Amendment to the International Traffic in Arms Regulations: Corrections and Clarifications, 87427-87430 [2016-28406]

Download as PDF sradovich on DSK3GMQ082PROD with RULES Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA) and OMB Control Number 0694–0088 are not expected to increase significantly as a result of this rule. Notwithstanding any other provisions of law, no person is required to respond to, nor be subject to a penalty for failure to comply with a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number. 3. This rule does not contain policies with Federalism implications as that term is defined under Executive Order 13132. 4. Pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B), BIS finds good cause to waive requirements that this rule be subject to notice and the opportunity for public comment because they are unnecessary. In determining whether to grant or remove VEU designations, a committee of U.S. Government agencies evaluates information about and commitments made by candidate companies, the nature and terms of which are set forth in 15 CFR part 748, Supplement Nos. 8 and 9. The criteria for evaluation by the committee are set forth in 15 CFR 748.15(a)(2) and the authority to remove VEU designations is contained in 15 CFR 748.15(a)(3). The information, commitments, and criteria for this extensive review were all established through the notice of proposed rulemaking and public comment process (71 FR 38313 (July 6, 2006) (proposed rule), and 72 FR 33646 (June 19, 2007) (final rule)). In publishing this final rule, BIS removes a VEU from the list of VEUs in the PRC, at the request of the VEU, similar to past requests by other VEUs, approved by the End-User Review Committee. This change has been made within the established regulatory framework of the VEU program. Further, this rule does not abridge the rights of the public or eliminate the public’s option to export under any of the forms of authorization set forth in the EAR. Publication of this rule in other than final form is unnecessary because the procedure for revocation of a VEU or facility from the Authorized VEU list is similar to the license revocation procedure, which does not undergo public review. During the VEU revocation procedure, the U.S. Government analyzes confidential business information according to set criteria to determine whether a given authorized VEU entity remains eligible for VEU status. Revocation may be the result of a material change in circumstance at the VEU or the VEU’s authorized facility. Such changes may VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 be the result of a VEU or VEU facility no longer meeting the eligibility criteria for Authorization VEU, and may thus lead the U.S. Government to modify or revoke VEU authorization. VEUs or VEU facilities that undergo material changes that result in their no longer meeting the criteria to be eligible VEUs must, according to the VEU program, have their VEU status revoked. Here, however, SMIC requested removal from the VEU program. Consequently, BIS is removing SMIC from the list of VEUs. Public comment on whether to make the removal is unnecessary. Section 553(d) of the APA generally provides that rules may not take effect earlier than thirty (30) days after they are published in the Federal Register. However, BIS finds good cause to waive the 30-day delay in effectiveness for this rule pursuant to 5 U.S.C. 553(d)(3) because the delay would be contrary to the public interest. BIS is simply removing SMIC as a VEU. In this rule, BIS amends the EAR consistent with established objectives and parameters administered and enforced by the responsible designated departmental representatives to the End-User Review Committee. Delaying this action’s effectiveness would likely cause confusion regarding which items are authorized by the U.S. government, and in turn stifle the purpose of the VEU program. Accordingly, it would be contrary to the public interest to delay this rule’s effectiveness. No other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required under the APA or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601et seq.) are not applicable. As a result, no final regulatory flexibility analysis is required and none has been prepared. List of Subjects in 15 CFR Part 748 Administrative practice and procedure, Exports, Reporting and recordkeeping requirements. Accordingly, part 748 of the EAR (15 CFR parts 730–774) is amended as follows: PART 748—[AMENDED] 1. The authority citation for part 748 continues to read as follows: ■ Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 4, 2016, 81 FR 52587 (August 8, 2016). PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 87427 Supplement No. 7 to Part 748— [AMENDED] 2. Amend Supplement No. 7 to Part 748 by removing the entire entry for ‘‘Semiconductor Manufacturing International Corporation,’’ in ‘‘China (People’s Republic of)’’. ■ Dated: November 23, 2016. Kevin J. Wolf, Assistant Secretary for Export Administration. [FR Doc. 2016–29057 Filed 12–2–16; 8:45 am] BILLING CODE 3510–33–P DEPARTMENT OF STATE 22 CFR Parts 120, 121, 122, 124, 126 and 127 [Public Notice: 9757] RIN 1400–AE05 Amendment to the International Traffic in Arms Regulations: Corrections and Clarifications Department of State. Final rule; request for comments. AGENCY: ACTION: The Department of State is amending the International Traffic in Arms Regulations (ITAR) to clarify recent revisions made pursuant to the President’s Export Control Reform (ECR) initiative. This rule clarifies the scope of disclosure of information submitted to the Directorate of Defense Trade Controls (DDTC), clarifies the policies and procedures regarding statutory debarments, and corrects administrative and typographical errors. DATES: This Final rule is effective on December 5, 2016. The Department will accept comments on the Final regulation up to January 4, 2017. ADDRESSES: Interested parties may submit comments within 30 days of the date of publication by one of the following methods: • Email: DDTCResponseTeam@state.gov with the subject line, ‘‘ITAR Corrections and Clarifications.’’ • Internet: You may view this Final rule and submit your comments by visiting the Regulations.gov Web site at www.regulations.gov, and searching for docket number DOS–2016–0070. Comments received after that date will be considered if feasible, but consideration cannot be assured. All comments (including any personally identifying information or information for which a claim of confidentiality is asserted in those comments or their transmittal emails) will be made SUMMARY: E:\FR\FM\05DER1.SGM 05DER1 87428 Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations available for public inspection and copying after the close of the comment period via the Directorate of Defense Trade Controls Web site at www.pmddtc.state.gov. Parties who wish to comment anonymously may do so by submitting their comments via www.regulations.gov, leaving the fields that would identify the commenter blank and including no identifying information in the comment itself. Comments submitted via www.regulations.gov are immediately available for public inspection. FOR FURTHER INFORMATION CONTACT: Mr. C. Edward Peartree, Director, Office of Defense Trade Controls Policy, Department of State, telephone (202) 663–2792; email DDTCResponseTeam@state.gov. ATTN: Regulatory Change, Corrections and Clarifications. The Department makes the following revisions to the ITAR in this final rule: • A definition of ‘‘classified’’ is moved from § 121.1(e) to § 120.46; • The structure of § 121.1(a)–(e) is realigned, with paragraphs (a) and (b) revised to clarify the existing requirements for United States Munitions List (USML) controls, and paragraphs (c), (d) and (e) removed; • Thirteen USML categories are amended to clarify that commodities, software, and technology subject to the Export Administration Regulations (EAR) and related to defense articles in a USML category may be exported or temporarily imported on the same license with defense articles from any category, provided they are to be used in or with that defense article; • In three places within the USML, the word ‘‘enumerated’’ is replaced with the word ‘‘described’’ to make the language consistent with changes directed in the Final Rule published at 79 FR 61226, Oct. 10, 2014; • Section 122.4(c)(4) is revised to permit the Directorate of Defense Trade Controls (DDTC) to approve an alternative timeframe, not less than 60 days, to the current 60-day requirement for registrants to provide a signed amended agreement; • Section 124.2(c)(5)(v) is revised to correct errors to the USML category references for gas turbine engine hot sections, from VI(f) and VIII(b) to Category XIX; • Section 124.12 is amended in paragraph (a)(9) to update the name of the Defense Investigative Service to Defense Security Service; • Section 126.9 on Advisory Opinions and Related Authorizations is amended to correct paragraph (a); sradovich on DSK3GMQ082PROD with RULES SUPPLEMENTARY INFORMATION: VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 • Paragraph (b) of § 126.10 is amended to clarify the scope of control and disclosure of information, however, notwithstanding the changes to paragraph (b) it is the Department’s policy not to publicly release information relating to activities regulated by the ITAR except as required by law or when doing so is otherwise in the interest of the United States Government; and • Section 127.7(b) is amended to clarify the policies and procedures regarding statutory debarments (addressing inadvertent omissions resulting from a prior amendment to that section), and § 127.11 is amended to make conforming revisions to paragraph (c) omitted from prior amendment to that section. Regulatory Analysis and Notices Administrative Procedure Act The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules implementing this function are exempt from sections 553 (Rulemaking) and 554 (Adjudications) of the Administrative Procedure Act (APA). Although the Department is of the opinion that this rule is exempt from the rulemaking provisions of the APA, the Department is providing 30 days for the public to submit comments 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 provisions of 5 U.S.C. 553, there is no requirement for an analysis under the Regulatory Flexibility Act. Unfunded Mandates Reform Act of 1995 This rulemaking 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 rulemaking is not a major rule within the definition of 5 U.S.C. 804. Executive Orders 12372 and 13132 This rulemaking will not have substantial direct effects on the States, on the relationship between the national PO 00000 Frm 00020 Fmt 4700 Sfmt 4700 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, the Department has determined that this rulemaking 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 rulemaking. Executive Orders 12866 and 13563 Executive Orders 12866 and 13563 direct agencies to assess costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributed impacts, and equity). These executive orders stress the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Department has determined that, given the nature of the amendments made in this rulemaking, there will be minimal cost to the public. Therefore, the benefits of this rulemaking outweigh the cost. This rule has not been designated a ‘‘significant regulatory action’’ by the Office and Information and Regulatory Affairs under Executive Order 12866. Executive Order 12988 The Department of State reviewed this rulemaking in light of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden. Executive Order 13175 The Department of State 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, the requirements of Executive Order 13175 do not apply to this rulemaking. Paperwork Reduction Act This rule does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35. List of Subjects 22 CFR Parts 120 and 121 Arms and munitions, Classified information, Exports. E:\FR\FM\05DER1.SGM 05DER1 Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations 22 CFR Part 122 ii. Removing the word ‘‘enumerated’’ and adding in its place the word ‘‘described’’ in paragraph (g); and ■ e. Removing the word ‘‘enumerated’’ and adding in its place the word ‘‘described’’ in paragraph (h) of Category VII. The revisions read as follows: ■ Arms and munitions, Exports. 22 CFR Part 124 Arms and munitions, Exports, Technical assistance. 22 CFR Part 126 Arms and munitions, Exports. § 121.1 22 CFR Part 127 Arms and munitions, Exports, Crime, Law, Penalties, Seizures and forfeitures. Accordingly, for the reasons set forth above, title 22, chapter I, subchapter M, parts 120, 121, 122, 124, 126, and 127 are amended as follows: PART 120—PURPOSE AND DEFINITIONS 1. The authority citation for part 120 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. 2794; 22 U.S.C. 2651a; Pub. L. 105–261, 112 Stat. 1920; Pub. L. 111–266; Section 1261, Pub. L. 112–239; E.O. 13637, 78 FR 16129. 2. Section 120.46 is added to read as follows: ■ § 120.46 Classified. Classified means classified pursuant to Executive Order 13526, and a security classification guide developed pursuant thereto or equivalent, or to the corresponding classification rules of another government or international organization. PART 121—THE UNITED STATES MUNITIONS LIST 3. 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. 4. Section 121.1 is amended by: a. Revising paragraphs (a) and (b); b. Removing paragraphs (c), (d), and (e); ■ c. Removing the words ‘‘controlled in this category’’ in paragraph (x) and the Note to paragraph (x) for each of the following USML categories: Category IV, Category V, Category VI, Category VII, Category VIII, Category IX, Category X, Category XI, Category XIII, Category XV, Category XVI, Category XIX, and Category XX; ■ d. In Category VI: ■ i. Removing the word ‘‘enumerated’’ and adding in its place the word ‘‘described’’ in Note 1 to paragraph (f); and sradovich on DSK3GMQ082PROD with RULES ■ ■ ■ VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 The United States Munitions List. (a) U.S. Munitions List. In this part, articles, services, and related technical data are designated as defense articles or defense services pursuant to sections 38 and 47(7) of the Arms Export Control Act and constitute the U.S. Munitions List (USML). Changes in designations are published in the Federal Register. Paragraphs (a)(1) through (3) of this section describe or explain the elements of a USML category: (1) Composition of U.S. Munitions List categories. USML categories are organized by paragraphs and subparagraphs identified alphanumerically. They usually start by enumerating or otherwise describing end-items, followed by major systems and equipment; parts, components, accessories, and attachments; and technical data and defense services directly related to the defense articles of that USML category. (2) Significant Military Equipment. All items described within a USML paragraph or subparagraph that is preceded by an asterisk (*) are designated ‘‘Significant Military Equipment’’ (see § 120.7 of this subchapter). Note that technical data directly related to the manufacture or production of a defense article designated as Significant Military Equipment (SME) is also designated as SME. (3) Missile Technology Control Regime (MTCR) designation. Annotation with the parenthetical ‘‘(MT)’’ at the end of a USML entry, or inclusion in § 121.16, indicates those defense articles that are on the MTCR Annex. See § 120.29 of this subchapter. (b) Order of review. Articles are controlled on the U.S. Munitions List because they are either: (1) Enumerated in a category; or (2) Described in a ‘‘catch-all’’ paragraph that incorporates ‘‘specially designed’’ (see § 120.41 of this subchapter) as a control parameter. In order to classify an item on the USML, begin with a review of the general characteristics of the item. This should guide you to the appropriate category, whereupon you should attempt to match the particular characteristics and functions of the article to a specific entry within that category. If the entry includes the term ‘‘specially designed,’’ PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 87429 refer to § 120.41 to determine if the article qualifies for one or more of the exclusions articulated in § 120.41(b). An item described in multiple entries should be categorized according to an enumerated entry rather than a specially designed catch-all paragraph. In all cases, articles not controlled on the USML may be subject to another U.S. government regulatory agency (see § 120.5 of this subchapter, and Supplement No. 4 to part 774 of the Export Administration Regulations for guidance on classifying an item subject to the EAR). * * * * * PART 122—REGISTRATION OF MANUFACTURERS AND EXPORTERS 5. The authority citation for part 122 continues to read as follows: ■ Authority: Sections 2 and 38, Pub. L. 90– 629, 90 Stat. 744 (22 U.S.C. 2752, 2778); 22 U.S.C. 2651a; E.O. 13637, 78 FR 16129. 6. Section 122.4 is amended by revising paragraph (c)(4) to read as follows: ■ § 122.4 Notification of changes in information furnished by registrants. * * * * * (c) * * * (4) Amendments to agreements approved by the Directorate of Defense Trade Controls to change the name of a party to those agreements. The registrant must provide to the Directorate of Defense Trade Controls a signed copy of such an amendment to each agreement signed by the new U.S. entity, the former U.S. licensor and the foreign licensee, within 60 days of this notification, unless an extension of time is approved by the Directorate of Defense Trade Controls. Any agreement not so amended may be considered invalid. * * * * * PART 124—AGREEMENTS, OFFSHORE PROCUREMENT, AND OTHER DEFENSE SERVICES 7. The authority citation for part 124 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; 22 U.S.C. 2776; Section 1514, Pub. L. 105–261; Pub. L. 111– 266; Section 1261, Pub. L. 112–239; E.O. 13637, 78 FR 16129. 8. Section 124.2 is amended by revising paragraph (c)(5)(v) to read as follows: ■ § 124.2 Exemptions for training and military service. * E:\FR\FM\05DER1.SGM * * 05DER1 * * 87430 Federal Register / Vol. 81, No. 233 / Monday, December 5, 2016 / Rules and Regulations (c) * * * (5) * * * (v) Gas turbine engine hot sections covered by Category XIX(f); * * * * * ■ 9. Section 124.12 is amended by revising paragraph (a)(9) to read as follows: § 124.12 Required information in letters of transmittal. (a) * * * (9) For agreements that may require the export of classified information, the Defense Security Service cognizant security offices that have responsibility for the facilities of the U.S. parties to the agreement shall be identified. The facility security clearance codes of the U.S. parties shall also be provided. * * * * * PART 126—GENERAL POLICIES AND PROVISIONS 10. The authority citation for part 126 continues to read as follows: ■ Control Act (22 U.S.C. 2778(e)) provides, by reference to section 12(c) of the Export Administration Act (50 U.S.C. 2411), that information obtained for the purpose of consideration of, or concerning, license applications shall be withheld from public disclosure unless the release of such information is determined by the Secretary to be in the national interest. Section 38(e) of the Arms Control Export Act further provides that, the names of countries and types and quantities of defense articles for which licenses are issued under this section shall not be withheld from public disclosure unless certain determinations are made that the release of such information would be contrary to the national interest. Such determinations required by section 38(e) shall be made by the Assistant Secretary of State for Political-Military Affairs. * * * * * 13. The authority citation for part 127 continues to read as follows: 11. Section 126.9 is amended by revising paragraph (a) to read as follows: ■ § 126.9 Advisory opinions and related authorizations. sradovich on DSK3GMQ082PROD with RULES ■ § 127.7 Disclosure of information. * * * * * (b) Determinations required by law. Section 38(e) of the Arms Export VerDate Sep<11>2014 15:57 Dec 02, 2016 Jkt 241001 Past violations. * * * * * (c) Debarred persons. Persons debarred pursuant to § 127.7(b) (statutory debarment) may not utilize the procedures provided by paragraph (b) of this section while the statutory debarment is in force. Such persons may utilize only the procedures provided by § 127.7(d). Dated: November 18, 2016. Tom Countryman, Acting Under Secretary, Arms Control and International Security, Department of State. [FR Doc. 2016–28406 Filed 12–2–16; 8:45 am] BILLING CODE 4710–25–P ■ § 126.10 § 127.11 PART 127—VIOLATIONS AND PENALTIES Authority: Secs. 2, 38, 40, 42, and 71, Pub. L. 90–629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2780, 2791, and 2797); 22 U.S.C. 2651a; 22 U.S.C. 287c; E.O. 12918, 59 FR 28205; 3 CFR, 1994 Comp., p. 899; Sec. 1225, Pub. L. 108– 375; Sec. 7089, Pub. L. 111–117; Pub. L. 111– 266; Sections 7045 and 7046, Pub. L. 112–74; E.O. 13637, 78 FR 16129. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Authority: Sections 2, 38, and 42, Pub. L. 90–629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2791); 22 U.S.C. 401; 22 U.S.C. 2651a; 22 U.S.C. 2779a; 22 U.S.C. 2780; E.O. 13637, 78 FR 16129; Pub. L. 114–74, 129 Stat. 584. 24 CFR Parts 965 and 966 14. Section 127.7 is amended by revising paragraph (b) to read as follows: Instituting Smoke-Free Public Housing Debarment. * (a) Preliminary authorization determinations. A person may request information from the Directorate of Defense Trade Controls as to whether it would likely grant a license or other approval for a particular defense article or defense service to a particular country. Such information from the Directorate of Defense Trade Controls is issued on a case-by-case basis and applies only to the particular matters presented to the Directorate of Defense Trade Controls. These opinions are not binding on the Department of State and may not be used in future matters before the Department. A request for an advisory opinion must be made in writing and must outline in detail the equipment, its usage, the security classification (if any) of the articles or related technical data, and the country or countries involved. * * * * * ■ 12. Section 126.10 is amended by revising paragraph (b) to read as follows: to this subchapter. The procedures of part 128 of this subchapter are not applicable in such cases. * * * * * ■ 15. Section 127.11(c) is revised to read as follows: * * * * (b) Statutory debarment. It is the policy of the Department of State not to consider applications for licenses or requests for approvals involving any person who has been convicted of violating the Arms Export Control Act or convicted of conspiracy to violate that Act for a three year period following conviction and to prohibit that person from participating directly or indirectly in any activities that are subject to this subchapter. Such individuals shall be notified in writing that they are statutorily debarred pursuant to this policy. A list of persons who have been convicted of such offenses and debarred for this reason shall be published periodically in the Federal Register. Statutory debarment in such cases is based solely upon the outcome of a criminal proceeding, conducted by a court of the United States, which established guilt beyond a reasonable doubt in accordance with due process. Reinstatement is not automatic, and in all cases the debarred person must submit a request for reinstatement to the Department of State and be approved for reinstatement before engaging in any activities subject PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 [Docket No. FR 5597–F–03] RIN 2577–AC97 Office of the Assistant Secretary for Public and Indian Housing, HUD. ACTION: Final rule. AGENCY: This rule requires each public housing agency (PHA) administering public housing to implement a smokefree policy. Specifically, no later than 18 months from the effective date of the rule, each PHA must implement a ‘‘smoke-free’’ policy banning the use of prohibited tobacco products in all public housing living units, indoor common areas in public housing, and in PHA administrative office buildings. The smoke-free policy must also extend to all outdoor areas up to 25 feet from the public housing and administrative office buildings. This rule improves indoor air quality in the housing; benefits the health of public housing residents, visitors, and PHA staff; reduces the risk of catastrophic fires; and lowers overall maintenance costs. DATES: Effective date February 3, 2017. FOR FURTHER INFORMATION CONTACT: Leroy Ferguson, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410–0500; telephone number 202–402–2411 (this is not a toll-free number). Persons who SUMMARY: E:\FR\FM\05DER1.SGM 05DER1

Agencies

[Federal Register Volume 81, Number 233 (Monday, December 5, 2016)]
[Rules and Regulations]
[Pages 87427-87430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28406]


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DEPARTMENT OF STATE

22 CFR Parts 120, 121, 122, 124, 126 and 127

[Public Notice: 9757]
RIN 1400-AE05


Amendment to the International Traffic in Arms Regulations: 
Corrections and Clarifications

AGENCY: Department of State.

ACTION: Final rule; request for comments.

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

SUMMARY: The Department of State is amending the International Traffic 
in Arms Regulations (ITAR) to clarify recent revisions made pursuant to 
the President's Export Control Reform (ECR) initiative. This rule 
clarifies the scope of disclosure of information submitted to the 
Directorate of Defense Trade Controls (DDTC), clarifies the policies 
and procedures regarding statutory debarments, and corrects 
administrative and typographical errors.

DATES: This Final rule is effective on December 5, 2016. The Department 
will accept comments on the Final regulation up to January 4, 2017.

ADDRESSES: Interested parties may submit comments within 30 days of the 
date of publication by one of the following methods:
     Email: DDTCResponseTeam@state.gov with the subject line, 
``ITAR Corrections and Clarifications.''
     Internet: You may view this Final rule and submit your 
comments by visiting the Regulations.gov Web site at 
www.regulations.gov, and searching for docket number DOS-2016-0070.
    Comments received after that date will be considered if feasible, 
but consideration cannot be assured. All comments (including any 
personally identifying information or information for which a claim of 
confidentiality is asserted in those comments or their transmittal 
emails) will be made

[[Page 87428]]

available for public inspection and copying after the close of the 
comment period via the Directorate of Defense Trade Controls Web site 
at www.pmddtc.state.gov. Parties who wish to comment anonymously may do 
so by submitting their comments via www.regulations.gov, leaving the 
fields that would identify the commenter blank and including no 
identifying information in the comment itself. Comments submitted via 
www.regulations.gov are immediately available for public inspection.

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

SUPPLEMENTARY INFORMATION: The Department makes the following revisions 
to the ITAR in this final rule:
     A definition of ``classified'' is moved from Sec.  
121.1(e) to Sec.  120.46;
     The structure of Sec.  121.1(a)-(e) is realigned, with 
paragraphs (a) and (b) revised to clarify the existing requirements for 
United States Munitions List (USML) controls, and paragraphs (c), (d) 
and (e) removed;
     Thirteen USML categories are amended to clarify that 
commodities, software, and technology subject to the Export 
Administration Regulations (EAR) and related to defense articles in a 
USML category may be exported or temporarily imported on the same 
license with defense articles from any category, provided they are to 
be used in or with that defense article;
     In three places within the USML, the word ``enumerated'' 
is replaced with the word ``described'' to make the language consistent 
with changes directed in the Final Rule published at 79 FR 61226, Oct. 
10, 2014;
     Section 122.4(c)(4) is revised to permit the Directorate 
of Defense Trade Controls (DDTC) to approve an alternative timeframe, 
not less than 60 days, to the current 60-day requirement for 
registrants to provide a signed amended agreement;
     Section 124.2(c)(5)(v) is revised to correct errors to the 
USML category references for gas turbine engine hot sections, from 
VI(f) and VIII(b) to Category XIX;
     Section 124.12 is amended in paragraph (a)(9) to update 
the name of the Defense Investigative Service to Defense Security 
Service;
     Section 126.9 on Advisory Opinions and Related 
Authorizations is amended to correct paragraph (a);
     Paragraph (b) of Sec.  126.10 is amended to clarify the 
scope of control and disclosure of information, however, 
notwithstanding the changes to paragraph (b) it is the Department's 
policy not to publicly release information relating to activities 
regulated by the ITAR except as required by law or when doing so is 
otherwise in the interest of the United States Government; and
     Section 127.7(b) is amended to clarify the policies and 
procedures regarding statutory debarments (addressing inadvertent 
omissions resulting from a prior amendment to that section), and Sec.  
127.11 is amended to make conforming revisions to paragraph (c) omitted 
from prior amendment to that section.

Regulatory Analysis and Notices

Administrative Procedure Act

    The Department of State is of the opinion that controlling the 
import and export of defense articles and services is a foreign affairs 
function of the United States Government and that rules implementing 
this function are exempt from sections 553 (Rulemaking) and 554 
(Adjudications) of the Administrative Procedure Act (APA). Although the 
Department is of the opinion that this rule is exempt from the 
rulemaking provisions of the APA, the Department is providing 30 days 
for the public to submit comments 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 provisions of 5 U.S.C. 553, 
there is no requirement for an analysis under the Regulatory 
Flexibility Act.

Unfunded Mandates Reform Act of 1995

    This rulemaking 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 rulemaking is not a major rule within the definition of 5 
U.S.C. 804.

Executive Orders 12372 and 13132

    This rulemaking 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, the Department has determined that this rulemaking 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 rulemaking.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributed impacts, and equity). These executive orders 
stress the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. The 
Department has determined that, given the nature of the amendments made 
in this rulemaking, there will be minimal cost to the public. 
Therefore, the benefits of this rulemaking outweigh the cost. This rule 
has not been designated a ``significant regulatory action'' by the 
Office and Information and Regulatory Affairs under Executive Order 
12866.

Executive Order 12988

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

Executive Order 13175

    The Department of State 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, the requirements of Executive Order 13175 do not apply to 
this rulemaking.

Paperwork Reduction Act

    This rule does not impose any new reporting or recordkeeping 
requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 
35.

List of Subjects

22 CFR Parts 120 and 121

    Arms and munitions, Classified information, Exports.

[[Page 87429]]

22 CFR Part 122

    Arms and munitions, Exports.

22 CFR Part 124

    Arms and munitions, Exports, Technical assistance.

22 CFR Part 126

    Arms and munitions, Exports.

22 CFR Part 127

    Arms and munitions, Exports, Crime, Law, Penalties, Seizures and 
forfeitures.

    Accordingly, for the reasons set forth above, title 22, chapter I, 
subchapter M, parts 120, 121, 122, 124, 126, and 127 are amended as 
follows:

PART 120--PURPOSE AND DEFINITIONS

0
1. The authority citation for part 120 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. 2794; 22 U.S.C. 2651a; Pub. 
L. 105-261, 112 Stat. 1920; Pub. L. 111-266; Section 1261, Pub. L. 
112-239; E.O. 13637, 78 FR 16129.


0
2. Section 120.46 is added to read as follows:


Sec.  120.46   Classified.

    Classified means classified pursuant to Executive Order 13526, and 
a security classification guide developed pursuant thereto or 
equivalent, or to the corresponding classification rules of another 
government or international organization.

PART 121--THE UNITED STATES MUNITIONS LIST

0
3. 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
4. Section 121.1 is amended by:
0
a. Revising paragraphs (a) and (b);
0
b. Removing paragraphs (c), (d), and (e);
0
c. Removing the words ``controlled in this category'' in paragraph (x) 
and the Note to paragraph (x) for each of the following USML 
categories: Category IV, Category V, Category VI, Category VII, 
Category VIII, Category IX, Category X, Category XI, Category XIII, 
Category XV, Category XVI, Category XIX, and Category XX;
0
d. In Category VI:
0
i. Removing the word ``enumerated'' and adding in its place the word 
``described'' in Note 1 to paragraph (f); and
0
ii. Removing the word ``enumerated'' and adding in its place the word 
``described'' in paragraph (g); and
0
e. Removing the word ``enumerated'' and adding in its place the word 
``described'' in paragraph (h) of Category VII.
    The revisions read as follows:


Sec.  121.1  The United States Munitions List.

    (a) U.S. Munitions List. In this part, articles, services, and 
related technical data are designated as defense articles or defense 
services pursuant to sections 38 and 47(7) of the Arms Export Control 
Act and constitute the U.S. Munitions List (USML). Changes in 
designations are published in the Federal Register. Paragraphs (a)(1) 
through (3) of this section describe or explain the elements of a USML 
category:
    (1) Composition of U.S. Munitions List categories. USML categories 
are organized by paragraphs and subparagraphs identified 
alphanumerically. They usually start by enumerating or otherwise 
describing end-items, followed by major systems and equipment; parts, 
components, accessories, and attachments; and technical data and 
defense services directly related to the defense articles of that USML 
category.
    (2) Significant Military Equipment. All items described within a 
USML paragraph or subparagraph that is preceded by an asterisk (*) are 
designated ``Significant Military Equipment'' (see Sec.  120.7 of this 
subchapter). Note that technical data directly related to the 
manufacture or production of a defense article designated as 
Significant Military Equipment (SME) is also designated as SME.
    (3) Missile Technology Control Regime (MTCR) designation. 
Annotation with the parenthetical ``(MT)'' at the end of a USML entry, 
or inclusion in Sec.  121.16, indicates those defense articles that are 
on the MTCR Annex. See Sec.  120.29 of this subchapter.
    (b) Order of review. Articles are controlled on the U.S. Munitions 
List because they are either:
    (1) Enumerated in a category; or
    (2) Described in a ``catch-all'' paragraph that incorporates 
``specially designed'' (see Sec.  120.41 of this subchapter) as a 
control parameter. In order to classify an item on the USML, begin with 
a review of the general characteristics of the item. This should guide 
you to the appropriate category, whereupon you should attempt to match 
the particular characteristics and functions of the article to a 
specific entry within that category. If the entry includes the term 
``specially designed,'' refer to Sec.  120.41 to determine if the 
article qualifies for one or more of the exclusions articulated in 
Sec.  120.41(b). An item described in multiple entries should be 
categorized according to an enumerated entry rather than a specially 
designed catch-all paragraph. In all cases, articles not controlled on 
the USML may be subject to another U.S. government regulatory agency 
(see Sec.  120.5 of this subchapter, and Supplement No. 4 to part 774 
of the Export Administration Regulations for guidance on classifying an 
item subject to the EAR).
* * * * *

PART 122--REGISTRATION OF MANUFACTURERS AND EXPORTERS

0
5. The authority citation for part 122 continues to read as follows:

    Authority:  Sections 2 and 38, Pub. L. 90-629, 90 Stat. 744 (22 
U.S.C. 2752, 2778); 22 U.S.C. 2651a; E.O. 13637, 78 FR 16129.


0
6. Section 122.4 is amended by revising paragraph (c)(4) to read as 
follows:


Sec.  122.4   Notification of changes in information furnished by 
registrants.

* * * * *
    (c) * * *
    (4) Amendments to agreements approved by the Directorate of Defense 
Trade Controls to change the name of a party to those agreements. The 
registrant must provide to the Directorate of Defense Trade Controls a 
signed copy of such an amendment to each agreement signed by the new 
U.S. entity, the former U.S. licensor and the foreign licensee, within 
60 days of this notification, unless an extension of time is approved 
by the Directorate of Defense Trade Controls. Any agreement not so 
amended may be considered invalid.
* * * * *

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

0
7. The authority citation for part 124 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; 22 U.S.C. 2776; 
Section 1514, Pub. L. 105-261; Pub. L. 111-266; Section 1261, Pub. 
L. 112-239; E.O. 13637, 78 FR 16129.


0
8. Section 124.2 is amended by revising paragraph (c)(5)(v) to read as 
follows:


Sec.  124.2  Exemptions for training and military service.

* * * * *

[[Page 87430]]

    (c) * * *
    (5) * * *
    (v) Gas turbine engine hot sections covered by Category XIX(f);
* * * * *

0
9. Section 124.12 is amended by revising paragraph (a)(9) to read as 
follows:


Sec.  124.12  Required information in letters of transmittal.

    (a) * * *
    (9) For agreements that may require the export of classified 
information, the Defense Security Service cognizant security offices 
that have responsibility for the facilities of the U.S. parties to the 
agreement shall be identified. The facility security clearance codes of 
the U.S. parties shall also be provided.
* * * * *

PART 126--GENERAL POLICIES AND PROVISIONS

0
10. The authority citation for part 126 continues to read as follows:

    Authority: Secs. 2, 38, 40, 42, and 71, Pub. L. 90-629, 90 Stat. 
744 (22 U.S.C. 2752, 2778, 2780, 2791, and 2797); 22 U.S.C. 2651a; 
22 U.S.C. 287c; E.O. 12918, 59 FR 28205; 3 CFR, 1994 Comp., p. 899; 
Sec. 1225, Pub. L. 108-375; Sec. 7089, Pub. L. 111-117; Pub. L. 111-
266; Sections 7045 and 7046, Pub. L. 112-74; E.O. 13637, 78 FR 
16129.

0
11. Section 126.9 is amended by revising paragraph (a) to read as 
follows:


Sec.  126.9  Advisory opinions and related authorizations.

    (a) Preliminary authorization determinations. A person may request 
information from the Directorate of Defense Trade Controls as to 
whether it would likely grant a license or other approval for a 
particular defense article or defense service to a particular country. 
Such information from the Directorate of Defense Trade Controls is 
issued on a case-by-case basis and applies only to the particular 
matters presented to the Directorate of Defense Trade Controls. These 
opinions are not binding on the Department of State and may not be used 
in future matters before the Department. A request for an advisory 
opinion must be made in writing and must outline in detail the 
equipment, its usage, the security classification (if any) of the 
articles or related technical data, and the country or countries 
involved.
* * * * *

0
12. Section 126.10 is amended by revising paragraph (b) to read as 
follows:


Sec.  126.10  Disclosure of information.

* * * * *
    (b) Determinations required by law. Section 38(e) of the Arms 
Export Control Act (22 U.S.C. 2778(e)) provides, by reference to 
section 12(c) of the Export Administration Act (50 U.S.C. 2411), that 
information obtained for the purpose of consideration of, or 
concerning, license applications shall be withheld from public 
disclosure unless the release of such information is determined by the 
Secretary to be in the national interest. Section 38(e) of the Arms 
Control Export Act further provides that, the names of countries and 
types and quantities of defense articles for which licenses are issued 
under this section shall not be withheld from public disclosure unless 
certain determinations are made that the release of such information 
would be contrary to the national interest. Such determinations 
required by section 38(e) shall be made by the Assistant Secretary of 
State for Political-Military Affairs.
* * * * *

PART 127--VIOLATIONS AND PENALTIES

0
13. The authority citation for part 127 continues to read as follows:

    Authority: Sections 2, 38, and 42, Pub. L. 90-629, 90 Stat. 744 
(22 U.S.C. 2752, 2778, 2791); 22 U.S.C. 401; 22 U.S.C. 2651a; 22 
U.S.C. 2779a; 22 U.S.C. 2780; E.O. 13637, 78 FR 16129; Pub. L. 114-
74, 129 Stat. 584.


0
14. Section 127.7 is amended by revising paragraph (b) to read as 
follows:


Sec.  127.7  Debarment.

* * * * *
    (b) Statutory debarment. It is the policy of the Department of 
State not to consider applications for licenses or requests for 
approvals involving any person who has been convicted of violating the 
Arms Export Control Act or convicted of conspiracy to violate that Act 
for a three year period following conviction and to prohibit that 
person from participating directly or indirectly in any activities that 
are subject to this subchapter. Such individuals shall be notified in 
writing that they are statutorily debarred pursuant to this policy. A 
list of persons who have been convicted of such offenses and debarred 
for this reason shall be published periodically in the Federal 
Register. Statutory debarment in such cases is based solely upon the 
outcome of a criminal proceeding, conducted by a court of the United 
States, which established guilt beyond a reasonable doubt in accordance 
with due process. Reinstatement is not automatic, and in all cases the 
debarred person must submit a request for reinstatement to the 
Department of State and be approved for reinstatement before engaging 
in any activities subject to this subchapter. The procedures of part 
128 of this subchapter are not applicable in such cases.
* * * * *

0
15. Section 127.11(c) is revised to read as follows:


Sec.  127.11   Past violations.

* * * * *
    (c) Debarred persons. Persons debarred pursuant to Sec.  127.7(b) 
(statutory debarment) may not utilize the procedures provided by 
paragraph (b) of this section while the statutory debarment is in 
force. Such persons may utilize only the procedures provided by Sec.  
127.7(d).

    Dated: November 18, 2016.
Tom Countryman,
Acting Under Secretary, Arms Control and International Security, 
Department of State.
[FR Doc. 2016-28406 Filed 12-2-16; 8:45 am]
 BILLING CODE 4710-25-P