Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Categories VIII and XIX, 83126-83135 [2016-27775]

Download as PDF 83126 Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations 14. In ECCN 9B619, revise the ‘‘Related Controls’’ paragraph in the List of Items Controlled section to read as follows: ■ 9B619 Test, inspection, and production ‘‘equipment’’ and related commodities ‘‘specially designed’’ for the ‘‘development’’ or ‘‘production’’ of commodities enumerated or otherwise described in ECCN 9A619 or USML Category XIX (see List of Items Controlled). * * * * * List of Items Controlled Related Controls: USML Category XIX(f)(1) controls ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially designed’’ for the engines described in Category XIX(f)(1), but does not control the commodities enumerated or otherwise described in ECCN 9B619. USML Category XIX(f)(2)–(11) controls other engine ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ ‘‘attachments,’’ and ‘‘systems.’’ * * * * * ■ 15. In ECCN 9C610, revise the heading, and the ‘‘Items’’ paragraph of the ‘‘List of Items Controlled’’ section to read as follows: 9C610 Materials ‘‘specially designed’’ for commodities controlled by USML Category VIII or ECCN 9A610 and not elsewhere specified in the CCL or the USML (see List of Items Controlled). * * * * * Note 2: Materials ‘‘specially designed’’ for both aircraft enumerated in USML Category VIII and aircraft enumerated in ECCN 9A610 are subject to the controls of this ECCN b. [Reserved] 16. In ECCN 9C619, revise the heading, and the ‘‘Items’’ paragraph of the ‘‘List of Items Controlled’’ section to read as follows: ■ asabaliauskas on DSK3SPTVN1PROD with RULES 9C619 Materials ‘‘specially designed’’ for commodities controlled by USML Category XIX or ECCN 9A619 and not elsewhere specified in the CCL or on the USML (see List of Items Controlled). * * * * List of Items Controlled * * * Items: a. Materials not controlled by paragraph .b of this entry and not elsewhere specified in the CCL or on the USML, and ‘‘specially designed’’ for commodities enumerated or VerDate Sep<11>2014 17:02 Nov 18, 2016 Note 2: Materials described in paragraph .a of this entry that are ‘‘specially designed’’ for both an engine enumerated in USML Category XIX and an engine enumerated in ECCN 9A619 are subject to the controls of this ECCN 9C619 Note 3: Materials described in this entry that are or have been used in gas turbine engines in production (i.e., not in development) that are not enumerated or otherwise described on the USML or ECCN 9A619 are not controlled by this entry. 17. In ECCN 9E610, in the ‘‘List of Items Controlled’’ section, the ‘‘Items’’ paragraph is amended by: ■ a. Removing the word ‘‘or’’ from the end of paragraph .b.13; ■ b. Removing the period from the end of paragraph .b.14 and adding in its place a semicolon followed by the word ‘‘or’’; and ■ c. Adding paragraph .b.15. The addition reads as follows. ■ List of Items Controlled * * * Items: a. Materials not elsewhere specified in the USML or the CCL and ‘‘specially designed’’ for commodities enumerated or otherwise described in USML Category VIII or ECCN 9A610 (except 9A610.y). Note 1: Materials enumerated elsewhere in the CCL, such as in a CCL Category 1 ECCN, are controlled pursuant to controls of the applicable ECCN. * otherwise described in USML Category XIX or ECCN 9A619 (except 9A619.y). b. Materials ‘‘specially designed’’ for use in certain gas turbine engines, as follows: b.1. Powders ‘‘specially designed’’ for thermal or environmental barrier coating of defense articles enumerated or described in USML Category XIX paragraphs (f)(1)–(f)(4) for engines listed in (f)(1); b.2. Superalloys (i.e., nickel, cobalt or iron based), used in directionally solidified or single crystal casting, ‘‘specially designed’’ for defense articles enumerated or described in USML Category XIX paragraphs (f)(1)– (f)(4) for engines listed in paragraph (f)(1); or b.3. Imide matrix, metal matrix, or ceramic matrix composite material (i.e., reinforcing fiber combined with a matrix) ‘‘specially designed’’ for defense articles enumerated or described in USML Category XIX paragraphs (f)(1)–(f)(4) for engines listed in paragraph (f)(1). Note 1: Materials enumerated elsewhere in the CCL, such as in a CCL Category 1 ECCN, are controlled pursuant to the controls of the applicable ECCN. Jkt 241001 18. In ECCN 9E619, the ‘‘List of Items Controlled’’ section is amended by revising the ‘‘Related Controls’’ paragraph, and in the ‘‘Items’’ paragraph: ■ a. Revising the Note that immediately follows paragraph .a; ■ b. Removing the word ‘‘or’’ from the end of paragraph .b.8; ■ c. Removing the period from the end of paragraph .b.9 and adding in its place a semicolon followed by the word ‘‘or’’; and ■ d. Adding paragraph b.10. The revision and addition read as follows: ■ 9E619 ‘‘Technology’’ ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul, or refurbishing of military gas turbine engines and related commodities controlled by 9A619, equipment controlled by 9B619, materials controlled by 9C619, or software controlled by 9D619 (see List of Items Controlled). * * * * * List of Items Controlled Related Controls: Technical data directly related to articles enumerated or otherwise described in USML Category XIX are subject to the control of USML Category XIX(g). * * * * * Items: * * * Note: ‘‘Build-to-print technology’’ ‘‘required’’ for the ‘‘production’’ of items described in paragraphs b.1 through b.10 of this entry is classified under 9E619.a. b. * * * b.10. Materials controlled by ECCN 9C619.b. Dated: November 8, 2016. Kevin J. Wolf, Assistant Secretary for Export Administration. 9E610 Technology ‘‘required’’ for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul, or refurbishing of military aircraft and related commodities controlled by 9A610, equipment controlled by 9B610, materials controlled by 9C610, or software controlled by 9D610 (see List of Items Controlled). [FR Doc. 2016–27777 Filed 11–18–16; 8:45 am] * * [Public Notice: 9604] Amendment to the International Traffic in Arms Regulations: Revision of U.S. Munitions List Categories VIII and XIX * * * List of Items Controlled * * * * * * * * * Items: * b. * * * b.15. Technology ‘‘required’’ for the ‘‘development’’ or ‘‘production’’ of ‘‘parts’’ or ‘‘components’’ controlled in 9A610.x and ‘‘specially designed’’ for damage or failureadaptive flight control systems controlled in Category VIII(h)(7) of the USML. * PO 00000 * * Frm 00020 * Fmt 4700 * Sfmt 4700 BILLING CODE 3510–33–P DEPARTMENT OF STATE 22 CFR Part 121 RIN 1400–AD89 Department of State. Final rule. AGENCY: ACTION: As part of the President’s Export Control Reform (ECR) initiative, the Department of State amends the International Traffic in Arms Regulations (ITAR) to revise Categories SUMMARY: E:\FR\FM\21NOR1.SGM 21NOR1 asabaliauskas on DSK3SPTVN1PROD with RULES Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations VIII (aircraft and related articles) and XIX (gas turbine engines and associated equipment) of the U.S. Munitions List (USML) to describe more precisely the articles warranting control on the USML. The revisions contained in this rule are part of the Department of State’s retrospective plan under E.O. 13563. DATES: This final 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: ITAR Amendment—USML Categories VIII and XIX. 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. All references to the USML in this rule are to the list of defense articles 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 section 38(a)(1) of the Arms Export Control Act (AECA), all defense articles controlled for export or import are part of the USML under the AECA. The list of defense articles controlled by ATF for the purpose of permanent import is the U.S. Munitions Import List (USMIL). The transfer of defense articles from the ITAR’s USML to the EAR’s CCL does not affect the list of defense articles controlled on the USMIL. Revision of Category VIII This final rule revises USML Category VIII, covering aircraft and related VerDate Sep<11>2014 17:02 Nov 18, 2016 Jkt 241001 articles. The revisions are undertaken in order to ensure that the category, which was last revised in 2013, is clear, does not inadvertently control items in normal commercial use, accounts for technological developments, and properly implements the national security and foreign policy objectives of the ECR initiative. The Department published a proposed rule for these revisions, as well as the revisions to Category XIX described below, on February 9, 2016 (81 FR 6797). Paragraph (a) is revised to clarify that the controls for all paragraphs are applicable ‘‘whether manned, unmanned, remotely piloted, or optionally piloted,’’ by modifying paragraph (a)(5) to clarify the design feature meriting USML control, and by deleting paragraph (a)(6) and placing it into reserve, because the relevant control is subsumed by revised paragraph (a)(5). Paragraphs (a)(7), (a)(8), and (a)(9) are modified to clarify the respective design features meriting USML control. The text of paragraphs (a)(11) and (a)(13) is deleted and the paragraphs are placed into reserve. Paragraph (a)(14) is modified to exclude L–100 and LM–100J aircraft from the scope of control. Note 2 to paragraph (a) is revised to clarify the definition of the described term. Paragraph (d) is modified to delete the ‘‘ship-based’’ control parameter and to clarify the intent and scope of the control. Paragraph (e) reflects having been placed into reserve in the final rule published by the Department on October 12, 2016 (81 FR 70340). Notes 1 and 3 to paragraph (f) are modified to incorporate clarifying language. Several changes are made to paragraph (h). Paragraph (h)(1) is revised to update the list of subject platforms, and to delete the reference to ‘‘equipment’’ because the specific types of equipment that warrant ITAR control are now enumerated separately in paragraph (h)(29). The Note to paragraph (h)(1) is modified to incorporate technical corrections and to enhance the clarity of the note. Paragraph (h)(2) is revised to focus the scope of control on certain rotorcraft gearboxes meeting specific technical parameters, and a note to paragraph (h)(2) is added to clarify certain terminology used therein. Paragraph (h)(4)(ii) is modified to clarify the scope of control. Paragraph (h)(5) is updated to add the words ‘‘On-aircraft’’ in order to clarify the scope of control, while paragraph (h)(6) is updated to add the words ‘‘or rocket’’ after ‘‘missile.’’ Paragraph (h)(7) is modified to clarify PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 83127 the scope of control. Paragraph (h)(8) is modified to clarify the meaning of ‘‘threat-adaptive autonomous flight control systems.’’ Paragraph (h)(10) is modified to enhance the clarity of the control text. Paragraph (h)(13) is deleted and placed into reserve. Paragraph (h)(16) is modified to incorporate a technical correction. Paragraph (h)(18) is modified to control parts and components that are specially designed to meet the same performance criteria as the systems identified in the paragraph. Paragraph (h)(19) is modified to remove reference to ECCN 9A610. Current paragraphs (h)(23) through (h)(26) are placed into reserve, with new controls added as paragraphs (h)(27) through (h)(29). Finally, the note to Category VIII is modified to update the paragraphs of paragraph (h) that are affected, as well as to reflect paragraph (e) having been placed into reserve. A commenting party expressed concern that the objective of the USML review process, first announced in a Notice of Inquiry on March 2, 2015 (80 FR 11314), is to reconsider or reverse the effect of the ECR initiative. The Department clarifies that the purpose of the USML review process is to review and update the subject USML categories, as needed, to account for technological developments, practical application issues identified by exporters and reexporters, and changes in the military and commercial applications of items affected by the list. The ‘‘positive list’’ structure adopted in each of the revised USML categories requires an ongoing process of review in order to ensure that the list is current and reflective of the modern state of the subject technology. This ongoing effort has been anticipated since the start of the ECR initiative and is not intended to reconsider or reverse the effort. A commenter requested clarification as to why paragraph (h)(2) had been removed from the Note to Category VIII. Paragraph (h)(2) has been revised significantly to control only a class of rotorcraft gearboxes for which there is no current civil application. Given the reduced scope of control in the revised paragraph (h)(2), inclusion in the Note to Category VIII is no longer appropriate. Three commenting parties recommended that paragraph (a)(5) be deleted, given the proposed reference to ‘‘unmanned’’ aircraft in paragraph (a), while an additional commenter suggested that the proposed paragraph (a)(5) was less clear than the existing version of the same paragraph. In light of these comments, the Department modified the paragraph to control only those unmanned aerial vehicles that are E:\FR\FM\21NOR1.SGM 21NOR1 asabaliauskas on DSK3SPTVN1PROD with RULES 83128 Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations specially designed to incorporate a defense article, in order to focus the paragraph on the intended scope of control. The Department disagrees with the commenters recommending deletion of the paragraph, as there is continuing oversight utility in maintaining a clear, enumerated control for unmanned aerial vehicles that are specially designed to incorporate a defense article, particularly in light of the unique considerations for these aircraft as set forth in the Department’s policy on unmanned aerial systems. Two commenters suggested that the proposed revisions to paragraph (a)(7) were less clear than the existing version of the same paragraph, and could potentially capture an overly broad scope of aircraft with intelligence, surveillance, and reconnaissance (ISR) capabilities where such aircraft incorporate a defense article. The Department agreed with these commenters and revised the paragraph to control only those aircraft that are specially designed to incorporate a defense article for the purpose of performing an intelligence, surveillance, and reconnaissance function, in order to better focus the scope of control and exclude certain aircraft that merely incorporate a defense article. One commenter expressed concern that proposed paragraph (a)(8) would control technical data for electronic warfare or command, control, and communication aircraft that simply incorporated a defense article, while another party requested clarification of these terms as well as the significant military equipment (SME) designation for this paragraph. The Department notes that command, control, and communication systems are currently designated as SME in USML Category XI, so analogous treatment is appropriate in this paragraph. While the Department has not defined the referenced terms, as there were no examples provided of demonstrated uncertainty in the regulated community, the scope of the paragraph has been revised to control only those referenced aircraft types that are specially designed to incorporate a defense article for the purpose of performing a referenced function. A commenting party recommended the replacement of each instance of the words ‘‘capable of’’ with ‘‘equipped to’’ or ‘‘designed for,’’ as appropriate in the context of the paragraph at issue. The Department reviewed each paragraph in which these words appeared and made the appropriate revisions where the paragraph did not otherwise provide technical parameters or performance criteria that sufficiently constrained and VerDate Sep<11>2014 17:02 Nov 18, 2016 Jkt 241001 identified the class of articles subject to control. Three commenters suggested that paragraph (a)(14) be revised to limit the scope of control to aircraft with uniquely military capabilities, to the exclusion of aircraft platforms such as the L–100 and LM–100J. One commenter asserted that the systems and functions that make the C–130J a sophisticated military platform are removed on the LM–100J, and that militarization of the latter platform would be very difficult. In response to these comments, the Department revised paragraph (a)(14) to exclude the L–100 and LM–100J aircraft. A commenting party requested clarification regarding the classification of parts and components that are not enumerated or otherwise described on the USML, and are common to the C– 130 and the L–100 aircraft. As with all parts and components classification concerns, the commenter is advised to follow the standard order of review guidance provided on the DDTC Web site (see http://pmddtc.state.gov/faqs/ ecr.html#b). Where an item is described in multiple entries, an enumerated entry takes precedence over an entry controlling the item by virtue of a specially designed catch-all. The exception to this rule is where a SME entry is involved. In all situations, a SME entry will take precedence over a non-SME entry. If, through the order of review, one determines a particular item is not specifically enumerated in the USML, it may still be controlled by virtue of its parts and components, which are caught via a catch-all. For example, a part or component of an airborne radar system specially designed for the F–35 may not be enumerated or captured in USML Category XI but will be controlled under the specially designed catch-all of Category VIII(h)(1). If the article does not appear to fall under any USML paragraph or paragraph, consult the EAR to complete the classification inquiry. A commenter recommended the deletion of paragraph (a)(15)(ii), based on the observation that paragraphs (a)(1) through (a)(14) do not specify whether the subject aircraft is of U.S. or foreign origin. The Department notes that paragraph (a)(15)(ii) follows paragraph (a)(15)(i), which captures aircraft not otherwise enumerated in paragraph (a) but bearing any enumerated military designation. Since foreign-origin aircraft would not bear a U.S. military designation, paragraph (a)(15)(ii) exists to capture the foreign equivalents of the U.S.-origin aircraft controlled by paragraph (a)(15)(i). PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 One commenting party recommended a revision of paragraph (d) to limit its scope to launching and recovery equipment for aircraft controlled in paragraph (a) that meet a minimum weight threshold, so as to exclude small UAVs. The Department disagreed with this recommendation, noting that the paragraph controls only launching and recovery equipment that is specially designed to allow a subject aircraft to land on a vessel described in Category VI(a)–(c). This language controls a sufficiently narrow class of aircraft and adequately excludes many small UAV platforms. A commenter expressed concern regarding the removal of the word ‘‘equipment’’ from paragraph (h)(1), as it potentially confuses the jurisdiction of such equipment. To clarify the scope of controlled equipment and avoid a perception that equipment designed for aircraft enumerated in paragraph (h)(1) is per se controlled in the same paragraph, the Department created proposed paragraph (h)(30), which appears in this final rule as paragraph (h)(29), to specify the specific types of equipment that warrant USML control. A commenting party recommended the exclusion from paragraph (h)(1) of those parts identified in ECCNs 9A610.y or 9A619.y. The Department disagreed with this recommendation. The structure of CCL controls is distinguishable from those in the USML, with the CCL utilizing ‘‘reasons for control’’ and country licensing policies that are not available under the ITAR or AECA. As such, provisions from the CCL cannot easily be adopted for the purposes of the USML. Given the unique policy considerations applicable to the enumerated aircraft in paragraph (h)(1) and their low observable/counter low observable capabilities, the Department declines to exclude classes of parts and components for these highly sensitive platforms. One commenter recommended that paragraph (h)(2) be revised to control only those rotorcraft gearboxes that are qualified to a particular military standard. The Department disagreed with this comment, because military standards are not developed and published to advance export controlrelated objectives and may be revised frequently for reasons unrelated to export controls, which may additionally reduce the clarity of the USML through successive iterations of revisions to these standards. Two commenters asserted that individual performance criteria specific in paragraph (h)(2) are not uniquely military in nature. The Department notes that both criteria are required for E:\FR\FM\21NOR1.SGM 21NOR1 asabaliauskas on DSK3SPTVN1PROD with RULES Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations control, and it is the combination of the two specified criteria that makes the controlled article militarily significant. No examples were provided of commercial items capable of meeting both performance criteria. A commenter suggested that tail boom folding systems controlled under paragraph (h)(3) could be useful in civil applications to optimize the use of space. The Department did not revise the control because the commenter did not provide an example of a current civil application for the articles controlled in this paragraph. A commenter recommended that paragraph (h)(5) be reviewed in concert with ECCN 9A610.e to ensure that the two entries did not overlap. The Department reviewed the entries and made no change to the paragraph, as it is sufficiently limited in scope to onaircraft arresting gear and excludes arresting gear used on the ground. One commenting party recommended that paragraph (h)(6) be revised to control ‘‘rocket launchers’’ in addition to ‘‘missile launchers,’’ and further recommended criteria to exclude from control certain airborne UAV launching capabilities. The Department agreed with the addition of ‘‘rocket launchers’’ and revised the paragraph accordingly. However, the Department disagreed with the recommended airborne launching criteria, as the ability to deploy a UAV from an aircraft in flight is a current military capability. A commenting party suggested that the Department had not offered a sufficient rationale to move to the USML specially designed parts and components for the systems controlled in paragraph (h)(7). The Department agreed with this comment and deleted the proposed addition. The disposition of the relevant parts and components will be addressed in the Department of Commerce’s companion rule. A commenting party recommended that paragraph (h)(8) be merged with paragraph (h)(12), in order to create a single paragraph for flight control systems that excludes commercial UAV ‘‘sense-and-avoid’’ capabilities. The Department observes that the ability of the subject UAVs to ‘‘avoid collisions’’ is only one aspect of the control parameter, which also requires the capability to ‘‘stay together’’ by virtue of the subject flight control system. No example has been presented of a commercial UAV flight control system that provides the capability for multiple UAVs to both ‘‘avoid collisions’’ and ‘‘stay together.’’ Accordingly, the Department did not revise the paragraph. VerDate Sep<11>2014 17:02 Nov 18, 2016 Jkt 241001 One commenter suggested that paragraph (h)(10) include a note, similar to the Note to Category XI(a)(3), indicating that the paragraph does not control radio altimeter equipment conforming to Federal Aviation Administration TSO–C87. The Department did not add this note to paragraph (h)(10), because commercial altimeters conforming to this standard would not possess either of the low probability of intercept capabilities described in the paragraph. Since current commercial altimeters cannot meet the criteria of paragraph (h)(10), it is not necessary to include a note that would impact only these commercial items. Three commenting parties suggested that the Department had not offered a sufficient rationale to move to the USML specially designed parts and components for the systems controlled in paragraph (h)(18). The Department partially agreed with this comment and revised the proposed addition. The only parts and components added to paragraph (h)(18) are those that are specially designed to function after impact of a 7.62 mm or larger projectile. This is the same criterion that applies to the drive systems and flight control systems subject to control under this paragraph; thus, this paragraph unifies the articles subject to control under a common parameter of military criticality. Two commenters recommended revisions to enhance the clarity of paragraph (h)(20). This paragraph pertains to classified defense articles and classified information, and replicates the structure of similar entries in other revised USML categories that are outside of the scope of this rule. To maintain conformity with those entries, the Department has noted these commenters’ recommendations and will reconsider them in the context of a later review of all USML entries relating to classified defense articles and classified information. Four commenting parties asserted that the proposed paragraph (h)(27) did not control articles providing a critical military advantage, would control variable speed gearboxes in commercial use, or would otherwise limit commercial development utilizing such technology. The Department notes that former paragraph (h)(2), prior to the revisions set forth in this rule, controlled ‘‘variable speed gearboxes’’ generally. Accordingly, the proposed paragraph (h)(27) constituted a reduction in the range of variable speed gearboxes subject to the ITAR to those employed in next-generation military technology. In light of the comments PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 83129 received, the Department has further refined paragraph (h)(27) to clarify the meaning of ‘‘variable speed gearbox,’’ as well as to articulate the varying output speed currently in use in military applications. A commenting party observed that the proposed paragraph (h)(28) would capture dual-use electrical power or thermal management systems used with Category XIX engines. The Department agreed with this comment and revised the paragraph to control electrical power or thermal management systems specially designed for an engine controlled in Category XIX. A commenter requested clarification that the use of the term ‘‘pound’’ in paragraph (h)(28)(i) refers only to the generator and not the controller. The Department updated the paragraph to clarify that the referenced threshold excludes the mass of the controller for the purpose of calculating the gravimetric power density. The commenter additionally requested clarification as to whether the threshold reflects the total heat exchanger capacity or a single heat exchanger. The Department updated the paragraph to address the concerns expressed in the comment. The same commenter asserted that paragraph (h)(28)(iii) lacked clarity and should be deleted. The Department agreed with this comment and deleted the paragraph. Consequentially, proposed paragraph (h)(28)(iv) now appears in this final rule as paragraph (h)(28)(iii). Additionally, the commenter requested clarification regarding the conditions for measuring the threshold in proposed paragraph (h)(28)(iv). The Department did not insert additional criteria regarding measurement conditions because the paragraph as drafted describes the threshold for ITAR control at a sufficient level of granularity. A commenter proposed revisions to proposed paragraph (h)(29) to better articulate the scope of software to be controlled. A second commenter recommended deletion of the paragraph, since algorithms and software are already controlled as technical data. The Department agreed with the second commenter and deleted the proposed paragraph, having determined that the subject software is already controlled under paragraph (i). Three commenters suggested that proposed paragraph (h)(30) would result in expense to industry with questionable regulatory benefit, and would require the re-review of certain parts and components to determine whether classification under the new paragraph is appropriate. E:\FR\FM\21NOR1.SGM 21NOR1 83130 Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations asabaliauskas on DSK3SPTVN1PROD with RULES The Department notes that Category VIII was among the first two categories to undergo revision pursuant to the ECR initiative, a primary goal of which was to create a ‘‘positive list’’ that would inevitably require periodic revisions to keep reflective of the current state of technology. The experience of industry with the earliest revised categories, as well as the U.S. government in enforcing the regulations, has identified areas in which adjustments to Categories VIII and XIX were necessary to best articulate the articles subject to control. The former treatment of equipment in paragraph (h)(1) potentially created the impression that equipment for enumerated aircraft was broadly controlled under that paragraph. For additional clarity, a newly-created paragraph, now found at (h)(29), enumerates certain types of equipment that merit ITAR control. While the Department’s review considered in all cases the potential impact to industry in revising aspects of these categories, the primary standard of review was the ‘‘critical military or intelligence advantage’’ standard set forth in ITAR § 120.3(b). As a general principle, where migration of items from the CCL to the USML was considered, the Department sought first to accommodate the item in a revised ECCN. The articles that newly appear on or have returned to the USML in this rule are those that constitute or are specially designed for nextgeneration technology and thus satisfy ITAR § 120.3. In response to comments received, the Department revised the paragraph to better articulate the specific types of equipment that meet this standard. Finally, a commenter recommended replacing the words ‘‘technical data’’ in paragraph (x) with ‘‘technology,’’ to align the text with other revised categories and utilize the appropriate EAR terminology. The Department agreed and made the recommended change. Revision of Category XIX This final rule revises USML Category XIX, covering gas turbine engines. As with USML Category VIII, the revisions are undertaken in order to ensure that the category is clear, does not inadvertently control items in normal commercial use, accounts for technological developments, and properly implements the national security and foreign policy objectives of the ECR initiative. Paragraph (a) is modified to clarify the scope of controlled engines and to incorporate technical corrections. Paragraph (b)(1) is revised to update the VerDate Sep<11>2014 17:02 Nov 18, 2016 Jkt 241001 performance criteria meriting control, while paragraph (b)(2) is revised to clarify the specific power threshold specified therein. Paragraph (c) is modified to incorporate conforming and technical changes and to make clear that the paragraph applies only to gas turbine engines, while paragraph (d) is modified to update the list of subject engines. The Note to paragraph (e) is modified to incorporate a conforming change. Several changes are included within paragraph (f). Paragraph (f)(1) is modified to incorporate technical corrections and to update the list of subject engines. Paragraph (f)(2) introduces additional text to clarify the scope of controlled hot section components, and to reorganize the text according to the nature of the articles. New controls are included in paragraphs (f)(7) through (f)(12). A commenter asserted that the PT6C– 67A, a commercial model, would exceed the threshold proposed in paragraph (b)(1). In response to this comment, the Department increased the relevant threshold to 2000 mechanical shp (1491 kW). Three commenting parties recommended clarification regarding the specific power threshold set forth in paragraph (b)(2). The Department agreed with these commenters and revised the relevant language to include a unit of measurement for the specific power threshold and maximum takeoff shaft horsepower. The Department further notes that given the additional modifications to paragraph (b)(2) described below, and the requirement that an engine must meet all of the criteria of paragraph (b)(2) to be subject to ITAR control, the revised paragraph should not pose a risk of capturing nextgeneration commercial engine models. Two commenters asserted that the term ‘‘armament gas’’ in paragraph (b)(2) is unclear and requested a definition. The Department disagreed with the commenters because the term can be interpreted based on the plain meaning of the words ‘‘armament gas ingestion’’—that is, the term describes an engine that is specially designed to ingest gas released from armaments. Three commenting parties requested clarification regarding the term ‘‘transient maneuvers’’ in paragraph (b)(2), and requested revision to capture only maneuvers that are unique to military scenarios. The Department agreed with these comments and revised the parameter to capture non-civil transient maneuvers. Three commenting parties suggested that the phrase ‘‘controlled in this category’’ in paragraph (c) be revised to PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 read ‘‘controlled in Category VIII.’’ The Department partially agreed and revised the phrase to read ‘‘controlled in this subchapter.’’ A commenter recommended the removal of the GE38 engine from paragraph (d), indicating that it is a marketing name that was used during the development of the T408 and will not be used in production. The Department agrees with this observation but also notes that GE38 models remain in use in test aircraft. Accordingly, the GE38 reference will remain in paragraph (d) while such engines are still in use. One commenter recommended the removal of the MT7 engine from paragraph (d), arguing that it is a derivative of the AE1107C and that oil sump sealing is being designed out of the model. While the comment appears to describe a design modification that has not yet occurred, the Department further notes that the subject engine is unique to a destroyer platform. For these reasons, the MT7 was retained in paragraph (d). The Department has removed the TF60 engine from paragraph (d) in response to a public comment that recommended its removal. A commenter questioned whether the word ‘‘systems’’ in paragraph (e) should be interpreted to also indicate controls of parts and components thereof. The Department confirms that paragraph (e) is limited to specified systems and includes no reference to ‘‘parts and components thereof’’; accordingly, parts and components thereof are not controlled under paragraph (e). Two comments asserted, with respect to paragraph (f) as well as several paragraphs thereof, that materials should not be controlled in this category because Category XIII is intended to contain all materials entries. The Department disagreed in part with these comments. Where the materials at issue pertain only to a particular class of defense articles that are controlled in a single subcategory—as with these materials relevant only to gas turbine engines controlled in Category XIX— there is little utility in requiring the reader to review multiple USML categories for articles of potential relevance. Were these materials of broad applicability for a variety of defense articles controlled under more than one USML category, the Department would locate the relevant USML entries in Category XIII. However, in this case, ECCN 9C619 remains the appropriate category for the materials described in the proposed rule. The companion rule the Commerce Department has published explains the new licensing policies pertaining to such materials. No E:\FR\FM\21NOR1.SGM 21NOR1 asabaliauskas on DSK3SPTVN1PROD with RULES Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations new materials controls are added to Category XIX. Two commenting parties recommended the exclusion from paragraph (f)(1) of those parts identified in ECCNs 9A610.y or 9A619.y. The Department disagreed with this comment for reasons similar to those explained above in the context of a similar comment on Category VIII(h)(1), regarding the different structures and objectives of CCL ECCNs as well as the national security interest in retaining control over the parts and components of engines with evolving or nextgeneration applications. One commenter expressed concern regarding the removal of the word ‘‘equipment’’ from paragraph (f)(1). As with Category VIII(h)(1), the word was removed to avoid the impression that all equipment, including production equipment, relevant to the enumerated aircraft was subject to control under this paragraph. The Department has created a new paragraph (f)(12), which appeared in the proposed rule as proposed paragraph (f)(16), to enumerate certain types of equipment that merit control. Three commenters requested clarification of the word ‘‘actively’’ in paragraph (f)(2), and requested the addition of a definition. The Department agreed that the term, which first appeared in the proposed rule, did not improve the clarity of the paragraph and deleted each instance of the term. A commenting party recommended the reorganization of paragraph (f)(2) to refer to ‘‘intermediate pressure turbine blades’’ after ‘‘high pressure turbine blades’’ and before ‘‘low pressure turbine blades.’’ The Department agreed and revised the paragraph accordingly. A commenting party expressed difficulty interpreting the meaning of ‘‘engine monitoring systems’’ in paragraph (f)(5) and suggested that a definition of the term might be beneficial. The Department disagreed with the comment because the term can be sufficiently understood without a new definition, given the existing definition of ‘‘system’’ set forth in ITAR § 120.45(g). Four parties commented generally on the new paragraphs that appeared in the proposed rule as (f)(7) through (f)(16), arguing that USML control of the subject articles will result in expense to industry by requiring reclassification of articles previously subject to the EAR. As with Category VIII, described above, Category XIX was among the first two categories to undergo revision pursuant to the ECR initiative, a primary goal of which was to create a ‘‘positive list’’ that would inevitably require periodic revisions to keep reflective of the VerDate Sep<11>2014 17:02 Nov 18, 2016 Jkt 241001 current state of technology. The experience of industry with the earliest revised categories, as well as the U.S. government in enforcing the regulations, has identified areas in which adjustments to Categories VIII and XIX were necessary to best articulate the articles subject to control. While the Department’s review considered in all cases the potential impact to industry in revising aspects of these categories, the primary standard of review was the ‘‘critical military or intelligence advantage’’ standard set forth in ITAR § 120.3(b). As a general principle, where a migration of items from the CCL to the USML was considered, the Department sought first to accommodate the item in a revised ECCN. The articles that nevertheless appear in new USML entries in this rule constitute or are specially designed for next-generation technology and thus satisfy ITAR § 120.3. The Department disagrees with the commenters’ characterization of proposed paragraph (f)(16), now appearing as paragraph (f)(12), which controls certain enumerated types of equipment. Since ‘‘equipment’’ was referenced generally in the previous iteration of paragraph (f), the objective of this addition is to better clarify the equipment subject to ITAR control. With respect to the remaining proposed paragraphs, the Department applied this standard and determined that proposed paragraphs (f)(7), (f)(13), (f)(14), and (f)(15) were not necessary for inclusion in the USML. Accordingly, these proposed paragraphs have been deleted. The considerations that prompted the addition of proposed paragraph (f)(7) are adequately addressed through paragraph (g), while the remaining deleted proposed entries will be addressed by the Department of Commerce in ECCN 9C619. The Department retained proposed paragraph (f)(8), now appearing in the category as paragraph (f)(7), because the referenced equipment allows for the production of gas turbine engines and parts and components that offer a critical military advantage. Among the retained new paragraphs and in response to public comments, the Department revised proposed paragraphs (f)(9) through (f)(12)—now appearing as paragraphs (f)(8) through (f)(11)—to reference only systems specially designed for gas turbine engines controlled in Category XIX, in order to avoid a chilling effect on potential commercial applications of these technologies. The Department revised proposed paragraph (f)(16), now appearing in this final rule as paragraph (f)(12), to PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 83131 enumerate certain types of equipment that is specially designed for a defense article described in paragraph (f)(1). Finally, a commenter recommended replacing the words ‘‘technical data’’ in paragraph (x) with ‘‘technology,’’ to align the text with other revised categories and utilize the appropriate EAR terminology. The Department agreed and made the recommended change. Regulatory Findings 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 published this rule as a proposed rule (81 FR 6797) with a 45-day provision for public comment and without prejudice to its determination that controlling the import and export of defense services is a foreign affairs function. Regulatory Flexibility Act Since this rule is exempt from the rulemaking provisions of 5 U.S.C. 553, it does not require analysis under the Regulatory Flexibility Act. Unfunded Mandates Reform Act of 1995 This 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 E:\FR\FM\21NOR1.SGM 21NOR1 83132 Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this amendment. Executive Order 12866 and 13563 Executive Orders 12866 and 13563 direct agencies to assess all 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 sections 3(a) and 3(b)(2) 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. asabaliauskas on DSK3SPTVN1PROD with RULES Paperwork Reduction Act Following is a listing of approved 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 rule continues the implementation of ECR. The list of collections 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. VerDate Sep<11>2014 17:02 Nov 18, 2016 Jkt 241001 (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 1. The authority citation for part 121 continues to read as follows: ■ Authority: Secs. 2, 38, and 71, Pub. L. 90– 629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2651a; Pub. L. 105–261, 112 Stat. 1920; Section 1261, Pub. L. 112–239; E.O. 13637, 78 FR 16129. 2. Section 121.1 is amended by revising U.S. Munitions List Categories VIII and XIX to read as follows: ■ § 121.1 * * The United States Munitions List. * * * Category VIII—Aircraft and Related Articles (a) Aircraft, whether manned, unmanned, remotely piloted, or optionally piloted, as follows (MT if the aircraft, excluding manned aircraft, has a range equal to or greater than 300 km): * (1) Bombers; * (2) Fighters, fighter bombers, and fixed-wing attack aircraft; * (3) Turbofan- or turbojet-powered trainers used to train pilots for fighter, attack, or bomber aircraft; * (4) Attack helicopters; * (5) Unmanned aerial vehicles (UAVs) specially designed to incorporate a defense article; * (6) [Reserved] * (7) Aircraft specially designed to incorporate a defense article for the PO 00000 Frm 00026 Fmt 4700 Sfmt 4700 purpose of performing an intelligence, surveillance, and reconnaissance function; * (8) Aircraft specially designed to incorporate a defense article for the purpose of performing an electronic warfare function; airborne warning and control aircraft; or aircraft specially designed to incorporate a defense article for the purpose of performing a command, control, and communications function; (9) Aircraft specially designed to incorporate a defense article for the purpose of performing an air refueling function; (10) Target drones; (11) [Reserved] (12) Aircraft capable of being refueled in-flight including hover-in-flight refueling (HIFR); (13) [Reserved] (14) Aircraft with a roll-on/roll-off ramp, capable of airlifting payloads over 35,000 lbs. to ranges over 2,000 nm without being refueled in-flight, and landing onto short or unimproved airfields, other than L–100 and LM–100J aircraft; * (15) Aircraft not enumerated in paragraphs (a)(1) through (a)(14) as follows: (i) U.S.-origin aircraft that bear an original military designation of A, B, E, F, K, M, P, R, or S; or (ii) Foreign-origin aircraft specially designed to provide functions equivalent to those of the aircraft listed in paragraph (a)(15)(i) of this category; or (16) Aircraft that are armed or are specially designed to be used as a platform to deliver munitions or otherwise destroy targets (e.g., firing lasers, launching rockets, firing missiles, dropping bombs, or strafing); Note 1 to paragraph (a): Aircraft specially designed for military applications that are not identified in paragraph (a) of this section are subject to the EAR and classified as ECCN 9A610, including any model of unarmed military aircraft manufactured prior to 1956, regardless of origin or designation, and unmodified since manufacture. Aircraft with modifications made to incorporate safety of flight features or other FAA or NTSB modifications such as transponders and air data recorders are considered ‘‘unmodified’’ for the purposes of this paragraph. Note 2 to paragraph (a): ‘‘Range’’ is the maximum distance that the specified aircraft system is capable of traveling in the mode of stable flight as measured by the projection of its trajectory over the surface of the Earth. The maximum capability based on the design characteristics of the system, when fully loaded with fuel or propellant, will be taken into consideration in determining range. The range for aircraft systems will be determined independently of any external factors such as operational restrictions, limitations imposed E:\FR\FM\21NOR1.SGM 21NOR1 Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations by telemetry, data links, or other external constraints. For aircraft systems, the range will be determined for a one-way distance using the most fuel-efficient flight profile (e.g., cruise speed and altitude), assuming International Civil Aviation Organization (ICAO) standard atmosphere with zero wind, but with no fuel reserve. (b)–(c) [Reserved] (d) Launching and recovery equipment specially designed to allow an aircraft described in paragraph (a) of this category to take off or land on a vessel described in Category VI paragraphs (a) through (c) (MT if the launching and recovery equipment is for an aircraft, excluding manned aircraft, that has a range equal to or greater than 300 km). Note to paragraph (d): For the definition of ‘‘range,’’ see note to paragraph (a) of this category. (e) [Reserved] (f) Developmental aircraft funded by the Department of Defense via contract or other funding authorization, and specially designed parts, components, accessories, and attachments therefor. asabaliauskas on DSK3SPTVN1PROD with RULES Note 1 to paragraph (f): This paragraph does not control aircraft and specially designed parts, components, accessories, and attachments therefor (a) in production; (b) determined to be subject to the EAR via a commodity jurisdiction determination (see § 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 (f): Note 1 does not apply to defense articles enumerated on the U.S. Munitions List, whether in production or development. Note 3 to paragraph (f): This paragraph is applicable only to those contracts, other funding authorizations, or modifications initiating development of a new defense article that are dated April 16, 2014, or later. (g) [Reserved] (h) Parts, components, accessories, attachments, associated equipment and systems, as follows: (1) Parts, components, accessories, and attachments specially designed for the following U.S.-origin aircraft: The B–1B, B–2, B–21, F–15SE, F/A–18 E/F, EA–18G, F–22, F–35, and future variants thereof; or the F–117 or U.S. Government technology demonstrators. Parts, components, accessories, and attachments of the F–15SE and F/A–18 E/F that are common to earlier models of these aircraft, unless listed in paragraph (h) of this category, are subject to the EAR; Note to paragraph (h)(1): This paragraph does not control parts, components, accessories, and attachments that are common to aircraft described in paragraph (a) of this category but not identified in VerDate Sep<11>2014 17:02 Nov 18, 2016 Jkt 241001 paragraph (h)(1), and those identified in paragraph (h)(1). For example, when applying § 120.41(b)(3), a part common to only the F–16 and F–35 is not specially designed for purposes of this paragraph. A part common to only the F–22 and F–35— two aircraft models identified in paragraph (h)(1)—is specially designed for purposes of this paragraph, unless one of the other paragraphs is applicable under § 120.41(b) of this subchapter. (2) Rotorcraft gearboxes with internal pitch line velocities exceeding 20,000 feet per minute and able to operate 30 minutes with loss of lubrication without an emergency or auxiliary lubrication system, and specially designed parts and components therefor; Note to paragraph (h)(2): Loss of lubrication means a situation where oil/ lubrication is mostly or completely lost from a transmission/gearbox such that only a residual coating remains due to the lubrication system failure. (3) Tail boom folding systems, stabilator folding systems or automatic rotor blade folding systems, and specially designed parts and components therefor; (4) Wing folding systems, and specially designed parts and components therefor, for: (i) Aircraft powered by power plants controlled under USML Category IV(d); or (ii) Aircraft with any of the following characteristics and powered by gas turbine engines: (A) The portion of the wing outboard of the wing fold is required for sustained flight; (B) Fuel can be stored outboard of the wing fold; (C) Control surfaces are outboard of the wing fold; (D) Hard points are outboard of the wing fold; (E) Hard points inboard of the wing fold allow for in-flight ejection; or (F) The aircraft is designed to withstand maximum vertical maneuvering accelerations greater than +3.5g/¥1.5g. (5) On-aircraft arresting gear (e.g., tail hooks and drag chutes) and specially designed parts and components therefor; (6) Bomb racks, missile or rocket launchers, missile rails, weapon pylons, pylon-to-launcher adapters, unmanned aerial vehicle (UAV) airborne launching systems, external stores support systems for ordnance or weapons, and specially designed parts and components therefor (MT if the bomb rack, missile launcher, missile rail, weapon pylon, pylon-tolauncher adapter, UAV airborne launching system, or external stores support system is for an aircraft, PO 00000 Frm 00027 Fmt 4700 Sfmt 4700 83133 excluding manned aircraft, or missile that has a ‘‘range’’ equal to or greater than 300 km); (7) Damage or failure-adaptive flight control systems, that do not consist solely of redundant internal circuitry, specially designed for aircraft controlled in this category; (8) Threat-adaptive autonomous flight control systems, where a ‘‘threatadaptive autonomous flight control system’’ is a flight control system that, without input from the operator or pilot, adjusts the aircraft control or flight path to minimize risk caused by hostile threats; (9) Non-surface-based flight control systems and effectors (e.g., thrust vectoring from gas ports other than main engine thrust vector); (10) Radar altimeters with output power management LPI (low probability of intercept) or signal modulation (i.e., frequency hopping, chirping, direct sequence-spectrum spreading) LPI capabilities (MT if for an aircraft, excluding manned aircraft, or missile that has a ‘‘range’’ equal to or greater than 300 km); (11) Air-to-air refueling systems and hover-in-flight refueling (HIFR) systems, and specially designed parts and components therefor; (12) Unmanned aerial vehicle (UAV) flight control systems and vehicle management systems with swarming capability (i.e., UAVs interact with each other to avoid collisions and stay together, or, if weaponized, coordinate targeting) (MT if for an aircraft, excluding manned aircraft, or missile that has a ‘‘range’’ equal to or greater than 300 km); (13) [Reserved] (14) Lift fans, clutches, and roll posts for short take-off, vertical landing (STOVL) aircraft and specially designed parts and components for such lift fans and roll posts; (15) Integrated helmets incorporating optical sights or slewing devices, which include the ability to aim, launch, track, or manage munitions (e.g., Helmet Mounted Cueing Systems, Joint Helmet Mounted Cueing Systems (JHMCS), Helmet Mounted Displays, Display and Sight Helmets (DASH)), and specially designed parts, components, accessories, and attachments therefor; (16) Fire control computers, stores management systems, armaments control processors, and aircraft-weapon interface units and computers (e.g., AGM–88 HARM Aircraft Launcher Interface Computer (ALIC)); (17) Mission computers, vehicle management computers, and integrated core processers specially designed for aircraft controlled in this category; E:\FR\FM\21NOR1.SGM 21NOR1 83134 Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations (18) Drive systems, flight control systems, and parts and components therefor, specially designed to function after impact of a 7.62mm or larger projectile; (19) Thrust reversers specially designed to be deployed in flight for aircraft controlled in this category; * (20) Any part, component, accessory, attachment, equipment, or system that: (i) Is classified; (ii) Contains classified software directly related to defense articles in this subchapter or 600 series items subject to the EAR; or (iii) Is being developed using classified information. asabaliauskas on DSK3SPTVN1PROD with RULES Note to paragraph (h)(20): 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 or international organization; (21)–(26) [Reserved] (27) Variable speed gearboxes, where a ‘‘variable speed gearbox’’ has the ability to vary the gearbox output speed by mechanical means within the gearbox while the gearbox input speed from the engine or other source is constant, and is capable of varying output speed by 20% or greater and providing power to rotors, proprotors, propellers, propfans, or liftfans; and specially designed parts and components therefor; (28) Electrical power or thermal management systems specially designed for an engine controlled in Category XIX and having any of the following: (i) Electrical power generators that provide greater than 300kW of electrical power (per generator) with gravimetric power densities exceeding 2kW/pound (excluding the mass of the controller for the purpose of calculating the gravimetric power density); (ii) Heat exchangers that exchange 60 kW/K-m3 or 1 kW/K of heat or greater into the gas turbine engine flow path; or (iii) Direct-cooling thermal electronic package heat exchangers that transfer 20kW of heat or greater at 100W/cm2 or greater. (29) Any of the following equipment if specially designed for a defense article described in paragraph (h)(1): (i) Scale test models; (ii) Full scale iron bird ground rigs used to test major aircraft systems; or (iii) Jigs, locating fixtures, templates, gauges, molds, dies, or caul plates. (i) Technical data (see § 120.10 of this subchapter) and defense services (see § 120.9 of this subchapter) directly related to the defense articles described in paragraphs (a) through (h) of this VerDate Sep<11>2014 17:02 Nov 18, 2016 Jkt 241001 category and classified technical data directly related to items controlled in ECCNs 9A610, 9B610, 9C610, and 9D610 and defense services using classified technical data. (See § 125.4 of this subchapter for exemptions.) (MT for technical data and defense services related to articles designated as such.) (j)–(w) [Reserved] (x) Commodities, software, and technology subject to the EAR (see § 120.42 of this subchapter) used in or with defense articles controlled in this category. * (c) Gas turbine engines (including technology demonstrators, developmental engines, and variable cycle engines) specially designed for unmanned aerial vehicle systems controlled in this subchapter, cruise missiles, or target drones (MT if for an engine used in an aircraft, excluding manned aircraft, or missile that has a ‘‘range’’ equal to or greater than 300 km). * (d) GE38, AGT1500, CTS800, MT7, T55, HPW3000, GE3000, T408, and T700 engines. 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 § 123.1(b) of this subchapter). Note: Parts, components, accessories, and attachments in paragraphs (h)(3)–(5), (7), (14), (17), or (19) are licensed by the Department of Commerce when incorporated in an aircraft subject to the EAR and classified under ECCN 9A610. Replacement systems, parts, components, accessories and attachments are subject to the controls of the ITAR. Note to paragraph (d): Engines subject to the control of this paragraph are licensed by the Department of Commerce when incorporated in an aircraft subject to the EAR and controlled under ECCN 9A610. Such engines are subject to the controls of the ITAR in all other circumstances. * * * * * Category XIX—Gas Turbine Engines and Associated Equipment * (a) Turbofan and Turbojet engines (including those that are technology demonstrators, developmental engines, or variable cycle engines) capable of 15,000 lbf (66.7 kN) of thrust or greater that have any of the following: (1) With or specially designed for thrust augmentation (afterburner); (2) Thrust or exhaust nozzle vectoring; (3) Parts or components controlled in paragraph (f)(6) of this category; (4) Specially designed for sustained 30 second inverted flight or negative g maneuver; or (5) Specially designed for high power extraction (greater than 50 percent of engine thrust at altitude) at altitudes greater than 50,000 feet. * (b) Turboshaft and Turboprop engines (including those that are technology demonstrators or developmental engines) that have any of the following: (1) Capable of 2000 mechanical shp (1491 kW) or greater and specially designed with oil sump sealing when the engine is in the vertical position; or (2) Capable of a specific power of 225 shp/(lbm/sec) or greater and specially designed for armament gas ingestion and non-civil transient maneuvers, where specific power is defined as maximum takeoff shaft horsepower (shp) divided by compressor inlet flow (lbm/sec). PO 00000 Frm 00028 Fmt 4700 Sfmt 4700 * (e) Digital engine control systems (e.g., Full Authority Digital Engine Controls (FADEC) and Digital Electronic Engine Controls (DEEC)) specially designed for gas turbine engines controlled in this category (MT if the digital engine control system is for an aircraft, excluding manned aircraft, or missile that has a range equal to or greater than 300 km). Note to paragraph (e): Digital electronic control systems autonomously control the engine throughout its whole operating range from demanded engine start until demanded engine shut-down, in both normal and fault conditions. (f) Parts, components, accessories, attachments, associated equipment, and systems as follows: (1) Parts, components, accessories, and attachments specially designed for the following U.S.-origin engines (and military variants thereof): F101, F107, F112, F118, F119, F120, F135, F136, F414, F415, and J402; Note to paragraph (f)(1): This paragraph does not control parts, components, accessories, and attachments that are common to engines enumerated in paragraph (a) through (d) of this category but not identified in paragraph (f)(1), and those identified in paragraph (f)(1). For example, a part common to only the F110 and F136 is not specially designed for purposes of this paragraph. A part common to only the F119 and F135—two engine models identified in paragraph (f)(1)—is specially designed for purposes of this paragraph, unless one of the other paragraphs is applicable under § 120.41(b). * (2) Hot section components (i.e., combustion chambers and liners; high pressure turbine blades, vanes, disks and related cooled structure; cooled intermediate pressure turbine blades, vanes, disks and related cooled structures; cooled low pressure turbine blades, vanes, disks and related cooled E:\FR\FM\21NOR1.SGM 21NOR1 Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Rules and Regulations than one, occurring across any section of the bypass duct, and specially designed parts, components, accessories, and attachments therefor; or (12) Any of the following equipment if specially designed for a defense article described in paragraph (f)(1): Jigs, locating fixtures, templates, gauges, molds, dies, caul plates, or bellmouths. (g) Technical data (see § 120.10 of this subchapter) and defense services (see § 120.9 of this subchapter) directly related to the defense articles described in paragraphs (a) through (f) of this category and classified technical data directly related to items controlled in ECCNs 9A619, 9B619, 9C619, and 9D619 and defense services using the classified technical data. (See § 125.4 of this subchapter for exemptions.) (MT for technical data and defense services related to articles designated as such.) (h)–(w) [Reserved] (x) Commodities, software, and technology subject to the EAR (see § 120.42 of this subchapter) used in or with defense articles controlled in this category. Note to paragraph (f)(6): ‘‘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 or international organization; asabaliauskas on DSK3SPTVN1PROD with RULES structures; cooled shaft-driving power turbine blades, vanes, disks and related cooled structures; cooled augmenters; and cooled nozzles) specially designed for gas turbine engines controlled in this category; (3) Uncooled turbine blades, vanes, disks, and tip shrouds specially designed for gas turbine engines controlled in this category; (4) Combustor cowls, diffusers, domes, and shells specially designed for gas turbine engines controlled in this category; (5) Engine monitoring systems (i.e., prognostics, diagnostics, and health) specially designed for gas turbine engines and components controlled in this category; * (6) Any part, component, accessory, attachment, equipment, or system that: (i) Is classified; (ii) Contains classified software directly related to defense articles in this subchapter or 600 series items subject to the EAR; or (iii) Is being developed using classified information. 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 § 123.1(b) of this subchapter). (7) Investment casting cores, core dies, or wax pattern dies for parts or components enumerated in paragraphs (f)(1), (f)(2), or (f)(3) of this category; (8) Pressure gain combustors specially designed for engines controlled in this category, and specially designed parts and components therefor; (9) Three-stream fan systems, specially designed for gas turbine engines controlled in this Category, that allow the movement of airflow between the streams to control fan pressure ratio or bypass ratio (by means other than use of fan corrected speed or the primary nozzle area to change the fan pressure ratio or bypass ratio), and specially designed parts, components, accessories, and attachments therefor; (10) High pressure compressors, specially designed for gas turbine engines controlled in this Category, with core-driven bypass streams that have a pressure ratio greater than one, occurring across any section of the bypass duct, and specially designed parts, components, accessories, and attachments therefor; (11) Intermediate compressors of a three-spool compression system, specially designed for gas turbine engines controlled in this Category, with an intermediate spool-driven bypass stream that has a pressure ratio greater VerDate Sep<11>2014 17:02 Nov 18, 2016 Jkt 241001 Dated: November 14, 2016. Thomas M. Countryman, Acting Under Secretary, Arms Control and International Security, Department of State. [FR Doc. 2016–27775 Filed 11–18–16; 8:45 am] BILLING CODE 4710–25–P NATIONAL LABOR RELATIONS BOARD 29 CFR Part 102 Rule Exempting an Amended System of Records From Certain Provisions of the Privacy Act AGENCY: National Labor Relations Board. ACTION: Direct final rule. The National Labor Relations Board (NLRB) exempts an amended system of records, NLRB–17, Personnel Security Records, from certain provisions of the Privacy Act of 1974, 5 U.S.C. 552a, pursuant to sections (k)(1), (2), (3), (5), (6), and (7) of that Act. DATES: This rule is effective January 20, 2017 without further action, unless adverse comment is received by December 21, 2016. If adverse comment is received, the NLRB will publish a timely withdrawal of the rule in the Federal Register. SUMMARY: PO 00000 Frm 00029 Fmt 4700 Sfmt 4700 83135 All persons who desire to submit written comments for consideration by the Agency regarding the rule shall mail them to the Agency’s Senior Agency Official for Privacy, National Labor Relations Board, 1015 Half Street SE., Third Floor, Washington, DC 20570–0001, or submit them electronically to pac@nlrb.gov. Comments may also be submitted electronically through http:// www.regulations.gov, which contains a copy of this rule and any submitted comments. FOR FURTHER INFORMATION CONTACT: Prem Aburvasamy, Senior Agency Official for Privacy, National Labor Relations Board, 1015 Half Street SE., Third Floor, Washington, DC 20570– 0001, (855)-209–9394, pac@nlrb.gov. SUPPLEMENTARY INFORMATION: Elsewhere in today’s issue of the Federal Register, the Agency is amending one of its systems of records, NLRB–17, Personnel Security Records, pursuant to the Privacy Act of 1974. Pursuant to subsections (k)(1), (2), (3), (5), (6), and (7) of the Privacy Act, and for the reasons set forth below, the Board includes within Section 102.119, additional paragraphs (o) and (p), exempting portions of the amended system of records (NLRB–17) from subsections (c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) of the Privacy Act. Subsection (k)(1) of the Privacy Act authorizes the head of an agency to exempt a system of records from subsections (c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) of the Privacy Act (5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), (f)) (hereinafter, ‘‘the applicable subsections’’) if records are properly classified pursuant to an Executive Order, within the meaning of section 552(b)(1). Subsection (k)(3) of the Privacy Act authorizes the head of an agency to exempt a system of records from the applicable subsections where the information is maintained in connection with providing protective services to the President of the United States or other individuals pursuant to section 3056 of title 18 of the U.S. Code. Subsections (k)(2), (5), and (7) of the Privacy Act, in combination, authorize the head of an agency to exempt a system of records from the applicable subsections if records are created or maintained for the purpose of determining suitability, eligibility, qualifications, or potential for promotion for Federal civilian employment, military service, Federal contracts, or access to classified ADDRESSES: E:\FR\FM\21NOR1.SGM 21NOR1

Agencies

[Federal Register Volume 81, Number 224 (Monday, November 21, 2016)]
[Rules and Regulations]
[Pages 83126-83135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27775]


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DEPARTMENT OF STATE

22 CFR Part 121

RIN 1400-AD89
[Public Notice: 9604]


Amendment to the International Traffic in Arms Regulations: 
Revision of U.S. Munitions List Categories VIII and XIX

AGENCY: Department of State.

ACTION: Final rule.

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

SUMMARY: As part of the President's Export Control Reform (ECR) 
initiative, the Department of State amends the International Traffic in 
Arms Regulations (ITAR) to revise Categories

[[Page 83127]]

VIII (aircraft and related articles) and XIX (gas turbine engines and 
associated equipment) of the U.S. Munitions List (USML) to describe 
more precisely the articles warranting control on the USML. The 
revisions contained in this rule are part of the Department of State's 
retrospective plan under E.O. 13563.

DATES: This final 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: ITAR 
Amendment--USML Categories VIII and XIX.

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.
    All references to the USML in this rule are to the list of defense 
articles 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 section 38(a)(1) of the 
Arms Export Control Act (AECA), all defense articles controlled for 
export or import are part of the USML under the AECA. The list of 
defense articles controlled by ATF for the purpose of permanent import 
is the U.S. Munitions Import List (USMIL). The transfer of defense 
articles from the ITAR's USML to the EAR's CCL does not affect the list 
of defense articles controlled on the USMIL.

Revision of Category VIII

    This final rule revises USML Category VIII, covering aircraft and 
related articles. The revisions are undertaken in order to ensure that 
the category, which was last revised in 2013, is clear, does not 
inadvertently control items in normal commercial use, accounts for 
technological developments, and properly implements the national 
security and foreign policy objectives of the ECR initiative. The 
Department published a proposed rule for these revisions, as well as 
the revisions to Category XIX described below, on February 9, 2016 (81 
FR 6797).
    Paragraph (a) is revised to clarify that the controls for all 
paragraphs are applicable ``whether manned, unmanned, remotely piloted, 
or optionally piloted,'' by modifying paragraph (a)(5) to clarify the 
design feature meriting USML control, and by deleting paragraph (a)(6) 
and placing it into reserve, because the relevant control is subsumed 
by revised paragraph (a)(5). Paragraphs (a)(7), (a)(8), and (a)(9) are 
modified to clarify the respective design features meriting USML 
control. The text of paragraphs (a)(11) and (a)(13) is deleted and the 
paragraphs are placed into reserve. Paragraph (a)(14) is modified to 
exclude L-100 and LM-100J aircraft from the scope of control. Note 2 to 
paragraph (a) is revised to clarify the definition of the described 
term.
    Paragraph (d) is modified to delete the ``ship-based'' control 
parameter and to clarify the intent and scope of the control.
    Paragraph (e) reflects having been placed into reserve in the final 
rule published by the Department on October 12, 2016 (81 FR 70340).
    Notes 1 and 3 to paragraph (f) are modified to incorporate 
clarifying language.
    Several changes are made to paragraph (h). Paragraph (h)(1) is 
revised to update the list of subject platforms, and to delete the 
reference to ``equipment'' because the specific types of equipment that 
warrant ITAR control are now enumerated separately in paragraph 
(h)(29). The Note to paragraph (h)(1) is modified to incorporate 
technical corrections and to enhance the clarity of the note. Paragraph 
(h)(2) is revised to focus the scope of control on certain rotorcraft 
gearboxes meeting specific technical parameters, and a note to 
paragraph (h)(2) is added to clarify certain terminology used therein. 
Paragraph (h)(4)(ii) is modified to clarify the scope of control. 
Paragraph (h)(5) is updated to add the words ``On-aircraft'' in order 
to clarify the scope of control, while paragraph (h)(6) is updated to 
add the words ``or rocket'' after ``missile.'' Paragraph (h)(7) is 
modified to clarify the scope of control. Paragraph (h)(8) is modified 
to clarify the meaning of ``threat-adaptive autonomous flight control 
systems.'' Paragraph (h)(10) is modified to enhance the clarity of the 
control text. Paragraph (h)(13) is deleted and placed into reserve. 
Paragraph (h)(16) is modified to incorporate a technical correction. 
Paragraph (h)(18) is modified to control parts and components that are 
specially designed to meet the same performance criteria as the systems 
identified in the paragraph. Paragraph (h)(19) is modified to remove 
reference to ECCN 9A610.
    Current paragraphs (h)(23) through (h)(26) are placed into reserve, 
with new controls added as paragraphs (h)(27) through (h)(29). Finally, 
the note to Category VIII is modified to update the paragraphs of 
paragraph (h) that are affected, as well as to reflect paragraph (e) 
having been placed into reserve.
    A commenting party expressed concern that the objective of the USML 
review process, first announced in a Notice of Inquiry on March 2, 2015 
(80 FR 11314), is to reconsider or reverse the effect of the ECR 
initiative. The Department clarifies that the purpose of the USML 
review process is to review and update the subject USML categories, as 
needed, to account for technological developments, practical 
application issues identified by exporters and reexporters, and changes 
in the military and commercial applications of items affected by the 
list. The ``positive list'' structure adopted in each of the revised 
USML categories requires an ongoing process of review in order to 
ensure that the list is current and reflective of the modern state of 
the subject technology. This ongoing effort has been anticipated since 
the start of the ECR initiative and is not intended to reconsider or 
reverse the effort.
    A commenter requested clarification as to why paragraph (h)(2) had 
been removed from the Note to Category VIII. Paragraph (h)(2) has been 
revised significantly to control only a class of rotorcraft gearboxes 
for which there is no current civil application. Given the reduced 
scope of control in the revised paragraph (h)(2), inclusion in the Note 
to Category VIII is no longer appropriate.
    Three commenting parties recommended that paragraph (a)(5) be 
deleted, given the proposed reference to ``unmanned'' aircraft in 
paragraph (a), while an additional commenter suggested that the 
proposed paragraph (a)(5) was less clear than the existing version of 
the same paragraph. In light of these comments, the Department modified 
the paragraph to control only those unmanned aerial vehicles that are

[[Page 83128]]

specially designed to incorporate a defense article, in order to focus 
the paragraph on the intended scope of control. The Department 
disagrees with the commenters recommending deletion of the paragraph, 
as there is continuing oversight utility in maintaining a clear, 
enumerated control for unmanned aerial vehicles that are specially 
designed to incorporate a defense article, particularly in light of the 
unique considerations for these aircraft as set forth in the 
Department's policy on unmanned aerial systems.
    Two commenters suggested that the proposed revisions to paragraph 
(a)(7) were less clear than the existing version of the same paragraph, 
and could potentially capture an overly broad scope of aircraft with 
intelligence, surveillance, and reconnaissance (ISR) capabilities where 
such aircraft incorporate a defense article. The Department agreed with 
these commenters and revised the paragraph to control only those 
aircraft that are specially designed to incorporate a defense article 
for the purpose of performing an intelligence, surveillance, and 
reconnaissance function, in order to better focus the scope of control 
and exclude certain aircraft that merely incorporate a defense article.
    One commenter expressed concern that proposed paragraph (a)(8) 
would control technical data for electronic warfare or command, 
control, and communication aircraft that simply incorporated a defense 
article, while another party requested clarification of these terms as 
well as the significant military equipment (SME) designation for this 
paragraph. The Department notes that command, control, and 
communication systems are currently designated as SME in USML Category 
XI, so analogous treatment is appropriate in this paragraph. While the 
Department has not defined the referenced terms, as there were no 
examples provided of demonstrated uncertainty in the regulated 
community, the scope of the paragraph has been revised to control only 
those referenced aircraft types that are specially designed to 
incorporate a defense article for the purpose of performing a 
referenced function.
    A commenting party recommended the replacement of each instance of 
the words ``capable of'' with ``equipped to'' or ``designed for,'' as 
appropriate in the context of the paragraph at issue. The Department 
reviewed each paragraph in which these words appeared and made the 
appropriate revisions where the paragraph did not otherwise provide 
technical parameters or performance criteria that sufficiently 
constrained and identified the class of articles subject to control.
    Three commenters suggested that paragraph (a)(14) be revised to 
limit the scope of control to aircraft with uniquely military 
capabilities, to the exclusion of aircraft platforms such as the L-100 
and LM-100J. One commenter asserted that the systems and functions that 
make the C-130J a sophisticated military platform are removed on the 
LM-100J, and that militarization of the latter platform would be very 
difficult. In response to these comments, the Department revised 
paragraph (a)(14) to exclude the L-100 and LM-100J aircraft.
    A commenting party requested clarification regarding the 
classification of parts and components that are not enumerated or 
otherwise described on the USML, and are common to the C-130 and the L-
100 aircraft. As with all parts and components classification concerns, 
the commenter is advised to follow the standard order of review 
guidance provided on the DDTC Web site (see http://pmddtc.state.gov/faqs/ecr.html#b). Where an item is described in multiple entries, an 
enumerated entry takes precedence over an entry controlling the item by 
virtue of a specially designed catch-all. The exception to this rule is 
where a SME entry is involved. In all situations, a SME entry will take 
precedence over a non-SME entry. If, through the order of review, one 
determines a particular item is not specifically enumerated in the 
USML, it may still be controlled by virtue of its parts and components, 
which are caught via a catch-all. For example, a part or component of 
an airborne radar system specially designed for the F-35 may not be 
enumerated or captured in USML Category XI but will be controlled under 
the specially designed catch-all of Category VIII(h)(1). If the article 
does not appear to fall under any USML paragraph or paragraph, consult 
the EAR to complete the classification inquiry.
    A commenter recommended the deletion of paragraph (a)(15)(ii), 
based on the observation that paragraphs (a)(1) through (a)(14) do not 
specify whether the subject aircraft is of U.S. or foreign origin. The 
Department notes that paragraph (a)(15)(ii) follows paragraph 
(a)(15)(i), which captures aircraft not otherwise enumerated in 
paragraph (a) but bearing any enumerated military designation. Since 
foreign-origin aircraft would not bear a U.S. military designation, 
paragraph (a)(15)(ii) exists to capture the foreign equivalents of the 
U.S.-origin aircraft controlled by paragraph (a)(15)(i).
    One commenting party recommended a revision of paragraph (d) to 
limit its scope to launching and recovery equipment for aircraft 
controlled in paragraph (a) that meet a minimum weight threshold, so as 
to exclude small UAVs. The Department disagreed with this 
recommendation, noting that the paragraph controls only launching and 
recovery equipment that is specially designed to allow a subject 
aircraft to land on a vessel described in Category VI(a)-(c). This 
language controls a sufficiently narrow class of aircraft and 
adequately excludes many small UAV platforms.
    A commenter expressed concern regarding the removal of the word 
``equipment'' from paragraph (h)(1), as it potentially confuses the 
jurisdiction of such equipment. To clarify the scope of controlled 
equipment and avoid a perception that equipment designed for aircraft 
enumerated in paragraph (h)(1) is per se controlled in the same 
paragraph, the Department created proposed paragraph (h)(30), which 
appears in this final rule as paragraph (h)(29), to specify the 
specific types of equipment that warrant USML control.
    A commenting party recommended the exclusion from paragraph (h)(1) 
of those parts identified in ECCNs 9A610.y or 9A619.y. The Department 
disagreed with this recommendation. The structure of CCL controls is 
distinguishable from those in the USML, with the CCL utilizing 
``reasons for control'' and country licensing policies that are not 
available under the ITAR or AECA. As such, provisions from the CCL 
cannot easily be adopted for the purposes of the USML. Given the unique 
policy considerations applicable to the enumerated aircraft in 
paragraph (h)(1) and their low observable/counter low observable 
capabilities, the Department declines to exclude classes of parts and 
components for these highly sensitive platforms.
    One commenter recommended that paragraph (h)(2) be revised to 
control only those rotorcraft gearboxes that are qualified to a 
particular military standard. The Department disagreed with this 
comment, because military standards are not developed and published to 
advance export control-related objectives and may be revised frequently 
for reasons unrelated to export controls, which may additionally reduce 
the clarity of the USML through successive iterations of revisions to 
these standards.
    Two commenters asserted that individual performance criteria 
specific in paragraph (h)(2) are not uniquely military in nature. The 
Department notes that both criteria are required for

[[Page 83129]]

control, and it is the combination of the two specified criteria that 
makes the controlled article militarily significant. No examples were 
provided of commercial items capable of meeting both performance 
criteria.
    A commenter suggested that tail boom folding systems controlled 
under paragraph (h)(3) could be useful in civil applications to 
optimize the use of space. The Department did not revise the control 
because the commenter did not provide an example of a current civil 
application for the articles controlled in this paragraph.
    A commenter recommended that paragraph (h)(5) be reviewed in 
concert with ECCN 9A610.e to ensure that the two entries did not 
overlap. The Department reviewed the entries and made no change to the 
paragraph, as it is sufficiently limited in scope to on-aircraft 
arresting gear and excludes arresting gear used on the ground.
    One commenting party recommended that paragraph (h)(6) be revised 
to control ``rocket launchers'' in addition to ``missile launchers,'' 
and further recommended criteria to exclude from control certain 
airborne UAV launching capabilities. The Department agreed with the 
addition of ``rocket launchers'' and revised the paragraph accordingly. 
However, the Department disagreed with the recommended airborne 
launching criteria, as the ability to deploy a UAV from an aircraft in 
flight is a current military capability.
    A commenting party suggested that the Department had not offered a 
sufficient rationale to move to the USML specially designed parts and 
components for the systems controlled in paragraph (h)(7). The 
Department agreed with this comment and deleted the proposed addition. 
The disposition of the relevant parts and components will be addressed 
in the Department of Commerce's companion rule.
    A commenting party recommended that paragraph (h)(8) be merged with 
paragraph (h)(12), in order to create a single paragraph for flight 
control systems that excludes commercial UAV ``sense-and-avoid'' 
capabilities. The Department observes that the ability of the subject 
UAVs to ``avoid collisions'' is only one aspect of the control 
parameter, which also requires the capability to ``stay together'' by 
virtue of the subject flight control system. No example has been 
presented of a commercial UAV flight control system that provides the 
capability for multiple UAVs to both ``avoid collisions'' and ``stay 
together.'' Accordingly, the Department did not revise the paragraph.
    One commenter suggested that paragraph (h)(10) include a note, 
similar to the Note to Category XI(a)(3), indicating that the paragraph 
does not control radio altimeter equipment conforming to Federal 
Aviation Administration TSO-C87. The Department did not add this note 
to paragraph (h)(10), because commercial altimeters conforming to this 
standard would not possess either of the low probability of intercept 
capabilities described in the paragraph. Since current commercial 
altimeters cannot meet the criteria of paragraph (h)(10), it is not 
necessary to include a note that would impact only these commercial 
items.
    Three commenting parties suggested that the Department had not 
offered a sufficient rationale to move to the USML specially designed 
parts and components for the systems controlled in paragraph (h)(18). 
The Department partially agreed with this comment and revised the 
proposed addition. The only parts and components added to paragraph 
(h)(18) are those that are specially designed to function after impact 
of a 7.62 mm or larger projectile. This is the same criterion that 
applies to the drive systems and flight control systems subject to 
control under this paragraph; thus, this paragraph unifies the articles 
subject to control under a common parameter of military criticality.
    Two commenters recommended revisions to enhance the clarity of 
paragraph (h)(20). This paragraph pertains to classified defense 
articles and classified information, and replicates the structure of 
similar entries in other revised USML categories that are outside of 
the scope of this rule. To maintain conformity with those entries, the 
Department has noted these commenters' recommendations and will 
reconsider them in the context of a later review of all USML entries 
relating to classified defense articles and classified information.
    Four commenting parties asserted that the proposed paragraph 
(h)(27) did not control articles providing a critical military 
advantage, would control variable speed gearboxes in commercial use, or 
would otherwise limit commercial development utilizing such technology. 
The Department notes that former paragraph (h)(2), prior to the 
revisions set forth in this rule, controlled ``variable speed 
gearboxes'' generally. Accordingly, the proposed paragraph (h)(27) 
constituted a reduction in the range of variable speed gearboxes 
subject to the ITAR to those employed in next-generation military 
technology. In light of the comments received, the Department has 
further refined paragraph (h)(27) to clarify the meaning of ``variable 
speed gearbox,'' as well as to articulate the varying output speed 
currently in use in military applications.
    A commenting party observed that the proposed paragraph (h)(28) 
would capture dual-use electrical power or thermal management systems 
used with Category XIX engines. The Department agreed with this comment 
and revised the paragraph to control electrical power or thermal 
management systems specially designed for an engine controlled in 
Category XIX.
    A commenter requested clarification that the use of the term 
``pound'' in paragraph (h)(28)(i) refers only to the generator and not 
the controller. The Department updated the paragraph to clarify that 
the referenced threshold excludes the mass of the controller for the 
purpose of calculating the gravimetric power density. The commenter 
additionally requested clarification as to whether the threshold 
reflects the total heat exchanger capacity or a single heat exchanger. 
The Department updated the paragraph to address the concerns expressed 
in the comment.
    The same commenter asserted that paragraph (h)(28)(iii) lacked 
clarity and should be deleted. The Department agreed with this comment 
and deleted the paragraph. Consequentially, proposed paragraph 
(h)(28)(iv) now appears in this final rule as paragraph (h)(28)(iii). 
Additionally, the commenter requested clarification regarding the 
conditions for measuring the threshold in proposed paragraph 
(h)(28)(iv). The Department did not insert additional criteria 
regarding measurement conditions because the paragraph as drafted 
describes the threshold for ITAR control at a sufficient level of 
granularity.
    A commenter proposed revisions to proposed paragraph (h)(29) to 
better articulate the scope of software to be controlled. A second 
commenter recommended deletion of the paragraph, since algorithms and 
software are already controlled as technical data. The Department 
agreed with the second commenter and deleted the proposed paragraph, 
having determined that the subject software is already controlled under 
paragraph (i).
    Three commenters suggested that proposed paragraph (h)(30) would 
result in expense to industry with questionable regulatory benefit, and 
would require the re-review of certain parts and components to 
determine whether classification under the new paragraph is 
appropriate.

[[Page 83130]]

    The Department notes that Category VIII was among the first two 
categories to undergo revision pursuant to the ECR initiative, a 
primary goal of which was to create a ``positive list'' that would 
inevitably require periodic revisions to keep reflective of the current 
state of technology. The experience of industry with the earliest 
revised categories, as well as the U.S. government in enforcing the 
regulations, has identified areas in which adjustments to Categories 
VIII and XIX were necessary to best articulate the articles subject to 
control.
    The former treatment of equipment in paragraph (h)(1) potentially 
created the impression that equipment for enumerated aircraft was 
broadly controlled under that paragraph. For additional clarity, a 
newly-created paragraph, now found at (h)(29), enumerates certain types 
of equipment that merit ITAR control. While the Department's review 
considered in all cases the potential impact to industry in revising 
aspects of these categories, the primary standard of review was the 
``critical military or intelligence advantage'' standard set forth in 
ITAR Sec.  120.3(b). As a general principle, where migration of items 
from the CCL to the USML was considered, the Department sought first to 
accommodate the item in a revised ECCN. The articles that newly appear 
on or have returned to the USML in this rule are those that constitute 
or are specially designed for next-generation technology and thus 
satisfy ITAR Sec.  120.3. In response to comments received, the 
Department revised the paragraph to better articulate the specific 
types of equipment that meet this standard.
    Finally, a commenter recommended replacing the words ``technical 
data'' in paragraph (x) with ``technology,'' to align the text with 
other revised categories and utilize the appropriate EAR terminology. 
The Department agreed and made the recommended change.

Revision of Category XIX

    This final rule revises USML Category XIX, covering gas turbine 
engines. As with USML Category VIII, the revisions are undertaken in 
order to ensure that the category is clear, does not inadvertently 
control items in normal commercial use, accounts for technological 
developments, and properly implements the national security and foreign 
policy objectives of the ECR initiative.
    Paragraph (a) is modified to clarify the scope of controlled 
engines and to incorporate technical corrections. Paragraph (b)(1) is 
revised to update the performance criteria meriting control, while 
paragraph (b)(2) is revised to clarify the specific power threshold 
specified therein.
    Paragraph (c) is modified to incorporate conforming and technical 
changes and to make clear that the paragraph applies only to gas 
turbine engines, while paragraph (d) is modified to update the list of 
subject engines. The Note to paragraph (e) is modified to incorporate a 
conforming change.
    Several changes are included within paragraph (f). Paragraph (f)(1) 
is modified to incorporate technical corrections and to update the list 
of subject engines. Paragraph (f)(2) introduces additional text to 
clarify the scope of controlled hot section components, and to 
reorganize the text according to the nature of the articles. New 
controls are included in paragraphs (f)(7) through (f)(12).
    A commenter asserted that the PT6C-67A, a commercial model, would 
exceed the threshold proposed in paragraph (b)(1). In response to this 
comment, the Department increased the relevant threshold to 2000 
mechanical shp (1491 kW).
    Three commenting parties recommended clarification regarding the 
specific power threshold set forth in paragraph (b)(2). The Department 
agreed with these commenters and revised the relevant language to 
include a unit of measurement for the specific power threshold and 
maximum takeoff shaft horsepower. The Department further notes that 
given the additional modifications to paragraph (b)(2) described below, 
and the requirement that an engine must meet all of the criteria of 
paragraph (b)(2) to be subject to ITAR control, the revised paragraph 
should not pose a risk of capturing next-generation commercial engine 
models.
    Two commenters asserted that the term ``armament gas'' in paragraph 
(b)(2) is unclear and requested a definition. The Department disagreed 
with the commenters because the term can be interpreted based on the 
plain meaning of the words ``armament gas ingestion''--that is, the 
term describes an engine that is specially designed to ingest gas 
released from armaments.
    Three commenting parties requested clarification regarding the term 
``transient maneuvers'' in paragraph (b)(2), and requested revision to 
capture only maneuvers that are unique to military scenarios. The 
Department agreed with these comments and revised the parameter to 
capture non-civil transient maneuvers.
    Three commenting parties suggested that the phrase ``controlled in 
this category'' in paragraph (c) be revised to read ``controlled in 
Category VIII.'' The Department partially agreed and revised the phrase 
to read ``controlled in this subchapter.''
    A commenter recommended the removal of the GE38 engine from 
paragraph (d), indicating that it is a marketing name that was used 
during the development of the T408 and will not be used in production. 
The Department agrees with this observation but also notes that GE38 
models remain in use in test aircraft. Accordingly, the GE38 reference 
will remain in paragraph (d) while such engines are still in use.
    One commenter recommended the removal of the MT7 engine from 
paragraph (d), arguing that it is a derivative of the AE1107C and that 
oil sump sealing is being designed out of the model. While the comment 
appears to describe a design modification that has not yet occurred, 
the Department further notes that the subject engine is unique to a 
destroyer platform. For these reasons, the MT7 was retained in 
paragraph (d).
    The Department has removed the TF60 engine from paragraph (d) in 
response to a public comment that recommended its removal.
    A commenter questioned whether the word ``systems'' in paragraph 
(e) should be interpreted to also indicate controls of parts and 
components thereof. The Department confirms that paragraph (e) is 
limited to specified systems and includes no reference to ``parts and 
components thereof''; accordingly, parts and components thereof are not 
controlled under paragraph (e).
    Two comments asserted, with respect to paragraph (f) as well as 
several paragraphs thereof, that materials should not be controlled in 
this category because Category XIII is intended to contain all 
materials entries. The Department disagreed in part with these 
comments. Where the materials at issue pertain only to a particular 
class of defense articles that are controlled in a single subcategory--
as with these materials relevant only to gas turbine engines controlled 
in Category XIX--there is little utility in requiring the reader to 
review multiple USML categories for articles of potential relevance. 
Were these materials of broad applicability for a variety of defense 
articles controlled under more than one USML category, the Department 
would locate the relevant USML entries in Category XIII. However, in 
this case, ECCN 9C619 remains the appropriate category for the 
materials described in the proposed rule. The companion rule the 
Commerce Department has published explains the new licensing policies 
pertaining to such materials. No

[[Page 83131]]

new materials controls are added to Category XIX.
    Two commenting parties recommended the exclusion from paragraph 
(f)(1) of those parts identified in ECCNs 9A610.y or 9A619.y. The 
Department disagreed with this comment for reasons similar to those 
explained above in the context of a similar comment on Category 
VIII(h)(1), regarding the different structures and objectives of CCL 
ECCNs as well as the national security interest in retaining control 
over the parts and components of engines with evolving or next-
generation applications.
    One commenter expressed concern regarding the removal of the word 
``equipment'' from paragraph (f)(1). As with Category VIII(h)(1), the 
word was removed to avoid the impression that all equipment, including 
production equipment, relevant to the enumerated aircraft was subject 
to control under this paragraph. The Department has created a new 
paragraph (f)(12), which appeared in the proposed rule as proposed 
paragraph (f)(16), to enumerate certain types of equipment that merit 
control.
    Three commenters requested clarification of the word ``actively'' 
in paragraph (f)(2), and requested the addition of a definition. The 
Department agreed that the term, which first appeared in the proposed 
rule, did not improve the clarity of the paragraph and deleted each 
instance of the term.
    A commenting party recommended the reorganization of paragraph 
(f)(2) to refer to ``intermediate pressure turbine blades'' after 
``high pressure turbine blades'' and before ``low pressure turbine 
blades.'' The Department agreed and revised the paragraph accordingly.
    A commenting party expressed difficulty interpreting the meaning of 
``engine monitoring systems'' in paragraph (f)(5) and suggested that a 
definition of the term might be beneficial. The Department disagreed 
with the comment because the term can be sufficiently understood 
without a new definition, given the existing definition of ``system'' 
set forth in ITAR Sec.  120.45(g).
    Four parties commented generally on the new paragraphs that 
appeared in the proposed rule as (f)(7) through (f)(16), arguing that 
USML control of the subject articles will result in expense to industry 
by requiring reclassification of articles previously subject to the 
EAR. As with Category VIII, described above, Category XIX was among the 
first two categories to undergo revision pursuant to the ECR 
initiative, a primary goal of which was to create a ``positive list'' 
that would inevitably require periodic revisions to keep reflective of 
the current state of technology. The experience of industry with the 
earliest revised categories, as well as the U.S. government in 
enforcing the regulations, has identified areas in which adjustments to 
Categories VIII and XIX were necessary to best articulate the articles 
subject to control.
    While the Department's review considered in all cases the potential 
impact to industry in revising aspects of these categories, the primary 
standard of review was the ``critical military or intelligence 
advantage'' standard set forth in ITAR Sec.  120.3(b). As a general 
principle, where a migration of items from the CCL to the USML was 
considered, the Department sought first to accommodate the item in a 
revised ECCN. The articles that nevertheless appear in new USML entries 
in this rule constitute or are specially designed for next-generation 
technology and thus satisfy ITAR Sec.  120.3.
    The Department disagrees with the commenters' characterization of 
proposed paragraph (f)(16), now appearing as paragraph (f)(12), which 
controls certain enumerated types of equipment. Since ``equipment'' was 
referenced generally in the previous iteration of paragraph (f), the 
objective of this addition is to better clarify the equipment subject 
to ITAR control. With respect to the remaining proposed paragraphs, the 
Department applied this standard and determined that proposed 
paragraphs (f)(7), (f)(13), (f)(14), and (f)(15) were not necessary for 
inclusion in the USML. Accordingly, these proposed paragraphs have been 
deleted. The considerations that prompted the addition of proposed 
paragraph (f)(7) are adequately addressed through paragraph (g), while 
the remaining deleted proposed entries will be addressed by the 
Department of Commerce in ECCN 9C619.
    The Department retained proposed paragraph (f)(8), now appearing in 
the category as paragraph (f)(7), because the referenced equipment 
allows for the production of gas turbine engines and parts and 
components that offer a critical military advantage.
    Among the retained new paragraphs and in response to public 
comments, the Department revised proposed paragraphs (f)(9) through 
(f)(12)--now appearing as paragraphs (f)(8) through (f)(11)--to 
reference only systems specially designed for gas turbine engines 
controlled in Category XIX, in order to avoid a chilling effect on 
potential commercial applications of these technologies.
    The Department revised proposed paragraph (f)(16), now appearing in 
this final rule as paragraph (f)(12), to enumerate certain types of 
equipment that is specially designed for a defense article described in 
paragraph (f)(1).
    Finally, a commenter recommended replacing the words ``technical 
data'' in paragraph (x) with ``technology,'' to align the text with 
other revised categories and utilize the appropriate EAR terminology. 
The Department agreed and made the recommended change.

Regulatory Findings

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 published this rule as 
a proposed rule (81 FR 6797) with a 45-day provision for public comment 
and without prejudice to its determination that controlling the import 
and export of defense services is a foreign affairs function.

Regulatory Flexibility Act

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

Unfunded Mandates Reform Act of 1995

    This 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

[[Page 83132]]

does not have sufficient federalism implications to require 
consultations or warrant the preparation of a federalism summary impact 
statement. The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this amendment.

Executive Order 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
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 
sections 3(a) and 3(b)(2) 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 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 rule continues the implementation of ECR. The list of 
collections 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:

    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 revising U.S. Munitions List Categories 
VIII and XIX to read as follows:


Sec.  121.1   The United States Munitions List.

* * * * *

Category VIII--Aircraft and Related Articles

    (a) Aircraft, whether manned, unmanned, remotely piloted, or 
optionally piloted, as follows (MT if the aircraft, excluding manned 
aircraft, has a range equal to or greater than 300 km):
    * (1) Bombers;
    * (2) Fighters, fighter bombers, and fixed-wing attack aircraft;
    * (3) Turbofan- or turbojet-powered trainers used to train pilots 
for fighter, attack, or bomber aircraft;
    * (4) Attack helicopters;
    * (5) Unmanned aerial vehicles (UAVs) specially designed to 
incorporate a defense article;
    * (6) [Reserved]
    * (7) Aircraft specially designed to incorporate a defense article 
for the purpose of performing an intelligence, surveillance, and 
reconnaissance function;
    * (8) Aircraft specially designed to incorporate a defense article 
for the purpose of performing an electronic warfare function; airborne 
warning and control aircraft; or aircraft specially designed to 
incorporate a defense article for the purpose of performing a command, 
control, and communications function;
    (9) Aircraft specially designed to incorporate a defense article 
for the purpose of performing an air refueling function;
    (10) Target drones;
    (11) [Reserved]
    (12) Aircraft capable of being refueled in-flight including hover-
in-flight refueling (HIFR);
    (13) [Reserved]
    (14) Aircraft with a roll-on/roll-off ramp, capable of airlifting 
payloads over 35,000 lbs. to ranges over 2,000 nm without being 
refueled in-flight, and landing onto short or unimproved airfields, 
other than L-100 and LM-100J aircraft;
    * (15) Aircraft not enumerated in paragraphs (a)(1) through (a)(14) 
as follows:
    (i) U.S.-origin aircraft that bear an original military designation 
of A, B, E, F, K, M, P, R, or S; or
    (ii) Foreign-origin aircraft specially designed to provide 
functions equivalent to those of the aircraft listed in paragraph 
(a)(15)(i) of this category; or
    (16) Aircraft that are armed or are specially designed to be used 
as a platform to deliver munitions or otherwise destroy targets (e.g., 
firing lasers, launching rockets, firing missiles, dropping bombs, or 
strafing);

    Note 1 to paragraph (a): Aircraft specially designed for 
military applications that are not identified in paragraph (a) of 
this section are subject to the EAR and classified as ECCN 9A610, 
including any model of unarmed military aircraft manufactured prior 
to 1956, regardless of origin or designation, and unmodified since 
manufacture. Aircraft with modifications made to incorporate safety 
of flight features or other FAA or NTSB modifications such as 
transponders and air data recorders are considered ``unmodified'' 
for the purposes of this paragraph.
    Note 2 to paragraph (a): ``Range'' is the maximum distance that 
the specified aircraft system is capable of traveling in the mode of 
stable flight as measured by the projection of its trajectory over 
the surface of the Earth. The maximum capability based on the design 
characteristics of the system, when fully loaded with fuel or 
propellant, will be taken into consideration in determining range. 
The range for aircraft systems will be determined independently of 
any external factors such as operational restrictions, limitations 
imposed

[[Page 83133]]

by telemetry, data links, or other external constraints. For 
aircraft systems, the range will be determined for a one-way 
distance using the most fuel-efficient flight profile (e.g., cruise 
speed and altitude), assuming International Civil Aviation 
Organization (ICAO) standard atmosphere with zero wind, but with no 
fuel reserve.

    (b)-(c) [Reserved]
    (d) Launching and recovery equipment specially designed to allow an 
aircraft described in paragraph (a) of this category to take off or 
land on a vessel described in Category VI paragraphs (a) through (c) 
(MT if the launching and recovery equipment is for an aircraft, 
excluding manned aircraft, that has a range equal to or greater than 
300 km).

    Note to paragraph (d): For the definition of ``range,'' see note 
to paragraph (a) of this category.

    (e) [Reserved]
    (f) Developmental aircraft funded by the Department of Defense via 
contract or other funding authorization, and specially designed parts, 
components, accessories, and attachments therefor.

    Note 1 to paragraph (f): This paragraph does not control 
aircraft and specially designed parts, components, accessories, and 
attachments therefor (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 (f): Note 1 does not apply to defense 
articles enumerated on the U.S. Munitions List, whether in 
production or development.
    Note 3 to paragraph (f): This paragraph is applicable only to 
those contracts, other funding authorizations, or modifications 
initiating development of a new defense article that are dated April 
16, 2014, or later.

    (g) [Reserved]
    (h) Parts, components, accessories, attachments, associated 
equipment and systems, as follows:
    (1) Parts, components, accessories, and attachments specially 
designed for the following U.S.-origin aircraft: The B-1B, B-2, B-21, 
F-15SE, F/A-18 E/F, EA-18G, F-22, F-35, and future variants thereof; or 
the F-117 or U.S. Government technology demonstrators. Parts, 
components, accessories, and attachments of the F-15SE and F/A-18 E/F 
that are common to earlier models of these aircraft, unless listed in 
paragraph (h) of this category, are subject to the EAR;

    Note to paragraph (h)(1): This paragraph does not control parts, 
components, accessories, and attachments that are common to aircraft 
described in paragraph (a) of this category but not identified in 
paragraph (h)(1), and those identified in paragraph (h)(1). For 
example, when applying Sec.  120.41(b)(3), a part common to only the 
F-16 and F-35 is not specially designed for purposes of this 
paragraph. A part common to only the F-22 and F-35--two aircraft 
models identified in paragraph (h)(1)--is specially designed for 
purposes of this paragraph, unless one of the other paragraphs is 
applicable under Sec.  120.41(b) of this subchapter.

    (2) Rotorcraft gearboxes with internal pitch line velocities 
exceeding 20,000 feet per minute and able to operate 30 minutes with 
loss of lubrication without an emergency or auxiliary lubrication 
system, and specially designed parts and components therefor;

    Note to paragraph (h)(2): Loss of lubrication means a situation 
where oil/lubrication is mostly or completely lost from a 
transmission/gearbox such that only a residual coating remains due 
to the lubrication system failure.

    (3) Tail boom folding systems, stabilator folding systems or 
automatic rotor blade folding systems, and specially designed parts and 
components therefor;
    (4) Wing folding systems, and specially designed parts and 
components therefor, for:
    (i) Aircraft powered by power plants controlled under USML Category 
IV(d); or
    (ii) Aircraft with any of the following characteristics and powered 
by gas turbine engines:
    (A) The portion of the wing outboard of the wing fold is required 
for sustained flight;
    (B) Fuel can be stored outboard of the wing fold;
    (C) Control surfaces are outboard of the wing fold;
    (D) Hard points are outboard of the wing fold;
    (E) Hard points inboard of the wing fold allow for in-flight 
ejection; or
    (F) The aircraft is designed to withstand maximum vertical 
maneuvering accelerations greater than +3.5g/-1.5g.
    (5) On-aircraft arresting gear (e.g., tail hooks and drag chutes) 
and specially designed parts and components therefor;
    (6) Bomb racks, missile or rocket launchers, missile rails, weapon 
pylons, pylon-to-launcher adapters, unmanned aerial vehicle (UAV) 
airborne launching systems, external stores support systems for 
ordnance or weapons, and specially designed parts and components 
therefor (MT if the bomb rack, missile launcher, missile rail, weapon 
pylon, pylon-to-launcher adapter, UAV airborne launching system, or 
external stores support system is for an aircraft, excluding manned 
aircraft, or missile that has a ``range'' equal to or greater than 300 
km);
    (7) Damage or failure-adaptive flight control systems, that do not 
consist solely of redundant internal circuitry, specially designed for 
aircraft controlled in this category;
    (8) Threat-adaptive autonomous flight control systems, where a 
``threat-adaptive autonomous flight control system'' is a flight 
control system that, without input from the operator or pilot, adjusts 
the aircraft control or flight path to minimize risk caused by hostile 
threats;
    (9) Non-surface-based flight control systems and effectors (e.g., 
thrust vectoring from gas ports other than main engine thrust vector);
    (10) Radar altimeters with output power management LPI (low 
probability of intercept) or signal modulation (i.e., frequency 
hopping, chirping, direct sequence-spectrum spreading) LPI capabilities 
(MT if for an aircraft, excluding manned aircraft, or missile that has 
a ``range'' equal to or greater than 300 km);
    (11) Air-to-air refueling systems and hover-in-flight refueling 
(HIFR) systems, and specially designed parts and components therefor;
    (12) Unmanned aerial vehicle (UAV) flight control systems and 
vehicle management systems with swarming capability (i.e., UAVs 
interact with each other to avoid collisions and stay together, or, if 
weaponized, coordinate targeting) (MT if for an aircraft, excluding 
manned aircraft, or missile that has a ``range'' equal to or greater 
than 300 km);
    (13) [Reserved]
    (14) Lift fans, clutches, and roll posts for short take-off, 
vertical landing (STOVL) aircraft and specially designed parts and 
components for such lift fans and roll posts;
    (15) Integrated helmets incorporating optical sights or slewing 
devices, which include the ability to aim, launch, track, or manage 
munitions (e.g., Helmet Mounted Cueing Systems, Joint Helmet Mounted 
Cueing Systems (JHMCS), Helmet Mounted Displays, Display and Sight 
Helmets (DASH)), and specially designed parts, components, accessories, 
and attachments therefor;
    (16) Fire control computers, stores management systems, armaments 
control processors, and aircraft-weapon interface units and computers 
(e.g., AGM-88 HARM Aircraft Launcher Interface Computer (ALIC));
    (17) Mission computers, vehicle management computers, and 
integrated core processers specially designed for aircraft controlled 
in this category;

[[Page 83134]]

    (18) Drive systems, flight control systems, and parts and 
components therefor, specially designed to function after impact of a 
7.62mm or larger projectile;
    (19) Thrust reversers specially designed to be deployed in flight 
for aircraft controlled in this category;
    * (20) Any part, component, accessory, attachment, equipment, or 
system that:
    (i) Is classified;
    (ii) Contains classified software directly related to defense 
articles in this subchapter or 600 series items subject to the EAR; or
    (iii) Is being developed using classified information.

    Note to paragraph (h)(20): 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 or 
international organization;

    (21)-(26) [Reserved]
    (27) Variable speed gearboxes, where a ``variable speed gearbox'' 
has the ability to vary the gearbox output speed by mechanical means 
within the gearbox while the gearbox input speed from the engine or 
other source is constant, and is capable of varying output speed by 20% 
or greater and providing power to rotors, proprotors, propellers, 
propfans, or liftfans; and specially designed parts and components 
therefor;
    (28) Electrical power or thermal management systems specially 
designed for an engine controlled in Category XIX and having any of the 
following:
    (i) Electrical power generators that provide greater than 300kW of 
electrical power (per generator) with gravimetric power densities 
exceeding 2kW/pound (excluding the mass of the controller for the 
purpose of calculating the gravimetric power density);
    (ii) Heat exchangers that exchange 60 kW/K-m\3\ or 1 kW/K of heat 
or greater into the gas turbine engine flow path; or
    (iii) Direct-cooling thermal electronic package heat exchangers 
that transfer 20kW of heat or greater at 100W/cm\2\ or greater.
    (29) Any of the following equipment if specially designed for a 
defense article described in paragraph (h)(1):
    (i) Scale test models;
    (ii) Full scale iron bird ground rigs used to test major aircraft 
systems; or
    (iii) Jigs, locating fixtures, templates, gauges, molds, dies, or 
caul plates.
    (i) Technical data (see Sec.  120.10 of this subchapter) and 
defense services (see Sec.  120.9 of this subchapter) directly related 
to the defense articles described in paragraphs (a) through (h) of this 
category and classified technical data directly related to items 
controlled in ECCNs 9A610, 9B610, 9C610, and 9D610 and defense services 
using classified technical data. (See Sec.  125.4 of this subchapter 
for exemptions.) (MT for technical data and defense services related to 
articles designated as such.)
    (j)-(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: Parts, components, accessories, and attachments in 
paragraphs (h)(3)-(5), (7), (14), (17), or (19) are licensed by the 
Department of Commerce when incorporated in an aircraft subject to 
the EAR and classified under ECCN 9A610. Replacement systems, parts, 
components, accessories and attachments are subject to the controls 
of the ITAR.

* * * * *

Category XIX--Gas Turbine Engines and Associated Equipment

    * (a) Turbofan and Turbojet engines (including those that are 
technology demonstrators, developmental engines, or variable cycle 
engines) capable of 15,000 lbf (66.7 kN) of thrust or greater that have 
any of the following:
    (1) With or specially designed for thrust augmentation 
(afterburner);
    (2) Thrust or exhaust nozzle vectoring;
    (3) Parts or components controlled in paragraph (f)(6) of this 
category;
    (4) Specially designed for sustained 30 second inverted flight or 
negative g maneuver; or
    (5) Specially designed for high power extraction (greater than 50 
percent of engine thrust at altitude) at altitudes greater than 50,000 
feet.
    * (b) Turboshaft and Turboprop engines (including those that are 
technology demonstrators or developmental engines) that have any of the 
following:
    (1) Capable of 2000 mechanical shp (1491 kW) or greater and 
specially designed with oil sump sealing when the engine is in the 
vertical position; or
    (2) Capable of a specific power of 225 shp/(lbm/sec) or greater and 
specially designed for armament gas ingestion and non-civil transient 
maneuvers, where specific power is defined as maximum takeoff shaft 
horsepower (shp) divided by compressor inlet flow (lbm/sec).
    * (c) Gas turbine engines (including technology demonstrators, 
developmental engines, and variable cycle engines) specially designed 
for unmanned aerial vehicle systems controlled in this subchapter, 
cruise missiles, or target drones (MT if for an engine used in an 
aircraft, excluding manned aircraft, or missile that has a ``range'' 
equal to or greater than 300 km).
    * (d) GE38, AGT1500, CTS800, MT7, T55, HPW3000, GE3000, T408, and 
T700 engines.

    Note to paragraph (d):  Engines subject to the control of this 
paragraph are licensed by the Department of Commerce when 
incorporated in an aircraft subject to the EAR and controlled under 
ECCN 9A610. Such engines are subject to the controls of the ITAR in 
all other circumstances.

    * (e) Digital engine control systems (e.g., Full Authority Digital 
Engine Controls (FADEC) and Digital Electronic Engine Controls (DEEC)) 
specially designed for gas turbine engines controlled in this category 
(MT if the digital engine control system is for an aircraft, excluding 
manned aircraft, or missile that has a range equal to or greater than 
300 km).

    Note to paragraph (e): Digital electronic control systems 
autonomously control the engine throughout its whole operating range 
from demanded engine start until demanded engine shut-down, in both 
normal and fault conditions.

    (f) Parts, components, accessories, attachments, associated 
equipment, and systems as follows:
    (1) Parts, components, accessories, and attachments specially 
designed for the following U.S.-origin engines (and military variants 
thereof): F101, F107, F112, F118, F119, F120, F135, F136, F414, F415, 
and J402;

    Note to paragraph (f)(1): This paragraph does not control parts, 
components, accessories, and attachments that are common to engines 
enumerated in paragraph (a) through (d) of this category but not 
identified in paragraph (f)(1), and those identified in paragraph 
(f)(1). For example, a part common to only the F110 and F136 is not 
specially designed for purposes of this paragraph. A part common to 
only the F119 and F135--two engine models identified in paragraph 
(f)(1)--is specially designed for purposes of this paragraph, unless 
one of the other paragraphs is applicable under Sec.  120.41(b).

    * (2) Hot section components (i.e., combustion chambers and liners; 
high pressure turbine blades, vanes, disks and related cooled 
structure; cooled intermediate pressure turbine blades, vanes, disks 
and related cooled structures; cooled low pressure turbine blades, 
vanes, disks and related cooled

[[Page 83135]]

structures; cooled shaft-driving power turbine blades, vanes, disks and 
related cooled structures; cooled augmenters; and cooled nozzles) 
specially designed for gas turbine engines controlled in this category;
    (3) Uncooled turbine blades, vanes, disks, and tip shrouds 
specially designed for gas turbine engines controlled in this category;
    (4) Combustor cowls, diffusers, domes, and shells specially 
designed for gas turbine engines controlled in this category;
    (5) Engine monitoring systems (i.e., prognostics, diagnostics, and 
health) specially designed for gas turbine engines and components 
controlled in this category;
    * (6) Any part, component, accessory, attachment, equipment, or 
system that:
    (i) Is classified;
    (ii) Contains classified software directly related to defense 
articles in this subchapter or 600 series items subject to the EAR; or
    (iii) Is being developed using classified information.

    Note to paragraph (f)(6): ``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 or international organization;

    (7) Investment casting cores, core dies, or wax pattern dies for 
parts or components enumerated in paragraphs (f)(1), (f)(2), or (f)(3) 
of this category;
    (8) Pressure gain combustors specially designed for engines 
controlled in this category, and specially designed parts and 
components therefor;
    (9) Three-stream fan systems, specially designed for gas turbine 
engines controlled in this Category, that allow the movement of airflow 
between the streams to control fan pressure ratio or bypass ratio (by 
means other than use of fan corrected speed or the primary nozzle area 
to change the fan pressure ratio or bypass ratio), and specially 
designed parts, components, accessories, and attachments therefor;
    (10) High pressure compressors, specially designed for gas turbine 
engines controlled in this Category, with core-driven bypass streams 
that have a pressure ratio greater than one, occurring across any 
section of the bypass duct, and specially designed parts, components, 
accessories, and attachments therefor;
    (11) Intermediate compressors of a three-spool compression system, 
specially designed for gas turbine engines controlled in this Category, 
with an intermediate spool-driven bypass stream that has a pressure 
ratio greater than one, occurring across any section of the bypass 
duct, and specially designed parts, components, accessories, and 
attachments therefor; or
    (12) Any of the following equipment if specially designed for a 
defense article described in paragraph (f)(1): Jigs, locating fixtures, 
templates, gauges, molds, dies, caul plates, or bellmouths.
    (g) Technical data (see Sec.  120.10 of this subchapter) and 
defense services (see Sec.  120.9 of this subchapter) directly related 
to the defense articles described in paragraphs (a) through (f) of this 
category and classified technical data directly related to items 
controlled in ECCNs 9A619, 9B619, 9C619, and 9D619 and defense services 
using the classified technical data. (See Sec.  125.4 of this 
subchapter for exemptions.) (MT for technical data and defense services 
related to articles designated as such.)
    (h)-(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).


     Dated: November 14, 2016.
Thomas M. Countryman,
Acting Under Secretary, Arms Control and International Security, 
Department of State.
[FR Doc. 2016-27775 Filed 11-18-16; 8:45 am]
 BILLING CODE 4710-25-P