Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Category XII, 8438-8446 [2016-03197]

Agencies

• DEPARTMENT OF STATE

[Federal Register Volume 81, Number 33 (Friday, February 19, 2016)]
[Proposed Rules]
[Pages 8438-8446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03197]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF STATE

22 CFR Part 121

[Public Notice: 9445]
RIN 1400-AD32


Amendment to the International Traffic in Arms Regulations: 
Revision of U.S. Munitions List Category XII

AGENCY: Department of State.

ACTION: Proposed rule.

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

SUMMARY: As part of the President's Export Control Reform effort, the 
Department of State proposes to amend the International Traffic in Arms 
Regulations (ITAR) to revise Category XII (fire control, laser, 
imaging, and guidance and control equipment) of the U.S. Munitions List 
(USML) to describe more precisely the articles warranting control on 
the USML. The Department also proposes to amend USML Categories VIII, 
XIII, and XV to reflect that items now described in those Categories 
will be in the revised Category XII.

DATES: The Department of State will accept comments on this proposed 
rule until April 4, 2016.

ADDRESSES: Interested parties may submit comments within 45 days of the 
date of publication by one of the following methods:
     Email: DDTCPublicComments@state.gov with the subject line, 
``ITAR Amendment--Category XII Second Proposed.''
     Internet: At www.regulations.gov, search for this notice 
by using this rule's RIN (1400-AD32).
    Comments received after that date will be considered if feasible, 
but consideration cannot be assured. Those submitting comments should 
not include any personally identifying information they do not desire 
to be made public or any information for which a claim of 
confidentiality is asserted. All comments and transmittal emails will 
be made available for public inspection and copying after the close of 
the comment period via the Directorate of Defense Trade Controls Web 
site at www.pmddtc.state.gov. Parties who wish to comment anonymously 
may do so by submitting their comments via www.regulations.gov, leaving 
the fields that would identify the commenter blank and including no 
identifying information in the comment itself. Comments submitted via 
www.regulations.gov are immediately available for public inspection.

FOR FURTHER INFORMATION CONTACT: Mr. C. Edward Peartree, Director, 
Office of Defense Trade Controls Policy, Department of State, telephone 
(202) 663-2792; email DDTCPublicComments@state.gov. ATTN: Regulatory 
Change, USML Category XII.

SUPPLEMENTARY INFORMATION: The Directorate of Defense Trade Controls 
(DDTC), U.S. Department of State, administers the International Traffic 
in Arms Regulations (ITAR) (22 CFR parts 120-130). The items subject to 
the jurisdiction of the ITAR, i.e., defense articles, are identified on 
the ITAR's U.S. Munitions List (USML) (22 CFR 121.1). With few 
exceptions, items not subject to the export control jurisdiction of the 
ITAR are subject to the jurisdiction of the Export Administration 
Regulations (EAR), 15 CFR parts 730-774, which includes the Commerce 
Control List (CCL) in Supplement No. 1 to Part 774), administered by 
the Bureau of Industry and Security (BIS), U.S. Department of Commerce. 
Both the ITAR and the EAR impose license requirements on exports and 
reexports. Items not subject to the ITAR or to the exclusive licensing 
jurisdiction of any other set of regulations are subject to the EAR.
    The revisions contained in this rule are part of the Department of 
State's retrospective plan under E.O. 13563.
    All references to the USML in this rule are to the list of defense 
articles that are controlled for the purpose of export or temporary 
import pursuant to the ITAR, and not to the defense articles on the 
USML that are controlled by the Bureau of Alcohol, Tobacco, Firearms 
and Explosives (ATF) for the purpose of permanent import under its 
regulations (see 27 CFR part 447). Pursuant to Sec.  38(a)(1) of the 
Arms Export Control Act (AECA), all defense articles controlled for 
export or import are part of the USML under the AECA. For the sake of 
clarity, the list of defense articles controlled by ATF for the purpose 
of permanent import is the United States Munitions Import List (USMIL). 
The transfer of defense articles from the ITAR's USML to the EAR's CCL 
for the purpose of export control does not affect the list of defense 
articles controlled on the USMIL under the AECA for the purpose of 
permanent import.

Revision of Category XII

    The revision of USML Category XII was first published as a proposed 
rule (RIN 1400-AD32) on May 5, 2015, for public comment (see 80 FR 
25821) (first proposed rule). The comment period ended July 6, 2015. 
One hundred twenty parties submitted public comments, which were 
reviewed and considered by the Department and other agencies.
    The majority of the public comments stated that the proposed 
controls in USML Category XII included items that are in commercial and 
civil applications, identifying items that would largely be controlled 
under paragraphs (b), (c), (d), and (e), and requested that the 
Department limit the USML controls for most paragraphs to items 
specially designed for the military. The comments varied in level of 
detail and specific paragraphs addressed, if any, but the general tenor 
of the public comments was consistent. These comments led the 
Department to reevaluate USML Category XII in its entirety and to draft 
this second proposed rule to allow for public feedback on new proposed 
changes. Given the thorough redrafting of USML Category XII, the 
Department does not address each public comment in detail.
    This second proposed rule revises USML Category XII, covering fire 
control, range finder, optical and guidance and control equipment, to 
advance the national security objectives of the President's Export 
Control Reform initiative and to more accurately

[[Page 8439]]

describe the articles within the category, in order to establish a 
``bright line'' between the USML and the CCL for the control of these 
articles. The revisions to Category XII being proposed in this second 
proposed rule are described below, along with a description of any 
changes from the first proposed rule.
    The most significant change from the first proposed rule to this 
second proposed rule is that, in response to a high number of 
substantive public comments, certain articles will be controlled based 
on the design intent of the manufacturer. This was decided because the 
Department found that certain articles could be used as components or 
as end items for the same military application. While applying the 
standard terminology ``specially designed for a defense article'' would 
apply to articles that operate as a component for a higher-level 
assembly, that terminology would not describe the same articles when 
used as end items on their own for the same military purpose. To 
address this concern, paragraphs (b)(6) and (c)(2)(iii) control 
articles if they are specially designed for a military end user. A 
military end user is defined in the new Note to Category XII as the 
national armed services, National Guard, national police, government 
intelligence or reconnaissance organizations, or any person or entity 
whose actions or functions are intended to support military end uses. 
An item is specially designed for a military end user if it was created 
for use by a military end user or users. If an item is created for both 
military and non-military end users, or if the item was created for no 
specific end user, then it is not specially designed for a military end 
user. Contemporaneous documents are required to support the design 
intent; otherwise, use by a military end user will establish that the 
item was specially designed for a military end user.
    Paragraph (a) is revised to add subparagraphs (1) through (10) to 
more clearly describe the articles controlled in (a).
    Paragraph (a)(1) is added for fire control systems. In response to 
one comment, the Department moved the control on ``specially designed 
parts and components'' to paragraph (e) for this paragraph and others, 
so that all parts and components are described in paragraph (e). None 
of the parts and components in paragraph (e) are designated significant 
military equipment. One comment requested clarification on the 
classification of defense articles enumerated elsewhere in the USML 
that are specially designed components of a fire control system, such 
as fire control computers for aircraft, described in USML Category 
VIII(h)(16). A control on ``specially designed parts and components'' 
is a catch all control for items that are not elsewhere specified in 
the USML, and items that are explicitly described elsewhere, such as 
USML Category VIII(h)(16), are controlled by that entry.
    Paragraph (a)(2) is added for weapons sights and weapons aiming or 
imaging systems, with certain infrared focal plane arrays, image 
intensifier tubes, ballistic computers, or lasers, when specially 
designed for a defense article. The Department received multiple 
comments requesting revisions to this paragraph. These comments were 
not adopted, as these weapons sights and weapon aiming and imaging 
systems all relate to the sighting, aiming, or imaging for a defense 
article and therefore warrant USML control.
    Paragraph (a)(3) is added for electronic or optical weapon 
positioning, laying, or spotting systems.
    Paragraph (a)(4) is added for certain laser spot trackers and laser 
spot detectors that are for laser target designators or coded laser 
target markers controlled in paragraph (b)(1). The Department revised 
this control from the first proposed rule by tying it to paragraph 
(b)(1) to more specifically describe the kinds of items controlled by 
this paragraph.
    Paragraph (a)(5) is added for bomb sights and bombing computers.
    Paragraph (a)(6) is added for electro-optical missile or ordnance 
tracking systems.
    Paragraph (a)(7) is added for electro-optical ordnance guidance 
systems.
    Paragraph (a)(8) is added for electro-optical systems that 
automatically detect and locate weapons launch or fire.
    Paragraph (a)(9) is added for remote wind sensing systems specially 
designed for ballistic-corrected aiming.
    Paragraph (a)(10) is added for certain helmet mounted display (HMD) 
systems. In response to comments, the Department limited the scope of 
the control for HMD's with optical sights or slewing devices that 
control infrared imaging systems and end items from the first proposed 
rule, to those infrared systems and end items that are also defense 
articles themselves. This clarifies that HMDs for civilian firefighter 
systems are not described in this control.
    Paragraph (b) is revised to add subparagraphs (1) through (7) to 
more clearly describe the articles controlled in (b). Controls on 
lasers and others parts and components of laser systems are moved to 
paragraph (e).
    Paragraph (b)(1) is added for laser target designators or coded 
target markers that mediate the delivery of ordnance to a target. The 
Department made the control language from the first proposed rule more 
specific to more completely describe the defense articles controlled by 
this paragraph.
    Paragraph (b)(2) is added for infrared laser target illumination 
systems having a variable beam divergence. The Department made the 
control language from the first proposed rule more specific to more 
completely describe the defense articles controlled by this paragraph.
    Paragraph (b)(3) is added for certain laser range finders. In 
response to comments, the Department revised the control language from 
the first proposed rule to specify only laser ranger finders operating 
at a wavelength of 1064 nm and having a Q-switched pulse output, and 
laser ranger finders operating in excess of 1064 nm and meeting certain 
technical parameters.
    Paragraph (b)(4) is added for certain targeting or target location 
systems. In response to public comments, the Department revised the 
control from the first proposed rule to require that the system use a 
Global Navigation Satellite System (GNSS), guidance, or navigation 
defense article.
    Paragraph (b)(5) is added for optical augmentation systems.
    Paragraph (b)(6) is added for light detection and ranging (LIDAR), 
laser detection and ranging (LADAR), or range-gated systems specially 
designed for a military end user.
    Paragraph (b)(7) is added for developmental lasers and laser 
systems funded by the Department of Defense, with certain exceptions.
    Paragraph (c) is revised to add subparagraphs (1) through (9) to 
more clearly describe the articles controlled in (c). Controls on image 
intensifier tubes (IITs), infrared focal plane arrays (IRFPAs), IRFPA 
dewar cooler assemblies (IDCAs), gimbals, and other parts and 
components of imaging systems are moved to paragraph (e).
    Paragraph (c)(1) is added for night vision or infrared cameras 
specially designed for defense articles. The Department revised this 
entry in response to comments regarding non-military uses of cameras 
and imaging systems described in the first proposed rule. As a 
specially designed component of another defense article, a camera, as 
defined in the Note to paragraph (c)(1), is eligible for paragraph (b) 
of specially designed in Sec.  120.41.

[[Page 8440]]

    Paragraph (c)(2) is added for certain binoculars, bioculars, 
monoculars, goggles, or head or helmet-mounted imaging systems. The 
Department revised this entry in response to comments regarding non-
military uses of binocular, goggles, and other close eye systems 
described in the first proposed rule. For articles that employ third 
generation IITs or are sensor fused, the Department described the 
articles based on their technical characteristics. For articles with an 
IRFPA or infrared imaging camera, the articles are controlled if 
specially designed for a military end user.
    Paragraph (c)(3) is added for targeting systems specially designed 
for defense articles.
    Paragraph (c)(4) is added for infrared search and track (IRST) 
systems that utilize a longwave IRFPA and maintain positional or 
angular state of a target through time. The Department revised this 
control from the first proposed rule in response to public comments 
regarding non-military IRST systems.
    Paragraph (c)(5) is added for certain infrared imaging systems, 
described in nine subparagraphs: (1) Mobile systems that provide real-
time target location at ranges greater than 5 km; (2) airborne 
stabilized systems specially designed for military reconnaissance; (3) 
multispectral imaging systems that classify or identify military or 
intelligence targets or characteristics; (4) automated missile 
detection or warning systems; (5) systems hardened to withstand 
electromagnetic pulse (EMP) or chemical, biological, or radiological 
threats; (6) systems incorporating mechanisms to reduce signature; (7) 
certain aerial persistent surveillance systems; (8) certain gimbaled 
infrared systems; (9) systems specially designed for USML platforms. 
The Department revised this entry from the first proposed rule in 
response to comments regarding non-military imaging systems described 
in the proposed rule.
    Paragraph (c)(6) is added for certain terahertz imaging systems. In 
response to public comments, the Department revised the technical 
parameter from the first proposed rule from 0.3 milliradians to 0.1 
milliradians.
    Paragraph (c)(7) is added for systems or equipment incorporating an 
infrared beacon or emitter specially designed for Combat 
Identification. The Department revised this entry to Combat 
Identification from Identification Friend or Foe (IFF) in the first 
proposed rule in response to public confusion regarding IFF.
    Paragraph (c)(8) is added for systems that project radiometrically 
calibrated scenes directly into the entrance aperture of an electro-
optical or infrared (EO/IR) sensor controlled in this subchapter within 
either the spectral band exceeding 10 nm but not exceeding 400 nm, or 
the spectral band exceeding 900 nm but not exceeding 30,000 nm.
    Paragraph (c)(9) is added for developmental imaging systems funded 
by the Department of Defense.
    Paragraph (d) is revised to include controls on GNSS equipment 
previously controlled in Category XV and to add subparagraphs (1) 
through (6) to more clearly describe the articles controlled in (d). 
Controls on inertial measurement units, accelerometers, gyroscopes, 
GNNS security devices, and other parts and components of navigation 
systems are moved to paragraph (e).
    Paragraph (d)(1) is added for certain guidance or navigation 
systems. The Department did not adopt public comments to revise this 
entry to items specially designed for the military. Rather the 
Department has revised the technical parameters from the first proposed 
rule to a level that more clearly describes the military critical 
technology.
    Paragraph (d)(2) is added for GNSS receiving equipment, moved from 
Category XV.
    Paragraph (d)(3) is added for GNSS anti-jam systems specially 
designed for use with the anti-jam antennae described in USML Category 
XI(c)(10). In response to public comments, the Department revised the 
entry for anti-jam GNNS systems from the first proposed rule by 
expressly linking the control to the anti-jam antennae described in 
USML Category XI(c)(10).
    Paragraph (d)(4) is added for certain mobile relative gravimeters.
    Paragraph (d)(5) is added for certain mobile gravity gradiometers.
    Paragraph (d)(6) is added for developmental guidance, navigation, 
or control systems funded by the Department of Defense.
    Paragraph (e) is revised to add subparagraphs (1) through (23) to 
more clearly describe the parts and components for the systems in (a)-
(d) that are controlled in (e).
    Paragraph (e)(1) is added for parts and components specially 
designed for articles described in paragraph (a)(1) or (a)(8).
    Paragraph (e)(2) is added for lasers specially designed for defense 
articles. In response to public comments regarding the non-military 
uses of lasers described in the first proposed rule, the Department 
limited this entry to lasers that are specially designed for defense 
articles.
    Paragraph (e)(3) is added for laser stacked arrays specially 
designed for defense articles. In response to public comments regarding 
the non-military uses of laser stacked arrays described in the first 
proposed rule, the Department limited this entry to laser stacked 
arrays that are unique to defense articles.
    Paragraph (e)(4) is added for IRFPAs specially designed for defense 
articles. In response to public comments, the Department completely 
revised the controls on IRFPAs from the first proposed rule, limiting 
the USML control to those that are unique to defense articles.
    Paragraph (e)(5) is added for certain charge multiplication focal 
plane arrays specially designed for defense articles. In response to 
public comments, the Department completely revised the controls on 
charge multiplication focal plane arrays from the first proposed rule, 
limiting the USML control to those that are unique to defense articles.
    Paragraph (e)(6) is added for second generation and greater IITs 
specially designed for defense articles, and specially designed parts 
and components therefor. This control includes third generation IITs, 
EBAPS, night vision and thermal fused IITs, and all subsequent IIT 
designs. In response to public comments, the Department completely 
revised the controls on IITs from the first proposed rule, limiting the 
USML control to those that are unique to defense articles.
    Paragraph (e)(7) is added for parts and components specially 
designed for articles described in paragraph (c)(3), (c)(4), or 
(c)(5)(vi)-(vii).
    Paragraph (e)(8) is added for inertial measurement units specially 
designed for defense articles. In response to public comments, the 
Department revised the controls on inertial measurement units from the 
first proposed rule to a technical parameter based control to a control 
on all inertial measurement units that are unique to defense articles.
    Paragraph (e)(9) is added for GNSS security devices, Selective 
Availability Anti-Spoofing Module (SAASM), Security Module (SM), and 
Auxiliary Output Chip (AOC) chips.
    Paragraph (e)(10) is added for certain accelerometers that meet the 
technical parameters. In response to public comments regarding the non-
military uses of accelerometers described in the first proposed rule, 
the Department revised this entry to more specifically describe the 
items warranting control on the USML.
    Paragraph (e)(11) is added for certain gyroscopes and angular rate 
sensors that meet the technical parameters. In

[[Page 8441]]

response to public comments regarding the non-military uses of 
gyroscopes and angular rate sensors described in the first proposed 
rule, the Department revised this entry to more specifically describe 
the items warranting control on the USML.
    Paragraph (e)(12) is added for optical sensors that have a spectral 
filter that is specially designed for items controlled in USML Category 
XI(a)(4) and optical sensor assemblies that provide threat warning or 
tracking for those items controlled in USML Category XI(a)(4). In 
response to public comments, the Department revised the control from 
the first proposed rule to add the specially designed control 
parameter.
    Paragraph (e)(13) is added for read-out integrated circuits (ROICs) 
specially designed for defense articles.
    Paragraph (e)(14) is added for IDCAs, with or without an IRFPA, 
specially designed for defense articles, other than those in USML 
Category XV, and specially designed parts and components therefor.
    Paragraph (e)(15) is added for gimbals specially designed for 
defense articles in this category.
    Paragraph (e)(16) is added for IRFPA Joule-Thomson (JT) self-
regulating cryostats specially designed for defense articles.
    Paragraph (e)(17) is added for infrared lenses, mirrors, beam 
splitters or combiners, filters, and treatments and coatings, specially 
designed for defense articles.
    Paragraph (e)(18) is added for drive, control, signal, or image 
processing electronics specially designed for defense articles in this 
category.
    Paragraph (e)(19) is added for near-to-eye displays specially 
designed for defense articles in this category.
    Paragraph (e)(20) is added for resonators, receivers, transmitters, 
modulators, gain media, and drive electronics or frequency converters 
specially designed for defense articles in this category.
    Paragraph (e)(21) is added for two-dimensional infrared scene 
projector emitter arrays (i.e., resistive arrays) specially designed 
for infrared scene generators controlled in USML Category IX(a)(10).
    Paragraph (e)(22) is added for classified parts, components, 
accessories, attachments, and associated equipment.
    Paragraph (e)(23) is added for developmental IITs, FPAs, ROICs, 
accelerometers, gyroscopes, angular rate sensors, and inertial 
measurement units funded by the Department of Defense.
    Paragraph (f) is revised to more clearly describe the technical 
data and defense services controlled in paragraph (f). In response to 
public comments, the Department significantly revised paragraph (f), so 
that it now mirrors the other technical data and defense services 
paragraphs in ECR-revised USML Categories.
    A new (x) paragraph has been added to USML Category XII, allowing 
ITAR licensing for commodities, software, and technology subject to the 
EAR provided those commodities, software, and technology are to be used 
in or with defense articles controlled in USML Category XII and are 
described in the purchase documentation submitted with the application.
    Finally, articles common to the Missile Technology Control Regime 
(MTCR) Annex and the USML are to be identified on the USML with the 
parenthetical ``(MT)'' at the end of each section containing such 
articles. A separate proposed rule will address the sections in the 
ITAR that include MTCR definitions.
    The following definitions explain and amplify terms used in this 
Category and are provided to assist exporters in understanding the 
scope of the proposed control.
    Charge multiplication is a form of electronic image amplification, 
the generation of charge carriers as a result of an impact ionization 
gain process.
    Focal plane array is a linear or two-dimensional planar layer, or 
combination of planar layers, of individual detector elements, with or 
without readout electronics, which work in the focal plane.

    Note: This definition does not include a stack of single 
detector elements or any two, three, or four element detectors 
provided time delay and integration is not performed within the 
element.

    Image intensifier tube refers to an imaging device that 
incorporates a photoemissive transducer (i.e., photocathode) and 
achieves electron image amplification in the vacuum space.
    Multispectral refers to producing discrete outputs associated with 
more than one spectral band of response.

Request for Comments

    As the U.S. Government works through the proposed revisions to the 
USML, some control parameters are proposed recognizing that they may 
control items in normal commercial use and on the Wassenaar 
Arrangement's Dual Use List. With the thought that multiple 
perspectives would be beneficial to the USML revision process, the 
Department welcomes the assistance of users of the lists and requests 
input on the following:
    (1) A key goal of this rulemaking is to ensure the USML and the CCL 
together control all the items that meet Wassenaar Arrangement 
commitments embodied in Munitions List Categories 5, 11 and 15 (WA-
ML15) and the relevant Dual Use List Categories including the IRFPAs in 
Category 6 (WA-DU 6.A.2). To that end, the public is asked to identify 
any potential lack of coverage brought about by the proposed rules for 
Category XII contained in this notice and the new and revised ECCNs 
published separately by the Department of Commerce when reviewed 
together.
    (2) Another key goal of this rulemaking is to identify items 
proposed for control on the USML or the CCL that are not controlled on 
the Wassenaar Arrangement's Munitions or Dual Use List. The public is 
asked to identify any items proposed for control on the USML that are 
not controlled on the Wassenaar Arrangement's Munitions or Dual Use 
List.
    (3) A third key goal of this rulemaking is to establish a ``bright 
line'' between the USML and the CCL for the control of these materials. 
The public is asked to provide specific examples of control criteria 
that do not clearly describe items that would be defense articles and 
thus do not establish a ``bright line'' between the USML and the CCL.
    (4) Although the proposed revisions to the USML do not preclude the 
possibility that items in normal commercial use would or should be 
ITAR-controlled because, e.g., they provide the United States with a 
critical military or intelligence advantage, the U.S. government does 
not want to inadvertently control items on the ITAR that are in normal 
commercial use. Items that would be controlled on the USML in this 
proposed rule have been identified as possessing parameters or 
characteristics that provide a critical military or intelligence 
advantage. The public is thus asked to provide specific examples of 
items, if any, that would be controlled by the revised USML Category 
XII that are now in normal commercial use. The examples should 
demonstrate actual commercial use, not just potential or theoretical 
use, with supporting documents, as well as foreign availability of such 
items.
    (5) For any criteria the public believes control items in normal 
commercial use, the public is asked to identify parameters or 
characteristics that differentiate such items from items exclusively or 
primarily in military use.
    (6) For any criteria the public believes control items in normal 
commercial use, the public is asked to identify the multilateral 
controls (such as the Wassenaar Arrangement's Dual Use

[[Page 8442]]

List), if any, for such items, and the consequences of such items being 
controlled on the USML.
    (7) The Department seeks public comment on each paragraph of the 
proposed USML Category XII.

Regulatory Analysis and Notices

Administrative Procedure Act

    The Department of State is of the opinion that controlling the 
import and export of defense articles and services is a foreign affairs 
function of the United States Government and that rules implementing 
this function are exempt from sections 553 (rulemaking) and 554 
(adjudications) of the Administrative Procedure Act (APA). Although the 
Department is of the opinion that this rule is exempt from the 
rulemaking provisions of the APA, the Department is publishing this 
rule with a 45-day provision for public comment and without prejudice 
to its determination that controlling the import and export of defense 
services is a foreign affairs function.

Regulatory Flexibility Act

    Since this rule is exempt from the rulemaking provisions of 5 
U.S.C. 553, it does not require analysis under the Regulatory 
Flexibility Act.

Unfunded Mandates Reform Act of 1995

    This proposed 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 proposed 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 proposed amendment will not have substantial direct effects on 
the States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this proposed 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 proposed amendment.

Executive Orders 12866 and 13563

    Executive Orders 13563 and 12866 direct agencies to assess costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributed impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. 
This rule has been designated a ``significant regulatory action,'' 
although not economically significant, under section 3(f) of Executive 
Order 12866. Accordingly, the rule has been reviewed by the Office of 
Management and Budget (OMB).

Executive Order 12988

    The Department of State has reviewed the proposed amendment in 
light of Executive Order 12988 to eliminate ambiguity, minimize 
litigation, establish clear legal standards, and reduce burden.

Executive Order 13175

    The Department of State has determined that this rulemaking will 
not have tribal implications, will not impose substantial direct 
compliance costs on Indian tribal governments, and will not preempt 
tribal law. Accordingly, Executive Order 13175 does not apply to this 
rulemaking.

Paperwork Reduction Act

    Following is a listing of approved Department of State information 
collections that will be affected by revision of the U.S. Munitions 
List (USML) and the Commerce Control List pursuant to the President's 
Export Control Reform (ECR) initiative. The list of collections and the 
description of the manner in which they will be affected pertains to 
revision of the USML in its entirety, not only to the categories 
published in this rule. In accordance with the Paperwork Reduction Act, 
the Department of State will request comment on these collections from 
all interested persons at the appropriate time. In particular, the 
Department will seek comment on changes to licensing burden based on 
implementation of regulatory changes pursuant to ECR, and on projected 
changes based on continued implementation of regulatory changes 
pursuant to ECR. The information collections are as follows:
    (1) Statement of Registration, DS-2032, OMB No. 1405-0002. The 
Department estimates that between 3,000 and 5,000 of the currently 
registered persons will not need to maintain registration following 
full revision of the USML. This would result in a burden reduction of 
between 6,000 and 10,000 hours annually, based on a revised time burden 
of two hours to complete a Statement of Registration.
    (2) Application/License for Permanent Export of Unclassified 
Defense Articles and Related Unclassified Technical Data, DSP-5, OMB 
No. 1405-0003. The Department estimates that there will be 35,000 fewer 
DSP-5 submissions annually following full revision of the USML. This 
would result in a burden reduction of 35,000 hours annually.
    (3) Application/License for Temporary Import of Unclassified 
Defense Articles, DSP-61, OMB No. 1405-0013. The Department estimates 
that there will be 200 fewer DSP-61 submissions annually following full 
revision of the USML. This would result in a burden reduction of 100 
hours annually.
    (4) Application/License for Temporary Export of Unclassified 
Defense Articles, DSP-73, OMB No. 1405-0023. The Department estimates 
that there will be 800 fewer DSP-73 submissions annually following full 
revision of the USML. This would result in a burden reduction of 800 
hours annually.
    (5) Application for Amendment to License for Export or Import of 
Classified or Unclassified Defense Articles and Related Technical Data, 
DSP-6, -62, -74, -119, OMB No. 1405-0092. The Department estimates that 
there will be 2,000 fewer amendment submissions annually following full 
revision of the USML. This would result in a burden reduction of 1,000 
hours annually.
    (6) Request for Approval of Manufacturing License Agreements, 
Technical Assistance Agreements, and Other Agreements, DSP-5, OMB No. 
1405-0093. The Department estimates that there will be 1,000 fewer 
agreement submissions annually following full revision of the USML. 
This would result in a burden reduction of 2,000 hours annually.
    (7) Maintenance of Records by Registrants, OMB No. 1405-0111. The 
requirement to actively maintain records pursuant to provisions of the 
ITAR will decline commensurate with the drop in the number of persons 
who will be required to register with the

[[Page 8443]]

Department pursuant to the ITAR. As stated above, the Department 
estimates that up to 5,000 of the currently-registered persons will not 
need to maintain registration following full revision of the USML. This 
would result in a burden reduction of 100,000 hours annually. However, 
the ITAR does provide for the maintenance of records for a period of 
five years. Therefore, persons newly relieved of the requirement to 
register with the Department may still be required to maintain records.

List of Subjects in 22 CFR Part 121

    Arms and munitions, Exports.

    Accordingly, for the reasons set forth above, title 22, chapter I, 
subchapter M, part 121 is proposed to be 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); 22 U.S.C. 2651a; Pub. L. 105-261, 112 
Stat. 1920; Section 1261, Pub. L. 112-239; E.O. 13637, 78 FR 16129.


Sec.  121.1  [Amended]

0
2. Section 121.1 is amended by:
0
a. Removing and reserving paragraph (e) in U.S. Munitions List Category 
VIII.
0
b. Revising U.S. Munitions List Category XII:
0
c. Removing and reserving paragraph (a) in U.S. Munitions List Category 
XIII.
0
d. Removing and reserving paragraph (c) in U.S. Munitions List Category 
XV.
    The revision to read as follows:


Sec.  121.1  The United States Munitions List.

* * * * *

Category XII--Fire Control, Laser, Imaging, and Guidance and Control 
Equipment

    * (a) Fire control and aiming systems, as follows:
    (1) Fire control systems;
    (2) Weapon sights, weapon aiming systems, and weapon imaging 
systems (e.g., clip-on), with or without an integrated viewer, display, 
or reticle, specially designed for an article subject to this 
subchapter and also incorporating or specially designed to incorporate 
any of the following:
    (i) An infrared focal plane array having a peak response at a 
wavelength exceeding 1,000 nm;
    (ii) Second generation or greater image intensifier tubes;
    (iii) A ballistic computer for adjusting the aim point display; or
    (iv) Infrared laser having a wavelength exceeding 710 nm;
    (3) Electronic or optical weapon positioning, laying, or spotting 
systems;
    (4) Laser spot trackers and laser spot detection, location, or 
imaging systems, with an operational wavelength shorter than 400 nm or 
longer than 710 nm and that are for laser target designators or coded 
laser target markers controlled in paragraph (b)(1);
    Note to paragraph (a)(4): For controls on LIDAR, see paragraph 
(b)(6) of this category.
    (5) Bomb sights or bombing computers;
    (6) Electro-optical missile or ordnance tracking systems,
    (7) Electro-optical ordnance guidance systems;
    (8) Electro-optical systems that automatically detect and locate 
weapons launch or fire;
    (9) Remote wind-sensing systems specially designed for ballistic-
corrected aiming; or
    (10) Helmet mounted display (HMD) systems or end items, 
incorporating optical sights or slewing devices that aim, launch, 
track, or manage munitions, or control infrared imaging systems or end 
items described in this category, other than such items controlled in 
Category VIII (e.g., Combat Vehicle Crew HMD, Mounted Warrior HMD, 
Integrated Helmet Assembly Subsystem, Drivers Head Tracked Vision 
System);
    * (b) Laser systems and end items, as follows:
    (1) Laser target designators or coded target markers that mediate 
the delivery of ordnance to a target;
    (2) Target illumination systems having a variable beam divergence, 
and a laser output wavelength exceeding 710 nm, to artificially light 
an area to search for or locate a target;
    (3) Laser rangefinders having any of the following:
    (i) Output wavelength of 1064 nm and any Q-switched pulse output; 
or
    (ii) Output wavelength exceeding 1064 nm and any of the following:
    (A) Single shot ranging capability of 3 km or greater against a 
standard 2.3 m x 2.3 m NATO target having 10% reflectivity and 23 km 
visibility; or
    (B) Multiple shot ranging capability at 3 Hz or greater of 1 km or 
greater against a standard 2.3 m x 2.3 m NATO target having 10% 
reflectivity and 23 km visibility;
    (4) Targeting systems and target location systems, incorporating or 
specially designed to incorporate a laser rangefinder and incorporating 
or specially designed to incorporate a Global Navigation Satellite 
System (GNSS), guidance, or navigation defense article controlled in 
paragraph (d) of this category (MT if designed or modified for rockets, 
missiles, space launch vehicles (SLVs), drones, or unmanned aerial 
vehicle systems capable of delivering at least a 500 kg payload to a 
range of at least 300 km);
    (5) Systems specially designed to use laser energy with an output 
wavelength exceeding 710 nm to exploit differential target-background 
retroreflectance in order to detect personnel or optical/electro-
optical equipment (e.g., optical augmentation systems);
    (6) Light detection and ranging (LIDAR), laser detection and 
ranging (LADAR), or range-gated systems specially designed for a 
military end user (MT if designed or modified for rockets, missiles, 
SLVs, drones, or unmanned aerial vehicle systems capable of delivering 
at least a 500 kg payload to a range of at least 300 km); or
    (7) Developmental lasers or laser systems funded by the Department 
of Defense via contract or other funding authorization;

    Note 1 to paragraph (b)(7): This paragraph does not control 
lasers or laser systems: (a) In production, (b) determined to be 
subject to the EAR via a commodity jurisdiction determination (see 
Sec.  120.4 of this subchapter), or (c) identified in the relevant 
Department of Defense contract or other funding authorization as 
being developed for both civil and military applications.


    Note 2 to paragraph (b)(7):  Note 1 does not apply to defense 
articles enumerated on the U.S. Munitions List, whether in 
production or development.


    Note 3 to paragraph (b)(7): This provision is applicable to 
those contracts or other funding authorizations that are dated XXXX, 
2017 or later.

    * (c) Night vision, infrared, or terahertz imaging systems or end 
items, as follows:
    (1) Night vision or infrared cameras specially designed for 
articles in this subchapter;

    Note to paragraph (c)(1): The articles controlled by this 
paragraph have sufficient electronics to enable at a minimum the 
output of an analog or digital signal once power is applied.

    (2) Binoculars, bioculars, monoculars, goggles, or head or helmet-
mounted imaging systems (including video-based articles having a 
separate near-to-eye display), as follows:
    (i) Incorporating an autogated third generation image intensifier 
tube or a higher generation image intensifier tube;
    (ii) Fusing output of an image intensifier tube and an infrared 
focal

[[Page 8444]]

plane array having a peak response greater than 1,000 nm; or
    (iii) Having an infrared focal plane array or imaging camera, and 
is specially designed for a military end user;
    (3) Targeting systems specially designed for articles in this 
subchapter;
    (4) Infrared search and track (IRST) systems, that:
    (i) Incorporate or are specially designed to incorporate an 
infrared focal plane array or imaging camera, having a peak response 
within the wavelength range exceeding 3 microns or greater; and
    (ii) Maintain positional or angular state of a target through time;
    (5) Infrared imaging systems, as follows:
    (i) Mobile reconnaissance, scout, or surveillance systems providing 
real-time target location at ranges greater than 5 km (e.g., LRAS, CIV, 
HTI, SeeSpot, MMS);
    (ii) Airborne stabilized systems specially designed for military 
reconnaissance (e.g., DB-110, C-B4);
    (iii) Multispectral imaging systems that classify or identify 
military or intelligence targets or characteristics;
    (iv) Automated missile detection or warning systems;
    (v) Systems hardened to withstand electromagnetic pulse (EMP) or 
chemical, biological, or radiological threats;
    (vi) Systems incorporating mechanism(s) to reduce signature;
    (vii) Persistent surveillance systems with a ground sample distance 
(GSD) of 0.5 m or better (smaller) at 10,000 ft AGL and a simultaneous 
coverage area of 3 km\2\ or greater;
    (viii) Gimbaled infrared systems, as follows:
    (A) Having a stabilization better (less) than 30 microradians RMS 
and a turret with a ball diameter of 15 inches or greater; or
    (B) Specially designed for articles in this subchapter; or
    (ix) Systems specially designed for military platforms controlled 
in this subchapter (MT if for determining bearings to specific 
electromagnetic sources (direction finding equipment) or terrain 
characteristics and designed or modified for rockets, missiles, SLVs, 
drones, or unmanned aerial vehicle systems capable of delivering at 
least a 500 kg payload to a range of at least 300 km);
    (6) Terahertz imaging systems having a peak response in the 
frequency range exceeding 30 GHz but not exceeding 3000 GHz, and having 
a resolution less (better) than 0.1 milliradians at a standoff range of 
100 m;
    (7) Systems or equipment, incorporating an infrared (IR) beacon or 
emitter, specially designed for Combat Identification;
    (8) Systems that project radiometrically calibrated scenes at a 
frame rate greater than 30 Hz directly into the entrance aperture of an 
electro-optical or infrared (EO/IR) sensor controlled in this 
subchapter within either the spectral band exceeding 10 nm but not 
exceeding 400 nm, or the spectral band exceeding 900 nm but not 
exceeding 30,000 nm;
    (9) Developmental electro-optical, infrared, or terahertz systems 
funded by the Department of Defense.

    Note 1 to paragraph (c)(9): This paragraph does not control 
electro-optical, infrared, or terahertz imaging systems: (a) In 
production, (b) determined to be subject to the EAR via a commodity 
jurisdiction determination (see Sec.  120.4 of this subchapter, or 
(c) identified in the relevant Department of Defense contract or 
other funding authorization as being developed for both civil and 
military applications.


    Note 2 to paragraph (c)(9): Note 1 does not apply to defense 
articles enumerated on the U.S. Munitions List, whether in 
production or development.


    Note 3 to paragraph (c)(9): This provision is applicable to 
those contracts or other funding authorizations that are dated XXXX, 
2017 or later.

    (d) Guidance, navigation, and control systems or end items, as 
follows:
    (1) Guidance or navigation systems (e.g., inertial navigation 
systems, inertial reference units, attitude and heading reference 
systems) as follows (MT if designed or modified for rockets, missiles, 
SLVs, drones, or unmanned aerial vehicle systems capable of a range 
greater than or equal to 300 km);
    (i) Having a circle of equal probability (CEP) of position error 
rate less (better) than 0.28 nautical miles per hour, without the use 
of positional aiding references;
    (ii) Having a heading error or true north determination of less 
(better) than 0.28 mrad secant (latitude) (0.016043 degrees secant 
(latitude));
    (iii) Having a CEP of position error rate less than 0.2 nautical 
miles in an 8 hour period, without the use of positional aiding 
references; or
    (iv) Specified to function at linear acceleration levels exceeding 
25 g;

    Note 1 to paragraph (d)(1):  For rocket, SLV, or missile flight 
control and guidance systems (including guidance sets), see Category 
IV(h).


    Note 2 to paragraph (d)(1): Inertial measurement units are 
described in paragraph (e) of this category.

    (2) Global Navigation Satellite System (GNSS) receiving equipment, 
as follows:
    (i) GNSS receiving equipment specially designed for military 
applications (MT if designed or modified for airborne applications and 
capable of providing navigation information at speeds in excess of 600 
m/s);
    (ii) Global Positioning System (GPS) receiving equipment specially 
designed for encryption or decryption (e.g., Y-Code, M-Code) of GPS 
precise positioning service (PPS) signals (MT if designed or modified 
for airborne applications);
    (iii) GPS receiving equipment specially designed for use with an 
antenna described in Category XI(c)(10) (MT if designed or modified for 
airborne applications); or
    (iv) GPS receiving equipment specially designed for use with 
rockets, missiles, SLVs, drones, or unmanned air vehicle systems 
capable of delivering at least a 500 kg payload to a range of at least 
300 km (MT);

    Note to paragraph (d)(2)(iv): ``Payload'' is the total mass that 
can be carried or delivered by the specified rocket, missile, SLV, 
drone or unmanned aerial vehicle that is not used to maintain 
flight. For definition of ``range'' as it pertains to rocket 
systems, see note 1 to paragraph (a) of USML Category IV. For 
definition of ``range'' as it pertains to aircraft systems, see note 
to paragraph (a) of USML Category VIII.

    (3) GNSS anti-jam systems specially designed for use with an 
antenna described in Category XI(c)(10);
    (4) Mobile relative gravimeters having automatic motion 
compensation, with an in-service accuracy of less (better) than 0.4 
mGal (MT if designed or modified for airborne or marine use and having 
a time to steady-state registration of two minutes or less);
    (5) Mobile gravity gradiometers having an accuracy of less (better) 
than 10 Eotvos squared per radian per second for any component of the 
gravity gradient tensor, and having a spatial gravity wavelength 
resolution of 50 m or less (MT if designed or modified for airborne or 
marine use);

    Note to paragraph (d)(5): ``Eotvos'' is a unit of acceleration 
divided by distance that was used in conjunction with the older 
centimeter-gram-second system of units. The Eotvos is defined as 1/
1,000,000,000 Galileo (Gal) per centimeter.

    (6) Developmental guidance, navigation, or control systems funded 
by the Department of Defense (MT if designed or modified for rockets, 
missiles, SLVs, drones, or unmanned aerial vehicle systems capable of a 
range equal to or greater than 300 km);


[[Page 8445]]


    Note 1 to paragraph (d)(6): This paragraph does not control 
guidance, navigation, or control systems: (a) In production, (b) 
determined to be subject to the EAR via a commodity jurisdiction 
determination (see Sec.  120.4 of this subchapter), or (c) 
identified in the relevant Department of Defense contract or other 
funding authorization as being developed for both civil and military 
applications.


    Note 2 to paragraph (d)(6): Note 1 does not apply to defense 
articles enumerated on the U.S. Munitions List, whether in 
production or development.


    Note 3 to paragraph (d)(6): This provision is applicable to 
those contracts or other funding authorizations that are dated XXXX, 
2017, or later.


    Note 4 to paragraph (d)(6): For definition of ``range'' as it 
pertains to rocket systems, see note 1 to paragraph (a) of USML 
Category IV. For definition of ``range'' as it pertains to aircraft 
systems, see note to paragraph (a) of USML Category VIII.

    (e) Parts, components, accessories, or attachments, as follows:
    (1) Parts and components specially designed for articles described 
in paragraph (a)(1) or (a)(8) of this section;
    (2) Lasers specially designed for articles in this subchapter;
    (3) Laser stacked arrays specially designed for articles in this 
category;
    (4) Infrared focal plane arrays (IRFPAs) specially designed for 
articles in this subchapter;
    (5) Charge multiplication focal plane arrays exceeding 50 mA/W for 
any wavelength exceeding 760 nm and specially designed for articles 
described in this subchapter;
    (6) Second generation and greater image intensifier tubes specially 
designed for articles in this subchapter, and specially designed parts 
and components therefore;

    Note to paragraph (e)(6): Second and third generation image 
intensifier tubes are defined as having a peak response within the 
0.4 to 1.05 micron wavelength range and incorporating a microchannel 
plate for electron image amplification having a hole pitch (center-
to-center spacing) of less than 25 microns and having either: (a) An 
S-20, S-25, or multialkali photo cathode; or (b) a GaAs, GaInAs, or 
other III-V compound semiconductor photocathode.

    (7) Parts and components specially designed for articles described 
in paragraph (c)(3), (c)(4), or (c)(5)(vi)-(vii);
    (8) Inertial measurement units specially designed for articles in 
this subchapter (MT for systems incorporating accelerometers specified 
in (e)(10) or gyroscopes or angular rate sensors specified in (e)(11) 
that are designated MT);
    (9) GNSS security devices (e.g., Selective Availability Anti-
Spoofing Modules (SAASM), Security Modules (SM), and Auxiliary Output 
Chips (AOC);
    (10) Accelerometers having a bias repeatability of less (better) 
than 10 [mu]g and a scale factor repeatability of less (better) than 10 
parts per million, or capable of measuring greater than 100,000 g (MT);

    Note 1 to paragraph (e)(10): For weapon fuze accelerometers, see 
Category III(d) or IV(h).


    Note 2 to paragraph (e)(10): MT designation does not include 
accelerometers that are designed to measure vibration or shock.

    (11) Gyroscopes or angular rate sensors as follows (MT if having a 
rated drift stability of less than 0.5 degrees (1 sigma or rms) per 
hour in a 1 g environment or specified to function at acceleration 
levels greater than 100 g):
    (i) Having an angle random walk of less (better) than 0.001 degrees 
per square root hour; or
    (ii) Mechanical gyroscopes or rate sensors having a bias 
repeatability less (better) than 0.0015 degrees per hour;

    Note to paragraphs (e)(10) and (e)(11): ``Repeatability'' is the 
closeness of agreement among repeated measurements of the same 
variable under the same operating conditions when changes in 
conditions or non-operating periods occur between measurements.
    ``Bias'' is the accelerometer output when no acceleration is 
applied.
    ``Scale factor'' is the ratio of change in output to a change in 
the input.
    The measurement of ``bias'' and ``scale factor'' refers to one 
sigma standard deviation with respect to a fixed calibration over a 
period of one year.
    ``Drift Rate'' is the component of gyro output that is 
functionally independent of input rotation and is expressed as an 
angular rate.
    ``Stability'' is a measure of the ability of a specific 
mechanism or performance coefficient to remain invariant when 
continuously exposed to a fixed operating condition. (This 
definition does not refer to dynamic or servo stability.)

    (12) Optical sensors having a spectral filter specially designed 
for systems or equipment controlled in USML Category XI(a)(4), or 
optical sensor assemblies that provide threat warning or tracking for 
systems or equipment controlled in Category XI(a)(4);
    (13) Read-out integrated circuits (ROICs) specially designed for 
articles in this subchapter;
    (14) Integrated IRFPA dewar cooler assemblies (IDCAs), with or 
without an IRFPA, specially designed for articles in this subchapter 
other than Category XV, and specially designed parts and components 
therefore;
    (15) Gimbals specially designed for articles in this category;
    (16) IRFPA Joule-Thomson (JT) self-regulating cryostats specially 
designed for articles controlled in this subchapter;
    (17) Infrared lenses, mirrors, beam splitters or combiners, 
filters, and treatments and coatings, specially designed for articles 
controlled in this category;
    (18) Drive, control, signal, or image processing electronics, 
specially designed for articles controlled in this category;
    (19) Near-to-eye displays specially designed for articles 
controlled in this category;
    (20) Resonators, receivers, transmitters, modulators, gain media, 
drive electronics, and frequency converters specially designed for 
laser systems controlled in this category;
    (21) Two-dimensional infrared scene projector emitter arrays (i.e., 
resistive arrays) specially designed for infrared scene generators 
controlled in USML Category IX(a)(10);
    * (22) Any part, component, accessory, attachment, or associated 
equipment, that:
    (i) Is classified;
    (ii) Contains classified software;
    (iii) Is manufactured using classified production data; or
    (iv) Is being developed using classified information.

    Note to paragraph (e)(22): ``Classified'' means classified 
pursuant to Executive Order 13526, or predecessor order, and a 
security classification guide developed pursuant thereto or 
equivalent, or to the corresponding classification rules of another 
government.

    (23) Developmental image intensification tubes, focal plane arrays, 
read-out-integrated circuits, accelerometers, gyroscopes, angular rate 
sensors and inertial measurement units funded by the Department of 
Defense (MT if designed or modified for rockets, missiles, SLVs, 
drones, or unmanned aerial vehicle systems capable of a range equal to 
or greater than 300 km);

    Note 1 to paragraph (e)(23): This paragraph does not control 
items: (a) In production, (b) determined to be subject to the EAR 
via a commodity jurisdiction determination (see Sec.  120.4 of this 
subchapter), or (c) identified in the relevant Department of Defense 
contract or other funding authorization as being developed for both 
civil and military applications.


    Note 2 to paragraph (e)(23): Note 1 does not apply to defense 
articles enumerated on the U.S. Munitions List, whether in 
production or development.


    Note 3 to paragraph (e)(23): This provision is applicable to 
those contracts or other funding authorizations that are dated XXXX, 
2017, or later.


[[Page 8446]]


    (f) Technical data (see Sec.  120.10) and defense services (see 
Sec.  120.9) directly related to the defense articles enumerated in 
paragraphs (a) through (e) of this category and classified technical 
data directly related to items controlled in ECCNs 7A611, 7B611, and 
7D611. (See Sec.  125.4 for exemptions.) (MT for technical data and 
defense services related to articles designated as such.) Technical 
data directly related to manufacture or production of any defense 
articles enumerated elsewhere in this category that are designated as 
Significant Military Equipment (SME) shall itself be designated as SME.
    (g)-(w) [Reserved]
    (x) Commodities, software, and technology subject to the EAR (see 
Sec.  120.42 of this subchapter) used in or with defense articles 
controlled in this category.

    Note to paragraph (x): Use of this paragraph is limited to 
license applications for defense articles controlled in this 
category where the purchase documentation includes commodities, 
software, or technology subject to the EAR (see Sec.  123.1(b) of 
this subchapter).


    Note to Category XII: For purposes of determining whether an 
item (i.e., system, end item, part, component, accessory, 
attachment, or software) is specially designed for a military end 
user, a ``military end user'' means the national armed services 
(army, navy, marine, air force, or coast guard), national guard, 
national police, government intelligence or reconnaissance 
organizations, or any person or entity whose actions or functions 
are intended to support military end uses. A system or end item is 
not specially designed for a military end user if the item was 
developed with knowledge that it is or would be for use by both 
military end users and non-military end users, or if the item was or 
is being developed with no knowledge for use by a particular end 
user. In such instances, documents contemporaneous with the 
development must establish such knowledge.

* * * * *

Rose E. Gottemoeller,
Under Secretary, Arms Control and International Security, Department of 
State.
[FR Doc. 2016-03197 Filed 2-18-16; 8:45 am]
 BILLING CODE 4710-25-P