Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Category XII, 70340-70357 [2016-24225]

Agencies

• DEPARTMENT OF STATE

[Federal Register Volume 81, Number 197 (Wednesday, October 12, 2016)]
[Rules and Regulations]
[Pages 70340-70357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24225]


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DEPARTMENT OF STATE

22 CFR Part 121

[Public Notice: 9605]
RIN 1400-AD32


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

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: As part of the President's Export Control Reform effort, the 
Department of State amends the International Traffic in Arms 
Regulations (ITAR) by revising Category

[[Page 70341]]

XII (fire control, laser, imaging, and guidance equipment) of the U.S. 
Munitions List (USML) to remove certain items from control on the USML 
and to describe more precisely the articles continuing to warrant 
control on the USML. The Department also amends USML Categories VIII, 
XIII, and XV to reflect that items previously described in those 
Categories are now controlled under the revised Category XII or 
Commerce Control List. Further, the Department revises USML Category XI 
to move items to the CCL as a result of changes to related control in 
USML Category XII.

DATES: This rule is effective on December 31, 2016.

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 temporary 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 (RIN 1400-AD32) was first 
published as a proposed rule on May 5, 2015, for public comment (see 80 
FR 25821) (1st 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.
    A second proposed rule was published on February 19, 2016 for 
public comment (see 81 FR 8438) (2nd proposed rule). The comment period 
ended on April 4, 2016. Thirty-eight parties submitted public comments, 
which were reviewed and considered by the Department and other 
agencies. The discussion below, regarding items added or modified to 
Category XII, refers to text proposed in one or both of the two 
proposed rules, unless otherwise stated.
    The majority of the public comments stated that the proposed 
controls in USML Category XII drew a clear line between the USML and 
CCL for items that are exclusively military vice those that have 
commercial and civil applications. Individual commenters addressed 
specific issues with some of the proposed provisions, which are 
described below.

General Comments

    One commenter requested a 365-day delayed effective date before 
this final rule goes into effect. The Department does not accept this 
comment. The rule will be effective on December 31, 2016.
    One commenter stated that small businesses face a substantial cost 
disadvantage when having to deal with export compliance regulations and 
fees when compared to their larger counterparts, who often have in-
house legal counsel and other resources that would be prohibitively 
expensive for small and mid-size businesses. The commenter requested 
that the Department enhance export assistance resources, particularly 
for small businesses. The Department accepts this comment. As part of 
ECR, the Department and our interagency partners have increased our 
industry outreach, and particularly our outreach to small and mid-size 
businesses.
    One commenter raised questions regarding the use of the term 
``specially designed'' which is set forth in the ITAR at Sec.  120.41. 
The commenter stated that, as exporters are explicitly authorized to 
self-determine the jurisdiction of their item, including for those 
controls that use ``specially designed'' as a control parameter, there 
may be situations where the U.S. government does not agree with the 
self-determination. The commenter stated that a number of Department of 
Commerce license applications have been returned without action due to 
the U.S. government's uncertainty about the jurisdiction of the item. 
As the commenter further notes, in such instances, the Department's 
position is that a Commodity Jurisdiction (CJ) determination is the 
only official method for determining an item's jurisdiction. The 
commenter stated that this process is contrary to ECR. The Department 
does not accept this comment. While exporters are obligated to 
determine jurisdiction, they must do so correctly. In instances where 
an exporter submits an application to the Department of Commerce that 
is incorrect, or potentially incorrect, it is the U.S. government's 
responsibility to question that self-determination, and the only method 
for officially resolving questions of jurisdiction is a CJ 
determination.
    The commenter also stated their concern that items may still be 
within the scope of Category XII, even though the items are not 
described in the control paragraphs. The commenter posited that there 
is a policy that the revised Category XII is intended to retain most 
items on the USML and that, therefore, how an item was controlled under 
the prior Category XII may still be relevant as to whether that item is 
controlled in Category XII today. The Department does not accept this 
comment. While it is true that the transfer to the CCL of lower level 
military parts and components was greater in other USML categories than 
in Category XII, it is because the parts and components that will 
remain in Category XII continue to warrant ITAR control. Through ECR, 
Category XII, and other USML categories, have been revised to be a 
positive list of defense articles. If an item is not within the scope 
of one or more of the control paragraphs, that item is not a defense 
article and is not ITAR controlled. For additional information, see the 
Department's Transition Plan, which addresses prior CJ determinations 
(78 FR 22740, 22747-22751).

[[Page 70342]]

    One commenter requested that the Department remove the phrases 
``specially designed for articles in this subchapter'' and ``specially 
designed for articles in this category'' and replace them with 
``specially designed for a military end user,'' throughout Category 
XII. The commenter stated that they read the two phrases as overly 
broad and confusing when applied to academic instrumentation, and were 
concerned that they will ``catch'' many items designed for civilian 
use. They also stated concern that there is no contingency to 
``release'' items as currently written. The Department does not accept 
this comment. The Category describes the items that warrant control on 
the USML.

Specially Designed for a Military End User

    The revised USML Category XII introduces a new concept that has not 
been used in the other revised USML categories, explicitly controlling 
certain articles based on the original intended end user. In paragraphs 
(b)(6), (c)(1)(iii), (c)(3), (c)(4)(ii), (c)(5), (c)(6)(viii)(b), and 
(c)(7)(ii), items are identified as defense articles if they are 
specially designed for a military end user. The definition of military 
end user in the new Note to Category XII is borrowed from the EAR (see 
15 CFR 744.21(g)), as further harmonization under ECR. A military end 
user is defined 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 developed for use by a military end 
user or users. If an item is developed 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 establishes that the item is 
specially designed for a military end user.
    If exporters are unable to determine the proper jurisdiction of an 
item, the Department has the CJ process available to provide definitive 
guidance. A request for a CJ determination under the control text below 
may be submitted up to 60 days prior to the effective date of this 
rulemaking.
    Many commenters submitted public comments identifying concerns with 
this control structure. The Department and its interagency partners 
reviewed these comments and largely agree with the commenters that 
control based on original design intent is more difficult to implement 
than a control based on technical parameters. However, the Department 
initially proposed technical parameter based controls in the 1st 
proposed rule, and the public comments asserted, to the Department's 
satisfaction, that commercial and civil variants exist that meet those 
technical parameters. Therefore, the Department developed and published 
the ``specially designed for a military end user'' in response to these 
public comments. The Department cannot yet articulate objective 
technical criteria that would establish a bright line between military 
and commercial and civil systems. The public comments to the 1st and 
2nd proposed rules also did not identify any such objective criteria 
for these seven paragraphs. The Department will publish a notice of 
inquiry (NOI) later this year soliciting public input on suggested 
control parameters for these seven paragraphs.
    One commenter asked whether this control will limit defense 
articles no longer in development to USML Category XII. The Department 
acknowledges that once an item is out of development, it is not 
possible to change the original intended end user of the item. It is 
for that reason that the Department will consider CJ applications based 
on information other than documents contemporaneous with the 
development of the item.
    One commenter stated that, while the definition of ``military end 
user'' is borrowed from the EAR, the purpose of the definition under 
the EAR is the imposition of a license requirement; it is not 
appropriate for the ITAR, where the purpose is to determine 
jurisdiction. Specifically, the commenter noted that the definition 
would result in commercial infrared cameras being subject to the ITAR. 
The Department does not accept this comment. While the definition does 
serve a different purpose under the ITAR than the EAR, it is an 
established definition. Additionally, the Department notes that the 
controls on infrared cameras in XII(e)(4) do not use the control 
parameters ``specially designed for a military end user,'' but rather 
use the control parameters ``specially designed for an article in the 
subchapter.'' While both controls use the term ``specially designed,'' 
defined in Sec.  120.41, they are very different in application. For 
example, an infrared camera would not be ``specially designed for an 
article in the subchapter'' if it is used in or with a system subject 
to the EAR that is in production, under paragraph (b)(3) of Sec.  
120.41.
    Several commenters stated that it may be difficult for purchasers 
and subsequent users to know the jurisdictional status of items because 
they may not be privy to the design intent of the original manufacturer 
or know all other uses of an item. The Department acknowledges that 
cooperation with the manufacturer in such cases to identify the proper 
jurisdiction of USML defense articles is critical for a successful 
compliance program. Moreover, this provision does not add new 
obligations on parties because most provisions of the USML in place 
prior to the reform effort required an investigation into the design 
intent behind a product's development. The revised USML has 
substantially reduced the need to conduct such investigations, but has 
not yet eliminated it.
    One commenter requested that the Department revise the note so 
that, in the absence of contemporaneous documentation, use by a 
military end user does not establish that an item is specially designed 
for a military end user, and instead make the note say that use by a 
commercial/civil end user establishes that an item is not specially 
designed for a military end user. The Department does not accept this 
comment. The items controlled under the seven paragraphs that use 
``specially designed for a military end user'' are items that warrant 
ITAR control, even if these items have been used by a commercial/civil 
end user. However, if such items have transitioned to normal commercial 
use, the Department would review an application for a CJ requesting the 
Department to establish that the item is not subject to the ITAR.
    One commenter noted that designing an item to a military 
specification for a military end user will make that item specially 
designed for a military end user. The Department confirms this comment. 
However, if the item was originally designed for both military and non-
military end users, then the fact that a military specification was 
included as a design requirement does not render the systems ITAR 
controlled.
    The commenter also noted that making other modifications to a 
commercially available item for a military end user will make that item 
specially designed for a military end user. The Department confirms 
this comment as well because the version modified for a military end 
user is a different item than the one originally developed for a non-
military end user.
    Several commenters noted that the definition of ``military end 
user'' includes national police, and that, in the United States, 
portions of the U.S. government could meet the definition of

[[Page 70343]]

national police. Some commenters requested further clarification on the 
term's potential scope. The Department confirms that some portions of 
the U.S. government may qualify as ``national police'' within the 
definition of ``military end user.'' If you have any questions as to 
whether a particular project involving a department or agency of the 
U.S. government is controlled in this paragraph, the Department 
suggests that you address that issue directly with that department or 
agency or submit a request for a CJ determination to the Department.
    Several commenters stated that the phrase ``. . . any person or 
entity whose actions or functions are intended to support military end 
uses'' is very broad. The Department acknowledges that the definition 
of military end user is broad and intends it to be so.
    One commenter asked whether the scope of ``military end uses'' is 
tied to a ``military end user'' (i.e., are all activities of a 
``military end user'' considered ``military end uses''?). The 
Department notes, as described above, that the definition of ``military 
end user'' is borrowed from the EAR. The EAR defines ``military end 
use'' in 15 CFR 744.21(f) as (1) incorporation into an item on the USML 
or the Wassenaar Arrangement Munitions List (WAML) or military 
commodities subject to the EAR; or (2) the use, development, or 
production such items. As the Department is borrowing this phrase from 
the EAR, the Department may look to the EAR, including the definition 
of ``military end use,'' for interpretive guidance.
    Several commenters stated that it may be difficult to find 
``documents contemporaneous with the development'' for items developed 
in the past. The Department acknowledges that the contemporaneous 
documentation may not have been created, may no longer exist, or may 
not be accessible by the person making the determination. However, if 
an item described in one of the seven paragraphs is used by a military 
end user, the lack of contemporaneous documentation will require a 
determination by the applicant that the item is ``specially designed 
for a military end user'' in the absence of a CJ determination that the 
item is not subject to the ITAR.
    Several commenters noted that items not originally designed for a 
military end user may be within the scope of the control, because no 
``documents contemporaneous with the development'' exist that can 
substantiate the original intended civil or dual use applications. The 
Department acknowledges that some items may fall within the scope of 
the control, even though they were originally developed for civil or 
dual use applications, because they are now used by a military end user 
and there is no documentation of the original intention. For the 
purpose of establishing clear controls, the Department has determined 
that without such documentation, the items should be USML controlled. 
However, the Department will consider a request for a CJ determination 
that the item be determined to be not subject to the ITAR, and may 
consider any relevant information, such as that which substantiates the 
original design intent.
    One commenter requested that the Department allow a manufacturer to 
self-determine dual use design intent with post-development 
documentation. The Department does not accept this comment, as post-
development documentation is not a sufficient criteria for self-
determination. However, the Department will consider CJ applications 
supported by post-development documentation.
    One commenter stated that one of the purposes of ECR was to avoid 
design intent based controls. The Department agrees with the commenter 
that technical parameter based controls are preferred to design intent 
or end user based controls. However, being unable at this time to 
determine appropriate technical parameters that differentiate critical 
military systems from highly capable civil and commercial systems, the 
Department has adopted the second best option, a design intent based 
control. As noted above, the Department continues to evaluate the 
practicality of technical parameter based controls and will be 
publishing a NOI soliciting public input on suggested control 
parameters.
    One commenter suggested that the Department abandon the term 
``military end user'' and replace it with ``military purpose'' and 
suggested a definition:

    ``Military Purpose'' means that the item is intended to have a 
unique property that, in and of itself, distinguishes it for the 
purpose of projecting military force, defending against military 
force or gathering of intelligence directly related to projecting 
military force or defending against military force.

    The Department does not accept the comment. The term ``military end 
user'' sufficiently describes those items of most interest to the 
Department, those that warrant control on the USML, while describing 
the smallest number of items that do not warrant such control, all of 
which still have military applications. Additionally, the Department is 
borrowing the term ``military end user'' and its definition from BIS 
and that harmonization of terms has independent value under ECR. The 
definition proposed by the commenter would be more difficult to apply 
and would not sufficiently describe all of the items that provide the 
United States with a critical military or intelligence advantage, and 
is therefore insufficient as a USML control criteria.
    One commenter suggested that the Department use specially designed 
as defined in Sec.  120.41 and state that items in these paragraphs are 
not eligible for the releases in Sec.  120.41(b). The Department is 
using specially designed as defined in Sec.  120.41, with the addition 
of an important caveat. The systems controlled using the ``specially 
designed for a military end user'' control are systems that would be 
caught under Sec.  120.41(a)(1), and therefore, the releases in 
paragraph (b) would not be available. The Department determined that 
such a control would be too restrictive and has introduced the ability 
to self-determine jurisdiction based on documents contemporaneous to 
the development that establish commercial or civil applications, 
similar to releases (b)(4) and (b)(5) of Sec.  120.41. The 
characteristic described under Sec.  120.41(a)(1) is being for a 
military end user, as defined by the Note to Category XII.
    The commenter also asked the Department to confirm that the 
releases in Sec.  120.41(b) apply to the items controlled using 
``specially designed for a military end user.'' The Department does not 
accept this comment. As systems (as opposed to parts, components, 
accessories, attachments, and software), Sec.  120.41(a)(1) governs the 
``specially designed'' analysis and the releases in (b) do not apply.
    One commenter stated that the inclusion of the phrase ``specially 
designed for a military end user'' generally helps address the 
jurisdiction of off-the-shelf (commercial) items used with defense 
articles, but notes that there are many situations when off-the-shelf 
items do not meet the specifications required for scientific 
instrumentation developed at universities for civilian end uses. The 
commenter recommends that the use of ``specially designed for a 
military end user'' be extended to ensure that custom-made items used 
in conjunction with defense articles for civilian end uses are not ITAR 
controlled. The Department does not accept this recommendation. The 
Department does confirm that making a custom item for a civilian end 
user does not make an item ``specially designed for a military end 
user'' even if a controlled good is

[[Page 70344]]

involved. However, if the control parameter is ``specially designed for 
an article in this subchapter'' then making a custom item for a defense 
article would result in the item being a defense article, even if it is 
for use by a civilian end user.

Paragraph (a)--Fire Control and Tracking Aiming Systems

    Paragraph (a) is revised to add subparagraphs (1) through (9) to 
more clearly describe the articles controlled in (a). Paragraph (a)(2) 
in the 2nd proposed rule was moved to paragraph (c)(2) in this final 
rule. This resulted in the remaining subparagraphs of paragraph (a) 
being renumbered. The Department also reordered subparagraphs (5)-(7) 
to more logically track the progression of devices, from those that 
detect ordnance launch, to those that guide the ordnance, and finally 
to those that track the ordnance. The Department addresses the public 
comments below.
    Paragraph (a)(1) is added for fire control systems.
    One commenter requested that the Department clarify the difference 
between fire control systems in paragraph (a)(1) and the items 
controlled in paragraphs (a)(2)-(10) of the proposed rule. Because 
there is a control in paragraph (e) for all specially designed parts 
and components for fire control systems in paragraph (a)(1) and remote 
wind-sensing systems specially designed for ballistic-corrected aiming 
in paragraph (a)(8), but not the other subparagraphs of (a), the 
commenter stated they were confused about the proper application of the 
specially designed parts and components controls. The Department 
confirms that a fire control system is a complex system that may 
perform some of the functions described in the other subparagraphs 
within paragraph (a). Additionally, each item described in another 
subparagraph of paragraph (a) can be a stand-alone system that is not 
part of a larger fire control system. When such items are part of a 
fire control system, all specially designed parts and components are 
controlled for that larger system, including the parts and components 
of the subsystem that perform the functions described elsewhere in 
paragraph (a). However, when they are stand-alone systems, or part of 
systems other than a fire control system, any specially designed parts 
and components, not elsewhere specified on the USML, would be subject 
to the EAR and controlled in Export Control Classification Number 
(ECCN) 7A611.x.
    One commenter requested that the Department provide guidance on how 
to classify items explicitly described by the prior USML Category 
XII(a) but no longer described on the USML. The commenter specifically 
identified periscopes and certain weapon sights, weapon aiming systems, 
and weapon imaging systems. If such items are described in another 
paragraph on the USML, such as electro-optical periscopes with infrared 
capabilities in paragraphs (c)(3) of Category XII or weapons sights or 
imaging systems in paragraph (c)(2) of Category XII, then they are 
controlled there. If they are a specially designed part or component 
for a fire control system, then they would be controlled in paragraph 
(e)(1) of Category XII. If they are not described on the USML, then 
they would be subject to the EAR and controlled in the appropriate 
ECCN.
    One commenter stated that they did not find Remote Weapons Stations 
(RWS) or Remote Controlled Weapons Stations (RCWS) within the proposed 
Category XII. The commenter defines RWS as systems that allow a weapon 
operator to operate and fire a weapon from inside the protection of a 
building or a wide variety of vehicle, vessel and aircraft platforms; 
and a RCWS as essentially the same as a RWS, except that it allows the 
operator to control the weapon from a distant or remote location. The 
Department partially accepts this comment. An RCW or RCWS that has a 
weapon in the system is a Category I or Category II weapons system. An 
RCW or RCWS that does not have an integrated weapon is a fire control 
system and is described in paragraph (a)(1).
    Paragraph (a)(2), formerly paragraph (a)(3) in the 2nd proposed 
rule, is added for electronic or optical weapon positioning, laying, or 
spotting systems. The Department received no comments on this proposed 
control.
    Paragraph (a)(3), formerly paragraph (a)(4) in the 2nd proposed 
rule, 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 1st proposed rule by tying it to paragraph (b)(1) to more 
specifically describe the kinds of items controlled by this paragraph. 
The Department received no comments on this proposed control.
    Paragraph (a)(4), formerly paragraph (a)(5) in the 2nd proposed 
rule, is added for bomb sights and bombing computers. The Department 
received no comments on this proposed control.
    Paragraph (a)(5), formerly paragraph (a)(8) in the 2nd proposed 
rule, is added for electro-optical systems that automatically detect 
and locate ordnance launch, blast, or fire. The Department determined 
that the control text in the 2nd proposed rule was inexact, as it 
identified weapons launch or fire, where the launch, blast or fire is 
actually of the ordnance from the weapon. Therefore, the Department 
revised the control text to more clearly state the scope of the 
control. The Department received no comments on this proposed control.
    Paragraph (a)(6), formerly paragraph (a)(7) in the 2nd proposed 
rule, is added for electro-optical ordnance guidance systems. The 
Department received no comments on this proposed control.
    Paragraph (a)(7), formerly paragraph (a)(6) in the 2nd proposed 
rule, is added for missile or ordnance electro-optical tracking 
systems. One commenter noted that some military sensor pods do not 
clearly meet the description of paragraph (a)(6) or (a)(7) in the 2nd 
proposed rule, but which are treated as USML today and which the 
commenter believes warrant continued USML control. The Department 
accepts this comment and revised the control to more clearly state the 
scope of the control is for electro-optical systems for tracking 
missiles or ordnance. The Department also revised paragraph (c)(3) to 
describe military reconnaissance, surveillance, target detection, or 
target acquisition systems, which includes the sensor pods identified 
by the commenter.
    Paragraph (a)(8), formerly paragraph (a)(9) in the 2nd proposed 
rule, is added for remote wind sensing systems specially designed for 
ballistic-corrected aiming. One commenter stated that the use of the 
word remote in the control would remove systems mounted on vehicles 
from the scope of the control. The Department does not accept this 
comment. The control text does not require that the wind sensing system 
be remote from the weapons system. The systems described in paragraph 
(a)(8) are those that sense the wind at a remote location to provide 
ballistic corrected aiming for the delivery of munitions or ordnance to 
a target, presumably at, or near the location where the wind is being 
sensed.
    Paragraph (a)(9), formerly paragraph (a)(10) in the 2nd proposed 
rule, is added for certain helmet mounted display (HMD) systems. The 
Department redrafted the control to maintain the scope, but make it 
easier to read. The Department also moved the exemplary parenthetical 
in the 2nd proposed rule to its new location in order to clarify the

[[Page 70345]]

types of items intended to be captured by the control.
    One commenter stated that the control is difficult to read and that 
the commenter read it to control HMDs that have the ability to connect 
to a weapons sight. The Department accepts this comment and has revised 
the control text by setting out the various elements in subparagraphs 
to more clearly articulate the scope of the control. The Department 
also confirms that the paragraph does not control a HMD solely on the 
basis of being capable of connecting to a weapons sight.
    One commenter noted that the control is designated Significant 
Military Equipment (SME), as is all of paragraph (a), but that it 
controls equipment very similar to the HMDs controlled in Category 
VIII, which are not designated SME. The Department accepts this comment 
and has removed the SME designation from this control.
    One commenter requested that the Department add ``specially 
designed for military end use'' to this control. The Department does 
not accept this comment. The items described in this control have 
significant military utility and no non-military applications have been 
identified.

Paragraph (b)--Laser Systems

    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 received no comments on this proposed control.
    Paragraph (b)(2) is added for infrared laser target illumination 
systems having a variable beam divergence. The Department made the 
control text from the 2nd proposed rule more specific by adding ``or 
track'' to more completely describe the defense articles controlled by 
this paragraph.
    One commenter requested that the Department define ``target'' and 
limit the control to only laser-based illumination systems that are 
designed and intended for use with weapons systems or other military 
applications. The Department does not accept this comment. The 
Department believes that the systems described by the control, variable 
beam infrared target illumination systems, are used primarily by the 
military and the commenter provided no specific examples of civil or 
commercial systems.
    One commenter requested that the Department add ``specially 
designed for military end use'' to the control. The Department does not 
accept this comment. The systems identified by the commenter are not 
variable beam systems, and no such non-military systems have been 
identified. Thus, there is no reason to so limit the control because it 
already only controls military systems.
    Paragraph (b)(3) is added for certain laser range finders that 
either: (1) operate at a wavelength of 1064 nm and have a Q-switched 
pulse output, or (2) operate in excess of 1064 nm and meet certain 
technical parameters. The Department revised subparagraph (A) to 
clarify that systems that send out multiple laser pulses within one 
second are also within the scope of the control.
    One commenter stated that laser range finders are ubiquitous and 
used in civil and commercial applications involving light detection and 
ranging (LIDAR) and laser detection and ranging (LADAR), and requested 
that the Department replace the control parameters with ``specially 
designed for military end use.'' The Department does not accept this 
comment. This control is for stand-alone laser range finders, the LIDAR 
and LADAR systems on the USML are described in paragraph (b)(6).
    One commenter stated that civil and commercial systems use long 
range laser range finders and requested that the Department revise the 
control to state: ``A system which is capable of calculating a 
certified Category I or II target location solution, using navigation 
data embedded in the system or externally supplied, and laser 
rangefinder data.'' The Department does not accept this comment. The 
civil applications identified by the commenter do not meet the accuracy 
parameters of the control text.
    Paragraph (b)(4) is added for certain targeting or target location 
systems. One commenter stated that the control would describe 
commercial and civil systems, such as robotic package handling. The 
Department does not accept the comment because the control requires 
that the item include a Global Navigation Satellite System (GNSS), 
guidance, or navigation defense article controlled in paragraph (d). 
The Department has revised the text of the control to more clearly 
describe the items controlled.
    Paragraph (b)(5) is added for optical augmentation systems. Several 
commenters stated that commercial and civil systems use infrared 
retroflectance, such as commercial automotive, biometric, and 3D 
imaging, and requested that the Department remove the word 
``personnel'' and insert the descriptor ``military.'' The Department 
partially accepts the comment by removing the word ``personnel,'' which 
addresses the applications identified by the commenters. The Department 
does not believe that the civil or automotive applications described by 
the commenters meet the control text. However, if there is any 
confusion regarding the jurisdiction of a specific item, the Department 
encourages exporters to submit a request for a CJ determination.
    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. One commenter stated inclusion of the 
phrase ``specially designed for a military end user'' resolves any 
question regarding the jurisdiction of their meteorological LIDARs. The 
Department accepts the comment.
    Paragraph (b)(7) is added for developmental lasers and laser 
systems funded by the Department of Defense (DoD), with certain 
exceptions. Several commenters submitted comments on (b)(7), as well as 
the other developmental paragraphs in the 2nd proposed rule, paragraphs 
(c)(9), (d)(6) and (e)(23), now paragraphs (c)(10), (d)(6) and (e)(24). 
The Department does not accept these comments.
    Several commenters stated that controlling future systems during 
their development based solely on DoD funding improperly presumed that 
all items funded by the DoD under this category are for military end 
use, that such a control would impede multi-source funding by 
universities and companies, and that DoD contracting officers may not 
be willing to make an export control jurisdiction determination in the 
contracting documents. The Department does not accept this comment. The 
developmental paragraphs only control items during their developmental 
phase, based on the premise that the government does not know, and thus 
cannot positively describe, those items that will be developed in the 
future. The Department did not explicitly limit the control text with a 
phrase such as ``specially designed for a military end use'' because 
the determination of the military utility of a DoD-funded system at its 
developmental stage is a role for the government. An item being 
developed with whole or partial DoD funding will be outside the scope 
of this control if the funding document with DoD simply states that it 
is being developed for both civil and military applications. The 
contract need not, and

[[Page 70346]]

should not, make a jurisdictional determination. For items with civil 
or commercial applications that nonetheless warrant ITAR control 
because they provide a critical military or intelligence advantage, the 
Department will have the ability to explicitly add them to the USML, 
notwithstanding the statement in the funding document, whether in 
production or development. DoD has undertaken a substantial effort to 
educate contracting officers and others in the DoD research and supply 
chain communities regarding the scope and intent of these developmental 
paragraphs. Additionally, a request for a CJ determination is another 
means of determining if a specific DoD-funded developmental item 
warrants ITAR control. These developmental paragraphs have been 
included in other USML Categories as part of the ECR review and appear 
to be working smoothly.
    One commenter expressed concern that the developmental control 
would prevent fundamental research funded by DoD. The Department does 
not accept this comment. The ITAR currently allows fundamental research 
into defense technologies at accredited U.S. colleges and universities. 
See Sec.  120.11(a)(8). The inclusion of these developmental systems on 
the USML does not change the ability of researchers to conduct 
fundamental research and publish the results. Publication and 
dissemination restrictions in the funding documents will be the primary 
mechanism for determining if DoD funding of a project prohibits that 
project from being considered as fundamental research.
    One commenter asked the Department to clarify how the CJ 
determination release in Note 1 will work for an item identified in 
another USML paragraph because Note 2 states that Note 1 does not apply 
to items enumerated elsewhere on the USML. The commenter specifically 
inquired as to how this will interact with the control in paragraph 
(b)(6) for LIDAR systems specially designed for a military end user. If 
the Department issues a CJ determination that an item is not subject to 
the ITAR, then that item is not specially designed under Sec.  120.41. 
The item is no longer described in a paragraph that uses specially 
designed as a control parameter, whether that control is for items 
specially designed for a defense article or specially designed for a 
military end user. Therefore, the item for which the CJ applied would 
not be within another USML paragraph and Note 2 would not apply.

Paragraph (c)--Imaging Systems or End Items

    Paragraph (c) is revised to add subparagraphs (1) through (10) to 
more clearly describe the articles controlled in (c). Controls on night 
vision and infrared cameras are moved from paragraph (c)(1) in the 2nd 
proposed rule to paragraph (e)(4) and comments on paragraph (c)(1) will 
be addressed below. Controls on weapons sights and weapon imaging 
systems are moved from paragraph (a) of the proposed rule to paragraph 
(c).
    Paragraph (c)(1), formerly paragraph (c)(2) in the 2nd proposed 
rule, is added for certain binoculars, bioculars, monoculars, goggles, 
or head or helmet-mounted imaging systems. The Department revised the 
text from the 2nd proposed rule to clarify the scope of the control. 
Subparagraph (i) is revised to clarify that it controls articles that 
employ autogated third generation image intensifier tubes (IITs) or a 
higher generation IIT. The Department revised subparagraph (ii) to 
clarify that it controls articles that are sensor fused with an IIT and 
an infrared focal plane array (IRFPA) having a peak response wavelength 
greater than 1,000 nm. Such articles with an IRFPA or infrared imaging 
camera are controlled if specially designed for a military end user.
    One commenter requested that the Department add ``head or helmet-
mounted'' to the parenthetical in paragraph (c)(1). The Department does 
not accept this comment because the text would be redundant. The 
control is for systems where both the sensor and the display are on the 
head or helmet. However, there may be such systems where the sensor and 
a near-to-eye display are both attached to the head or the helmet, but 
not attached to each other.
    One commenter stated that the control describes hardware used for 
medical applications and requested that the Department add 
``specifically designed for military systems'' to the entire control. 
The Department does not accept this comment. As noted above, the 
control is for systems where both the sensor and the display are on the 
head or helmet. The Department is unaware of such systems that include 
the sensors described in the control being used in medical 
applications. The commenter did not provide any examples of such 
systems.
    One commenter stated that a monocular could be within the scope of 
this control, even if it is not specially designed for a military end 
use and it includes an IIT that is not ITAR controlled, simply because 
the IIT is an autogated third generation IIT. The Department confirms 
this comment. Monoculars and other similar systems with an autogated 
third generation IIT have significant military capability and provide 
the United States with a critical military and intelligence advantage. 
Therefore, they warrant ITAR control.
    The commenter further stated that it was incongruous to have the 
control on IITs, in paragraph (e), different from the control parameter 
for binoculars, bioculars, monoculars, goggles, or head or helmet-
mounted imaging systems that incorporate an IIT. The comment claimed 
that a monocular could include a non-autogated third generation IIT 
that was specially designed for a defense article, and that in such a 
scenario the monocular would be subject to the EAR, even though it 
includes an IIT that is ITAR controlled. The Department does not accept 
this comment. If a non-autogated third generation IIT is controlled in 
paragraph (e)(7) (paragraph (e)(6) in the 2nd proposed rule) on the 
basis of being specially designed for a defense article, the use of 
that IIT in a monocular that is not otherwise within the scope of 
(c)(1) would result in the IIT being not specially designed on the 
basis of Sec.  120.41(b)(3). Therefore, a monocular subject to the EAR 
cannot include an IIT that is subject to the ITAR, excluding a 
developmental monocular or a DOD funded developmental IIT.
    Paragraph (c)(2) is added for weapons sights and aiming or imaging 
systems, specially designed to mount to a weapon or to withstand weapon 
shock or recoil, with certain IRFPAs, IITs, ballistic computers, or 
lasers. These items were described in paragraph (a)(2) of the 2nd 
proposed rule. The Department moved the control to paragraph (c) as 
these systems are controlled largely on the basis of the incorporation 
of an imaging device, such as an IRFPA or IIT and are similar to the 
items described in paragraph (c)(1).
    One commenter requested that the Department define ``weapons 
sight.'' The Department does not accept this comment to the extent that 
it asks for ``weapons sight'' to be a defined term. However, the 
Department has revised the control text to describe those items that 
are within the scope of the control more directly. The Department added 
the parenthetical phrase ``(i.e., with a reticle)'' following weapon 
sight to more specifically identify the items described by that term. 
The Department also added that the systems must be specially designed 
to mount to a weapon or specially designed to

[[Page 70347]]

withstand weapon shock or recoil. These features are critical 
capabilities for differentiating a weapons sight from other infrared 
and night vision devices.
    One commenter stated that the inclusion of clip-on systems in the 
same sub-category as weapons sights creates confusion and recommended 
that clip-on systems be separated into another subcategory as they are 
multi-functional devices and are not directly related to designated 
weapon sights. The Department does not accept this comment. A clip-on 
is controlled if it is specially designed to mount to a weapon or 
specially designed to withstand weapon shock or recoil, and meets one 
of the technical parameters. The Department notes that the control is 
for clip-ons that are specially designed to attach to a weapon, not to 
a day-scope. This means that a clip-on that is truly multi-functional, 
and designed to attach to binoculars, monoculars, and other infrared 
and night vision devices via a universal attachment, would not be 
controlled in this paragraph, unless it was also specially designed to 
withstand weapons shock or recoil. Systems specially designed for 
weapons shock warrant USML control.
    One commenter stated that the controls in the 2nd proposed rule 
would include weapons sights incorporating 2nd generation IITs, some of 
which have previously been subject to the EAR. The Department 
acknowledges the comment and adopts a technical parameter of 350 
microamps per lumen for the control.
    One commenter stated that the 2nd proposed rule would include any 
night vision weapon sight specially designed for any type of weapon 
listed in Category I of the USML. The Department confirms this 
understanding. While the Department has revised the control parameter 
from ``specially designed for a defense article'' to ``specially 
designed to mount to a weapon to withstand weapon shock or recoil,'' 
this change is a clarification only that does not reduce the scope of 
the control.
    One commenter noted that the ``specially designed for a military 
end user'' control was not used for weapons sights, but was used for 
the binoculars, bioculars, monoculars, goggles, or head or helmet-
mounted imaging systems in paragraph (c)(2) of the 2nd proposed rule. 
The Department acknowledges the comment. The Department was able to 
describe those weapons sights and imaging or aiming systems that 
warrant USML control positively using technical parameters. 
Unfortunately, that was not possible for certain binoculars, bioculars, 
monoculars, goggles, or head or helmet-mounted imaging systems, so they 
are controlled when specially designed for a military end user.
    One commenter claimed that the 2nd proposed rule described weapons 
sights in a way that could make an infrared imaging camera a weapons 
sight. The Department does not accept this comment. Additionally, the 
Department has revised the control to more specifically describe those 
items.
    One commenter requested that the Department limit the scope of the 
control based on the incorporation of an infrared focal plane array to 
systems with two-dimensional arrays. The Department does not accept 
this comment. If a system meets all of the other parameters of the 
control and the IRFPA is a one-dimensional array, that system still 
warrants control on the USML.
    Paragraph (c)(3) is added for electro-optical reconnaissance, 
surveillance, target detection, or target acquisition systems, 
specially designed for defense articles. The Department consolidated 
the control in paragraph (c)(3) of the 2nd proposed rule for targeting 
systems with the control in paragraph (c)(5)(ix) for all infrared 
systems that are specially designed for a defense article. This also 
addresses the comment to paragraph (a)(7), described above. The 
Department also incorporated the missile technology control designation 
(MT) from paragraph (c)(5)(ix).
    Paragraph (c)(4) is added for certain infrared search and track 
(IRST) systems. The Department revised this control to include the 
positive technical parameter based control that was published in the 
2nd proposed rule, for systems that utilize a longwave IRFPA and 
maintain positional or angular state of a target through time, and 
added a separate control for all other IRST systems that are specially 
designed for a military end user. The Department revised this control 
from the 1st proposed rule in response to public comments regarding 
certain non-military systems.
    Two commenters expressed concern that certain civil and commercial 
systems that utilize long wave infrared imaging, such as a civil 
automotive system for searching and tracking pedestrians and other 
vehicles and aerial commercial systems used for infrared detection and 
quantification of hydrocarbon gas leaks (e.g., methane), may be 
controlled. One commenter requested that the Department add the control 
parameter ``for military applications'' and the other asked the 
Department to move the control into paragraph (c)(5). The Department 
does not accept these comments. The Department confirms that IRST is a 
military capability used in airborne and naval platforms and does not 
include normal commercial systems such as civilian automotive and 
hydrocarbon gas leak detection systems.
    Paragraph (c)(5) is added for infrared distributed aperture systems 
that are specially designed for defense articles. This paragraph was 
not expressly in the 2nd proposed rule, but the items described in this 
entry were within the control in paragraph (c)(5)(ix) of the 2nd 
proposed rule. This logically includes all infrared systems that are 
specially designed for a defense article, and thus would include all 
such distributed aperture systems with infrared detectors, including 
those with additional visible light or other non-infrared detectors.
    Paragraph (c)(6), formerly paragraph (c)(5) in the 2nd proposed 
rule, is added for certain infrared imaging systems, described in eight 
subparagraphs. These paragraphs describe systems with infrared 
detectors, including those with additional visible light or other non-
infrared detectors. One commenter requested that the Department define 
imaging systems and suggested that such definition exclude those 
systems that include an infrared detector but which do not use the 
detector to capture video or pictures. The Department does not accept 
this comment. Paragraph (c)(6) controls systems that have an infrared 
imager and does not require that those system produce a human viewable 
image. The commenter also noted confusion with classifying their items 
within the USML, noting that systems described in USML Category 
XI(a)(4)(i) may include an imager. The Department notes that USML 
Category XI(a) explicitly states that it is for systems not described 
in USML Category XII. Therefore, if your system is described in USML 
Category XII, that is where it should be classified.
    Subparagraph (i) is added for mobile systems that provide real-time 
target recognition at ranges greater than 3 km and includes a note to 
describe the size of the target that the system must be able to 
identify. One commenter suggested that the proposed control text was 
broad and would include non-military systems used for search and 
rescue, civil law enforcement, border protection, and commercial 
applications related to security surveillance systems for high value 
asset protection. The Department accepted this comment and revised the 
control to more specifically describe the critical military systems. 
The Department revised the control by switching the operative function 
from ``target location'' to ``target recognition'' and added a note to 
describe the size of

[[Page 70348]]

the target as a NATO standard tank. The Department moved the range from 
5km to 3km because target locating is possible at twice the distance as 
target recognition. Therefore, the change is actually an increase in 
the capabilities of the systems that are subject to control.
    Subparagraph (ii) is added for airborne stabilized systems 
specially designed for military reconnaissance. The Department received 
no comments on this proposed control.
    Subparagraph (iii) is added for automated multispectral imaging 
systems that classify or identify military or intelligence targets or 
characteristics. Two commenters stated that the proposed control could 
describe civil and commercial multispectral systems because it is 
unknown whether the spectral signatures that they classify are 
considered military or intelligence characteristics by the Department. 
The Department accepts this comment and revised the control to only 
those systems that provide automated classification or identification 
of the military or intelligence targets or characteristics.
    Subparagraph (iv) is added for automated missile detection or 
warning systems. The Department received no comments on this proposed 
control.
    Subparagraph (v) is added for systems hardened to withstand 
electromagnetic pulse (EMP), directed energy, chemical, biological, or 
radiological threats. The Department revised subparagraph (v) to 
include infrared imaging systems hardened against directed energy 
weapons. Such systems are also described in USML Category XVIII, but 
the Department determined that the inclusion in this subparagraph would 
assist exporters in the identification of their systems, as this 
subparagraph controls similarly shielded systems. The Department 
received no comments on this proposed control.
    Subparagraph (vi) is added for systems incorporating mechanisms to 
reduce the optical chain signature for optical augmentation. One 
commenter stated that the proposed control could describe non-military 
systems, as it did not describe the kind of signature or level of 
signature reduction that would trigger the control. The commenter noted 
that a commercial infrared imaging system incorporating insulation that 
provides audible noise reduction or flat black paint to reduce 
reflections could be described, as noise reduction and reflection 
reduction could be considered signature reduction. The Department 
accepts this comment and revised the control to identify the optical 
chain signature for optical augmentation specifically.
    Subparagraph (vii) is added for certain aerial persistent 
surveillance systems. The Department clarified the proposed control by 
noting that the technical parameters for systems that can detect a 
certain ground sample distance at 10,000 feet above ground level also 
described systems that can obtain the same or greater performance at 
greater altitude. The Department received no comments on this proposed 
control.
    Subparagraph (viii) is added for certain gimbaled infrared systems. 
Two commenters stated that the control for a turret with a ball of 15 
inches or greater includes civil and commercial systems. The commenters 
asserted that large sized turret balls are not a uniquely military 
capability and that the commercial and civil users require large turret 
balls as well. The Department does not accept these comments. Stable 
turrets with balls greater than 15 inches provide significant military 
capability and warrant ITAR control.
    Paragraph (c)(7), formerly paragraph (c)(6) in the 2nd proposed 
rule, is added for certain terahertz imaging systems. One commenter 
requested that the Department limit the terahertz imaging systems 
within the control to concealed object detection systems to mirror the 
dual use control in ECCN 2A984. The Department partially accepts this 
comment. The Department revised the control to limit those systems 
meeting or exceeding the technical parameters described in the 2nd 
proposed rule to concealed object detection systems, and added an 
additional control for all terahertz imaging systems specially designed 
for a military end user. As a result of the revision to the control 
text, the Department of Commerce revised ECCN 2A984 by changing the 
lower end of the controls from 0.5 milliradians to 0.1 milliradians, 
and the Department is making conforming changes to USML Category XI, 
paragraphs (a)(3)(ii) and (a)(10), which exclude those items controlled 
in ECCN 2A984.
    Paragraph (c)(8), formerly paragraph (c)(7) in the 2nd proposed 
rule, is added for systems or equipment incorporating an ultraviolet or 
infrared beacon or emitter specially designed for Combat 
Identification. The Department revised this entry to include 
ultraviolet Combat Identification systems. The Department received no 
comments on this proposed control.
    Paragraph (c)(9), formerly paragraph (c)(8) in the 2nd proposed 
rule, 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. The Department 
received no comments on this proposed control.
    Paragraph (c)(10), formerly paragraph (c)(9) in the 2nd proposed 
rule, is added for developmental imaging systems funded by the DoD.
    One commenter stated that the developmental paragraph should be 
deleted because DoD funds basic research. The Department does not 
accept this comment.
    One commenter stated that it supported the developmental paragraph 
due to the inclusion of Note 1. The commenter stated that throughout 
the microelectronics industry, there are many ``electro-optical'' 
companies that have received rather modest, yet ultimately critical 
research and development funding from DoD to migrate their core 
commercial off-the-shelf (COTS) technology into specialized and vitally 
important applications in support of the Armed Forces. According to the 
commenter, in many cases, that research and development funding was 
sufficiently necessary that, but for such funding, the Armed Forces 
would not have gained the support of a given manufacturer. The costs of 
migrating a COTS product to a specialized military item, even if 
relatively modest technically, might have been too expensive for a 
small company to undertake, given the relatively fewer units that would 
eventually be sold for military uses. The commenter noted that Note 1 
allows DoD to specify upfront and without ambiguity what will be the 
desired status of DoD-funded research and development efforts in 
private industry. If the contract explicitly specifies that the 
intended results of such a research and development program are to 
enable ``both civil and military applications,'' that specificity will, 
by itself, be sufficient to settle whether the ``military'' version is 
to be treated as an ITAR-controlled item. The commenter continued that 
the principle set out in Note 1 is that, once DoD has so stated, then 
the resulting ``military'' part is to be considered outside the purview 
of USML Category XII and to be controlled only under the EAR. That 
removes both ambiguity and cost to private industry, directly in 
understanding what will happen to the item even before it is developed 
and then, afterwards, when that item has been developed and goes to 
actual commercial production and distribution, including elimination of 
an

[[Page 70349]]

unnecessary CJ request. The Department accepts this comment.

Paragraph (d)--Guidance and Navigation Systems

    Paragraph (d) is revised to add subparagraphs (1) through (6) to 
more clearly describe the articles controlled. One commenter requested 
that the Department revise the introductory text in proposed paragraph 
(d) by adding ``specially designed for military systems'' to clarify 
that industrial control systems are not within the scope of this 
paragraph, citing, for example, an industrial control system that 
performs a function which involves linear acceleration levels exceeding 
25g. The Department partially accepts this comment. The Department 
revised the introductory text to guidance and navigation systems and 
end items, and also removed ``control'' from paragraph (d)(1). This 
paragraph is for guidance and navigation systems that control the 
movement of other systems, not for industrial control systems.
    Paragraph (d)(1) is added for certain guidance or navigation 
systems. The Department revised the text of paragraph (d)(1)(i) from 
the proposed by correcting ``circle of equal probability'' to 
``circular error probability''.
    One commenter stated that the use of technical parameters, in 
paragraph (d)(1) and the controls for accelerometers and gyroscopes in 
paragraph (e), without limiting the control to those systems 
``specially designed'' for the military, could result in commercial 
products being controlled on the USML, particularly if the items are 
validated on an individual item-by-item basis, rather than as a product 
line, due to run-to-run variation in performance. The Department does 
not accept this comment to the extent it is a request to include 
``specially designed for the military'' as a control parameter. The 
Department notes that the question of whether a system is validated to 
USML technical control parameter thresholds on an individual item-by-
item basis or on a product line basis is a question that involves all 
of the USML. The Department will address this issue in a separate 
rulemaking.
    One commenter requested that the Department add the word ``or'' 
between each subparagraph, rather than just the final two 
subparagraphs, to clarify that the systems need only meet one of the 
technical parameters. In response to this comment, the Department 
revised the introductory text to paragraph (d)(1) to state ``having any 
of the following'' to clarify that an item will be within the scope of 
this control if it meets any of the technical parameters identified.
    One commenter suggested that the Department delete paragraph (d)(1) 
in its entirety. The commenter reasoned that the MT control text in the 
parenthetical describes those systems that warrant control. The 
Department does not accept this comment. An MT parenthetical is not 
control text. It is an identification of those portions of the control 
text that are controlled for missile technology reasons and are 
reviewed under the missile technology review policies. If the system is 
not described in the control text, it is not subject to the USML.
    One commenter requested that the Department add ``for airborne 
applications'' in paragraph (d)(1)(i), ``for land applications'' in 
paragraph (d)(1)(ii), and ``for maritime applications'' in paragraph 
(d)(1)(iii). The Department does not accept this comment. While 
paragraph (d)(1)(i) will primarily describe systems that are used in 
airborne applications, paragraph (d)(1)(ii) will primarily describe 
systems that are used in land applications, and paragraph (d)(1)(iii) 
will primarily describe systems that are used in maritime applications, 
the controls are based on the technical parameters.
    One commenter requested that the Department add ``without the use 
of positional aiding references'' to proposed paragraph (d)(1)(ii). The 
Department accepts this comment.
    One commenter requested that the Department adding the qualifier 
``50%'' to the term ``CEP'' used in proposed paragraphs (d)(1)(i) and 
(d)(1)(iii) to clarify that 50% is the appropriate threshold, not 95%. 
The Department accepts this comment.
    Several commenters requested that the Department revise proposed 
paragraph (d)(1)(iv) to control only those systems that meet or exceed 
its normal performance parameters at linear acceleration levels 
exceeding 25g, as opposed to those systems that merely continue to 
function with degraded performance. The Department accepts this 
comment.
    One commenter requested that the Department increase the 
performance parameter in proposed paragraph (d)(1)(iv) from 25g to 35g. 
The Department does not accept this comment. Providing a high level of 
performance at linear acceleration levels exceeding 25g provides a 
critical military or intelligence advantage and warrants ITAR control.
    One commenter requested that the Department revise the control 
parameter to ``continuous linear accelerations levels'' to avoid 
controlling those items that can continue to function after a shock or 
period that includes a 25g environment. The Department does not accept 
this comment. The control is for systems that provide continued 
performance during a 25g or greater environment, not those systems that 
can operate after such shock or environment (such as space launch) has 
ceased.
    One commenter requested that the Department add a note, mirroring a 
note in the EAR, stating, ``[Such equipment and systems] incorporate 
accelerometers or gyroscopes to measure velocity and orientation in 
order to determine or maintain heading or position without requiring an 
external reference once aligned.'' The Department does not accept this 
comment. The proposed note is a generally accurate description of 
modern guidance and navigation systems. However, the control in this 
paragraph is intended to describe all guidance and navigation systems 
that meet the technical parameters, so such a note that is limited to 
today's technology would not be appropriate.
    Paragraph (d)(2) is added for GNSS receiving equipment. This 
control is moved from Category XV(c). The Department revised paragraphs 
(d)(2)(iii) and (d)(2)(iv) to clarify that the controls apply to all 
GNSS systems, not just U.S. Global Positioning System (GPS) systems.
    One commenter stated that the control in paragraph (d)(2)(i) 
includes all GNSS systems that are specially designed for the military, 
even if those systems do not have specific military GNSS capabilities, 
such as military-grade encryption or access to the U.S. military-only 
precise positioning service (PPS) signals. The Department confirms this 
comment. All GNSS receiving equipment that is specially designed for 
the military warrants ITAR control. Since GPS was first identified on 
the USML in 1992, the USML has included all receiving equipment 
specifically designed, modified, or configured for military use in 
Category XV(c). When the Department revised Category XV in 2014 as part 
of ECR, the phrase ``specifically designed, modified, or configured for 
military use'' was replaced with the new control text ``specially 
designed for military application'' to reflect the updated ECR 
terminology. The scope of the control was not changed, and any item 
that would be within the scope of the proposed control is, and has 
been, ITAR controlled. For questions about the jurisdiction of a 
particular piece of GNSS receiving equipment, please review the 
definition of specially designed in Sec.  120.41, and if you have any 
further doubt, please submit an application for a CJ determination.

[[Page 70350]]

    One commenter noted there are discrepancies between the 
parenthetical MT reference for paragraph (d)(2)(i) and the Missile 
Technology Control Regime (MTCR) Annex in Sec.  121.16. The Department 
acknowledges that Sec.  121.16 is out of date, it was last updated in 
2006, and it will be removed through a separate rulemaking. The 
parenthetical MT references in each paragraph are current and more 
accurately reflect U.S. international commitments.
    One commenter stated that the GNSS receiving equipment in paragraph 
(d)(2)(iii), specially designed for use with an antenna described in 
Category XI(c)(10), may soon include commercial and civil system, due 
to advancements in the field. The Department does not accept this 
comment. This control is for GNSS receiving equipment that uses the 
military antennae identified in Category XI(c)(10). If the antennae 
currently described in Category XI(c)(10) are in such wide commercial 
use that USML control is no longer appropriate, then the solution is to 
revise Category XI(c)(10). The Department is committed to continuously 
reviewing the USML and is currently finalizing the first final rule to 
re-review the first USML categories that were revised as part of ECR. 
The Department will continue to re-review the categories published 
under ECR.
    Paragraph (d)(3) is added for GNSS anti-jam systems specially 
designed for use with the anti-jam antennae described in Category 
XI(c)(10). One commenter stated that the GNSS anti-jam systems in 
paragraph (d)(3), specially designed for use with an antenna described 
in Category XI(c)(10), may soon include commercial and civil systems, 
due to advancements in the field. The Department does not accept this 
comment. As discussed above, the issue of commercial use of antennae 
described in Category XI(c)(10) should be address through Category XI.
    Paragraph (d)(4) is added for certain mobile relative gravimeters. 
The Department received no comments on this paragraph.
    Paragraph (d)(5) is added for certain mobile gravity gradiometers. 
The Department received no comments on this paragraph.
    Paragraph (d)(6) is added for developmental guidance, navigation, 
or control systems funded by the DoD. Several commenters stated that 
developmental funding from DoD is not a proper control parameter. The 
Department does not agree, as discussed above in paragraphs (b)(6) and 
(c)(10).

Paragraph (e)--Parts, Components, Accessories, and Attachments

    Paragraph (e) is revised to add subparagraphs (1) through (24) to 
more clearly describe the parts and components for the systems in (a)-
(d) that are controlled in (e).
    One commenter requested that the Department add ``specially 
designed for a military end use'' to the introductory text. The 
Department does not accept this comment. Each subparagraph within 
paragraph (e) stands on its own terms. Additionally, the Department 
does not agree that the term ``military use'' is a clear control 
parameter when applied to all of the items within paragraph (e).
    One commenter requested that the Department identify military-grade 
items by technical parameter, rather than control those specially 
designed for another defense article, specifically discussing IITs, 
IRFPAs, and thermal imaging cores. The Department does not accept this 
comment. The Department published the 1st proposed rule, which 
identified most items in this Category, and specifically IITs, IRFPAs, 
and thermal imaging cores, by technical parameters. The public comments 
in response to the 1st proposed rule showed that the technical 
parameters identified by the Department did not adequately distinguish 
civil and military systems but did not provide alternative technical 
parameters that would adequately distinguish the critical military 
systems. The Department is open to replacing the existing controls with 
objective technical parameters and will invite public comments on how 
to accomplish this in a future rulemaking.
    Paragraph (e)(1) is added for parts and components specially 
designed for articles described in paragraph (a)(1) or (a)(5). The 2nd 
proposed rule identified parts and components specially designed for 
articles described in paragraph (a)(1) or (a)(8), and paragraph (a)(8) 
from the 2nd proposed rule is paragraph (a)(5) in this final rule.
    One commenter requested that the Department clarify how paragraph 
(b)(3) of specially designed in Sec.  120.41 applies to the parts and 
components of the now paragraph (a)(5) systems. The Department notes 
that, in determining if a part or component of an (a)(5) system is 
specially designed for that system, it is easier to move to paragraphs 
(a)(2) of Sec.  120.41. While the part or component may also meet the 
criteria in paragraphs (a)(1) of Sec.  120.41, such analysis is not 
necessary if it also meets (a)(2). If the item is a part or component, 
a necessary condition for control under paragraph (e)(1), paragraph (b) 
of Sec.  120.41 applies, including (b)(3). Assuming that the item has 
not been subject to a CJ determination under (b)(1), is not one of the 
minor types of items identified in (b)(2), and that contemporaneous 
development documentation does not exist for (b)(4) or (b)(5), the item 
can be released under (b)(3), if it meets the criteria.
    Paragraph (e)(2) is added for lasers specially designed for defense 
articles. The Department received no comments on this proposed control.
    Paragraph (e)(3) is added for laser stacked arrays specially 
designed for defense articles. The Department received no comments on 
this proposed control.
    Paragraph (e)(4), formerly paragraph (c)(1) in the 2nd proposed 
rule, is added for night vision or infrared cameras specially designed 
for defense articles. The Department moved this entry from paragraph 
(c)(1) of the 2nd proposed rule to list all components controlled in 
paragraph (e) and to respond to several public comments asking about 
the applicability of paragraph (b) of Sec.  120.41 due to the control's 
inclusion within paragraph (c). The Department confirms that the 
releases in paragraph (b) of specially designed in Sec.  120.41 may be 
applied when determining if a night vision or infrared camera is with 
the scope of paragraph (e)(4). One commenter also stated that the 
detector and camera used in commercial LADAR systems would be included 
within the control. The Department does not accept this comment. If a 
LADAR system is itself a defense article under paragraph (b)(6), or 
another entry on the USML, then a detector or camera that is specially 
designed for that LADAR would itself be USML controlled. However, if 
the LADAR is not itself a defense article, or the detector or camera is 
not specially designed for a defense article LADAR, then the detector 
or camera would not be USML controlled.
    Paragraph (e)(5), formerly paragraph (e)(4) in the 2nd proposed 
rule, is added for IRFPAs specially designed for defense articles. The 
Department received only comments in support of this proposed control.
    Paragraph (e)(6), formerly paragraph (e)(5) in the 2nd proposed 
rule, is added for certain charge multiplication focal plane arrays 
specially designed for defense articles. The Department received no 
comments on this proposed control.
    Paragraph (e)(7), formerly paragraph (e)(6) in the 2nd proposed 
rule, is added for second generation and greater IITs specially 
designed for defense articles, and specially designed parts and

[[Page 70351]]

components therefor. This control includes third generation IITs, 
Electron Bombarded Active Pixel Sensor (EBAPS), night vision and 
thermal fused IITs, and all subsequent IIT designs that are specially 
designed for a defense article.
    One commenter stated that, as the integrator of IITs into higher-
level assemblies, they would not necessarily be capable of classifying 
the IITs that they obtain from manufacturers, particularly foreign 
manufacturers. The Department does not accept this comment. An exporter 
must classify the item based on the information available. If the 
exporter is using the IIT in a defense article, it therefore meets the 
catch in paragraph (a)(2) of specially designed in Sec.  120.41; then 
it is specially designed, unless the exporters know that one of the 
releases in paragraph (b) applies. If the exporter is using the IIT in 
an item subject to the EAR, as long as that item is in production the 
exporter knows that paragraph (b)(3) of Sec.  120.41 is met, regardless 
of any other information about the IIT.
    The commenter further stated that the proposed control text creates 
a potential for all 2nd generation and above IITs to be subject to the 
ITAR, unless the foreign manufacturers can provide contemporaneous data 
to prove their design intent. The Department does not accept this 
comment. If an IIT is only used in defense articles, then it is true 
that it is within the scope of paragraph (e)(7), unless there is a CJ 
determination or the manufacturer has contemporaneous developmental 
documentation showing dual use intent. However, if the IIT is used in 
items that are subject to the EAR, paragraph (b)(3) of Sec.  120.41 is 
met and the IIT would not be specially designed.
    Paragraph (e)(8), formerly paragraph (e)(7) in the 2nd proposed 
rule, is added for parts and components specially designed for articles 
described in paragraph (c)(3), (c)(4), (c)(5), or (c)(6)(vi)-(vii). The 
Department revised paragraph (e)(8) of the proposed rule by adding 
paragraph (c)(5) and updating the numbering to reflect the revised 
numbering in this final rule. The Department received no comments on 
this proposed control.
    Paragraph (e)(9), formerly paragraph (e)(8) in the 2nd proposed 
rule, is added for inertial measurement units specially designed for 
defense articles. The Department received no comments on this proposed 
control.
    Paragraph (e)(10), formerly paragraph (e)(9) in the 2nd proposed 
rule, is added for GNSS security devices, Selective Availability Anti-
Spoofing Module (SAASM), Security Module (SM), and Auxiliary Output 
Chip (AOC) chips. The Department received no comments on this proposed 
control.
    Paragraph (e)(11), formerly paragraph (e)(10) in the 2nd proposed 
rule, is added for accelerometers that meet certain technical 
parameters. One commenter requested that licensing jurisdiction of 
these items be determined based on the ensemble performance of a 
particular device model (a product line), and not based on the 
performance of an individual sensor. As noted above in a response to a 
similar comment to paragraph (d)(1), this is a question that involves 
all of the USML and the Department will address it in a separate 
rulemaking.
    Paragraph (e)(12), formerly paragraph (e)(11) in the 2nd proposed 
rule, is added for certain gyroscopes and angular rate sensors that 
meet the technical parameters.
    One comment noted the term in the control text, namely ``bias,'' is 
different from the term in the MT parenthetical, namely ``drift,'' and 
suggested that the Department revise the MT parenthetical to use 
``bias.'' The Department does not accept this comment. The control text 
defines the scope of the items on the USML. An MT parenthetical only 
identifies that portion of the items covered by the control text for 
which licenses for export will be reviewed under missile technology 
review policies. The MT text is drawn from the Missile Technology 
Control Regime Annex, a multilaterally agreed control list.
    One commenter stated that the MT parenthetical should be revised to 
apply to items that are specified to function at constant acceleration 
levels greater than 100g, to clarify that the control does not apply to 
systems that can survive such a shock, but do not perform to 
specifications through shock levels above 100g. The Department confirms 
that this portion of the MT parenthetical only applies to those systems 
that continue to function to specification during a 100g environment. 
The Department is not revising the text of the MT parenthetical. As 
noted above, the MT parenthetical does not determine jurisdiction, only 
the license review policies of those items described in the control 
text.
    One commenter stated that the MT parenthetical describes gyroscopes 
used in commercial satellites and requested that the Department add 
``specially designed for articles in this subchapter'' to the control 
text. The Department does not accept this comment. As described above, 
the MT parenthetical is not control text. Items that meet the MT 
parenthetical but are not within the scope of the control are subject 
to the EAR and are very likely to be identified in an ECCN with an MT 
reason for control.
    One commenter requested that jurisdiction of these items be 
determined based on the ensemble performance of a particular device 
model (a product line), and not based on the performance of an 
individual sensor. As noted above in a response to a similar comment to 
paragraph (d)(1), this is a question that involves many other parts of 
the USML and the Department will address it in a separate rulemaking.
    Paragraph (e)(13), formerly paragraph (e)(12) in the 2nd proposed 
rule, 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). One commenter 
requested that the Department move this control to paragraph XI(c) or 
add a note to paragraph (XI)(c)(4). The Department does not accept this 
comment. Many systems described in Category XII, as well as in Category 
XI, are subsystems of platforms and other defense articles. In general, 
cross-references are not added to the USML. As optical sensors are 
controlled in Category XII, when determining the jurisdiction of an 
optical sensor, an exporter must review Category XII, regardless of the 
kind of system that the optical sensor will be used in.
    Paragraph (e)(14), formerly paragraph (e)(13) in the 2nd proposed 
rule, is added for IRFPA read-out integrated circuits (ROICs) specially 
designed for defense articles. Two commenters stated that the proposed 
control would include ROICs for systems other than IRFPAs. The 
Department accepts this comment and adds ``infrared focal plane array'' 
to clarify the scope of the control.
    Paragraph (e)(15), formerly paragraph (e)(14) in the 2nd proposed 
rule, is added for integrated dewar cooler assemblies (IDCA) specially 
designed for defense articles, with or without an infrared focal plane 
array, and any specially designed parts and components therefor.
    One commenter stated that the phrase ``other than Category XV'' is 
not clear. The Department accepts this comment and removes the phrase. 
If an IDCA is specially designed for a spacecraft described in Category 
XV, it warrants ITAR control, except that space-qualified mechanical 
cryocoolers and active cold fingers are controlled in Category 
XV(e)(4).

[[Page 70352]]

    One commenter requested that the Department revise the control to 
cover IDCAs specially designed for a military end use, rather than 
specially designed for a defense article, because they may be used for 
scientific and research purposes, such as in astronomical telescopes. 
The Department does not accept this comment. In general, astronomical 
telescopes are not described on the USML and are not subject to the 
ITAR. Therefore, an IDCA that is for an astronomical telescope is not 
likely to be specially designed for a defense article. In the event 
that the use of the IDCA within an astronomical telescope is not 
sufficient to meet the release in paragraph (b)(3) of Sec.  120.41 and 
the use in the astronomical telescope is the only non-military use of 
that IDCA, then it would be specially designed for a defense article 
under Sec.  120.41.
    Paragraph (e)(16), formerly paragraph (e)(15) in the 2nd proposed 
rule, is added for gimbals specially designed for defense articles in 
this category. The Department received no comments on this proposed 
control.
    Paragraph (e)(17), formerly paragraph (e)(16) in the 2nd proposed 
rule, is added for IRFPA Joule-Thomson (JT) self-regulating cryostats 
specially designed for defense articles. The Department received no 
comments on this proposed control.
    Paragraph (e)(18), formerly paragraph (e)(17) in the 2nd proposed 
rule, is added for infrared lenses, mirrors, beam splitters or 
combiners, filters, and treatments and coatings, specially designed for 
defense articles.
    One commenter requested that the Department revise the control to 
be only for those items specially designed for a military end use, 
rather than specially designed for a defense article, because they may 
be used for scientific and research purposes, such as in infrared 
telescopes. The Department does not accept this comment. In general, 
scientific or research telescopes are not described on the USML and are 
not subject to the ITAR. Therefore, an infrared lens or mirror that is 
for a scientific or research telescope is not likely to be specially 
designed for a defense article, particularly as the commenter states 
that the items are generally customized for the telescope.
    One commenter requested that the Department add a note clarifying 
that the application of a coating, once applied and dried to an item, 
does not by itself change the jurisdiction of the item to which it was 
applied. The Department does not accept this comment. The Department 
adds a note to clarify that the treatments and coatings controlled in 
this paragraph are eligible to be analyzed under paragraph (b) of Sec.  
120.41.
    One commenter objected to infrared lenses being ITAR control based 
on being specially designed for a defense article, rather than by 
technical parameter. The Department does not accept this comment. 
Infrared lenses that are unique to a defense article warrant ITAR 
control.
    Paragraph (e)(19), formerly paragraph (e)(18) in the 2nd proposed 
rule, is added for drive, control, signal, or image processing 
electronics specially designed for defense articles in this category.
    One commenter requested that the Department revise the control to 
be only those items specially designed for a military end use, rather 
than specially designed for a defense article, because they may be used 
with an ITAR controlled IRFPA for research. The Department does not 
accept this comment. In general, if an ITAR controlled IRFPA is being 
used, then the research involves a defense article. This is because the 
IRFPA is ITAR controlled if it is specially designed for a defense 
article. If the IRFPA is ITAR controlled, then any specially designed 
drive, control, signal, or image processing electronics for that IRFPA 
warrant ITAR control.
    One commenter requested that the Department limit this control to 
drive, control, signal, or image processing electronics specially 
designed for optical sensors and not for the ITAR controlled 
accelerometers and gyroscopes. The Department does not accept this 
comment. ITAR control for such electronics is warranted when specially 
designed for one of the defense articles described in this category.
    One commenter requested that the Department clarify whether 
populated circuit card assemblies (PCCAs) related to drive, control, 
signal, or image processing and specially designed for defense articles 
in Category XII should be controlled in this paragraph; or in Category 
XI(c)(2), in the paragraph for PCCAs with a layout specially designed 
for a defense article. The Department acknowledges that defense 
articles may be described in more than one paragraph on the USML. When 
determining the proper classification within the USML, specifically 
described controls take precedence over general, catch-all controls. 
This control, for specially designed drive, control, signal, or image 
processing electronics, is more specific that the control in Category 
XI(c)(2), so these items would be controlled in Category XII.
    Paragraph (e)(20), formerly paragraph (e)(19) in the 2nd proposed 
rule, is added for near-to-eye displays specially designed for defense 
articles in this category. The Department added a parenthetical 
``(e.g., micro-displays)'' to clarify the scope of the control. The 
Department received no comments on this proposed control.
    Paragraph (e)(21), formerly paragraph (e)(20) in the 2nd proposed 
rule, is added for resonators, receivers, transmitters, modulators, 
gain media, drive electronics, and frequency converters specially 
designed for defense articles in this category. The Department received 
no comments on this proposed control.
    Paragraph (e)(22), formerly paragraph (e)(21) in the 2nd proposed 
rule, 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). The Department 
received no comments on this proposed control.
    Paragraph (e)(23), formerly paragraph (e)(22) in the 2nd proposed 
rule, is added for classified parts, components, accessories, 
attachments, and associated equipment. The Department received no 
comments on this proposed control.
    Paragraph (e)(24), formerly paragraph (e)(23) in the 2nd proposed 
rule, is added for developmental IITs, FPAs, ROICs, accelerometers, 
gyroscopes, angular rate sensors, and inertial measurement units funded 
by the DoD. One commenter stated that the control needed further 
explanation to address projects partially funded by DoD. The Department 
does not accept this comment. Any amount of DoD funding for a 
developmental IIT, FPA, ROIC, accelerometer, gyroscope, angular rate 
sensor, and inertial measurement unit described in the control meets 
the DoD-funding threshold.
    Paragraph (f) is revised to more clearly describe the technical 
data and defense services controlled in paragraph (f). No changes are 
made from the 2nd proposed rule. One commenter requested that the 
Department define the term ``directly related.'' The term directly 
related is used in every USML category, and therefore the comment is 
beyond the scope of this final rule. The Department will, however, 
address the issue in a separate rulemaking.
    A new paragraph (x) 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

[[Page 70353]]

purchase documentation submitted with the application.
    The proposed rules included certain definitions to assist 
commenters in responding to the proposed controls. They included 
``charge multiplication,'' ``focal plane array,'' ``image intensifier 
tube,'' and ``multispectral.'' One commenter requested that the 
Department include these definitions within the regulatory text of the 
ITAR. The Department does not accept this comment. These definitions 
reflect the standard, generally applicable definitions of these terms, 
as used in both the Wassenaar Arrangement and the Export Administration 
Regulations. The Department provided these definitions in the proposed 
rules to assist commenters who may not have sufficient technical 
knowledge. The Department does not generally provide definitions within 
the ITAR, unless the definition intended by the Department is different 
from a dictionary or industry standard definition. As these definitions 
are the standard definitions of these terms, the Department is not 
including them within the text of the regulations.
    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.

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 has published two 
NPRMs as part of this rulemaking and has addressed the relevant public 
comments; this was done 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 amendment does not involve a mandate that will result in the 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100 million or more in any year and it 
will not significantly or uniquely affect small governments. Therefore, 
no actions were deemed necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This amendment has been found not to be a major rule within the 
meaning of the Small Business Regulatory Enforcement Fairness Act of 
1996.

Executive Orders 12372 and 13132

    This amendment will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this amendment does not have 
sufficient federalism implications to require consultations or warrant 
the preparation of a federalism summary impact statement. The 
regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this amendment.

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 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. This final rule continues the 
implementation of ECR. 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.
    The Department is not proposing or making changes to these 
collections in this rule. The information collections impacted by the 
ECR initiative are as follows:
    (1) Statement of Registration, DS-2032, OMB No. 1405-0002.
    (2) Application/License for Permanent Export of Unclassified 
Defense Articles and Related Unclassified Technical Data, DSP-5, OMB 
No. 1405-0003.
    (3) Application/License for Temporary Import of Unclassified 
Defense Articles, DSP-61, OMB No. 1405-0013.
    (4) Application/License for Temporary Export of Unclassified 
Defense Articles, DSP-73, OMB No. 1405-0023.
    (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.
    (6) Request for Approval of Manufacturing License Agreements, 
Technical Assistance Agreements, and Other Agreements, DSP-5, OMB No. 
1405-0093.
    (7) Maintenance of Records by Registrants, OMB No. 1405-0111.

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 amended as follows:

PART 121--THE UNITED STATES MUNITIONS LIST

0
1. The authority citation for part 121 continues to read as follows:


[[Page 70354]]


    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.


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 paragraphs (a)(3)(ii) and (a)(10) of U.S. Munitions List 
Category XI;
0
c. Revising U.S. Munitions List Category XII;
0
d. Removing and reserving paragraph (a) in U.S. Munitions List Category 
XIII; and
0
e. Removing and reserving paragraph (c) in U.S. Munitions List Category 
XV.
    The revisions read as follows:


Sec.  121.1   The United States Munitions List.

* * * * *

Category XI --Military Electronics

    (a) * * *
    * (3) * * *
    (ii) Synthetic Aperture Radar (SAR) incorporating image resolution 
less than (better than) 0.3 m, or incorporating Coherent Change 
Detection (CCD) with geo-registration accuracy less than (better than) 
0.3 m, not including concealed object detection equipment operating in 
the frequency range from 30 GHz to 3,000 GHz and having a spatial 
resolution of 0.1 milliradians up to and including 1 milliradians at a 
standoff distance of 100 m;
* * * * *
    (10) Electronic sensor systems or equipment for detection of 
concealed weapons, having a standoff detection range of greater than 45 
m for personnel or detection of vehicle-carried weapons, not including 
concealed object detection equipment operating in the frequency range 
from 30 GHz to 3,000 GHz and having a spatial resolution of 0.1 
milliradians up to and including 1 milliradians at a standoff distance 
of 100 m;
* * * * *

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

    (a) Fire control, aiming, detection, guidance, and tracking 
systems, as follows:
    * (1) Fire control systems;
    * (2) Electronic or optical weapon positioning, laying, or spotting 
systems;
    * (3) Laser spot trackers or 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 
target markers controlled in paragraph (b)(1);

    Note to paragraph (a)(3): For controls on LIDAR, see paragraph 
(b)(6) of this category.

    * (4) Bomb sights or bombing computers;
    * (5) Electro-optical systems that automatically detect and locate 
ordnance launch, blast, or fire;
    * (6) Electro-optical ordnance guidance systems;
    * (7) Missile or ordnance electro-optical tracking systems;
    * (8) Remote wind-sensing systems specially designed for ballistic-
corrected aiming; or
    (9) Helmet mounted display (HMD) systems or end items (e.g., Combat 
Vehicle Crew HMD, Mounted Warrior HMD, Integrated Helmet Assembly 
Subsystem, Drivers Head Tracked Vision System), other than such items 
controlled in Category VIII, that:
    (i) Incorporate or interface (either via wired or wireless 
connection) with optical sights or slewing devices that aim, launch, 
track, or manage munitions; or
    (ii) Control infrared imaging systems or end items described in 
paragraphs (a) through (d) of this category.
    * (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, locate, or track 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 or multiple shot(s) within one second 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 atmospheric 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 atmospheric visibility;
    (4) Targeting systems and target location systems, incorporating or 
specially designed to incorporate both of the following:
    (i) A laser rangefinder; and
    (ii) A 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 for exploiting differential target-
background retroreflectance in order to detect 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 
October 12, 2017 or later.

    * (c) Imaging systems or end items, as follows:
    (1) 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) Employing 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 plane array having a peak response wavelength greater than 1,000 
nm; or
    (iii) Having an infrared focal plane array or infrared imaging 
camera, and specially designed for a military end user;
    (2) Weapon sights (i.e., with a reticle) or aiming or imaging 
systems (e.g., clip-on), specially designed to mount to a weapon or to 
withstand weapon shock or recoil, with or without an integrated viewer 
or display, and also incorporating or specially designed to incorporate 
any of the following:
    (i) An infrared focal plane array having a peak response wavelength 
exceeding 1,000 nm;

[[Page 70355]]

    (ii) Second generation with luminous sensitivity greater than 350 
[micro]A/lm, third generation, or higher generation, image intensifier 
tubes;
    (iii) Ballistic computing electronics for adjusting the aim point 
display; or
    (iv) Infrared laser having a wavelength exceeding 710 nm;
    (3) Electro-optical reconnaissance, surveillance, target detection, 
or target acquisition systems, specially designed for articles in this 
subchapter or specially designed for a military end user (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);
    (4) Infrared search and track (IRST) systems having one of the 
following:
    (i) Airborne or naval systems, that:
    (A) Have range performance of 3 km or greater;
    (B) Incorporate or are specially designed to incorporate an 
infrared focal plane array or imaging camera, having a peak response 
wavelength exceeding 3 microns or greater; and
    (C) Maintain positional or angular state of a target through time; 
or
    (ii) Specially designed for a military end user;
    (5) Distributed aperture systems having a peak response wavelength 
exceeding 710 nm specially designed for articles in this subchapter or 
specially designed for a military end user;
    (6) Infrared imaging systems, as follows:
    (i) Mobile reconnaissance, scout, or surveillance systems providing 
real-time target recognition at ranges greater than 3 km (e.g., LRAS, 
CIV, HTI, SeeSpot, MMS);

    Note to paragraph (c)(6)(i): Target is defined as a NATO 
standard tank target having a frontal cross-section of 2.3 x 2.3 
meters, and a side cross-section of 2.3 x 6.4 meters.

    (ii) Airborne stabilized systems specially designed for military 
reconnaissance (e.g., DB-110, C-B4);
    (iii) Multispectral imaging systems that provide automated 
classification or identification of military or intelligence targets or 
characteristics;
    (iv) Automated missile detection or warning systems;
    (v) Systems hardened to withstand electromagnetic pulse (EMP), 
directed energy, chemical, biological, or radiological threats;
    (vi) Systems incorporating mechanism(s) to reduce the optical chain 
signature for optical augmentation;
    (vii) Persistent surveillance systems with a ground sample distance 
(GSD) of 0.5 m or better (smaller) at 10,000 ft or higher above ground 
level 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 specially 
designed for a military end user;
    (7) Terahertz imaging systems as follows:
    (i) Concealed object detection systems operating in the frequency 
range from 30 GHz to 3000 GHz, and having a resolution less (better) 
than 0.1 milliradians at a standoff range of 100 m; or
    (ii) Specially designed for a military end user;
    (8) Systems or equipment, incorporating an ultraviolet or infrared 
(IR) beacon or emitter, specially designed for Combat Identification;
    (9) 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;
    (10) Developmental electro-optical, infrared, or terahertz systems 
funded by the Department of Defense.

    Note 1 to paragraph (c)(10): 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)(10): 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)(10): This provision is applicable to 
those contracts or other funding authorizations that are dated 
October 12, 2017 or later.

    (d) Guidance and navigation systems or end items, as follows:
    (1) Guidance or navigation systems (e.g., inertial navigation 
systems, inertial reference units, attitude and heading reference 
systems) having any of the following:
    (i) A circular error probability at fifty percent (CEP50) of 
position error rate less (better) than 0.28 nautical miles per hour, 
without the use of positional aiding references;
    (ii) A heading error or true north determination of less (better) 
than 0.28 mrad secant (latitude) (0.016043 degrees secant (latitude)), 
without the use of positional aiding references;
    (iii) A CEP50 of position error rate less than 0.2 nautical miles 
in an 8 hour period, without the use of positional aiding references; 
or
    (iv) Meeting or exceeding specified performance at linear 
acceleration levels exceeding 25g (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 or incorporating 
accelerometers specified in paragraph (e)(11) or gyroscopes or angular 
rate sensors specified in paragraph (e)(12) of this category that are 
designated MT);

    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) GNSS 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) GNSS 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 
2 to paragraph (a) of USML Category VIII.


[[Page 70356]]


    (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 or navigation 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).

    Note 1 to paragraph (d)(6): This paragraph does not control 
guidance or navigation 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 
October 12, 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 2 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)(5) of this category;
    (2) Lasers specially designed for articles in this subchapter;
    (3) Laser stacked arrays specially designed for articles in this 
subchapter;
    (4) Night vision or infrared cameras (e.g., camera core) specially 
designed for articles in this subchapter;

    Note to paragraph (e)(4): 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.

    (5) Infrared focal plane arrays specially designed for articles in 
this subchapter;
    (6) Charge multiplication focal plane arrays exceeding 50 mA/W for 
any wavelength exceeding 760 nm and specially designed for articles 
described in this subchapter;
    (7) Second generation and greater image intensifier tubes specially 
designed for articles in this subchapter, and specially designed parts 
and components therefor;

    Note to paragraph (e)(7): 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.

    (8) Parts and components specially designed for articles described 
in paragraph (c)(3), (c)(4), (c)(5) or (c)(6)(vi)-(vii) of this 
category;
    (9) Inertial measurement units specially designed for articles in 
this subchapter (MT for systems incorporating accelerometers specified 
in paragraph (e)(11) or gyroscopes or angular rate sensors specified in 
paragraph (e)(12) that are designated MT);
    (10) GNSS security devices (e.g., Selective Availability Anti-
Spoofing Modules (SAASM), Security Modules (SM), and Auxiliary Output 
Chips (AOC));
    (11) 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)(11): For weapon fuze accelerometers, see 
Category III(d) or IV(h).


    Note 2 to paragraph (e)(11): MT designation does not include 
accelerometers that are designed to measure vibration or shock.

    (12) Gyroscopes or angular rate sensors as follows:
    (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 (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);

    Note to paragraphs (e)(11) and (e)(12): ``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 measurements of ``bias'' and ``scale factor'' refer 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.)

    (13) 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);
    (14) Infrared focal plane array read-out integrated circuits 
(ROICs) specially designed for articles in this subchapter;
    (15) Integrated dewar cooler assemblies specially designed for 
articles in this subchapter, with or without an infrared focal plane 
array, and specially designed parts and components therefor;;
    (16) Gimbals specially designed for articles in this category;
    (17) Infrared focal plane array Joule-Thomson (JT) self-regulating 
cryostats specially designed for articles controlled in this 
subchapter;
    (18) Infrared lenses, mirrors, beam splitters or combiners, 
filters, and treatments and coatings, specially designed for articles 
controlled in this category;

    Note to paragraph (e)(18): For the purposes of this paragraph, 
treatments and coatings may be analyzed as a part, component, 
accessory, or attachment under paragraph (b) of Sec.  120.41 to 
determine if they are specially designed.

    (19) Drive, control, signal, or image processing electronics, 
specially designed for articles controlled in this category;
    (20) Near-to-eye displays (e.g., micro-displays) specially designed 
for articles controlled in this category;
    (21) Resonators, receivers, transmitters, modulators, gain media,

[[Page 70357]]

drive electronics, and frequency converters, specially designed for 
laser systems controlled in this category;
    (22) Two-dimensional infrared scene projector emitter arrays (i.e., 
resistive arrays) specially designed for infrared scene generators 
controlled in USML Category IX(a)(10);
    * (23) 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)(23): ``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.

    (24) Developmental image intensifier 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)(24): 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)(24): 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)(24): This provision is applicable to 
those contracts or other funding authorizations that are dated 
October 12, 2017 or later.

    (f) Technical data (see Sec.  120.10) and defense services (see 
Sec.  120.9) directly related to the defense articles described 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.)
    (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 paragraphs (b)(6), 
(c)(1)(iii), (c)(3), (c)(4)(ii), (c)(5), (c)(6)(viii)(b), and 
(c)(7)(ii) of this category, 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 of use by a particular 
end user. For the purpose of conducting a self-determination of 
jurisdiction, documents contemporaneous with the development must 
establish such knowledge. For the purpose of a Commodity 
Jurisdiction determination, the government may base a determination 
on post-development information that evidences such knowledge or is 
otherwise consistent with Sec.  120.4 of this subchapter.

* * * * *

Rose E. Gottemoeller,
Under Secretary, Arms Control and International Security, Department of 
State.
[FR Doc. 2016-24225 Filed 10-11-16; 8:45 am]
 BILLING CODE 4710-25-P