and 22 CFR 121.1(c)
Category VIII Note of this subchapter.
The Proposed Rule had a comment
period ending May 12, 2008. Twenty
(20) parties filed comments by May 12th
recommending changes. Having
thoroughly reviewed and evaluated the
comments and the recommended
changes, the Department has
determined that it will, and hereby
does, adopt the Proposed Rule, with
minor edits, and promulgates it as a
Final Rule. The Department’s evaluation
of the written comments and
recommendations follows.
Comment Analysis
Ten (10) commenting parties
criticized the Department for making
‘‘specifically designed military hot
section components and digital engine
controls (e.g., Full Authority Digital
Engine Controls (FADEC) and Digital
Electronic Engine Controls (DEEC))’’
significant military equipment in
paragraph *(b) of Category VIII. The
Department believes that the
designation of these military hot section
components and digital engine controls
as significant military equipment is
necessary to safeguard the national
security of the United States, because
these components and controls fulfill
the definition of significant military
equipment in 22 CFR 120.7 in that they
have the ‘‘capacity for substantial
military utility or capability.’’ In
addition, the significant military
equipment designation of these
components and controls is consistent
with the exclusion of hot section
technology from 22 CFR 124.2(c) and
126.5. The Department will not, as a
matter of process, require DSP–83
nontransfer and use certificates for the
export of spare parts for hot sections
and digital engine controls previously
authorized for export. The ‘‘grand-father
clause’’ added to sub-paragraph (b) for
military hot section components and
digital engine controls manufactured to
engineering drawings dated on or before
January 1, 1970 was also intended to
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address the concerns raised by the ten
commenting parties.
Six (6) commenting parties
recommended paragraph (h) of Category
VIII(h) start with the phrase ‘‘Except as
noted below.’’ That phrase does not
conform with the regulatory language
used in other sub-paragraphs of the
United States Munitions List categories
that have associated notes paragraphs.
One (1) commenting party
recommended the commodity
jurisdiction requirement for significant
military equipment be removed from the
explanatory note. The inclusion of the
commodity jurisdiction requirement for
significant military equipment is needed
to ensure the government has an
opportunity to review proposals to use
military equipment in a civil
application and to avoid the removal of
items from the United States Munitions
List through company selfdeterminations. Before placing a defense
article considered significant military
equipment on a civil aircraft, a written
commodity jurisdiction determination
must be obtained.
Seven (7) commenting parties
recommended the first sentence of the
explanatory note add the EAR term ‘‘or
item.’’ The Department has chosen to
use ITAR terms.
One (1) commenting party
recommended the first sentence of the
explanatory note use the phrase
‘‘component, part, accessory, and
associated equipment’’ instead of ‘‘part
or component.’’ That recommendation
was adopted.
Eleven (11) commenting parties
recommended the first sentence of the
explanatory note delete ‘‘exclusively.’’
The suggestion was not adopted. The
word is necessary, since the Department
claims no jurisdiction over parts or
components designed exclusively for
civil, non-military aircraft. Such parts
and components are subject to
Department of Commerce jurisdiction.
Four (4) commenting parties
recommended the ‘‘and’’ linking ‘‘civil,
non-military aircraft’’ and ‘‘civil, nonmilitary aircraft engines’’ in the first
sentence of the explanatory note be
changed to an ‘‘or.’’ There was a
concern about coverage of a part or
component of a civil, non-military
aircraft engine. The sentence in the final
rule was changed to clarify that a part
or component designed exclusively for
civil, non-military aircraft and a part or
component designed exclusively for a
civil, non-military aircraft engine are
both controlled by the Department of
Commerce.
Two (2) commenting parties
recommended part (b) of the second
sentence of the explanatory note add
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Parts Manufacturer Approval (PMA). As
a PMA may be issued for an exclusively
USML item, inclusion of PMA is not
appropriate here.
Six (6) commenting parties
recommended part (b) of the second
sentence of the explanatory note be
expanded to include foreign government
civil aviation authorities. As Section
17(c) is limited to certifications issued
by the Federal Aviation Administration,
it is appropriate to limit the civil aircraft
type certificate (including amended type
certificates and supplemental type
certificates) to those issued by the U.S.
Federal Aviation Administration.
Six (6) commenting parties
recommended part (b) of the second
sentence of the explanatory note add
‘‘FAA Order 8110.10’’ after ‘‘Military
Commercial Derivative Aircraft.’’ That
reference has been included in the
supplementary information above.
Six (6) commenting parties
recommended part (c) of the second
sentence of the explanatory note change
‘‘control of the EAR’’ to ‘‘jurisdiction of
the EAR.’’ This change was adopted.
One (1) commenting party
recommended explaining the
Department of State’s policy concerning
its jurisdiction over an ITAR-controlled
article that is incorporated into a civil
item. With few exceptions specified in
the ITAR (e.g. USML Category
XIV(n)(4)(i)), a USML item does not
change jurisdiction when it is
incorporated into another item. As
stated above, it is important for the
government to review, via the
Commodity Jurisdiction process, the
proposed use of military items in
commercial applications.
One (1) commenting party
recommended the fourth sentence of the
explanatory note change ‘‘part or
component’’ to ‘‘components, parts,
accessories, attachments, and associated
equipment.’’ This change was not
adopted. An ‘‘accessory,’’ an
‘‘attachment,’’ and ‘‘associated
equipment’’ are not considered standard
equipment integral to the civil aircraft.
Four (4) commenting parties
recommended the fourth sentence of the
explanatory note change ‘‘a part’’ to
‘‘such a part’’ and delete ‘‘designated as
SME in this category.’’ The purpose of
this sentence is to grandfather from
obtaining a commodity jurisdiction
determination a part or component
designated as Significant Military
Equipment (SME) in Category VIII that
was standard equipment, integral to
civil aircraft prior to the effective date
of the final rule. The language of the
proposed rule is clearer and has been
retained.
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Ten (10) commenting parties
recommended the eighth sentence of the
explanatory note add at the end of the
sentence ‘‘of the item’s form, fit, or
function.’’ This change was adopted.
Four (4) commenting parties
recommended the ninth sentence of the
explanatory note delete ‘‘radomes’’ and
‘‘low observable blades’’ and add
‘‘rotodomes’’ and ‘‘bomb bay doors.’’
The Department accepted the
substitution of rotodomes for radomes.
Fifteen (15) commenting parties
recommended the tenth sentence of the
explanatory note add ‘‘manufacturer’s
specification or standard’’ and add
Technical Standard Order ‘‘TSO’’ in the
parenthesis. As a TSO may be issued for
an exclusively USML item, inclusion of
TSOs is not appropriate here.
Eleven (11) commenting parties
recommended the eleventh sentence of
the explanatory note change
‘‘unpublished civil aviation industry
specifications’’ to ‘‘unpublished (e.g.,
proprietary) manufacturer’s
specifications.’’ Also, it was
recommended to add ‘‘bolts’’ to the e.g.
list. The Department believes that many
of the concerns raised with regard to
sentences ten and eleven are alleviated
when the two sentences are read
together. Parts and components meeting
published industry or government
specifications or established but
unpublished (e.g., proprietary) industry
standards are considered standard
equipment. Also, the recommendation
to add bolts was not adopted.
Eleven (11) commenting parties
recommended the twelfth sentence of
the explanatory note be deleted, noting
that aircraft parts are routinely tested
beyond the applicable specification for
a variety of reasons, including
marketing purposes or warranty
obligations. This recommendation was
not adopted. If a part is required to
exceed established standards, such
requirements call into question whether
it is a ‘‘standard part.’’
Ten (10) commenting parties
recommended the thirteenth sentence of
the explanatory note delete ‘‘unless the
item was designed or modified to meet
that specification or standard.’’ That
change was adopted.
Fourteen (14) commenting parties
recommended the fourteenth sentence
of the explanatory note clarify the
jurisdiction of exporting spare parts
when the part or component is not
installed in the aircraft at the time of
export. The Department believes it is
clear that parts and components that
meet the section 17(c) criteria, when
exported separately are subject to EAR
jurisdiction.
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Five (5) commenting parties
recommended the fifteenth sentence of
the explanatory note add ‘‘APUs, seats,
and flaps’’ to the e.g. parenthesis. This
change was not adopted. We believe the
examples provided are sufficient, and
note that not all APUs, seats, and flaps
are subject to Department of Commerce
jurisdiction.
One (1) commenting party objected to
disqualifying ‘‘unique application parts
or components not integral to the
aircraft’’ in the sixteenth sentence of the
explanatory note. Section 17(c) applies
to standard parts and components
integral to the aircraft. Parts that are not
standard or are not integral to the
aircraft are clearly not included in
Section 17(c), and are therefore not
included here.
regulations implementing Executive
Order 12372 regarding
intergovernmental consultation on
Federal programs and activities do not
apply to this amendment.
Regulatory Analysis and Notices
Arms and munitions, Exports, U.S.
munitions list.
I Accordingly, for the reasons set forth
above, Title 22, Chapter I, Subchapter
M, part 121 is amended as follows:
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 involves a
foreign affairs function of the United
States, it does not require analysis under
the Regulatory Flexibility Act.
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 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 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
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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.
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 in 22 CFR Part 121
PART 121—THE UNITED STATES
MUNITIONS LIST
1. The authority citation for part 121
continues to read as follows:
I
Authority: Secs. 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,
112 Stat. 1920.
2. In § 121.1, paragraph (c) Category
VIII is amended by revising Category
VIII paragraphs (b) and (h) to read as
follows:
I
§ 121.1 General. The United States
Munitions List.
*
*
*
*
*
Category VIII—Aircraft and Associated
Equipment
*
*
*
*
*
*(b) Military aircraft engines, except
reciprocating engines, specifically
designed or modified for the aircraft in
paragraph (a) of this category, and all
specifically designed military hot
section components (i.e., combustion
chambers and liners; high pressure
turbine blades, vanes, disks and related
cooled structure; cooled low pressure
turbine blades, vanes, disks and related
cooled structure; cooled augmenters;
and cooled nozzles) and digital engine
controls (e.g., Full Authority Digital
Engine Controls (FADEC) and Digital
Electronic Engine Controls (DEEC)).
However, if such military hot section
components and digital engine controls
are manufactured to engineering
drawings dated on or before January 1,
1970, with no subsequent changes or
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revisions to such drawings, they are
controlled under Category VIII(h).
*
*
*
*
*
(h) Components, parts, accessories,
attachments, and associated equipment
(including ground support equipment)
specifically designed or modified for the
articles in paragraphs (a) through (d) of
this category, excluding aircraft tires
and propellers used with reciprocating
engines.
Note: The Export Administration
Regulations (EAR) administered by the
Department of Commerce control any
component, part, accessory, attachment, and
associated equipment (including propellers)
designed exclusively for civil, non-military
aircraft (see § 121.3 of this subchapter for the
definition of military aircraft) and control
any component, part, accessory, attachment,
and associated equipment designed
exclusively for civil, non-military aircraft
engines. The International Traffic in Arms
Regulations administered by the Department
of State control any component, part,
accessory, attachment, and associated
equipment designed, developed, configured,
adapted or modified for military aircraft, and
control any component, part, accessory,
attachment, and associated equipment
designed, developed, configured, adapted or
modified for military aircraft engines. For
components and parts that do not meet the
above criteria, including those that may be
used on either civil or military aircraft, the
following requirements apply. A non-SME
component or part (as defined in §§ 121.8(b)
and (d) of this subchapter) that is not
controlled under another category of the
USML, that: (a) Is standard equipment; (b) is
covered by a civil aircraft type certificate
(including amended type certificates and
supplemental type certificates) issued by the
Federal Aviation Administration for a civil,
non-military aircraft (this expressly excludes
military aircraft certified as restricted and
any type certification of Military Commercial
Derivative Aircraft); and (c) is an integral part
of such civil aircraft, is subject to the
jurisdiction of the EAR. In the case of any
part or component designated as SME in this
or any other USML category, a determination
that such item may be excluded from USML
coverage based on the three criteria above
always requires a commodity jurisdiction
determination by the Department of State
under § 120.4 of this subchapter. The only
exception to this requirement is where a part
or component designated as SME in this
category was integral to civil aircraft prior to
August 14, 2008. For such part or
component, U.S. exporters are not required to
seek a commodity jurisdiction determination
from State, unless doubt exists as to whether
the item meets the three criteria above (See
§ 120.3 and § 120.4 of this subchapter). Also,
U.S. exporters are not required to seek a
commodity jurisdiction determination from
State regarding any non-SME component or
part (as defined in §§ 121.8(b) and (d) of this
subchapter) that is not controlled under
another category of the USML, unless doubt
exists as to whether the item meets the three
criteria above (See § 120.3 and § 120.4 of this
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subchapter). These commodity jurisdiction
determinations will ensure compliance with
this section and the criteria of Section 17(c)
of the Export Administration Act of 1979. In
determining whether the three criteria above
have been met, consider whether the same
item is common to both civil and military
applications without modification of the
item’s form, fit, or function. Some examples
of parts or components that are not common
to both civil and military applications are tail
hooks, rotodomes, and low observable rotor
blades. ‘‘Standard equipment’’ is defined as
a part or component manufactured in
compliance with an established and
published industry specification or an
established and published government
specification (e.g., AN, MS, NAS, or SAE).
Parts and components that are manufactured
and tested to established but unpublished
civil aviation industry specifications and
standards are also ‘‘standard equipment,’’
e.g., pumps, actuators, and generators. A part
or component is not standard equipment if
there are any performance, manufacturing or
testing requirements beyond such
specifications and standards. Simply testing
a part or component to meet a military
specification or standard for civil purposes
does not in and of itself change the
jurisdiction of such part or component.
Integral is defined as a part or component
that is installed in an aircraft. In determining
whether a part or component may be
considered as standard equipment and
integral to a civil aircraft (e.g., latches,
fasteners, grommets, and switches) it is
important to carefully review all of the
criteria noted above. For example, a part
approved solely on a non-interference/
provisions basis under a type certificate
issued by the Federal Aviation
Administration would not qualify. Similarly,
unique application parts or components not
integral to the aircraft would also not qualify.
*
*
*
*
*
Dated: August 4, 2008.
John C. Rood,
Acting Under Secretary for Arms Control and
International Security, Department of State.
[FR Doc. E8–18844 Filed 8–13–08; 8:45 am]
BILLING CODE 4710–25–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9422]
RIN 1545–BE95
S Corporation Guidance Under AJCA
of 2004 and GOZA of 2005
regarding certain changes made to the
rules governing S corporations under
the American Jobs Creation Act of 2004
and the Gulf Opportunity Zone Act of
2005. The final regulations replace
obsolete references in the current
regulations and allow taxpayers to make
proper use of the provisions that made
changes to prior law. The final
regulations include guidance on the S
corporation family shareholder rules,
the definitions of ‘‘powers of
appointment’’ and ‘‘potential current
beneficiaries’’ (PCBs) with regard to
electing small business trusts (ESBTs),
the allowance of suspended losses to the
spouse or former spouse of an S
corporation shareholder, and relief for
inadvertently terminated or invalid
qualified subchapter S subsidiary
(QSub) elections. The final regulations
affect S corporations and their
shareholders.
Effective Date: These regulations
are effective on August 14, 2008.
Applicability Dates: For dates of
applicability, see §§ 1.1361–4(a)(9)(ii),
1.1361–6, 1.1362–4(g) and 1.1366–5.
FOR FURTHER INFORMATION CONTACT:
Charles J. Langley, Jr., (202) 622–3060
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
DATES:
Paperwork Reduction Act
The collection of information
contained in these final regulations has
been reviewed and approved by the
Office of Management and Budget for
review in accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)) under control number
1545–2114.
The collection of information is
required by § 1.1361–1(m)(2)(ii)(A) of
these final regulations. This information
is required to enable the IRS to verify
whether the corporation is an eligible S
corporation.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number.
Books or records relating to a
collection of information must be
retained as long as their contents might
become material in the administration
of any internal revenue law. Generally,
tax returns and tax return information
are confidential, as required by 26
U.S.C. 6103.
AGENCY:
Background
SUMMARY: This document contains final
regulations that provide guidance
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) concerning S corporations under
sections 1361, 1362, and 1366 of the
Internal Revenue Code (Code). These
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
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]]>Agencies
[Federal Register Volume 73, Number 158 (Thursday, August 14, 2008)]
[Rules and Regulations]
[Pages 47523-47526]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-18844]
=======================================================================
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DEPARTMENT OF STATE
22 CFR Part 121
[Public Notice 6316]
RIN 1400-AC47
Amendment to the International Traffic in Arms Regulations: The
United States Munitions List Category VIII
AGENCY: Department of State.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of State is amending the text of the
International Traffic in Arms Regulations (ITAR), Part 121 to add
language clarifying how the criteria of Section 17(c) of the Export
Administration Act of 1979 (``EAA'') are implemented in accordance with
the Department of State's obligations under the Arms Export Control Act
(``AECA''), and restating the Department's longstanding policy and
practice of implementing the criteria of this provision.
DATES: Effective Date: This rule is effective August 14, 2008.
FOR FURTHER INFORMATION CONTACT: Director Ann Ganzer, Office Defense
Trade Controls Policy, Department of State, Telephone (202) 663-2792 or
Fax (202) 261-8199; e-mail DDTCResponseTeam@state.gov. ATTN: Regulatory
Change, ITAR Part 121.
SUPPLEMENTARY INFORMATION: On April 11, 2008, the Department published
a Notice of Proposed Rulemaking (NPRM) to add language clarifying how
the criteria of Section 17(c) of the Export Administration Act of 1979
are implemented in accordance with the Arms Export Control Act by
amending Category VIII *(b), (h), and the Note. Further background is
provided with the NPRM at 73 FR 19778.
This rule reinstates the Section 17(c) reference in the ITAR to
assist exporters in understanding the scope and application of the
Section 17(c) criteria to parts and components for civil aircraft. It
also clarifies that any part or component that (a) is standard
equipment; (b) is covered by a civil aircraft type certificate
(including amended type certificates and supplemental type
certificates) issued by the Federal Aviation Administration for civil,
non-military aircraft (this expressly excludes military aircraft
certified as restricted and any type certification of Military
Commercial Derivative Aircraft, defined by FAA Order 8110.101 effective
date September 7, 2007 as ``civil aircraft procured or acquired by the
military''); and (c) is an integral part of such civil aircraft, is
subject to the jurisdiction of the Export Administrative Regulations
(EAR). Where such part or component is not Significant Military
Equipment (``SME''), no Commodity Jurisdiction (CJ) determination is
required to determine whether the item meets these criteria for
exclusion under the United States Munitions List (USML), unless doubt
exists as to whether these criteria have been met. However, where the
part or component is SME, a CJ determination is always required, except
where a SME part or component was integral to civil aircraft prior to
the effective date of this rule.
Additionally, this proposed rule adds language in a new Note after
Category VIII(h) to provide guidelines concerning the parts or
components meeting these criteria. The change to Category VIII*(b) also
identifies and designates certain sensitive military items, heretofore
controlled under Category VIII(h), as SME. Previous and current
authorizations concerning the manufacturer of these items will not
require notification in accordance with Sec. 124.11, and will not
require a ``Nontransfer and Use Certificate'' DSP-83, unless they are
amended, modified, or renewed.
This requirement for a CJ determination by the Department of State
helps ensure the U.S. Government is made aware of, and can reach an
informed decision regarding, any sensitive military item proposed for
standardization in the commercial aircraft industry before the item or
technology is actually applied to a commercial aircraft program,
whether such item is integral to the aircraft, and, if so, whether the
development, production, and use of the technology
[[Page 47524]]
associated with the item should nevertheless be controlled on the USML.
It will also ensure the Department of State fulfills the requirements
of section 38(f) of the Arms Export Control Act.
This regulation is intended to clarify the control of aircraft
parts and components, and does not remove any items from the USML, nor
does it change any CJ determinations. Should there be an apparent
conflict between this regulation and a CJ determination issued prior to
this date, the holder of the determination should seek reconsideration,
citing this Federal Register Notice and 22 CFR 121.1(c) Category VIII
Note of this subchapter.
The Proposed Rule had a comment period ending May 12, 2008. Twenty
(20) parties filed comments by May 12th recommending changes. Having
thoroughly reviewed and evaluated the comments and the recommended
changes, the Department has determined that it will, and hereby does,
adopt the Proposed Rule, with minor edits, and promulgates it as a
Final Rule. The Department's evaluation of the written comments and
recommendations follows.
Comment Analysis
Ten (10) commenting parties criticized the Department for making
``specifically designed military hot section components and digital
engine controls (e.g., Full Authority Digital Engine Controls (FADEC)
and Digital Electronic Engine Controls (DEEC))'' significant military
equipment in paragraph *(b) of Category VIII. The Department believes
that the designation of these military hot section components and
digital engine controls as significant military equipment is necessary
to safeguard the national security of the United States, because these
components and controls fulfill the definition of significant military
equipment in 22 CFR 120.7 in that they have the ``capacity for
substantial military utility or capability.'' In addition, the
significant military equipment designation of these components and
controls is consistent with the exclusion of hot section technology
from 22 CFR 124.2(c) and 126.5. The Department will not, as a matter of
process, require DSP-83 nontransfer and use certificates for the export
of spare parts for hot sections and digital engine controls previously
authorized for export. The ``grand-father clause'' added to sub-
paragraph (b) for military hot section components and digital engine
controls manufactured to engineering drawings dated on or before
January 1, 1970 was also intended to address the concerns raised by the
ten commenting parties.
Six (6) commenting parties recommended paragraph (h) of Category
VIII(h) start with the phrase ``Except as noted below.'' That phrase
does not conform with the regulatory language used in other sub-
paragraphs of the United States Munitions List categories that have
associated notes paragraphs.
One (1) commenting party recommended the commodity jurisdiction
requirement for significant military equipment be removed from the
explanatory note. The inclusion of the commodity jurisdiction
requirement for significant military equipment is needed to ensure the
government has an opportunity to review proposals to use military
equipment in a civil application and to avoid the removal of items from
the United States Munitions List through company self-determinations.
Before placing a defense article considered significant military
equipment on a civil aircraft, a written commodity jurisdiction
determination must be obtained.
Seven (7) commenting parties recommended the first sentence of the
explanatory note add the EAR term ``or item.'' The Department has
chosen to use ITAR terms.
One (1) commenting party recommended the first sentence of the
explanatory note use the phrase ``component, part, accessory, and
associated equipment'' instead of ``part or component.'' That
recommendation was adopted.
Eleven (11) commenting parties recommended the first sentence of
the explanatory note delete ``exclusively.'' The suggestion was not
adopted. The word is necessary, since the Department claims no
jurisdiction over parts or components designed exclusively for civil,
non-military aircraft. Such parts and components are subject to
Department of Commerce jurisdiction.
Four (4) commenting parties recommended the ``and'' linking
``civil, non-military aircraft'' and ``civil, non-military aircraft
engines'' in the first sentence of the explanatory note be changed to
an ``or.'' There was a concern about coverage of a part or component of
a civil, non-military aircraft engine. The sentence in the final rule
was changed to clarify that a part or component designed exclusively
for civil, non-military aircraft and a part or component designed
exclusively for a civil, non-military aircraft engine are both
controlled by the Department of Commerce.
Two (2) commenting parties recommended part (b) of the second
sentence of the explanatory note add Parts Manufacturer Approval (PMA).
As a PMA may be issued for an exclusively USML item, inclusion of PMA
is not appropriate here.
Six (6) commenting parties recommended part (b) of the second
sentence of the explanatory note be expanded to include foreign
government civil aviation authorities. As Section 17(c) is limited to
certifications issued by the Federal Aviation Administration, it is
appropriate to limit the civil aircraft type certificate (including
amended type certificates and supplemental type certificates) to those
issued by the U.S. Federal Aviation Administration.
Six (6) commenting parties recommended part (b) of the second
sentence of the explanatory note add ``FAA Order 8110.10'' after
``Military Commercial Derivative Aircraft.'' That reference has been
included in the supplementary information above.
Six (6) commenting parties recommended part (c) of the second
sentence of the explanatory note change ``control of the EAR'' to
``jurisdiction of the EAR.'' This change was adopted.
One (1) commenting party recommended explaining the Department of
State's policy concerning its jurisdiction over an ITAR-controlled
article that is incorporated into a civil item. With few exceptions
specified in the ITAR (e.g. USML Category XIV(n)(4)(i)), a USML item
does not change jurisdiction when it is incorporated into another item.
As stated above, it is important for the government to review, via the
Commodity Jurisdiction process, the proposed use of military items in
commercial applications.
One (1) commenting party recommended the fourth sentence of the
explanatory note change ``part or component'' to ``components, parts,
accessories, attachments, and associated equipment.'' This change was
not adopted. An ``accessory,'' an ``attachment,'' and ``associated
equipment'' are not considered standard equipment integral to the civil
aircraft.
Four (4) commenting parties recommended the fourth sentence of the
explanatory note change ``a part'' to ``such a part'' and delete
``designated as SME in this category.'' The purpose of this sentence is
to grandfather from obtaining a commodity jurisdiction determination a
part or component designated as Significant Military Equipment (SME) in
Category VIII that was standard equipment, integral to civil aircraft
prior to the effective date of the final rule. The language of the
proposed rule is clearer and has been retained.
[[Page 47525]]
Ten (10) commenting parties recommended the eighth sentence of the
explanatory note add at the end of the sentence ``of the item's form,
fit, or function.'' This change was adopted.
Four (4) commenting parties recommended the ninth sentence of the
explanatory note delete ``radomes'' and ``low observable blades'' and
add ``rotodomes'' and ``bomb bay doors.'' The Department accepted the
substitution of rotodomes for radomes.
Fifteen (15) commenting parties recommended the tenth sentence of
the explanatory note add ``manufacturer's specification or standard''
and add Technical Standard Order ``TSO'' in the parenthesis. As a TSO
may be issued for an exclusively USML item, inclusion of TSOs is not
appropriate here.
Eleven (11) commenting parties recommended the eleventh sentence of
the explanatory note change ``unpublished civil aviation industry
specifications'' to ``unpublished (e.g., proprietary) manufacturer's
specifications.'' Also, it was recommended to add ``bolts'' to the e.g.
list. The Department believes that many of the concerns raised with
regard to sentences ten and eleven are alleviated when the two
sentences are read together. Parts and components meeting published
industry or government specifications or established but unpublished
(e.g., proprietary) industry standards are considered standard
equipment. Also, the recommendation to add bolts was not adopted.
Eleven (11) commenting parties recommended the twelfth sentence of
the explanatory note be deleted, noting that aircraft parts are
routinely tested beyond the applicable specification for a variety of
reasons, including marketing purposes or warranty obligations. This
recommendation was not adopted. If a part is required to exceed
established standards, such requirements call into question whether it
is a ``standard part.''
Ten (10) commenting parties recommended the thirteenth sentence of
the explanatory note delete ``unless the item was designed or modified
to meet that specification or standard.'' That change was adopted.
Fourteen (14) commenting parties recommended the fourteenth
sentence of the explanatory note clarify the jurisdiction of exporting
spare parts when the part or component is not installed in the aircraft
at the time of export. The Department believes it is clear that parts
and components that meet the section 17(c) criteria, when exported
separately are subject to EAR jurisdiction.
Five (5) commenting parties recommended the fifteenth sentence of
the explanatory note add ``APUs, seats, and flaps'' to the e.g.
parenthesis. This change was not adopted. We believe the examples
provided are sufficient, and note that not all APUs, seats, and flaps
are subject to Department of Commerce jurisdiction.
One (1) commenting party objected to disqualifying ``unique
application parts or components not integral to the aircraft'' in the
sixteenth sentence of the explanatory note. Section 17(c) applies to
standard parts and components integral to the aircraft. Parts that are
not standard or are not integral to the aircraft are clearly not
included in Section 17(c), and are therefore not included here.
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 involves a foreign affairs function of the
United States, it does not require analysis under the Regulatory
Flexibility Act.
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 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 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.
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.
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 in 22 CFR Part 121
Arms and munitions, Exports, U.S. munitions list.
0
Accordingly, for the reasons set forth above, Title 22, Chapter I,
Subchapter M, part 121 is amended as follows:
PART 121--THE UNITED STATES MUNITIONS LIST
0
1. The authority citation for part 121 continues to read as follows:
Authority: Secs. 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, 112 Stat. 1920.
0
2. In Sec. 121.1, paragraph (c) Category VIII is amended by revising
Category VIII paragraphs (b) and (h) to read as follows:
Sec. 121.1 General. The United States Munitions List.
* * * * *
Category VIII--Aircraft and Associated Equipment
* * * * *
*(b) Military aircraft engines, except reciprocating engines,
specifically designed or modified for the aircraft in paragraph (a) of
this category, and all specifically designed military hot section
components (i.e., combustion chambers and liners; high pressure turbine
blades, vanes, disks and related cooled structure; cooled low pressure
turbine blades, vanes, disks and related cooled structure; cooled
augmenters; and cooled nozzles) and digital engine controls (e.g., Full
Authority Digital Engine Controls (FADEC) and Digital Electronic Engine
Controls (DEEC)). However, if such military hot section components and
digital engine controls are manufactured to engineering drawings dated
on or before January 1, 1970, with no subsequent changes or
[[Page 47526]]
revisions to such drawings, they are controlled under Category VIII(h).
* * * * *
(h) Components, parts, accessories, attachments, and associated
equipment (including ground support equipment) specifically designed or
modified for the articles in paragraphs (a) through (d) of this
category, excluding aircraft tires and propellers used with
reciprocating engines.
Note: The Export Administration Regulations (EAR) administered
by the Department of Commerce control any component, part,
accessory, attachment, and associated equipment (including
propellers) designed exclusively for civil, non-military aircraft
(see Sec. 121.3 of this subchapter for the definition of military
aircraft) and control any component, part, accessory, attachment,
and associated equipment designed exclusively for civil, non-
military aircraft engines. The International Traffic in Arms
Regulations administered by the Department of State control any
component, part, accessory, attachment, and associated equipment
designed, developed, configured, adapted or modified for military
aircraft, and control any component, part, accessory, attachment,
and associated equipment designed, developed, configured, adapted or
modified for military aircraft engines. For components and parts
that do not meet the above criteria, including those that may be
used on either civil or military aircraft, the following
requirements apply. A non-SME component or part (as defined in
Sec. Sec. 121.8(b) and (d) of this subchapter) that is not
controlled under another category of the USML, that: (a) Is standard
equipment; (b) is covered by a civil aircraft type certificate
(including amended type certificates and supplemental type
certificates) issued by the Federal Aviation Administration for a
civil, non-military aircraft (this expressly excludes military
aircraft certified as restricted and any type certification of
Military Commercial Derivative Aircraft); and (c) is an integral
part of such civil aircraft, is subject to the jurisdiction of the
EAR. In the case of any part or component designated as SME in this
or any other USML category, a determination that such item may be
excluded from USML coverage based on the three criteria above always
requires a commodity jurisdiction determination by the Department of
State under Sec. 120.4 of this subchapter. The only exception to
this requirement is where a part or component designated as SME in
this category was integral to civil aircraft prior to August 14,
2008. For such part or component, U.S. exporters are not required to
seek a commodity jurisdiction determination from State, unless doubt
exists as to whether the item meets the three criteria above (See
Sec. 120.3 and Sec. 120.4 of this subchapter). Also, U.S.
exporters are not required to seek a commodity jurisdiction
determination from State regarding any non-SME component or part (as
defined in Sec. Sec. 121.8(b) and (d) of this subchapter) that is
not controlled under another category of the USML, unless doubt
exists as to whether the item meets the three criteria above (See
Sec. 120.3 and Sec. 120.4 of this subchapter). These commodity
jurisdiction determinations will ensure compliance with this section
and the criteria of Section 17(c) of the Export Administration Act
of 1979. In determining whether the three criteria above have been
met, consider whether the same item is common to both civil and
military applications without modification of the item's form, fit,
or function. Some examples of parts or components that are not
common to both civil and military applications are tail hooks,
rotodomes, and low observable rotor blades. ``Standard equipment''
is defined as a part or component manufactured in compliance with an
established and published industry specification or an established
and published government specification (e.g., AN, MS, NAS, or SAE).
Parts and components that are manufactured and tested to established
but unpublished civil aviation industry specifications and standards
are also ``standard equipment,'' e.g., pumps, actuators, and
generators. A part or component is not standard equipment if there
are any performance, manufacturing or testing requirements beyond
such specifications and standards. Simply testing a part or
component to meet a military specification or standard for civil
purposes does not in and of itself change the jurisdiction of such
part or component. Integral is defined as a part or component that
is installed in an aircraft. In determining whether a part or
component may be considered as standard equipment and integral to a
civil aircraft (e.g., latches, fasteners, grommets, and switches) it
is important to carefully review all of the criteria noted above.
For example, a part approved solely on a non-interference/provisions
basis under a type certificate issued by the Federal Aviation
Administration would not qualify. Similarly, unique application
parts or components not integral to the aircraft would also not
qualify.
* * * * *
Dated: August 4, 2008.
John C. Rood,
Acting Under Secretary for Arms Control and International Security,
Department of State.
[FR Doc. E8-18844 Filed 8-13-08; 8:45 am]
BILLING CODE 4710-25-P
