Subchapter M—International Traffic in Arms Regulations

SUBCHAPTER M—INTERNATIONAL TRAFFIC IN ARMS REGULATIONS

PART 120—PURPOSE AND authority by the Secretary of State, DEFINITIONS these regulations are primarily admin- istered by the Director of the Office of Sec. Defense Trade Controls, Bureau of Po- 120.1 General authorities and eligibility. litico-Military Affairs, Department of 120.2 Designation of defense articles and de- State. fense services. (b) Authorized Officials. All authori- 120.3 Policy on designating and determining defense articles and services. ties conferred upon the Director of the 120.4 Commodity jurisdiction. Office of Defense Trade Controls by 120.5 Relation to regulations of other agen- this subchapter may be exercised at cies. any time by the Under Secretary of 120.6 Defense article. State for International Security Af- 120.7 Significant military equipment. 120.8 Major defense equipment. fairs, the Assistant Secretary of State 120.9 Defense service. for Politico-Military Affairs, or the 120.10 Technical data. Deputy Assistant Secretary of State 120.11 Public domain. for Politico-Military Affairs respon- 120.12 Office of Defense Trade Controls. sible for supervising the Office of De- 120.13 United States. 120.14 Person. fense Trade Controls unless the Legal 120.15 U.S. person. Adviser or the Assistant Legal Adviser 120.16 Foreign person. for Politico-Military Affairs of the De- 120.17 Export. partment of State determines that any 120.18 Temporary import. specific exercise of this authority 120.19 Reexport or retransfer. 120.20 License. under this subsection may be inappro- 120.21 Manufacturing license agreement. priate. 120.22 Technical assistance agreement. (c) Eligibility. Only U.S. persons (as 120.23 Distribution agreement. defined in § 120.15) and foreign govern- 120.24 District Director of Customs. mental entities in the United States 120.25 Empowered Official. 120.26 Presiding Official. may be granted licenses or other ap- 120.27 U.S. criminal statutes. provals (other than retransfer approv- 120.28 Listing of forms referred to in this als sought pursuant to this sub- subchapter. chapter). Foreign persons (as defined in 120.29 Missile Technology Control Regime. § 120.16) other than governments are AUTHORITY: Secs. 2, 38, and 71, Pub. L. 90– not eligible. U.S. persons who have 629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); 22 been convicted of violating the crimi- U.S.C. 2794; E.O. 11958, 42 FR 4311; 3 CFR, 1977 nal statutes enumerated in § 120.27, who Comp. p. 79; 22 U.S.C. 2658. have been debarred pursuant to part SOURCE: 58 FR 39283, July 22, 1993, unless 127 or 128 of this subchapter, who are otherwise noted. the subject of an indictment involving § 120.1 General authorities and eligi- the criminal statutes enumerated in bility. § 120.27, who are ineligible to contract with, or to receive a license or other (a) Section 38 of the Arms Export Control Act (22 U.S.C. 2778) authorizes form of authorization to import de- the President to control the export and fense articles or defense services from import of defense articles and defense any agency of the U.S. Government, services. The statutory authority of who are ineligible to receive export li- the President to promulgate regula- censes (or other forms of authorization tions with respect to exports of defense to export) from any agency of the U.S. articles and defense services was dele- Government, who are subject to De- gated to the Secretary of State by Ex- partment of State Suspension/Revoca- ecutive Order 11958, as amended (42 FR tion under § 126.7 (a)(1)–(a)(7) of this 4311). This subchapter implements that subchapter, or who are ineligible under authority. By virtue of delegations of

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§ 127.6(c) of this subchapter are gen- cability such that control under this erally ineligible. Applications for li- subchapter is necessary. censes or other approvals will be con- The intended use of the article or sidered only if the applicant has reg- service after its export (i.e., for a mili- istered with the Office of Defense tary or civilian purpose) is not relevant Trade Controls pursuant to part 122 of in determining whether the article or this subchapter. All applications and service is subject to the controls of this requests for approval must be signed by subchapter. Any item covered by the a U.S. person who has been empowered U.S. Munitions List must be within the by the registrant to sign such docu- categories of the U.S. Munitions List. ments. The scope of the U.S. Munitions List (d) The exemptions provided in this shall be changed only by amendments subchapter do not apply to trans- made pursuant to section 38 of the actions in which the exporter or any Arms Export Control Act (22 U.S.C. party to the export (as defined in 2778). § 126.7(e) of this subchapter) is generally ineligible as set forth above in § 120.4 Commodity jurisdiction. paragraph (c) of this section, unless an (a) The commodity jurisdiction pro- exception has been granted pursuant to cedure is used with the U.S. Govern- § 126.7(c) of this subchapter. ment if doubt exists as to whether an article or service is covered by the U.S. § 120.2 Designation of defense articles Munitions List. It may also be used for and defense services. consideration of a redesignation of an The Arms Export Control Act (22 article or service currently covered by U.S.C. 2778(a) and 2794(7)) provides that the U.S. Munitions List. The Depart- the President shall designate the arti- ment must submit a report to Congress cles and services deemed to be defense at least 30 days before any item is re- articles and defense services for pur- moved from the U.S. Munitions List. poses of this subchapter. The items so Upon written request, the Office of De- designated constitute the United fense Trade Controls shall provide a de- States Munitions List and are specified termination of whether a particular ar- in part 121 of this subchapter. Such ticle or service is covered by the U.S. designations are made by the Depart- Munitions List. The determination, ment of State with the concurrence of consistent with §§ 120.2, 120.3, and 120.4, the Department of Defense. For a de- entails consultation among the Depart- termination on whether a particular ments of State, Defense, Commerce item is included on the U.S. Munitions and other U.S. Government agencies List see § 120.4(a). and industry in appropriate cases. (b) Registration with the Office of § 120.3 Policy on designating and de- Defense Trade Controls as defined in termining defense articles and serv- part 122 of this subchapter is not re- ices. quired prior to submission of a com- An article or service may be des- modity jurisdiction request. If it is de- ignated or determined in the future to termined that the commodity is a de- be a defense article (see § 120.6) or defense article or service covered by the fense service (see § 120.9) if it: U.S. Munitions List, registration is re- (a) Is specifically designed, devel- quired for exporters, manufacturers, oped, configured, adapted, or modified and furnishers of defense articles and for a military application, and defense services (see part 122 of this (i) Does not have predominant civil subchapter). applications, and (c) Requests shall identify the article (ii) Does not have performance equiv- or service, and include a history of the alent (defined by form, fit and func- product’s design, development and use. tion) to those of an article or service Brochures, specifications and any other used for civil applications; or documentation related to the article or (b) Is specifically designed, devel- service shall be submitted in seven col- oped, configured, adapted, or modified lated sets. for a military application, and has sig- (d)(1) A determination that an article nificant military or intelligence appli- or service does not have predominant

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civil applications shall be made by the Office of Defense Trade Controls has Department of State, in accordance not provided a final commodity juris- with this subchapter, on a case-by-case diction determination, the applicant basis, taking into account: may request in writing to the Director, (i) The number, variety and predomi- Center for Defense Trade that this de- nance of civil applications; termination be given expedited proc- (ii) The nature, function and capa- essing. bility of the civil applications; and (f) State, Defense and Commerce will (iii) The nature, function and capa- resolve commodity jurisdiction dis- bility of the military applications. putes in accordance with established (2) A determination that an article procedures. State shall notify Defense does not have the performance equiva- and Commerce of the initiation and lent, defined by form, fit and function, conclusion of each case. to those used for civil applications (g) A person may appeal a commodity shall be made by the Department of jurisdiction determination by submit- State, in accordance with this sub- ting a written request for reconsider- chapter, on a case-by-case basis, taking ation to the Director of the Center for into account: Defense Trade. The Center for Defense (i) The nature, function, and capa- Trade will provide a written response bility of the article; of the Director’s determination within (ii) Whether the components used in 30 days of receipt of the appeal. If de- the defense article are identical to sired, an appeal of the Director’s deci- those components originally developed sion can then be made directly to the for civil use. Assistant Secretary for Politico-Mili- NOTE: The form of the item is its defined tary Affairs. configuration, including the geometrically measured configuration, density, and weight § 120.5 Relation to regulations of other or other visual parameters which uniquely agencies. characterize the item, component or assem- If an article or service is covered by bly. For software, form denotes language, the U.S. Munitions List, its export is language level and media. The fit of the item is its ability to physically interface or inter- regulated by the Department of State, connect with or become an integral part of except as indicated otherwise in this another item. The function of the item is the subchapter. For the relationship of this action or actions it is designed to perform. subchapter to regulations of the De- (3) A determination that an article partment of Commerce, the Depart- has significant military or intelligence ment of Energy and the Nuclear Regu- applications such that it is necessary latory Commission, see § 123.20 of this to control its export as a defense arti- subchapter. The Treasury Department cle shall be made, in accordance with controls permanent imports of articles this subchapter, on a case-by-case and services covered by the U.S. Muni- basis, taking into account: tions Import List from foreign coun- (i) The nature, function, and capa- tries by persons subject to U.S. juris- bility of the article; diction (31 CFR part 505). The Depart- (ii) The nature of controls imposed ment of Commerce regulates the ex- by other nations on such items (includ- port of items on the Commerce Control ing COCOM and other multilateral con- List (CCL) under the Export Adminis- trols), and tration Regulations (15 CFR parts 768– (iii) That items described on the 799). COCOM Industrial List shall not be designated defense articles or defense § 120.6 Defense article. services unless the failure to control Defense article means any item or such items on the U.S. Munitions List technical data designated in § 121.1 of would jeopardize significant national this subchapter. The policy described security or foreign policy interests. in § 120.3 is applicable to designations (e) The Office of Defense Trade Con- of additional items. This term includes trols will provide a preliminary re- technical data recorded or stored in sponse within 10 working days of re- any physical form, models, mockups or ceipt of a complete request for com- other items that reveal technical data modity jurisdiction. If after 45 days the directly relating to items designated in

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§ 121.1 of this subchapter. It does not in- § 120.10 Technical data. clude basic marketing information on (a) Technical data means, for purposes function or purpose or general system of this subchapter: descriptions. (1) Information, other than software § 120.7 Significant military equipment. as defined in § 120.10(4), which is required for the design, development, (a) Significant military equipment production, manufacture, assembly, op- means articles for which special export eration, repair, testing, maintenance controls are warranted because of their or modification of defense articles. capacity for substantial military util- This includes information in the form ity or capability. of blueprints, drawings, photographs, (b) Significant military equipment plans, instructions and documentation. includes: (1) Items in § 121.1 of this subchapter (2) Classified information relating to which are preceded by an asterisk; and defense articles and defense services; (2) All classified articles enumerated (3) Information covered by an inven- in § 121.1 of this subchapter. tion secrecy order; (4) Software as defined in § 121.8(f) of [58 FR 39283, July 22, 1993, as amended at 62 this subchapter directly related to de- FR 67275, Dec. 24, 1997] fense articles; § 120.8 Major defense equipment. (5) This definition does not include information concerning general sci- Pursuant to section 47(6) of the Arms entific, mathematical or engineering Export Control Act (22 U.S.C. 2794(6) principles commonly taught in schools, note), major defense equipment means colleges and universities or informa- any item of significant military equip- tion in the public domain as defined in ment (as defined in § 120.7) on the U.S. § 120.11. It also does not include basic Munitions List having a nonrecurring marketing information on function or research and development cost of more purpose or general system descriptions than $50,000,000 or a total production of defense articles. cost of more than $200,000,000. (b) [Reserved] § 120.9 Defense service. [58 FR 39283, July 22, 1993, as amended at 61 (a) Defense service means: FR 48831, Sept. 17, 1996] (1) The furnishing of assistance (including training) to foreign persons, § 120.11 Public domain. whether in the United States or abroad (a) Public domain means information in the design, development, engineer- which is published and which is gen- ing, manufacture, production, assem- erally accessible or available to the bly, testing, repair, maintenance, public: modification, operation, demilitariza- (1) Through sales at newsstands and tion, destruction, processing or use of bookstores; defense articles; (2) Through subscriptions which are (2) The furnishing to foreign persons available without restriction to any in- of any technical data controlled under dividual who desires to obtain or pur- this subchapter (see § 120.10), whether chase the published information; in the United States or abroad; or (3) Through second class mailing (3) Military training of foreign units privileges granted by the U.S. Govern- and forces, regular and irregular, in- ment; cluding formal or informal instruction (4) At libraries open to the public or of foreign persons in the United States from which the public can obtain docu- or abroad or by correspondence ments; courses, technical, educational, or in- (5) Through patents available at any formation publications and media of patent office; all kinds, training aid, orientation, (6) Through unlimited distribution at training exercise, and military advice. a conference, meeting, seminar, trade (See also § 124.1.) show or exhibition, generally acces- (b) [Reserved] sible to the public, in the United [62 FR 67275, Dec. 24, 1997] States;

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(7) Through public release (i.e., un- § 120.14 Person. limited distribution) in any form (e.g., Person means a natural person as not necessarily in published form) after well as a corporation, business associa- approval by the cognizant U.S. govern- tion, partnership, society, trust, or any ment department or agency (see also other entity, organization or group, in- § 125.4(b)(13) of this subchapter); cluding governmental entities. If a pro- (8) Through fundamental research in vision in this subchapter does not refer science and engineering at accredited exclusively to a foreign person (§ 120.16) institutions of higher learning in the or U.S. person (§ 120.15), then it refers U.S. where the resulting information is to both. ordinarily published and shared broadly in the scientific community. Funda- § 120.15 U.S. person. mental research is defined to mean U.S. person means a person (as de- basic and applied research in science fined in section 120.14 of this part) who and engineering where the resulting in- is lawful permanent resident as defined formation is ordinarily published and by 8 U.S.C. 1101(a)(20) or who is a pro- shared broadly within the scientific tected individual as defined by 8 U.S.C. community, as distinguished from re- 1324b(a)(3). It also means any corpora- search the results of which are re- tion, business association, partnership, stricted for proprietary reasons or spe- society, trust, or any other entity, or- cific U.S. Government access and dis- ganization or group that is incor- semination controls. University re- porated to do business in the United search will not be considered funda- States. It also includes any governmental research if: mental (federal, state or local) entity. It does not include any foreign person (i) The University or its researchers as defined in section 120.16 of this part. accept other restrictions on publication of scientific and technical infor- [59 FR 25811, May 18, 1994] mation resulting from the project or activity, or § 120.16 Foreign person. (ii) The research is funded by the Foreign persons means any natural U.S. Government and specific access person who is not a lawful permanent and dissemination controls protecting resident as defined by 8 U.S.C. information resulting from the re- 1101(a)(20) or who is not a protected in- search are applicable. dividual as defined by 8 U.S.C. (b) [Reserved] 1324b(a)(3). It also means any foreign corporation, business association, part- § 120.12 Office of Defense Trade Con- nership, trust, society or any other en- trols. tity or group that is not incorporated or organized to do business in the Office of Defense Trade Controls, Bu- United States, as well as international reau of Politico-Military Affairs, De- organizations, foreign governments and partment of State, Washington, DC any agency or subdivision of foreign 20522–0602. governments (e.g. diplomatic missions). § 120.13 United States. [59 FR 25811, May 18, 1994] United States, when used in the geo- graphical sense, includes the several § 120.17 Export. states, the Commonwealth of Puerto (a) Export means: Rico, the insular possessions of the (1) Sending or taking a defense arti- United States, the District of Colum- cle out of the United States in any bia, the Commonwealth of the North- manner, except by mere travel outside ern Mariana Islands, any territory or of the United States by a person whose possession of the United States, and personal knowledge includes technical any territory or possession over which data; or the United States exercises any powers (2) Transferring registration, control of administration, legislation, and ju- or ownership to a foreign person of any risdiction. aircraft, vessel, or satellite covered by

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the U.S. Munitions List, whether in the § 120.21 Manufacturing license agree- United States or abroad; or ment. (3) Disclosing (including oral or vis- An agreement (e.g., contract) where- ual disclosure) or transferring in the United States any defense article to an by a U.S. person grants a foreign per- embassy, any agency or subdivision of son an authorization to manufacture a foreign government (e.g., diplomatic defense articles abroad and which in- missions); or volves or contemplates: (4) Disclosing (including oral or vis- (a) The export of technical data (as ual disclosure) or transferring tech- defined in § 120.10) or defense articles or nical data to a foreign person, whether the performance of a defense service; or in the United States or abroad; or (b) The use by the foreign person of (5) Performing a defense service on technical data or defense articles pre- behalf of, or for the benefit of, a foreign viously exported by the U.S. person. person, whether in the United States or (See part 124 of this subchapter). abroad. (6) A launch vehicle or payload shall § 120.22 Technical assistance agree- not, by reason of the launching of such ment. vehicle, be considered an export for An agreement (e.g., contract) for the purposes of this subchapter. However, performance of a defense service(s) or for certain limited purposes (see § 126.1 the disclosure of technical data, as op- of this subchapter), the controls of this subchapter may apply to any sale, posed to an agreement granting a right transfer or proposal to sell or transfer or license to manufacture defense arti- defense articles or defense services. cles. Assembly of defense articles is in- (b) [Reserved] cluded under this section, provided production rights or manufacturing know- § 120.18 Temporary import. how are not conveyed. Should such Temporary import means bringing into rights be transferred, § 120.21 is applica- the United States from a foreign coun- ble. (See part 124 of this subchapter). try any defense article that is to be returned to the country from which it § 120.23 Distribution agreement. was shipped or taken, or any defense An agreement (e.g., a contract) to es- article that is in transit to another for- tablish a warehouse or distribution eign destination. Temporary import in- point abroad for defense articles excludes withdrawal of a defense article ported from the United States for sub- from a customs bonded warehouse or sequent distribution to entities in an foreign trade zone for the purpose of re- approved sales territory (see part 124 of turning it to the country of origin or this subchapter). country from which it was shipped or for shipment to another foreign des- § 120.24 District Director of Customs. tination. Permanent imports are regulated by the Department of the Treas- District Director of Customs means the ury (see 27 CFR parts 47, 178 and 179). District Directors of Customs at Cus- toms Headquarters Ports (other than § 120.19 Reexport or retransfer. the port of New York City, New York, Reexport or retransfer means the where it is the Area Director of Cus- transfer of defense articles or defense toms); the Regional Commissioners of services to an end use, end user or des- Customs, the Deputy and Assistant Re- tination not previously authorized. gional Commissioners of Customs for Customs Region II at the Port of New § 120.20 License. York, New York; and Port Directors at License means a document bearing Customs ports not designated as Head- the word license issued by the Director, quarters Ports. Office of Defense Trade Controls or his authorized designee which permits the § 120.25 Empowered Official. export or temporary import of a spe- (a) Empowered Official means a U.S. cific defense article or defense service person who: controlled by this subchapter.

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(1) Is directly employed by the appli- (8) Section 4(b) of the Internal Secu- cant or a subsidiary in a position hav- rity Act of 1950 (relating to commu- ing authority for policy or manage- nication of classified information; 50 ment within the applicant organiza- U.S.C. 783(b)); tion; and (9) Sections 57, 92, 101, 104, 222, 224, (2) Is legally empowered in writing by 225, or 226 of the Atomic Energy Act of the applicant to sign license applica- 1954 (42 U.S.C. 2077, 2122, 2131, 2134, 2272, tions or other requests for approval on 2274, 2275, and 2276); behalf of the applicant; and (10) Section 601 of the National Secu- (3) Understands the provisions and rity Act of 1947 (relating to intelligence requirements of the various export con- identities protection; 50 U.S.C. 421); trol statutes and regulations, and the (11) Section 603(b) or (c) of the Com- criminal liability, civil liability and prehensive Anti-Apartheid Act of 1986 administrative penalties for violating (22 U.S.C. 5113(b) and (c)); and the Arms Export Control Act and the (12) Section 371 of title 18, United International Traffic in Arms Regula- States Code (when it involves con- tions; and spiracy to violate any of the above (4) Has the independent authority to: statutes). (i) Enquire into any aspect of a pro- (b) [Reserved] posed export or temporary import by the applicant, and § 120.28 Listing of forms referred to in (ii) Verify the legality of the trans- this subchapter. action and the accuracy of the infor- The forms referred to in this sub- mation to be submitted; and chapter are available from the fol- (iii) Refuse to sign any license appli- lowing government agencies: cation or other request for approval (a) Department of State, Bureau of without prejudice or other adverse re- Politico-Military Affairs, Office of De- course. fense Trade Controls, Washington, DC. (b) [Reserved] 20522–0602. § 120.26 Presiding Official. (1) Application/License for permanent export of unclassified defense ar- Presiding Official means a person au- ticles and related technical data (Form thorized by the U.S. Government to DSP–5). conduct hearings in administrative proceedings. (2) Application for registration (Form DSP–9). § 120.27 U.S. criminal statutes. (3) Application/License for temporary import of unclassified defense articles (a) For purposes of this subchapter, (Form DSP–61). the phrase U.S. criminal statutes means: (1) Section 38 of the Arms Export (4) Application/License for temporary Control Act (22 U.S.C. 2778); export of unclassified defense articles (2) Section 11 of the Export Adminis- (Form DSP–73). tration Act of 1979 (50 U.S.C. app. 2410); (5) Non-transfer and use certificate (3) Sections 793, 794, or 798 of title 18, (Form DSP–83). United States Code (relating to espio- (6) Application/License for perma- nage involving defense or classified in- nent/temporary export or temporary formation); import of classified defense articles (4) Section 16 of the Trading with the and related classified technical data Enemy Act (50 U.S.C. app. 16); (Form DSP–85). (5) Section 206 of the International (7) Authority to Export Defense Arti- Emergency Economic Powers Act (re- cles and Defense Services sold under lating to foreign assets controls; 50 the Foreign Military Sales program U.S.C. 1705); (Form DSP–94). (6) Section 30A of the Securities Ex- (b) Department of Commerce, Bureau change Act of 1934 (15 U.S.C. 78dd–1) or of Export Administration: section 104 of the Foreign Corrupt (1) International Import Certificate Practices Act (15 U.S.C. 78dd–2); (Form BXA–645P/ATF–4522/DSP–53). (7) Chapter 105 of title 18, United (2) Shipper’s Export Declaration States Code (relating to sabotage); (Form No. 7525–V).

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(3) Department of Defense, Defense 121.15 Vessels of war and special naval Security Assistance Agency: Letter of equipment. Offer and Acceptance (DD Form 1513). 121.16 Missile Technology Control Regime Annex.

§ 120.29 Missile Technology Control AUTHORITY: Sec. 2, 38, and 71, Pub. L. 90– Regime. 629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); (a) For purposes of this subchapter, E.O. 11958, 42 FR 4311, 3 CFR 1977 Comp. p. 79; Missile Technology Control Regime 22 U.S.C. 2658; Pub. L. 105–261. (MTCR) means the policy statement SOURCE: 58 FR 39287, July 22, 1993, unless between the United States, the United otherwise noted. Kingdom, the Federal Republic of Ger- many, France, Italy, Canada, and ENUMERATION OF ARTICLES Japan, announced on April 16, 1987, to restrict sensitive missile-relevant § 121.1 General. The United States Mu- nitions List. transfers based on the MTCR Annex, and any amendments thereto; (a) The following articles, services (b) The term MTCR Annex means the and related technical data are des- Guidelines and Equipment and Tech- ignated as defense articles and defense nology Annex of the MTCR, and any services pursuant to sections 38 and amendments thereto; 47(7) of the Arms Export Control Act (c) List of all items on the MTCR (22 U.S.C. 2778 and 2794(7)). Changes in Annex. Section 71(a) of the Arms Ex- designations will be published in the port Control Act (22 U.S.C. § 2797) refers FEDERAL REGISTER. Information and to the establishment as part of the U.S. clarifications on whether specific items Munitions List of a list of all items on are defense articles and services under the MTCR Annex, the export of which this subchapter may appear periodi- is not controlled under section 6(l) of cally in the Defense Trade News pub- the Export Administration Act of 1979 lished by the Center for Defense Trade. (50 U.S.C. app. 2405(l)), as amended. In (b) Significant military equipment: accordance with this provision, the list An asterisk precedes certain defense of MTCR Annex items shall constitute articles in the following list. The aster- all items on the U.S. Munitions List in isk means that the article is deemed to § 121.16 of this subchapter. be ‘‘significant military equipment’’ to the extent specified in § 120.19. The as- PART 121—THE UNITED STATES terisk is placed as a convenience to MUNITIONS LIST help identify such articles. (c) Missile Technology Control Re- gime Annex (MTCR). Certain defense ENUMERATION OF ARTICLES articles and services are identified in Sec. § 121.16 as being on the list of MTCR 121.1 General. The United States Munitions Annex items on the United States Mu- List. 121.2 Interpretations of the U.S. Munitions nitions List. These are articles as spec- List and the Missile Technology Control ified in § 120.29 of this subchapter and Regime Annex. appear on the list at § 121.16. 121.3 Aircraft and related articles. 121.4 Amphibious vehicles. CATEGORY I—FIREARMS 121.5 Apparatus and devices under Category IV(c). *(a) Nonautomatic, semi-automatic and 121.6 Cartridge and shell casings. fully automatic firearms to caliber .50 inclu- 121.7 Chemical agents. sive. (See § 121.9 and §§ 123.17 and 123.18 of this 121.8 End-items, components, accessories, subchapter.) attachments, parts, firmware, software (b) Riflescopes manufactured to military and systems. specifications; firearm silencers and sup- 121.9 Firearms. pressers, including flash suppressors. (See 121.10 Forgings, castings and machined bod- Category XII(c) for night sighting devices.) ies. *(c) Insurgency-counterinsurgency type 121.11 Military demolition blocks and blast- firearms or other weapons having a special ing caps. military application (e.g. close assault weap- 121.12 Military explosives and propellants. ons systems) regardless of caliber. 121.13 Military fuel thickeners. *(d) Components, parts, accessories and at- 121.14 [Reserved] tachments for the articles in paragraphs (a)

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through (c) of this category. All the compo- that are designated as Significant Military nents, parts, accessories and attachments Equipment (SME) shall itself be designated covered by this paragraph, except barrels, SME. cylinders, receivers (frames) or complete breach mechanisms, are non-SME (see CATEGORY IV—LAUNCH VEHICLES, GUIDED § 120.7). MISSILES, BALLISTIC MISSILES, ROCKETS, (e) Technical data (as defined in § 120.10 of TORPEDOES, BOMBS AND MINES this subchapter) and defense services (as de- *(a) Rockets (including but not limited to fined in § 120.9 of this subchapter) directly re- meteorological and other sounding rockets), lated to the defense articles enumerated in bombs, grenades, torpedoes, depth charges, paragraphs (a) through (d) of this category. land and naval mines, as well as launchers (See § 125.4 of this subchapter for exemp- for such defense articles, and demolition tions.) Technical data directly related to the manufacture or production of any defense ar- blocks and blasting caps. (See § 121.11.) ticles enumerated elsewhere in this category *(b) Launch vehicles and missile and anti- that are designated as Significant Military missile systems including but not limited to Equipment (SME) shall itself be designated guided, tactical and strategic missiles, SME. launchers, and systems. (c) Apparatus, devices, and materials for CATEGORY II—ARTILLERY PROJECTORS the handling, control, activation, moni- *(a) Guns over caliber .50, howitzers, mor- toring, detection, protection, discharge, or tars, and recoilless rifles. detonation of the articles in paragraphs (a) *(b) Military flamethrowers and projectors. and (b) of this category. (See § 121.5.) (c) Components, parts, accessories and at- *(d) Missile and space launch vehicle pow- tachments for the articles in paragraphs (a) erplants. and (b) of this category, including but not *(e) Military explosive excavating devices. limited to mounts and carriages for these ar- *(f) Ablative materials fabricated or semi- ticles. fabricated from advanced composites (e.g., (d) Technical data (as defined in 120.21 of silica, graphite, carbon, carbon/carbon, and this subchapter) and defense services (as de- boron filaments) for the articles in this cat- fined in § 120.8 of this subchapter) directly re- egory that are derived directly from or spe- lated to the defense articles enumerated in cifically developed or modified for defense paragraphs (a) through (c) of this category. articles. (See § 125.4 of this subchapter for exemp- *(g) Non/nuclear warheads for rockets and tions.) Technical data directly related to the guided missiles. manufacture or production of any defense ar- (h) All specifically designed or modified ticles enumerated elsewhere in this category components, parts, accessories, attachments, that are designated as Significant Military and associated equipment for the articles in Equipment (SME) shall itself be designated this category. SME. (i) Technical data (as defined in § 120.21 of this subchapter) and defense services (as de- CATEGORY III—AMMUNITION fined in § 120.8 of this subchapter) directly re- *(a) Ammunition for the arms in Cat- lated to the defense articles enumerated in egories I and II of this section. (See § 121.6.) paragraphs (a) through (h) of this category. (b) Components, parts, accessories, and at- (See § 125.4 of this subchapter for exemp- tachments for articles in paragraph (a) of tions.) Technical data directly related to the this category, including but not limited to manufacture or production of any defense ar- cartridge cases, powder bags, bullets, jack- ticles enumerated elsewhere in this category ets, cores, shells (excluding shotgun shells), that are designated as Significant Military projectiles, boosters, fuzes and components Equipment (SME) shall itself be designated therefor, primers, and other detonating de- SME. vices for such ammunition. (See § 121.6.) (c) Ammunition belting and linking ma- CATEGORY V—EXPLOSIVES, PROPELLANTS, IN- chines. CENDIARY AGENTS, AND THEIR CONSTITU- *(d) Ammunition manufacturing machines ENTS and ammunition loading machines (except handloading ones). *(a) Military explosives. (See § 121.12.) (e) Technical data (as defined in § 120.21 of *(b) Military fuel thickeners. (See § 121.13.) this subchapter) and defense services (as de- (c) Propellants for the articles in Cat- fined in § 120.8 of this subchapter) directly re- egories III and IV of this section. (See lated to the defense articles enumerated in § 121.14.) paragraphs (a) through (d) of this category. (d) Military pyrotechnics, except pyro- (See § 125.4 of this subchapter for exemp- technic materials having dual military and tions.) Technical data directly related to the commercial use. manufacture or production of any defense ar- (e) All compounds specifically formulated ticles enumerated elsewhere in this category for the articles in this category.

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(f) Technical data (as defined in § 120.21 of *(b) Military tanks, combat engineer vehi- this subchapter) and defense services (as de- cles, bridge launching vehicles, half-tracks fined in § 120.8 of this subchapter) directly re- and gun carriers. lated to the defense articles enumerated in *(c) Self-propelled guns and howitzers. paragraphs (a) through (e) of this category. (d) Military trucks, trailers, hoists, and (See § 125.4 of this subchapter for exemp- skids specifically designed, modified, or tions.) Technical data directly related to the equipped to mount or carry weapons of Cat- manufacture or production of any defense ar- egories I, II and IV or for carrying and han- ticles enumerated elsewhere in this category dling the articles in paragraph (a) of Cat- that are designated as Significant Military egories III and IV. Equipment (SME) shall itself be designated *(e) Military recovery vehicles. SME. *(f) Amphibious vehicles. (See § 121.4) *(g) Engines specifically designed or modi- CATEGORY VI—VESSELS OF WAR AND SPECIAL fied for the vehicles in paragraphs (a), (b), NAVAL EQUIPMENT. (c), and (f) of this category. (h) All specifically designed or modified *(a) Warships, amphibious warfare vessels, components and parts, accessories, attach- landing craft, mine warfare vessels, patrol ments, and associated equipment for the ar- vessels and any vessels specifically designed ticles in this category, including but not or modified for military purposes. (See limited to military bridging and deep water § 121.15.) fording kits. (b) Patrol craft without armor, armament (i) Technical data (as defined in § 120.21 of or mounting surfaces for weapon systems this subchapter) and defense services (as de- more significant than .50 caliber machine fined in § 120.8 of this subchapter) directly re- guns or equivalent and auxiliary vessels. lated to the defense articles enumerated in (See § 121.15.) paragraphs (a) through (h) of this category. *(c) Turrets and gun mounts, arresting (See § 125.4 of this subchapter for exemp- gear, special weapons systems, protective tions.) Technical data directly related to the systems, submarine storage batteries, cata- manufacture or production of any defense ar- pults, mine sweeping equipment (including ticles enumerated elsewhere in this category mine countermeasures equipment deployed that are designated as Significant Military by aircraft) and other significant naval sys- Equipment (SME) shall itself be designated tems specifically designed or modified for SME. combatant vessels. (d) Harbor entrance detection devices CATEGORY VIII—AIRCRAFT AND ASSOCIATED (magnetic, pressure, and acoustic) and con- EQUIPMENT trols therefor. *(a) Aircraft, including but not limited to *(e) Naval nuclear propulsion plants, their helicopters, non-expansive balloons, drones, land prototypes, and special facilities for and lighter-than-air aircraft, which are spe- their construction, support, and mainte- cifically designed, modified, or equipped for nance. This includes any machinery, device, military purposes. This includes but is not component, or equipment specifically devel- limited to the following military purposes: oped, designed or modified for use in such Gunnery, bombing, rocket or missile launch- plants or facilities. (See § 123.20) ing, electronic and other surveillance, recon- (f) All specifically designed or modified naissance, refueling, aerial mapping, mili- components, parts, accessories, attachments, tary liaison, cargo carrying or dropping, per- and associated equipment for the articles in sonnel dropping, airborne warning and con- paragraphs (a) through (e) of this category. trol, and military training. (See § 121.3.) (g) Technical data (as defined in § 120.10) *(b) Military aircraft engines, except recip- and defense services (as defined in § 120.9) di- rocating engines, specifically designed or rectly related to the defense articles enu- modified for the aircraft in paragraph (a) of merated in paragraphs (a) through (f) of this this category. category. (See § 125.4 for exemptions.) Tech- *(c) Cartridge-actuated devices utilized in nical data directly related to the manufac- emergency escape of personnel and airborne ture or production of any defense articles equipment (including but not limited to air- enumerated elsewhere in this category that borne refueling equipment) specifically de- are designated as Significant Military Equip- signed or modified for use with the aircraft ment (SME) shall itself be designated SME. and engines of the types in paragraphs (a) and (b) of this category. CATEGORY VII—TANKS AND MILITARY (d) Launching and recovery equipment for VEHICLES the articles in paragraph (a) of this category, *(a) Military type armed or armored vehi- if the equipment is specifically designed or cles, military railway trains, and vehicles modified for military use. Fixed land-based specifically designed or modified to accom- arresting gear is not included in this cat- modate mountings for arms or other special- egory. ized military equipment or fitted with such *(e) Inertial navigation systems, aided or items. hybrid inertial navigation systems, Inertial

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Measurement Units (IMUs), and Attitude and get trainers, radar target generators, gun- Heading Reference Systems (AHRS) specifi- nery training devices, antisubmarine warfare cally designed, modified, or configured for trainers, target equipment, armament train- military use and all specifically designed ing units, operational flight trainers, air components, parts and accessories. For other combat training systems, radar trainers, inertial reference systems and related com- navigation trainers, and simulation devices ponents refer to Category XII(d). related to defense articles. (f) Developmental aircraft, engines, and (b) Components, parts, accessories, attach- components thereof specifically designed, ments, and associated equipment specifically modified, or equipped for military uses or designed or modified for the articles in para- purposes, or developed principally with U.S. graph (a) of this category. Department of Defense funding, excluding (c) Technical Data (as defined in § 120.21 of such aircraft, engines, and components sub- this subchapter) and defense services (as de- ject to the jurisdiction of the Department of fined in § 120.8 of this subchapter) directly re- Commerce. lated to the defense articles enumerated in NOTE: Developmental aircraft, engines, and paragraphs (a) and (b) of this category. (See components thereof, having no commercial § 125.4 for exemptions.). application at the time of this amendment and which have been specifically designed for CATEGORY X—PROTECTIVE PERSONNEL military uses or purposes, or developed prin- EQUIPMENT cipally with U.S. Department of Defense (a) Body armor specifically designed, modi- funding, will be considered eligible for a CCL fied or equipped for military use; articles, in- license when actually applied to a commer- cluding but not limited to clothing, de- cial aircraft or commercial aircraft engine signed, modified or equipped to protect program. Exporters may seek to establish against or reduce detection by radar, infra- commercial application either on a case-by- red (IR) or other sensors; military helmets case basis through submission of documenta- equipped with communications hardware, tion demonstrating application to a commer- optical sights, slewing devices or mecha- cial program in requesting an export license nisms to protect against thermal flash or la- application from Commerce in respect of a sers, excluding standard military helmets. specific export or, in the case of use for (b) Partial pressure suits and liquid oxygen broad categories of aircraft, engines, or com- converters used in aircraft in Category ponents, a commodity jurisdiction from VIII(a). State. (c) Protective apparel and equipment spe- *(g) Ground effect machines (GEMS) specifically designed or modified for use with cifically designed or modified for military the articles in paragraphs (a) through (d) in use, including but not limited to surface ef- Category XIV. fect machines and other air cushion vehicles, (d) Components, parts, accessories, attach- and all components, parts, and accessories, ments, and associated equipment specifically attachments, and associated equipment spe- designed or modified for use with the articles cifically designed or modified for use with in paragraphs (a), (b), and (c) of this cat- such machines. egory. (h) Components, parts, accessories, attach- (e) Technical Data (as defined in § 120.21 of ments, and associated equipment (including this subchapter) and defense services (as de- ground support equipment) specifically defined in § 120.8 of this subchapter) directly re- signed or modified for the articles in para- lated to the defense articles enumerated in graphs (a) through (e) of this category, ex- paragraphs (a) through (d) of this category. cluding aircraft tires and propellers used (See § 125.4 of this subchapter for exemp- with reciprocating engines. tions.) (i) Technical data (as defined in § 120.10) and defense services (as defined in § 120.9) di- CATEGORY XI—MILITARY ELECTRONICS rectly related to the defense articles enu- (a) Electronic equipment not included in merated in paragraphs (a) through (h) of this Category XII of the U.S. Munitions List category (see § 125.4 for exemptions), except which is specifically designed, modified or for hot section technical data associated configured for military application. This with commercial aircraft engines. Technical equipment includes but is not limited to: data directly related to the manufacture or *(1) Underwater sound equipment to in- production of any defense articles enumer- clude active and passive detection, identi- ated elsewhere in this category that are des- fication, tracking, and weapons control ignated as Significant Military Equipment equipment. (SME) shall itself be designated SME. *(2) Underwater acoustic active and passive countermeasures and counter-counter- CATEGORY IX—MILITARY TRAINING measures. EQUIPMENT (3) Radar systems, with capabilities such (a) Military training equipment including as: but not limited to attack trainers, radar tar- *(i) Search,

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*(ii) Acquisition, (c) Components, parts, accessories, attach- *(iii) Tracking, ments, and associated equipment specifically *(iv) Moving target indication, designed or modified for use with the equip- *(v) Imaging radar systems, ment in paragraphs (a) and (b) of this cat- (vi) Any ground air traffic control radar egory, except for such items as are in normal which is specifically designed or modified for commercial use. military application. (d) Technical data (as defined in § 120.21) *(4) Electronic combat equipment, such as: and defense services (as defined in § 120.8) di- (i) Active and passive countermeasures, rectly related to the defense articles enu- (ii) Active and passive counter-counter- merated in paragraphs (a) through (c) of this measures, and category. (See § 125.4 for exemptions.) Tech- (iii) Radios (including transceivers) specifi- nical data directly related to the manufac- cally designed or modified to interfere with ture or production of any defense articles other communication devices or trans- enumerated elsewhere in this category that missions. are designated as Significant Military Equip- *(5) Command, control and communica- ment (SME) shall itself be designated as tions systems to include radios SME. (transceivers), navigation, and identification equipment. CATEGORY XII—FIRE CONTROL, RANGE FIND- (6) Computers specifically designed or de- ER, OPTICAL AND GUIDANCE AND CONTROL veloped for military application and any EQUIPMENT computer specifically modified for use with any defense article in any category of the *(a) Fire control systems; gun and missile U.S. Munitions List. tracking and guidance systems; gun range, (7) Any experimental or developmental position, height finders, spotting instru- electronic equipment specifically designed or ments and laying equipment; aiming devices modified for military application or specifi- (electronic, optic, and acoustic); bomb cally designed or modified for use with a sights, bombing computers, military tele- military system. vision sighting and viewing units, and peri- *(b) Electronic systems or equipment spe- scopes for the articles of this section. cifically designed, modified, or configured *(b) Lasers specifically designed, modified for intelligence, security, or military pur- or configured for military application in- poses for use in search, reconnaissance, col- cluding those used in military communica- lection, monitoring, direction-finding, dis- tion devices, target designators and range play, analysis and production of information finders, target detection systems, and di- from the electromagnetic spectrum and elec- rected energy weapons. tronic systems or equipment designed or *(c) Infrared focal plane array detectors modified to counteract electronic surveil- specifically designed, modified or configured lance or monitoring. A system meeting this for military use; image intensification and definition is controlled under this sub- other night sighting equipment or systems chapter even in instances where any indi- specifically designed, modified, or configured vidual pieces of equipment constituting the for military use; second generation and system may be subject to the controls of an- above military image intensification tubes other U.S. Government agency. Such sys- (defined below) specifically designed, devel- tems or equipment described above include, oped, modified or configured for military but are not limited to, those: use, and infrared, visible and ultraviolet de- (1) Designed or modified to use cryp- vices specifically designed, developed, modi- tographic techniques to generate the spread- fied, or configured for military application. ing code for spread spectrum or hopping code Military second and third generation image for frequency agility. This does not include intensification tubes and military infrared fixed code techniques for spread spectrum. focal plane arrays identified in this subpara- (2) Designed or modified using burst tech- graph are licensed by the Department of niques (e.g., time compression techniques) Commerce (ECCN 6A02A and 6A03A) when a for intelligence, security or military pur- part of a commercial system (i.e. those sys- poses. tems originally designed for commercial (3) Designed or modified for the purpose of use). This does not include any military sys- information security to suppress the compro- tem comprised of non-military specification mising emanations of information-bearing components. Replacement tubes or focal signals. This covers TEMPEST suppression plane arrays identified in this paragraph technology and equipment meeting or de- being exported for commercial systems are signed to meet government TEMPEST stand- subject to the controls of the ITAR. ards. This definition is not intended to in- NOTE: Special Definition. For purposes of clude equipment designed to meet Federal this subparagraph, second and third genera- Communications Commission (FCC) com- tion image intensification tubes are defined as mercial electro-magnetic interference stand- having: ards or equipment designed for health and A peak response within the 0.4 to 1.05 mi- safety. cron wavelength range and incorporating a

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microchannel plate for electron image am- (3) Military cryptanalytic systems, equip- plification having a hold pitch (center-to- ment, assemblies, modules, integrated cir- center spacing) of less than 25 microns and cuits, components or software. having either: (4) Military systems, equipment, assem- (a) An S–20, S–25 or multialkali blies, modules, integrated circuits, compo- photocathode; or nents or software providing certified or cer- (b) A GaAs, GaInAs, or other compound tifiable multi-level security or user isolation semiconductor photocathode. exceeding class B2 of the Trusted Computer *(d) Inertial platforms and sensors for System Evaluation Criteria (TCSEC) and weapons or weapon systems; guidance, con- software to certify such systems, equipment trol and stabilization systems except for or software. those systems covered in Category VIII; (5) Ancillary equipment specifically de- astro-compasses and star trackers and mili- signed or modified for paragraphs (b) (1), (2), tary accelerometers and gyros. For aircraft (3), and (4) of this category. inertial reference systems and related com- (c) Self-contained diving and underwater ponents refer to Category VIII. breathing apparatus as follows: (e) Components, parts, accessories, attach- (1) Closed and semi-closed circuits (re- ments and associated equipment specifically breathing) apparatus; designed or modified for the articles in para- (2) Specially designed components for use graphs (a) through (d) of this category, ex- in the conversion of open-circuit apparatus cept for such items as are in normal com- to military use; and mercial use. (3) Articles exclusively designed for mili- (f) Technical data (as defined in § 120.21) tary use with self-contained diving and un- and defense services (as defined in § 120.8) di- derwater swimming apparatus. rectly related to the defense articles enu- (d) Carbon/carbon billets and preforms merated in paragraphs (a) through (e) of this which are reinforced with continuous category. (See § 125.4 for exemptions.) Tech- unidirectional tows, tapes, or woven cloths nical data directly related to manufacture in three or more dimensional planes (i.e. 3D, and production of any defense articles enu- 4D, etc.). This is exclusive of carbon/carbon merated elsewhere in this category that are billets and preforms where reinforcement in designated as Significant Military Equip- the third dimension is limited to inter- ment (SME) shall itself be designated as locking of adjacent layers only, and carbon/ SME. carbon 3D, 4D, etc. end items which have not been specifically designed or modified for de- CATEGORY XIII—AUXILIARY MILITARY fense articles (e.g., brakes for commercial EQUIPMENT aircraft or high speed trains). Armor (e.g., (a) Cameras and specialized processing organic, ceramic, metallic), and reactive equipment therefor, photointerpretation, armor which has been specifically designed stereoscopic plotting, and photogrammetry or modified for defense articles. Structural equipment which are specifically designed or materials including carbon/carbon and metal modified for military purposes, and compo- matrix composites, plate, forgings, castings, nents specifically designed or modified welding consumables and rolled and extruded therefor; shapes which have been specifically designed (b) Military Information Security Systems or modified for defense articles. and equipment, cryptographic devices, soft- (e) Concealment and deception equipment, ware, and components specifically designed including but not limited to special paints, or modified therefor (i.e., such items when decoys, and simulators and components, specifically designed, developed, configured, parts and accessories specifically designed or adapted or modified for military applications modified therefor. (including command, control and intel- (f) Energy conversion devices for producing ligence applications)). This includes: electrical energy from nuclear, thermal, or (1) Military cryptographic (including key solar energy, or from chemical reaction management) systems, equipment, assem- which are specifically designed or modified blies, modules, integrated circuits, compo- for military application. nents or software with the capability of (g) Chemiluminescent compounds and solid maintaining secrecy or confidentiality of in- state devices specifically designed or modi- formation or information systems, including fied for military application. equipment and software for tracking, telem- (h) Devices embodying particle beam and etry and control (TT&C) encryption and electromagnetic pulse technology and asso- decryption. ciated components and subassemblies (e.g., (2) Military cryptographic (including key ion beam current injectors, particle accel- management) systems, equipment, assem- erators for neutral or charged particles, blies, modules, integrated circuits, compo- beam handling and projection equipment, nents of software which have the capability beam steering, fire control, and pointing of generating spreading or hopping codes for equipment, test and diagnostic instruments, spread spectrum systems or equipment. and targets) which are specifically designed

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or modified for directed energy weapon ap- *NOTE TO PARAGRAPH (a): Commercial com- plications. munications satellites, scientific satellites, (i) Metal embrittling agents. research satellites and experimental sat- *(j) Hardware and equipment, which has ellites are designated as SME only when the been specifically designed or modified for equipment is intended for use by the armed military applications, that is associated with forces of any foreign country. the measurement or modification of system (b) Ground control stations for telemetry, signatures for detection of defense articles. tracking and control of spacecraft or sat- This includes but is not limited to signature ellites, or employing any of the cryp- measurement equipment; prediction tech- tographic items controlled under category niques and codes; signature materials and XIII of this subchapter. treatments; and signature control design (c) Global Positioning System (GPS) re- methodology. ceiving equipment specifically designed, (k) Technical data (as defined in § 120.21 of modified or configured for military use; or this subchapter) and defense services (as de- GPS receiving equipment with any of the fol- fined in § 120.8 of this subchapter) related to lowing characteristics: the defense articles listed in this category. (1) Designed for encryption or decryption (See § 125.4 of this subchapter for exemptions; (e.g., Y-Code) of GPS precise positioning see also § 123.21 of this subchapter). Technical service (PPS) signals; data directly related to the manufacture or (2) Designed for producing navigation re- production of any defense articles enumer- sults above 60,000 feet altitude and at 1,000 ated elsewhere in this category that are des- knots velocity or greater; ignated as Significant Military Equipment (3) Specifically designed or modified for (SME) shall itself be designated as SME. use with a null steering antenna or including CATEGORY XIV—TOXICOLOGICAL AGENTS AND a null steering antenna designed to reduce or EQUIPMENT AND RADIOLOGICAL EQUIPMENT avoid jamming signals; (4) Designed or modified for use with un- *(a) Chemical agents, including but not manned air vehicle systems capable of deliv- limited to lung irritants, vesicants, ering at least a 500 kg payload to a range of lachrymators, tear gases (except tear gas at least 300 km. formulations containing 1% or less CN or NOTE: GPS receivers designed or modified CS), sternutators and irritant smoke, and for use with military unmanned air vehicle nerve gases and incapacitating agents. (See systems with less capability are considered § 121.7.) to be specifically designed, modified or con- *(b) Biological agents. figured for military use and therefore cov- *(c) Equipment for dissemination, detec- ered under this paragraph (d)(4).) tion, and identification of, and defense Any GPS equipment not meeting this defi- against, the articles in paragraphs (a) and (b) nition is subject to the jurisdiction of the of this category. Department of Commerce (DOC). Manufac- *(d) Nuclear radiation detection and meas- turers or exporters of equipment under DOC uring devices, manufactured to military jurisdiction are advised that the U.S. Gov- specification. ernment does not assure the availability of (e) Components, parts, accessories, attach- the GPS P-Code for civil navigation. It is the ments, and associated equipment specifically policy of the Department of Defense (DOD) designed or modified for the articles in para- that GPS receivers using P-Code without graphs (c) and (d) of this category. clarification as to whether or not those re- (f) Technical data (as defined in § 120.21 of ceivers were designed or modified to use Y- this subchapter) and defense services (as de- Code will be presumed to be Y-Code capable fined in § 120.8 of this subchapter) related to and covered under this paragraph. The DOD the defense articles enumerated in para- policy further requires that a notice be at- graphs (a) through (e) of this category. (See tached to all P-Code receivers presented for § 125.4 of this subchapter for exemptions; see export. The notice must state the following: also § 123.21 of this subchapter). Technical ‘‘ADVISORY NOTICE: This receiver uses the data directly related to the manufacture or GPS P-Code signal, which by U.S. policy, production of any defense articles enumer- may be switched off without notice.’’ ated elsewhere in this category that are des- (d) Radiation-hardened microelectronic ignated as Significant Military Equipment circuits that meet or exceed all five of the (SME) shall itself be designated as SME. following characteristics: (1) A total dose of 5×105 Rads (SI); CATEGORY XV—SPACECRAFT SYSTEMS AND (2) A dose rate upset of 5×108 Rads (SI)/Sec; ASSOCIATED EQUIPMENT (3) A neutron dose of 1×1014 N/cm2; * (a) Spacecraft, including communications (4) A single event upset of 1×10¥7 or less satellites, remote sensing satellites, sci- error/bit/day; entific satellites, research satellites, naviga- (5) Single event latch-up free and having a tion satellites, experimental and multi-mis- dose rate latch-up of 5×108 Rads(SI)/sec or sion satellites. greater.

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(e) All specifically designed or modified chapter and Department of Commerce Ex- systems, components, parts, accessories, at- port Regulations, 15 CFR part 778). tachments, and associated equipment for the *(b) Any article, material, equipment, or articles in this category, including the arti- device which is specifically designed or cles identified in § 1516 of Public Law 105–261: modified for use in the devising, carrying satellite fuel, ground support equipment, out, or evaluating of nuclear weapons tests test equipment, payload adapter or interface or any other nuclear explosions, except such hardware, replacement parts, and non-em- items as are in normal commercial use for bedded solid propellant orbit transfer en- other purposes. gines (see also categories IV and V). (c) Technical data (as defined in § 120.21 of (f) Technical data (as defined in § 120.10 of this subchapter) and defense services (as de- this subchapter) and defense services (as defined in § 120.8 of this subchapter) directly re- fined in § 120.9 of this subchapter) directly related to the defense articles enumerated in lated to the articles enumerated in para- paragraphs (a) through (b) of this category. graphs (a) through (e) of this category, as (See § 125.4 of this subchapter for exemp- well as detailed design, development, manu- tions.) Technical data directly related to the facturing or production data for all space- manufacture or production of any defense ar- craft and specifically designed or modified ticles enumerated elsewhere in this category components for all spacecraft systems. This that are designated as Significant Military paragraph includes all technical data, with- Equipment (SME) shall itself be designated out exception, for all launch support activi- SME. ties (e.g., technical data provided to the launch provider on form, fit, function, mass, CATEGORY XVII—CLASSIFIED ARTICLES, TECH- electrical, mechanical, dynamic, environ- NICAL DATA AND DEFENSE SERVICES NOT mental, telemetry, safety, facility, launch OTHERWISE ENUMERATED pad access, and launch parameters, as well as interfaces for mating and parameters for *(a) All articles, technical data (as defined launch.) (See § 124.1 for the requirements for in § 120.21 of this subchapter) and defense technical assistance agreements before de- services (as defined in § 120.8 of this sub- fense services may be furnished even when chapter) relating thereto which are classified all the information relied upon by the U.S. in the interests of national security and person in performing the defense service is in which are not otherwise enumerated in the the public domain or is otherwise exempt U.S. Munitions List. from the licensing requirements of this subchapter.) Technical data directly related to CATEGORY XVIII—[RESERVED] the manufacture or production of any article enumerated elsewhere in this category that CATEGORY XIX—[RESERVED] is designated as Significant Military Equip- CATEGORY XX—SUBMERSIBLE VESSELS, ment (SME) shall itself be designated SME. OCEANOGRAPHIC AND ASSOCIATED EQUIPMENT Further, technical data directly related to the manufacture or production of all space- *(a) Submersible vessels, manned or un- craft, notwithstanding the nature of the in- manned, tethered or untethered, designed or tended end use (e.g., even where the hard- modified for military purposes, or powered ware is not SME), is designated SME. by nuclear propulsion plants. *(b) Swimmer delivery vehicles designed or NOTE TO PARAGRAPH (f): The special export controls contained in § 124.15 of this sub- modified for military purposes. chapter are always required before a U.S. (c) Equipment, components, parts, acces- person may participate in a launch failure sories, and attachments specifically designed investigation or analysis and before the ex- or modified for any of the articles in para- port of any article or defense service in this graphs (a) and (b) of this category. category for launch in, or by nationals of, a (d) Technical data (as defined in § 120.21 of country that is not a member of the North this subchapter) and defense services (as de- Atlantic Treaty Organization or a major fined in § 120.8 of this subchapter) directly re- non-NATO ally of the United States. Such lated to the defense articles enumerated in special export controls also may be imposed paragraphs (a) through (c) of this category. with respect to any destination as deemed (See § 125.4 of this subchapter for exemp- appropriate in furtherance of the security tions.) Technical data directly related to the and foreign policy of the United States. manufacture or production of any defense articles enumerated elsewhere in this category CATEGORY XVI—NUCLEAR WEAPONS DESIGN that are designated as Significant Military AND TEST EQUIPMENT Equipment (SME) shall itself be designated *(a) Any article, material, equipment, or as SME. device which is specifically designed or CATEGORY XXI—MISCELLANEOUS ARTICLES modified for use in the design, development, or fabrication of nuclear weapons or nuclear (a) Any article not specifically enumerated explosive devices. (See § 123.21 of this sub- in the other categories of the U.S. Munitions

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List which has substantial military applica- (d) All liaison aircraft bearing an bility and which has been specifically de- ‘‘L’’ designation. signed or modified for military purposes. The (e) All observation aircraft bearing decision on whether any article may be in- ‘‘O’’ designations and using recipro- cluded in this category shall be made by the Director of the Office of Defense Trade Con- cating engines. trols. § 121.4 Amphibious vehicles. (b) Technical data (as defined in § 120.21 of this subchapter) and defense services (as de- An amphibious vehicle in Category fined in § 120.8 of this subchapter) directly re- VII(f) is an automotive vehicle or chas- lated to the defense articles enumerated in sis which embodies all-wheel drive, is paragraphs (a) of this category. equipped to meet special military re- [58 FR 39287, July 22, 1993, as amended at 58 quirements, and which has sealed elec- FR 47638, Sept. 10, 1993; 58 FR 60115, Nov. 15, trical systems or adaptation features 1993; 59 FR 46548 and 46549, Sept. 9, 1994; 59 FR for deep water fording. 47800, Sept. 19, 1994; 61 FR 56895, Nov. 5, 1996; 61 FR 68633, Dec. 30, 1996; 64 FR 13680, Mar. 22, § 121.5 Apparatus and devices under 1999; 64 FR 17533, Apr. 12, 1999] Category IV(c). Category IV includes but is not lim- § 121.2 Interpretations of the U.S. Mu- ited to the following: Fuzes and compo- nitions List and the Missile Tech- nology Control Regime Annex. nents specifically designed, modified or configured for items listed in that cat- The following interpretations (listed egory, bomb racks and shackles, bomb alphabetically) explain and amplify the shackle release units, bomb ejectors, terms used in § 121.1. These interpreta- torpedo tubes, torpedo and guided mis- tions have the same force as if they sile boosters, guidance systems equip- were a part of the U.S. Munitions List ment and parts, launching racks and (USML) category to which they refer. projectors, pistols (exploders), ignitors, In addition, all the items listed in fuze arming devices, intervalometers, § 121.16 shall constitute all items on the thermal batteries, hardened missile United States Munitions List which launching facilities, guided missile are Missile Technology Control Regime launchers and specialized handling Annex items in accordance with sec- equipment, including transporters, tion 71(a) of the Arms Export Control cranes and lifts designed to handle ar- Act. ticles in paragraphs (a) and (b) of this category for preparation and launch § 121.3 Aircraft and related articles. from fixed and mobile sites. The equip- In Category VIII, aircraft means air- ment in this category includes robots, craft designed, modified, or equipped robot controllers and robot end-effec- for a military purpose, including air- tors specially designed or modified for craft described as ‘‘demilitarized.’’ All military applications. aircraft bearing an original military designation are included in Category § 121.6 Cartridge and shell casings. VIII. However, the following aircraft Cartridge and shell casings are in- are not included so long as they have cluded in Category III unless, prior to not been specifically equipped, reexport, they have been rendered useless equipped, or modified for military op- beyond the possibility of restoration erations: for use as a cartridge or shell casing by (a) Cargo aircraft bearing ‘‘C’’ des- means of heating, flame treatment, ignations and numbered C–45 through mangling, crushing, cutting, or pop- C–118 inclusive, C–121 through C–125 in- ping. clusive, and C–131, using reciprocating engines only. § 121.7 Chemical agents. (b) Trainer aircraft bearing ‘‘T’’ des- A chemical agent in Category XIV(a) ignations and using reciprocating en- is a substance having military applica- gines or turboprop engines with less tion which by its ordinary and direct than 600 horsepower (s.h.p.) chemical action produces a powerful (c) Utility aircraft bearing ‘‘U’’ des- physiological effect. The term ‘‘chem- ignations and using reciprocating en- ical agent’’ includes, but is not limited gines only. to, the following chemical compounds:

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(a) Lung irritants: (c) Accessories and attachments are as- (1) Diphenylcyanoarsine (DC). sociated equipment for any component, (2) Fluorine (but not fluorene). end-item or system, and which are not (3) Trichloronitro methane necessary for their operation, but (chloropicrin PS). which enhance their usefulness or ef- (b) Vesicants: fectiveness. (EXAMPLES: Military (1) B-Chlorovinyldichloroarsine (Lew- riflescopes, special paints, etc.) isite, L). (d) A part is any single unassembled (2) Bis(dichloroethyl)sulphide (Mus- element of a major or a minor compo- tard Gas, HD or H). nent, accessory, or attachment which (3) Ethyldichloroarsine (ED). is not normally subject to disassembly (4) Methyldichloroarsine (MD). without the destruction or the impair- (c) Lachrymators and tear gases: ment of design use. (EXAMPLES: Rivets, (1) A-Bromobenzyl cyanide (BBC). wire, bolts, etc.) (2) Chloroacetophenone (CN). (e) Firmware and any related unique (3) Dibromodimethyl ether. support tools (such as computers, link- (4) Dichlorodimethyl ether (ClCi). ers, editors, test case generators, diag- (5) Ethyldibromoarsine. nostic checkers, library of functions (6) Phenylcarbylamine chloride. and system test diagnostics) specifi- (7) Tear gas solutions (CNB and CNS). cally designed for equipment or sys- (8) Tear gas tems covered under any category of the orthochlorobenzalmalononitrile (CS). U.S. Munitions List are considered as (d) Sternutators and irritant smokes: part of the end-item or component. (1) Diphenylamine chloroarsine (Ad- Firmware includes but is not limited to amsite, DM). circuits into which software has been (2) Diphenylchloroarsine (BA). programmed. (3) Liquid pepper. (f) Software includes but is not lim- (e) Nerve agents, gases and aerosols. ited to the system functional design, These are toxic compounds which af- logic flow, algorithms, application pro- fect the nervous system, such as: grams, operating systems and support (1) Dimethylaminoethoxycyanophos- software for design, implementation, phine oxide (GA). test, operation, diagnosis and repair. A (2) Methylisopropoxyfluorophosphine person who intends to export software oxide (GB). only should, unless it is specifically (3) Methylpinacolyloxyfluoriphos- enumerated in § 121.1 (e.g., XIII(b)), phine oxide (GD). apply for a technical data license pur- (f) Antiplant chemicals, such as: suant to part 125 of this subchapter. Butyl 2-chloro-4-fluorophenoxyacetate (g) A system is a combination of end- (LNF). items, components, parts, accessories, attachments, firmware or software, § 121.8 End-items, components, acces- specifically designed, modified or sories, attachments, parts, adapted to operate together to perform firmware, software and systems. a specialized military function. (a) An end-item is an assembled article ready for its intended use. Only am- § 121.9 Firearms. munition, fuel or another energy (a) Category I includes revolvers, pis- source is required to place it in an op- tols, rifles, carbines, fully automatic erating state. rifles, submachine guns, machine pis- (b) A component is an item which is tols and machine guns to .50 inclusive. useful only when used in conjunction It includes combat shotguns. It ex- with an end-item. A major component cludes other shotguns with barrels 18″ includes any assembled element which or longer, BB, pellet, and muzzle load- forms a portion of an end-item without ing (black powder) firearms. It also ex- which the end-item is inoperable. cludes accessories and attachments for (EXAMPLE: Airframes, tail sections, firearms that do not enhance the use- transmissions, tank treads, hulls, etc.) fulness, effectiveness, or capabilities of A minor component includes any as- the firearm, its components and parts sembled element of a major compo- (e.g. belts, slings, after market rubber nent. grips, cleaning kits).

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(b) A firearm is a weapon not over .50 (e) Oil well perforating devices. caliber which is designed to expel a projectile by the action of an explosive § 121.12 Military explosives and pro- or which may be readily converted to pellants. do so. (a) Military Explosives in Category V (c) A rifle is a shoulder firearm which are military explosives or energetic can discharge a bullet through a rifled materials consisting of high explosives, barrel 16 inches or longer. propellants or low explosives, pyro- (d) A carbine is a lightweight shoul- technics and high energy solid or liquid der firearm with a barrel under 16 fuels, including aircraft fuels specially inches in length. formulated for military purposes. Mili- (e) A pistol is a hand-operated firearm tary explosives are solid, liquid or gas- having a chamber integral with or per- eous substances or mixtures of sub- manently aligned with the bore. stances which, in their application as (f) A revolver is a hand-operated fire- primary, booster or main charges in arm with a revolving cylinder con- warheads, demolition and other mili- taining chambers for individual car- tary applications, are required to deto- tridges. nate. (g) A submachine gun, ‘‘machine pis- Military explosives, military propel- tol’’ or ‘‘machine gun’’ is a firearm lants and military pyrotechnics in Cat- originally designed to fire, or capable egory V include substances or mixtures of being fired, fully automatically by a containing any of the following: single pull of the trigger. (1) Spherical aluminum powder of [58 FR 39287, July 22, 1993, as amended at 64 particle size 60 micrometres or less FR 17533, Apr. 12, 1999] manufactured from material with an aluminum content of 99% or more; § 121.10 Forgings, castings and ma- (2) Metal fuels in particle sizes less chined bodies. than 60 micrometres whether spherical, Articles on the U.S. Munitions List atomized, spheroidal, flaked or ground, include articles in a partially com- manufactured from material consisting pleted state (such as forgings, castings, of 99% or more of any of the following: extrusions and machined bodies) which Zirconium, magnesium and alloys of have reached a stage in manufacture these; beryllium; fine iron powder with where they are clearly identifiable as average particle size of 3 micrometres defense articles. If the end-item is an or less produced by reduction of iron article on the U.S. Munitions List (in- oxide with hydrogen; boron or boron cluding components, accessories, at- carbide fuels of 85% purity or higher tachments and parts as defined in and average particle size of 60 microm- § 121.8), then the particular forging, eters or less; casting, extrusion, machined body, (3) Any of the foregoing metals or al- etc., is considered a defense article sub- loys of paragraphs (a) (1) and (2) of this ject to the controls of this subchapter, section, whether or not encapsulated in except for such items as are in normal aluminum, magnesium, zirconium or commercial use. beryllium; (4) Perchlorates, chlorates and § 121.11 Military demolition blocks and chromates composited with powered blasting caps. metal or other high energy fuel compo- Military demolition blocks and blast- nents; ing caps referred to in Category IV(a) (5) Nitroganidine (NQ); do not include the following articles: (6) With the exception of (a) Electric squibs. chlorinetrifluoride, compounds com- (b) No. 6 and No. 8 blasting caps, in- posed of fluorine and one or more of cluding electric ones. the following: Other halogens, oxygen, (c) Delay electric blasting caps (in- nitrogen; cluding No. 6 and No. 8 millisecond (7) Carboranes; decaborane; ones). pentaborane and derivatives; (d) Seismograph electric blasting (8) caps (including SSS, Static-Master, Cyclotetramethylenetetranitramine Vibrocap SR, and SEISMO SR). (HMX); octahydro-1,3,5,7-tetranitro-

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1,3,5,7-tetrazine; 1,3,5,7-tetranitro- 1,3,5-triaza-cyclohexane; hexogen, 1,3,5,7-tetraza-cyclooctane; (octogen, hexogene; octogene); (33) Hydroxylammonium nitrate (9) Hexanitrostilbene (HNS); (HAN); hydroxylammonium per- (10) Diaminotrinitrobenzene (DATB); chlorate (HAP); (11) Triaminotrinitrobenzene (TATB); (34) Hydroxy terminated (12) Triaminoguanidinenitrate Polybutadiene (HTPB) with a hydroxyl (TAGN); functionality of less than 2.28, a (13) Titanium subhydride of hydroxyl value of less than 0.77 meq/g, stiochiometry TiH 0.65–168; and a viscosity at 30 degrees C of less (14) Dinitroglycoluril (DNGU, than 47 poise; DNGU); tetranitroglycoluril (TNGU, (b) ‘‘Additives’’ include the following: SORGUYL); (1) Glycidylazide Polymer (GAP) and (15) its derivatives; Tetranitrobenzotriazolobenzotriazole (2) Polycyanodifluoroamino- (TACOT); ethyleneoxide (PCDE); (16) Diaminohexanitrobiphenyl (3) Butanetrioltrinitrate (BTTN); (DIPAM); (4) Bis-2-Fluoro-2,2- (17) Picrylaminodinitropyridine dinitroethylformal (FEFO); (PYX); (5) Butadienenitrileoxide (BNO); (18) 3-nitro-1,2,4-triazol-5-one (NTO or (6) Catocene, N-butyl-ferrocene and ONTA); other ferrocene derivatives; (19) Hydrazine in concentrations of (7) 3-nitraza-1,5 pentane diisocyanate; 70% or more; hydrazine nitrate; hydra- (8) Bis(2,2-dinitropropyl) formal and zine perchlorates; unsymmetrical di- acetal; methyl hydrazine; monomethyl hydra- (9) Energetic monomers, plasticisers zine; symmetrical dimethyl hydrazine; and polymers containing nitro, azido, (20) Ammonium perchlorate; nitrate, nitraza or difluroamino (21) 2-(5-cyanotetrozolato) penta groups; amminecobalt (III) perchlorate (CP); (10) 1,2,3-Tris [1,2- (22) cis-bis (5-nitrotetrazolato) penta bis(difluoroamino)ethoxy] propane; amminechobalt (III) perchlorate (or Tris vinoxy propane adduct, (TVOPA); BNCP); (11) Bisazidomethyloxetane and its (23) 7-amino 4,6-dinitrobenzofurazane- polymers; 1-oxide (ADNBF); amino (12) Nitratomethylmethyloxetane or dinitrobenzofuroxan; poly (3-nitratomethyl, 3-methyl (24) 5,7-diamino-4,6- oxetane); (Poly-NIMMO); (NMMO); dinitrobenzofurazane-1-oxide, (CL–14 or (13) Azidomethylmethyloxetane diaminodinitrobenzofurozan); (AMMO) and its polymers; (25) 2,4,6-trinitro-2,4,6-triaza-cyclo- (14) Tetraethylenepentamine- hexanone (K–6 or keto-RDX); acrylonitrile (TEPAN); cyanoethylated (26) 2,4,6,8-tetranitro-2,4,6,8-tetraaza- polyamine and its salts; bicyclo (3,3,0)-octanone- (15) Polynitroorthocarbonates; 3(tetranitrosemiglycouril, K–55, or (16) Tetraethylenepentamine- keto-bicyclic HMX); acrylonitrileglycidol (TEPANOL); (27) 1,1,3-trinitroazetidine (TNAZ); cyanoethylated polyamine adducted (28) 1,4,5,8-tetranitro-1,4,5,8- with glycidol and its salts; tetraazadecalin (TNAD); (17) Polyfunctional aziridine amides (29) Hexanitrohexaazaisowurtzitane with isophthalic, trimesic BITA or bu- (CL-20 or NNIW; and chlathrates of CL- tylene imine trimesamide isoyanuric, 20); or trimethyladipic backbone structures (30) Polynitrocubanes with more than and 2-methyl or 2-ethyl substitutions four nitro groups; on the aziridine ring; (31) Ammonium dinitramide (ADN or (18) Basic copper salicylate; lead sa- SR–12); licylate; (32) Cyclotrimethylentrinitramine (19) Lead beta resorcylate; (RDX); cyclonite; T4; hexahydro-1,3,5- (20) Lead stannate, lead maleate, lead trinitro-1,3,5-triazine; 1,3,5-trinitro- citrate;

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(21) Tris-1-(2-methyl)aziridinyl (9) Hexabenzylhexaazaisowurtzitane phosphine oxide (MAPO), bis(2-methyl (HBIW); aziridinyl) 2-(2-hydroxypropanoxy) (10) Tetraacetyldibenzylhexa- propylamino phosphine oxide (BOBBA azaisowurtzitane (TAIW); 8), and other MAPO derivatives; (11) 1,4,5,8-tetraazadecaline. (22) Bis(2-methyl aziridinyl) (d) Military high energy solid or liq- methylamino phosphine oxide (methyl uid fuels specially formulated for mili- BAPO); tary purposes: (1) Aircraft fuels con- (23) Organo-metallic coupling agents, trolled by § 121.12(a) are finished prod- specifically: ucts not their independent constitu- (i) Neopentyl (diallyl) oxy, tri ents. (2) military materials containing [dioctyl] phosphato titanate or tita- thickeners for hydrocarbon fuels spe- nium IV, 2,2[bis 2-propenolatomethyl, cially formulated for use in flame- butanolato or tris [dioctyl] phosphato- throwers or incendiary munitions; O], or LICA 12; metal stearates or palmates (also (ii) Titanium IV, [(2-propenolato- known as octol); and M1, M2 and M3 1)methyl, N-propanolatemethyl] thickeners; butanolato-1 or (e) Any substance, or mixture meet- tris(dioctyl)pyrophosphato, or KR3538; ing the following performance require- (iii) Titanium IV, [2-propenolato- ments: 1)methyl, N-propanolatomethyl] (1) Any explosive with a detonation butanolato-1; or tris(dioctyl) phos- velocity greater than 8,700 m/s or a det- phate; onation pressure greater than 340 (24) FPF–1 poly-2,2,3,3,4,4-hexafluoro kilobars; pentane-1,5-diolformal; (2) Other organic high explosives (25) FPF–3 poly-2,4,4,5,5,6,6- yielding detonation pressures of 250 heptafluoro-2-trifluoromethyl-3- kilobars or greater that will remain oxaheptane-1,7-diolformal; stable at temperatures of 523 K (250 de- (26) Polyglycidylnitrate (PGN) or grees C) or higher for periods of 5 min- poly(nitratomethyl oxirane); (poly- utes or longer; GLYN) (PGN); (3) Any other UN Class 1.1 solid pro- (27) Lead-copper chelates of beta- pellant with a theoretical specific im- resorcylate and/or salicylates; pulse (under standard conditions) (28) Triphenyl bismuth (TPB); greater than 250 seconds for non-metal- (29) bis-2-hydroxyethylglycolamide lized, or greater than 270 seconds for (BHEGA); aluminized compositions; (4) Any UN Class 1.3 solid propellant (30) Superfine iron oxide (Fe O hem- 2 3 with a theoretical specific impulse atite) with a specific surface area greater than 230 seconds for non- greater than 250 m2/g and an average halogenized, 250 seconds for non-metal- particle size of 0.003 micrometres or lized and 266 seconds for metallized less; compositions; (31) N-methyl-p-nitroaniline; (5) Any other explosive, propellant or (c) ‘‘Precursors’’ include the fol- pyrotechnic that can sustain a steady- lowing: state burning rate greater than 38mm (1) 1,2,4-trihydroxybutane (1,2,4- (1.5 in) per second under standard con- butanetriol); ditions of 68.9 bar (1,000 PSI) pressure (2) Guanidine nitrate; and 294K (21 degrees C); (3) 1,3,5-trichlorobenzene; (6) Any other gun propellants having (4) Bischloromethyloxetane (BCMO); a force constant greater than 1,200 kJ/ (5) Low (less than 10,000) molecular kg; weight, alcohol-functionalised, (7) Elastomer modified cast double poly(ephichlorohydrin); based propellants (EMCDB) with exten- poly(ephichlorhydrindiol); and triol; sibility at maximum stress greater (6) Propyleneimide, 2- than 5% at 233 K (¥40 degrees C). methylaziridine; (f) Liquid oxidizers comprised of or (7) 1,3,5,7,-tetraacetyl-1,3,5,7-tetraaza- containing the following: cyclooctane (TAT); (1) Inhibited red fuming nitric acid (8) Dinitroazetidine-t-butyl salt; (IRFNA));

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(2) Oxygen difluoride. when added to petroleum products, pro- NOTE: Category V includes the following vide a gel-type incendiary material for substances when compounded or mixed with use in bombs, projectiles, flame throw- military explosives, fuels or propellants con- ers, or other defense articles. trolled under this category: —Ammonium picrate § 121.14 [Reserved] —Black powder —Hexanitrodiphenylamine § 121.15 Vessels of war and special —Difluoroamine (HNF2) naval equipment. —Nitrostarch Vessels of war means vessels, water- —Potassium nitrate borne or submersible, designed, modi- —Tetranitronaphthalene —Trinitroanisol fied or equipped for military purposes, —Trinitronaphthalene including vessels described as develop- —Trinitroxylene mental, ‘‘demilitarized’’ or decommis- —Fuming nitric acid non-inhibited and non- sioned. Vessels of war in Category VI, enriched whether developmental, ‘‘demili- —Acetylene tarized’’ and/or decommissioned or not, —Propane include, but are not limited to, the fol- —Liquid oxygen lowing: —Hydrogen peroxide in concentrations less than 85% (a) Combatant vessels: (1) Warships —Misch metal (including nuclear-powered versions): —N-pyrrolidinone and l-methyl-2- (i) Aircraft carriers. pyrrolidinone (ii) Battleships. —Dioctylmaleate (iii) Cruisers. —Ethylhexylacrylate (iv) Destroyers. —Triethylaluminum (TEA), (v) Frigates. trimethylaluminum (TMA) and other (vi) Submarines. pyrophoric metal alkyls and aryls of lith- ium, sodium, magnesium, zinc or boron (2) Other Combatants: —Nitrocellulose (i) Patrol Combatants (e.g., including —Nitroglycerin (or glyceroltrinitrate, but not limited to PHM). trinitroglycerine (NG) (ii) Amphibious Aircraft/Landing —2,4,6 trinitrotoluene (TNT) Craft Carriers. —Pentaerythritol tetranitrate (PETN) (iii) Amphibious Materiel/Landing —Trinitrophenylmethylnitramine (Tetryl) Craft Carriers. —Ethylenediaminedinitrate (EDDN) (iv) Amphibious Command Ships. —Lead azide, normal and basic lead styphnate, and primary explosives or (v) Mine Warfare Ships. priming composition containing azides or (vi) Coast Guard Cutters (e.g., includ- azide complexes ing but not limited to: WHEC, WMEC). —Triethyleneglycoldinitrate (TEGDN) (b) Combatant Craft: (1) Patrol Craft —2,4,6-trinitroresorcinol (styphnic acid) (patrol craft described in § 121.1, Cat- —Diethyldiphenyl urea, dimethyldiphenyl egory VI, paragraph (b) are considered urea and methylethyldiphenyl urea non-combatant): (Centralites) (i) Coastal Patrol Combatants. —N,N-diphenylurea (unsymmetrical diphenylurea) (ii) River, Roadstead Craft (including —Methyl-N,N-diphenylurea (methyl unsym- swimmer delivery craft). metrical diphenylurea) (iii) Coast Guard Patrol Craft (e.g., —Ethyl-N,N-diphenylurea (ethyl unsymmet- including but not limited to WPB). rical diphenylurea) (2) Amphibious Warfare Craft: —2-nitrodiphenylamine (2–NDPA) (i) Landing Craft (e.g., including but —4-nitrodiphenylamine (4–NDPA) not limited to LCAC). —2,2-dinitropropanol (ii) Special Warfare Craft (e.g., in- —Chlorinetrifluoride. cluding but not limited to: LSSC, [58 FR 60113, Nov. 15, 1993] MSSC, SDV, SWCL, SWCM). (3) Mine Warfare Craft and Mine § 121.13 Military fuel thickeners. Countermeasures Craft (e.g., including Military fuel thickeners in Category but not limited to: MCT, MSB). V include compounds (e.g., octal) or (c) Non-Combatant Auxiliary Vessels mixtures of such compounds (e.g., na- and Support Ships: palm) specifically formulated for the (1) Combat Logistics Support: purpose of producing materials which, (i) Underway Replenishment Ships.

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(ii) Surface Vessel and Submarine x 10 N-sec (2.5 x 10 lb-sec) or greater (see Tender/Repair Ships. § 121.1, Cat. IV, (h)). (2) Support Ships: (d) ‘‘Guidance sets’’ capable of achieving (i) Submarine Rescue Ships. system accuracy of 3.33 percent or less of the (ii) Other Auxiliaries (e.g., including range (e.g., a CEP of 1 j,. or less at a range of 300 km), except as provided in Note (1) but not limited to: AGDS, AGF, AGM, below for those designed for missiles with a AGOR, AGOS, AH, AP, ARL, AVB, range under 300 km or manned aircraft (see AVM, AVT). § 121.1, Cat. XII(d)); (d) Non-Combatant Support, Service (e) Thrust vector control sub-systems, ex- and Miscellaneous Vessels (e.g., includ- cept as provided in Note (1) below for those ing but not limited to: DSRV, DSV, designed for rocket systems that do not ex- NR, YRR). ceed the range/payload capability of Item 1 (see § 121.1, Cat. IV); [58 FR 60115, Nov. 15, 1993] (f) Warhead safing, arming, fuzing, and fir- ing mechanisms, except as provided in Note § 121.16 Missile Technology Control (1) below for those designed for systems Regime Annex. other than those in Item 1 (see § 121.1, Cat. Some of the items on the Missile IV(h)). Technology Control Regime Annex are NOTES TO ITEM 2 controlled by both the Department of Commerce on the Commodity Control (1) The exceptions in (b), (d), (e), and (f) List and by the Department of State on above may be treated as Category II if the the United States Munitions List. To subsystem is exported subject to end use the extent an article is on the United statements and quantity limits appropriate for the excepted end use stated above. States Munitions List, a reference ap- (2) CEP (circle of equal probability) is a pears in parentheses listing the U.S. measure of accuracy, and defined as the ra- Munitions List category in which it ap- dius of the circle centered at the target, at a pears. The following items constitute specific range, in which 50 percent of the all items on the Missile Technology payloads impact. Control Regime Annex which are cov- (3) A ‘‘guidance set’’ integrates the process ered by the U.S. Munitions List: of measuring and computing a vehicle’s position and velocity (i.e. navigation) with that of computing and sending commands to the ITEM 1—CATEGORY I vehicle’s flight control systems to correct Complete rocket systems (including bal- the trajectory. listic missile systems, space launch vehicles, (4) Examples of methods of achieving and sounding rockets (see § 121.1, Cat. IV(a) thrust vector control which are covered by and (b)) and unmanned air vehicle systems (e) include: (including cruise missile systems see § 121.1, (i) Flexible nozzle; Cat. VIII (a), target drones and (ii) Fluid or secondary gas injection; reconnaisance drones (see § 121.1, Cat. VIII (iii) Movable engine or nozzle; Deflection (a)) capable of delivering at least a 500 kg of exhaust gas stream (jet vanes or probes); payload to a range of at least 300 km. or ITEM 2—CATEOGRY I (v) Use of thrust tabs.

Complete subsystems usable in the sys- ITEM 3—CATEGORY II tems in Item 1 as follows: (a) Individual rocket stages (see § 121.1, Propulsion components and equipment us- Cat. IV(h)); able in the systems in Item 1, as follows: (b) Reentry vehicles (see § 121.1, Cat. IV(g)), (a) Lightweight turbojet and turbofan en- and equipment designed or modified there- gines (including) turbocompound engines) for, as follows, except as provided in Note (1) that are small and fuel efficient (see § 121.1, below for those designed for non-weapon pay- both Cat. IV(h) and VIII(b)); loads; (b) Ramjet/Scramjet/pulse jet/combined (1) Heat shields and components thereof cycle engines, including devices to regulate fabricated of ceramic or ablative materials combustion, and specially designed compo- (see § 121.1, Cat. IV(f)); nents therefor (see § 121.1, both Cat. IV(h) and (2) Heat sinks and components thereof fab- Cat. VIII(b)); ricated of light-weight, high heat capacity (c) Rocket motor cases, ‘‘interior lining’’, materials; ‘‘insulation’’ and nozzles therefor (see § 121.1, (3) Electronic equipment specially designed Cat. IV(h) and Cat. V(c)); for reentry vehicles (see § 121.1, Cat. XI(a)(7)); (d) Staging mechanisms, separation mech- (c) Solid or liquid propellant rocket en- anisms, and interstages therefor (see § 121.1, gines, having a total impulse capacity of 1.1 Cat. IV(c) and (h));

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(e) Liquid and slurry propellant (including sisting of 97 percent or more of any of the oxidizers) control systems, and specially de- following: zirconium, beryllium, boron, mag- signed components therefor, designed or nesium, zinc, and alloys of these (see modified to operate in vibration environ- § 121.12(a)(2)); ments of more than 100 g RMS between 20 Hz (6) Nitro-amines (cyclotetramethylene- and,000 Hz (see § 121.1, Cat. IV(c) and (h)); tetranitramene (HMX) (see § 121.12(a)(11)), (f) Hybrid rocket motors and specially de- cyclotrimethylene-trinitramine (RDX)) (see signed components therefor (see § 121.1, Cat. 121.12(a)(35)); IV(h)). (7) Perchlorates, chlorates or chromates mixed with powdered metals or other high NOTES TO ITEM 3 energy fuel components (see § 121.12(a)(4); (1) Item 3(a) engines may be exported as (8) Carboranes, decaboranes, pentaboranes part of a manned aircraft or in quantities ap- and derivatives thereof (see § 121.12(a)(10); propriate for replacement parts for manned (9) Liquid oxidizers, as follows: aircraft. (i) Nitrogen dioxide/dinitrogen tetroxide (2) In Item 3(C), ‘‘interior lining’’ suited for (see § 121.14.(g)); the bond interface between the solid propel- (ii) Inhibited Red Fuming Nitric Acid lant and the case or insulating liner is usu- (IRFNA) (see § 121.12(f)(1); ally a liquid polymer based dispersion of re- (iii) Compounds composed of flourine and fractory or insulating materials, e.g., carbon one or more of other halogens, oxygen or ni- filled HTPB or other polymer with added trogen (see § 121.12(a)(9). curing agents to be sprayed or screeded over (b) Polymeric substances: a case interior (see § 121.1, Cat. V(c)). (2) Hydroxy-terminated polybutadiene (3) In Item 3(c), ‘‘insulation’’ intended to (HTPB) (see § 121.12(a)(38); be applied to the components of a rocket (3) Glycidyl azide polymer (GAP) (see motor, i.e., the case, nozzle inlets, case clo- § 121.12(b)(1)). sures, includes cured or semi-cured com- (c) Other high energy density propellants pounded rubber sheet stock containing an in- such as, Boron Slurry, having an energy den- sulating or refractory material. It may also sity of 40 x 10 joules/kg or greater (see be incorporated as stress relief boots or § 121.12(a)(3)). flaps. (d) Other propellant additives and agents: (4) The only servo valves and pumps cov- (1) Bonding agents as follows: ered in (e) above, are the following: (i) tris(1-(2-methyl)aziridinyl phosphine (i) Servo valves designed for flow rates of oxide (MAPO) (see § 121.12(b)(17)); 24 liters per minute or greater, at an abso- (ii) trimesol-1(2-ethyl)aziridine (HX–868, lute pressure of 7,000 kPa (1,000 psi) or great- BITA) (see § 121.12(b)(13)); er, that have an actuator response time of (iii) ‘‘Tepanol’’ (HX–878), reaction product less than 100 msec; of tetraethylenepentamine, acrylonitrile and (ii) Pumps, for liquid propellants, with glycidol (see § 121.12.(b)(11)); shaft speeds equal to or greater than 8,000 (iv) ‘‘Tepan’’ (HX–879), Reaction product of RPM or with discharge pressures equal to or tet enepentamine and acrylonitrile (see greater than 7,000 kPa (1,000 psi). § 121.12(b)(11)); (5) Item 3(e) systems and components may (v) Polyfunctional aziridene amides with be exports as part of a satellite. isophthalic, trimesic, isocyanuric, or trimethyladipic backbone also having a 2- ITEM 4—CATEGORY II methyl or 2-ethyl aziridine group (HX–752, Propellants and constituent chemicals for HX–872 and HX–877). (see § 121.12(b)(13)). propellants as follows: (see § 121.1, Cat. V(c) (2) Curing agents and catalysts as follows: and § 121.12 and § 121.14). (i) Triphenyl bismuth (TPB) (see (a) Propulsive substances: § 121.12(b)(23)); (1) Hydrazine with a concentration of more (3) Burning rate modifiers as follows: than 70 percent and its derivatives including (i) Catocene (see § 121.12(b)(5)); monomethylhydrazine (MMH) (see (ii) N-butyl-ferrocene (see § 121.12(b)(5)); § 121.12(a)(22)); (iii) Other ferrocene derivatives (see (2) Unsymmetric dimethylhydrazine § 121.12(b)). (UDHM) (see § 121.12(a)(22)); (4) Nitrate esters and nitrato plasticizers (3) Ammonium perchlorate (see as follows: § 121.12(a)(23)); (i) 1,2,4-butanetriol trinitrate (BTTN) (see (4) Spherical aluminum powder with par- § 121.12(b)(3)); ticle of uniform diameter of less than 500 x (5) Stabilizers as follows: 10-m (500 micrometer) and an aluminum con- (i) N-methyl-p-nitroaniline (see tent of 97 percent or greater (see § 121.12(d)(1)). § 121.12(a)(1)); ITEM 8—CATEGORY II (5) Metal fuels in particle sizes less than 500 x 10-m (500 Microns), whether spherical, Structural materials usable in the systems atomized, spheroidal, flaked or ground, con- in Item 1, as follows:

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(a) Composite structures, laminates, and NOTES TO ITEM 9 manufactures thereof, including resin im- (1) Items (a) through (f) may be exported as pregnated fibre prepregs and metal coated part of a manned aircraft or satellite or in fibre preforms therefor, specially designed for use in the systems in Item 1 and the sub- quantities appropriate for replacement parts systems in Item 2 made either with organix for manned aircraft. matrix or metal matrix utilizing fibrous or (2) In subitem (d): filamentary reinforcements having a specific (i) Drift rate is defined as the time rate of tensile strength greater than 7.62 x 104 m (3 output deviation from the desired output. It x 106 inches) and a specific modules greater consists of random and systematic compo- than 3.18 x 106 m (1.25 x 108 inches), (see nents and is expressed as an equivalent angu- § 121.1, Category IV (f), and Category XIII lar displacement per unit time with respect (d)); to inertial space. (b) Resaturated pyrolized (i.e. carbon-car- (ii) Stability is defined as standard devi- bon) materials designed for rocket systems, ation (1 sigma) of the variation of a par- (see § 121.1 Category IV (f)); ticular parameter from its calibrated value (c) Fine grain recrystallized bulk graphites measured under stable temperature condi- (with a bulk density of at least 1.72 g/cc tions. This can be expressed as a function of measured at 15 degrees C), pyrolytic, or fi- time. brous reinforced graphites useable for rocket nozzles and reentry vehicle nose tips (see ITEM 10—CATEGORY II § 121.1, Category IV (f) and Category XIII; Flight control systems and ‘‘technology’’ (d) Ceramic composites materials (dielec- as follows; designed or modified for the sys- tric constant less than 6 at frequencies from tems in Item 1. 100 Hz to 10,000 MHz) for use in missile (a) Hydraulic, mechanical, electro-optical, radomes, and bulk machinable silicon-car- or electro-mechanical flight control systems bide reinforced unfired ceramic useable for (including fly-by-wire systems), (see § 121.1, nose tips (see § 121.1, Category IV (f)); Category IV (h)); (b) Attitude control equipment, (see § 121.1, ITEM 9—CATEGORY II Category IV, (c) and (h)); Instrumentation, navigation and direction (c) Design technology for integration of air finding equipment and systems, and associ- vehicle fuselage, propulsion system and lift- ated production and test equipment as fol- ing control surfaces to optimize aero- lows; and specially designed components and dynamic performance throughout the flight software therefor: regime of an unmanned air vehicle, (see (a) Integrated flight instrument systems, § 121.1, Category VIII (k)); which include gyrostabilizers or automatic (d) Design technology for integration of pilots and integration software therefor; de- the flight control, guidance, and propulsion signed or modified for use in the systems in data into a flight management system for Item 1 (See § 121.1, Category XII(d)); optimization of rocket system trajectory, (b) Gyro-astro compasses and other devices (see § 121.1, Category IV (i)). which derive position or orientation by means of automatically tracking celestrial NOTE TO ITEM 10 bodies or satellites (see § 121.1, Category Items (a) and (b) may be exported as part XV(d)); of a manned aircraft or satellite or in quan- (c) Accelerometers with a threshold of 0.05 tities appropriate for replacement parts for g or less, or a linearity error within 0.25 per- manned aircraft. cent of full scale output, or both, which are designed for use in inertial navigation sys- ITEM 11—CATEGORY II tems or in guidance systems of all types (see § 121.1, Category VIII(e) and Category XII Avionics equipment, ‘‘technology’’ and (d)); components as follows; designed or modified (d) All types of gyros usable in the systems for use in the systems in Item 1, and spe- in Item 1, with a rated drift rate stability of cially designed software therefor: less than 0.5 degree (1 sigma or rms) per hour (a) Radar and laser radar systems, includ- in a 1 q environment (see § 121.1, Category ing altimeters (see § 121.1, Category XI(a)(3)); VIII(e) and Category XII(d)); (b) Passive sensors for determining bear- (e) Continuous output accelerometers or ings to specific electromagnetic sources (di- gyros of any type, specified to function at rection finding equipment) or terrain charac- acceleration levels greater than 100 g (see teristics (see § 121.1, Category XI(b) and (d)); § 121.1, Category XII(d)); (c) Global Positioning System (GPS) or (f) Inertial or other equipment using similar satellite receivers; accelerometers described by subitems (c) and (1) Capable of providing navigation infor- (e) above, and systems incorporating such mation under the following operational con- equipment, and specially designed integra- ditions: tion software therefor (see § 121.1, Category (i) At speeds in excess of 515 m/sec (1,000 VIII (e) and Category XII(d)); nautical miles/hours); and

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(ii) At altitudes in excess of 18 km (60,000 measurements of in-flight position and ve- feet), (see § 121.1, Category XV(d)(2); or locity, (see § 121.1, Category XI(a)); (2) Designed or modified for use with un- (2) Range instrumention radars including manned air vehicles covered by Item 1 (see associated optical/infrared trackers and the § 121.1, Category XV(d)(4)). specially designed software therefor with all (d) Electronic assemblies and components of the following capabilities (see § 121.1, Cat- specifically designed for military use and op- egory XI(a)(3)): eration at temperatures in excess of 125 de- (i) angular resolution better than 3 milli- grees C, (see § 121.1, Category XI(a)(7)). radians (0.5 mils); (e) Design technology for protection of avi- (ii) range of 30 km or greater with a range onics and electrical subsystems against elec- resolution better than 10 meters RMS; tromagnetic pulse (EMP) and electro- (iii) velocity resolution better than 3 me- magnetic interference (EMI) hazards from ters per second. external sources, as follows, (see § 121.1, Cat- egory XI (b)). (3) Software which processes post-flight, (1) Design technology for shielding sys- recorded data, enabling determination of ve- tems; hicle position throughout its flight path (see (2) Design technology for the configuration § 121.1, Category IV(i)). of hardened electrical circuits and sub- ITEM 13—CATEGORY II systems; (3) Determination of hardening criteria for Analog computers, digital computers, or the above. digital differential analyzers designed or modified for use in the systems in Item 1 (see NOTES TO ITEM 11 § 121.1, Category XI (a)(6), having either of (1) Item 11 equipment may be exported as the following characteristics: part of a manned aircraft or satellite or in (a) Rated for continuous operation at tem- quantities appropriate for replacement parts perature from below minus 45 degrees C to for manned aircraft. above plus 55 degrees C; or (2) Examples of equipment included in this (b) Designed as ruggedized or ‘‘radiation Item: hardened’’. (i) Terrain contour mapping equipment; (ii) Scene mapping and correlation (both NOTE TO ITEM 13 digital and analog) equipment; (iii) Doppler navigation radar equipment; Item 13 equipment may be exported as part (iv) Passive interferometer equipment; of a manned aircraft or satellite or in quan- (v) Imaging sensor equipment (both active tities appropriate for replacement parts for and passive); manned aircraft. (3) In subitem (a), laser radar systems em- body specialized transmission, scanning, re- ITEM 14—CATEGORY II ceiving and signal processing techniques for Analog-to-digital converters, usable in the utilization of lasers for echo ranging, direc- system in Item 1, having either of the fol- tion finding and discrimination of targets by lowing characteristics: location, radial speed and body reflection (a) Designed to meet military specifica- characteristics. tions for ruggedized equipment (see § 121.1, Category XI(d)); or, ITEM 12—CATEGORY II (b) Designed or modified for military use Launch support equipment, facilities and (see § 121.1, Category XI(d)); and being one of software for the systems in Item 1, as fol- the following types: lows: (1) Analog-to-digital converter ‘‘microcir- (a) Apparatus and devices designed or cuits,’’ which are ‘‘radiation hardened’’ or modified for the handling, control, activa- have all of the following characteristics: tion and launching of the systems in Item 1, (i) Having a resolution of 8 bits or more; (see § 121.1, Category IV(c)); (ii) Rated for operation in the temperature (b) Vehicles designed or modified for the range from below minus 54 degrees C to transport, handling, control, activation and above plus 125 degrees C; and launching of the systems in Item 1, (see § 121.1, Category VII(d)); (iii) Hermetically sealed. (c) Telemetering and telecontrol equip- (2) Electrical input type analog-to-digital ment usable for unmanned air vehicles or converter printed circuit boards or modules, rocket systems, (see § 121.1, Category XI(a)); with all of the following characteristics: (d) Precision tracking systems: (i) Having a resolution of 8 bits or more; (1) Tracking systems which use a translb (ii) Rated for operation in the temperature nv installed on the rocket system or un- range from below minus 45 degrees C to manned air vehicle in conjunction with ei- above plus 55 degrees C; and ther surface or airborne references or naviga- (iii) Incorporated ‘‘microcircuits’’ listed in tion satellite systems to provide real-time (1), above.

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ITEM 16—CATEGORY II of the Export Administration Act of 1979 (50 U.S.C. App. 2405(l)), as amended. In accord- Specially designed software, or specially designed software with related specially de- ance with this provision, the list of MTCR signed hybrid (combined analog/digital) com- Annex items shall constitute all items on puters, for modeling, simulation, or design the U.S. Munitions List in § 121.16. integration of the systems in Item 1 and Item 2 (see § 121.1, Category IV(i) and Cat- PART 122—REGISTRATION OF egory XI(a)(6)). MANUFACTURERS AND EXPORTERS NOTE TO ITEM 16 The modelling includes in particular the Sec. aerodynamic and thermodynamic analysis of 122.1 Registration requirements. the system. 122.2 Submission of registration statement. 122.3 Registration fees. ITEM 17—CATEGORY II 122.4 Notification of changes in information Materials, devices, and specially designed furnished by registrants. software for reduced observables such as 122.5 Maintenance of records by registrants. radar reflectivity, ultraviolet/infrared signatures on acoustic signatures (i.e. stealth AUTHORITY: Secs. 2 and 38, Pub. L. 90–629, 90 technology), for applications usable for the Stat. 744 (22 U.S.C. 2752, 2778); E.O. 11958, 42 systems in Item 1 or Item 2 (see § 121.1, Cat- FR 4311, 1977 Comp. p. 79; 22 U.S.C. 2658. egory XIII (e) and (k)), for example: SOURCE: 58 FR 39298, July 22, 1993, unless (a) Structural material and coatings spe- otherwise noted. cially designed for reduced radar reflectivity; § 122.1 Registration requirements. (b) Coatings, including paints, specially designed for reduced or tailored reflectivity or (a) Any person who engages in the emissivity in the microwave, infrared or ul- United States in the business of either traviolet spectra, except when specially used manufacturing or exporting defense ar- for thermal control of satellites. ticles or furnishing defense services is (c) Specially designed software or databases for analysis of signature reduction. required to register with the Office of (d) Specially designed radar cross section Defense Trade Controls. Manufacturers measurement systems (see § 121.1, Category who do not engage in exporting must XI(a)(3)). nevertheless register.

ITEM 18—CATEGORY II (b) Exemptions. Registration is not required for: Devices for use in protecting rocket sys- (1) Officers and employees of the tems and unmanned air vehicles against nuclear effects (e.g. Electromagnetic Pulse United States Government acting in an (EMP), X-rays, combined blast and thermal official capacity. effects), and usable for the systems in Item 1, (2) Persons whose pertinent business as follows (see § 121.1, Category IV (c) and activity is confined to the production (h)): of unclassified technical data only. (a) ‘‘Radiation Hardened’’ ‘‘microcircuits’’ and detectors (see § 121.1, Category XI(c)(3) (3) Persons all of whose manufac- Note: This commodity has been formally turing and export activities are li- proposed for movement to category XV(e)(2) censed under the Atomic Energy Act of in the near future). 1954, as amended. (b) Radomes designed to withstand a com- (4) Persons who engage only in the bined thermal shock greater than 1000 cal/sq fabrication of articles for experimental cm accompanied by a peak over pressure of or scientific purpose, including re- greater than 50 kPa (7 pounds per square inch) (see § 121.1, Category IV(h)). search and development. (c) Purpose. Registration is primarily NOTE TO ITEM 18(a) a means to provide the U.S. Govern- A detector is defined as a mechanical, elec- ment with necessary information on trical, optical or chemical device that auto- who is involved in certain manufac- matically identifies and records, or registers turing and exporting activities. Reg- a stimulus such as an environmental change istration does not confer any export in pressure or temperature, an electrical or electromagnetic signal or radiation from a rights or privileges. It is generally a radioactive material. The following pages precondition to the issuance of any li- were removed from the final itar for replace- cense or other approval under this sub- ment by DTC’s updated version section 6(l) chapter.

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§ 122.2 Submission of registration ing securities of the firm are owned by statement. one or more foreign persons. Control (a) General. The Department of State means that one or more foreign persons Form DSP–9 (Registration Statement) have the authority or ability to estab- and the transmittal letter required by lish or direct the general policies or paragraph (b) of this section must be day-to-day operations of the firm. Con- submitted by an intended registrant trol is presumed to exist where foreign with a payment by check or money persons own 25 percent or more of the order payable to the Department of outstanding voting securities if no U.S. State of one of the fees prescribed in persons control an equal or larger per- § 122.3(a) of this subchapter. The Reg- centage. The standards for control istration Statement and transmittal specified in 22 CFR 60.2(c) also provide letter must be signed by a senior offi- guidance in determining whether con- cer who has been empowered by the in- trol in fact exists. tended registrant to sign such documents. The intended registrant shall § 122.3 Registration fees. also submit documentation that dem- (a) A person who is required to reg- onstrates that it is incorporated or ister may do so for a period up to 4 otherwise authorized to do business in years upon submission of a completed the United States. The Office of De- form DSP–9, transmittal letter, and fense Trade Controls will return to the payment of a fee as follows: sender any Registration Statement 1 year—$600 that is incomplete, or that is not ac- 2 years—$1,200 companied by the required letter or 3 years—$1,800 payment of the proper registration fee. 4 years—$2,200 (b) Transmittal letter. A letter of transmittal, signed by an authorized (b) Lapse in registration. A registrant senior officer of the intended reg- who fails to renew a registration and, istrant, shall accompany each Reg- after an intervening period, seeks to istration Statement. register again must pay registration (1) The letter shall state whether the fees for any part of such intervening intended registrant, chief executive of- period during which the registrant en- ficer, president, vice-presidents, other gaged in the business of manufacturing senior officers or officials (e.g. comp- or exporting defense articles or defense troller, treasurer, general counsel) or services. any member of the board of directors: (c) Refund of fee. Fees paid in advance (i) Has ever been indicted for or con- for future years of a multiple year reg- victed of violating any of the U.S. istration will be refunded upon request criminal statutes enumerated in § 120.27 if the registrant ceases to engage in of this subchapter; or the manufacture or export of defense (ii) Is ineligible to contract with, or articles and defense services. A request to receive a license or other approval for a refund must be submitted to the to import defense articles or defense Office of Defense Trade Controls prior services from, or to receive an export to the beginning of any year for which license or other approval from, any a refund is claimed. agency of the U.S. Government. [58 FR 39298, July 22, 1993, as amended at 62 (2) The letter shall also declare FR 27497, May 20, 1997] whether the intended registrant is owned or controlled by foreign persons § 122.4 Notification of changes in infor- (as defined in § 120.16 of this sub- mation furnished by registrants. chapter). If the intended registrant is (a) A registrant must, within five owned or controlled by foreign persons, days of the event, notify the Office of the letter shall also state whether the Defense Trade Controls by registered intended registrant is incorporated or mail if: otherwise authorized to engage in busi- (1) Any of the persons referred to in ness in the United States. § 122.2(b) are indicted for or convicted (c) Definition. For purposes of this of violating any of the U.S. criminal section, ownership means that more statutes enumerated in § 120.27 of this than 50 percent of the outstanding vot- subchapter, or become ineligible to

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contract with, or to receive a license or tion, provide to the Office of Defense other approval to export or tempo- Trade Controls a signed copy of an rarily import defense articles or de- amendment to each agreement signed fense services from any agency of the by the new U.S. entity, the former U.S. U.S. government; or licensor and the foreign licensee. Any (2) There is a material change in the agreements not so amended will be information contained in the Registra- considered invalid. tion Statement, including a change in (d) Prior approval by the Office of De- the senior officers; the establishment, fense Trade Controls is required for acquisition or divestment of a sub- any amendment making a substantive sidiary or foreign affiliate; a merger; a change. change of location; or the dealing in an additional category of defense articles § 122.5 Maintenance of records by reg- or defense services. istrants. (b) A registrant must notify the Of- (a) A person who is required to reg- fice of Defense Trade Controls by register must maintain records concerning istered mail at least 60 days in advance the manufacture, acquisition and dis- of any intended sale or transfer to a position of defense articles; the provi- foreign person of ownership or control sion of defense services; and informa- of the registrant or any entity thereof. tion on political contributions, fees, or Such notice does not relieve the reg- commissions furnished or obtained, as istrant from obtaining the approval re- required by part 130 of this subchapter. quired under this subchapter for the All such records must be maintained export of defense articles or defense for a period of five years from the expi- services to a foreign person, including ration of the license or other approval. the approval required prior to dis- The Director, Office of Defense Trade closing technical data. Such notice Controls, may prescribe a longer or provides the Office of Defense Trade shorter period in individual cases. Controls with the information nec- (b) Records maintained under this essary to determine whether the au- section shall be available at all times thority of section 38(g)(6) of the Arms for inspection and copying by the Di- Export Control Act regarding licenses rector, Office of Defense Trade Con- or other approvals for certain sales or trols or a person designated by the Di- transfers of articles or data should be rector (the Director of the Diplomatic invoked (see §§ 120.10 and 126.1(e) of this Security Service or a person designated subchapter). by the Director of the Diplomatic Se- (c) The new entity formed when a curity Service or another designee), or registrant merges with another com- the Commissioner of the U.S. Customs pany or acquires, or is acquired by, an- Service or a person designated by the other company or a subsidiary or divi- Commissioner. sion of another company shall advise the Office of Defense Trade Controls of PART 123—LICENSES FOR THE the following: EXPORT OF DEFENSE ARTICLES (1) The new firm name and all previous firm names being disclosed; Sec. (2) The registration number that will 123.1 Requirement for export or temporary survive and those that are to be discon- import licenses. tinued (if any); 123.2 Import jurisdiction. 123.3 Temporary import licenses. (3) The license numbers of all approv- 123.4 Temporary import license exemp- als on which unshipped balances will be tions. shipped under the surviving registra- 123.5 Temporary export licenses. tion number, since any license not the 123.6 Foreign trade zones and U.S. Customs subject of notification will be consid- bonded warehouses. ered invalid; and 123.7 Exports to warehouses or distribution (4) Amendments to agreements ap- points outside the United States. 123.8 Special controls on vessels, aircraft proved by the Office of Defense Trade and satellites covered by the U.S. Muni- Controls to change the name of a party tions List. to those agreements. The registrant 123.9 Country of ultimate destination and must, within 60 days of this notifica- approval of reexports or retransfers.

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123.10 Non-transfer and use assurances. articles or classified technical data 123.11 Movements of vessels and aircraft must be made on Form DSP–85. covered by the U.S. Munitions List out- (b) Applications for Department of side the United States. 123.12 Shipments between U.S. possessions. State export licenses must be confined 123.13 Domestic aircraft shipments via a to proposed exports of defense articles foreign country. including technical data. 123.14 Import certificate/delivery (c) As a condition to the issuance of verification procedure. a license or other approval, the Office 123.15 Congressional notification for li- of Defense Trade Controls may require censes. 123.16 Exemptions of general applicability. all pertinent documentary information 123.17 Exports of firearms and ammunition. regarding the proposed transaction and 123.18 Firearms for personal use of members proper completion of the application of the U.S. Armed Forces and civilian form as follows: employees of the U.S. Government. (1) Form DSP–5, DSP–61, DSP–73, and 123.19 Canadian and Mexican border ship- DSP–85 applications must have an ments. 123.20 Nuclear materials. entry in each block where space is pro- 123.21 Duration, renewal and disposition of vided for an entry. All requested infor- licenses. mation must be provided. 123.22 Filing of export licenses and Ship- (2) Attachments and supporting tech- per’s Export Declarations with District nical data or brochures should be sub- Directors of Customs. 123.23 Monetary value of shipments. mitted in seven collated copies. Two 123.24 Shipments by mail. copies of any freight forwarder lists 123.25 Amendments to licenses. must be submitted. If the request is 123.26 Recordkeeping requirement for ex- limited to renewal of a previous license emptions. or for the export of spare parts, only 123.27 Special licensing regime for export to two sets of any attachment (including U.S. allies of commercial communica- freight forwarder lists) and one copy of tions satellite components, systems, parts, accessories, attachments and asso- the previous license should be sub- ciated technical data. mitted. (3) A certification letter signed by an AUTHORITY: 19 U.S.C. 66, 1202 (General Note 23, Harmonized Tariff Schedule of the United empowered official must accompany all States (HTSUS)), 1431, 1433, 1436, 1448, 1624. application submissions (see § 126.13 of this subchapter). SOURCE: 58 FR 39299, July 22, 1993, unless otherwise noted. (4) An application for a license under this part for the permanent export of § 123.1 Requirement for export or tem- defense articles sold commercially porary import licenses. must be accompanied by a copy of a (a) Any person who intends to export purchase order, letter of intent or or to import temporarily a defense ar- other appropriate documentation. In ticle must obtain the approval of the cases involving the U.S. Foreign Mili- Office of Defense Trade Controls prior tary Sales program, three copies of the to the export or temporary import, un- relevant Department of Defense Form less the export or temporary import 1513 are required, unless the procedures qualifies for an exemption under the of § 126.4(c) or § 126.6 of this subchapter provisions of this subchapter. Applica- are followed. tions for export or temporary import (5) Form DSP–83, duly executed, must be made as follows: must accompany all license applica- (1) Applications for licenses for per- tions for the permanent export of sig- manent export must be made on Form nificant military equipment, including DSP–5 (unclassified); classified hardware or classified tech- (2) Applications for licenses for tem- nical data (see §§ 123.10 and 125.3 of this porary export must be made on Form subchapter). DSP–73 (unclassified); (6) A statement concerning the pay- (3) Applications for licenses for tem- ment of political contributions, fees porary import must be made on Form and commissions must accompany a DSP–61 (unclassified); and permanent export application if the ex- (4) Applications for the export or port involves defense articles or de- temporary import of classified defense fense services valued in an amount of

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$500,000 or more and is being sold com- approval) if the item temporarily im- mercially to or for the use of the armed ported: forces of a foreign country or inter- (1) Is serviced (e.g., inspection, test- national organization (see part 130 of ing, calibration or repair, including this subchapter). overhaul, reconditioning and one-to- (d) Provisions for furnishing the type one replacement of any defective of defense services described in items, parts or components, but ex- § 120.9(a) of this subchapter are con- cluding any modifications, enhance- tained in part 124 of this subchapter. ment, upgrade or other form of alter- Provisions for the export or temporary ation or improvement that changes the import of technical data and classified basic performance of the item), and is defense articles are contained in part subsequently returned to the country 125 of this subchapter. from which it was imported. Shipment (e) A request for a license for the ex- may be made by the U.S. importer or a port of unclassified technical data foreign government representative of (DSP–5) related to a classified defense the country from which the goods were article should specify any classified imported; or technical data or material that subse- (2) Is to be enhanced, upgraded or in- quently will be required for export in corporated into another item which the event of a sale. has already been authorized by the Of- fice of Defense Trade Controls for per- § 123.2 Import jurisdiction. manent export; or The Department of State regulates (3) Is imported for the purpose of ex- the temporary import of defense arti- hibition, demonstration or marketing cles. Permanent imports of defense ar- in the United States and is subse- ticles into the United States are regu- quently returned to the country from lated by the Department of the Treas- which it was imported; or ury (see 27 CFR parts 47, 178 and 179). (4) Has been rejected for permanent import by the Department of the § 123.3 Temporary import licenses. Treasury and is being returned to the (a) A license (DSP–61) issued by the country from which it was shipped; or Office of Defense Trade Controls is re- (5) Is approved for such import under quired for the temporary import and the U.S. Foreign Military Sales (FMS) subsequent export of unclassified de- program pursuant to an executed U.S. fense articles, unless exempted from Department of Defense Letter of Offer this requirement pursuant to § 123.4. and Acceptance (LOA). This requirement applies to: NOTE: These Exceptions do not apply to (1) Temporary imports of unclassified shipments that transit the U.S. to or from defense articles that are to be returned Canada (see § 123.19 and § 126.5 of this sub- directly to the country from which chapter for exceptions). they were shipped to the United States; (b) District Directors of Customs (2) Temporary imports of unclassified shall permit the temporary import (but defense articles in transit to a third not the subsequent export) without a country; license of unclassified defense articles (b) A bond may be required as appro- that are to be incorporated into an- priate (see part 125 of this subchapter other article, or modified, enhanced, for license requirements for technical upgraded, altered, improved or serviced data and classified defense articles.) in any other manner that changes the basic performance or productivity of § 123.4 Temporary import license ex- the article prior to being returned to emptions. the country from which they were (a) District Directors of Customs shipped or prior to being shipped to a shall permit the temporary import third country. A DSP–5 is required for (and subsequent export) without a li- the reexport of such unclassified de- cense, for a period of up to 4 years, of fense articles after incorporation into unclassified U.S.-origin defense items another article, modification, enhance- (including any items manufactured ment, upgrading, alteration or im- abroad pursuant to U.S. Government provement.

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(c) Requirements. To use an exemption and will be returned to the United under § 123.4 (a) or (b), the following States and (2) transfer of title will not criteria must be met: occur during the period of temporary (1) The importer must meet the eligi- export. Accordingly, articles exported bility requirements set forth in pursuant to a temporary export license § 120.1(b) of this subchapter; may not be sold or otherwise perma- (2) At the time of export, the ulti- nently transferred to a foreign person mate consignee named on the Shipper’s while they are overseas under a tem- Export Declaration (SED) must be the porary export license. A renewal of the same as the foreign consignee or end- license or other written approval must user of record named at the time of im- be obtained from the Office of Defense port; and Trade Controls if the article is to re- (3) As stated in § 126.1 of this sub- main outside the United States beyond chapter, the temporary import must the period for which the license is not be from or on behalf of a proscribed valid. country listed in that section unless an (b) Requirements. Defense articles au- exception has been granted in accord- thorized for temporary export under ance with § 126.3 of this subchapter. this section may be shipped only from (d) Procedures. To the satisfaction of a port in the United States where a the District Director of Customs, the District Director of Customs is avail- importer and exporter must comply able, or from a U.S. Post Office (see 39 with the following procedures: CFR part 20), as appropriate. The li- (1) At the time of temporary im- cense for temporary export must be port— presented to the District Director of (i) File and annotate the applicable Customs who, upon verification, will U.S. Customs document (e.g., Form CF endorse the exit column on the reverse 3461, 7512, 7501, 7523 or 3311) to read: side of the license. In some instances of ‘‘This shipment is being imported in the temporary export of technical data accordance with and under the author- (e.g postal shipments), self-endorse- ity of 22 CFR 123.4(a) (identify sub- ment will be necessary (see § 123.22(d)). section),’’ and The endorsed license for temporary ex- (ii) Include, on the invoice or other port is to be retained by the licensee. appropriate documentation, a complete In the case of a military aircraft or list and description of the defense arti- vessel exported under its own power, cle(s) being imported, including quan- the endorsed license must be carried on tity and U.S. dollar value; and board such vessel or aircraft as evi- (2) At the time of export, file with dence that it has been duly authorized the District Director of Customs at the by the Department of State to leave port of exit a Shipper’s Export Declara- the United States temporarily. tion (Department of Commerce Form (c) Upon the return to the United 7525–V) and include on the SED or as an States of defense articles covered by a attachment the following information: license for temporary export, the li- (i) the U.S. Customs entry document cense will be endorsed in the entry col- number or a copy of the U.S. Customs umn by the District Director of Cus- documentation under which the article toms. This procedure shall be followed was imported; for all exits and entries made during (ii) the following statement: ‘‘22 CFR the period for which the license is (identify section) and 22 CFR 120.1(b) valid. The licensee must send the li- applicable.’’ cense to the Office of Defense Trade [58 FR 39299, July 22, 1993, as amended at 64 Controls immediately upon expiration FR 17533, Apr. 12, 1999] or after the final return of the defense articles approved for export, whichever § 123.5 Temporary export licenses. occurs first. (a) The Office of Defense Trade Con- trols may issue a license for the tem- § 123.6 Foreign trade zones and U.S. porary export of unclassified defense Customs bonded warehouses. articles (DSP–73). Such licenses are Foreign trade zones and U.S. Cus- valid only if (1) the article will be ex- toms bonded warehouses are considered ported for a period of less than 4 years integral parts of the United States for

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the purpose of this subchapter. An ex- application for an export license, or on port license is therefore not required a Shipper’s Export Declaration where for shipment between the United an exemption is claimed under this States and a foreign trade zone or a subchapter, must be the country of ul- Customs bonded warehouse. In the case timate end-use. The written approval of classified defense articles, the provi- of the Office of Defense Trade Controls sions of the Department of Defense In- must be obtained before reselling, dustrial Security Manual will apply. transferring, transshipping, or dis- An export license is required for all posing of a defense article to any end shipments of articles on the U.S. Muni- user, end use or destination other than tions List from foreign trade zones and as stated on the export license, or on U.S. Customs bonded warehouses to the Shipper’s Export Declaration in foreign countries, regardless of how the cases where an exemption is claimed articles reached the zone or warehouse. under this subchapter. Exporters must ascertain the specific end-user and end- § 123.7 Exports to warehouses or dis- use prior to submitting an application tribution points outside the United States. to the Office of Defense Trade Controls or claiming an exemption under this Unless the exemption under subchapter. § 123.16(b)(1) is used, a license is re- (b) The exporter shall incorporate the quired to export defense articles to a following statement as an integral part warehouse or distribution point outside of the bill of lading, and the invoice the United States for subsequent resale whenever defense articles on the U.S. and will normally be granted only if an Munitions List are to be exported: agreement has been approved pursuant to § 124.14 of this subchapter. These commodities are authorized by the U.S. Government for export only to § 123.8 Special controls on vessels, air- [country of ultimate destination] for craft and satellites covered by the use by [end-user]. They may not be U.S. Munitions List. transferred, transshipped on a non-con- (a) Transferring registration or continuous voyage, or otherwise be dis- trol to a foreign person of any aircraft, posed of in any other country, either in vessel, or satellite on the U.S. Muni- their original form or after being in- tions List is an export for purposes of corporated into other end-items, with- this subchapter and requires a license out the prior written approval of the or written approval from the Office of U.S. Department of State.’’ Defense Trade Controls. This requirement applies whether the aircraft, ves- (c) A U.S. person or a foreign person sel, or satellite is physically located in requesting approval for the reexport or the United States or abroad. retransfer, or change in end-use, of a (b) The registration in a foreign defense article shall submit a written country of any aircraft, vessel or sat- request which shall be subject to all ellite covered by the U.S. Munitions the documentation required for a per- List which is not registered in the manent export license (see § 123.1) and United States but which is located in shall contain the following: the United States constitutes an ex- (1) The license number under which port. A license or written approval the defense article was previously au- from the Office of Defense Trade Con- thorized for export from the United trols is therefore required. Such trans- States; actions may also require the prior ap- (2) A precise description, quantity proval of the Maritime Administration, and value of the defense article; the Federal Aviation Administration (3) A description of the new end-use; or other agencies of the U.S. Govern- and ment. (4) Identification of the new end-user. (d) The written approval of the Office § 123.9 Country of ultimate destination of Defense Trade Controls must be ob- and approval of reexports or retained before reselling, transferring, transfers. transshipping on a non-continuous voy- (a) The country designated as the age, or disposing of a defense article in country of ultimate destination on an any country other than the country of

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ultimate destination, or anyone other eign end-user will not reexport, resell than the authorized end-user, as stated or otherwise dispose of the significant on the Shipper’s Export Declaration in military equipment enumerated in the cases where an exemption is claimed application outside the country named under this subchapter. as the location of the foreign end-use (e) Reexports or retransfers of U.S.- or to any other person. origin components incorporated into a (b) The Office of Defense Trade Con- foreign defense article to a government trols may also require a DSP–83 for the of a NATO country, or the govern- export of any other defense articles or ments of Australia or Japan, are au- defense services. thorized without the prior written ap- (c) When a DSP–83 is required for an proval of the Office of Defense Trade export of any defense article or defense Controls, provided: service to a non-governmental foreign (1) The U.S.-origin components were end-user, the Office of Defense Trade previously authorized for export from Controls may require as a condition of the United States, either by a license issuing the license that the appropriate or an exemption; authority of the government of the (2) The U.S.-origin components are country of ultimate destination also not significant military equipment, the execute the certificate. items are not major defense equipment sold under a contract in the amount of § 123.11 Movements of vessels and air- $14,000,000 ($14 million) or more; the ar- craft covered by the U.S. Munitions ticles are not defense articles or de- List outside the United States. fense services sold under a contract in (a) A license issued by the Office of the amount of $50,000,000 ($50 million) Defense Trade Controls is required or more; and are not identified in part whenever a privately-owned aircraft or 121 of this subchapter as Missile Tech- vessel on the U.S. Munitions List nology Control Regime (MTCR) items; makes a voyage outside the United and States. (3) The person reexporting the de- (b) Exemption. An export license is fense article must provide written noti- not required when a vessel or aircraft fication to the Office of Defense Trade referred to in paragraph (a) of this sec- Controls of the retransfer not later tion departs from the United States than 30 days following the reexport. and does not enter the territorial wa- The notification must state the arti- ters or airspace of a foreign country if cles being reexported and the recipient no defense articles are carried as cargo. government. Such a vessel or aircraft may not enter (4) In certain cases, the Director, Of- the territorial waters or airspace of a fice of Defense Trade Controls, may foreign country before returning to the place retransfer restrictions on a li- United States, or carry as cargo any cense prohibiting use of this exemp- defense article, without a temporary tion. export license (Form DSP–73) from the Department of State. (See § 123.5.) § 123.10 Non-transfer and use assurances. § 123.12 Shipments between U.S. pos- (a) A nontransfer and use certificate sessions. (Form DSP–83) is required for the ex- An export license is not required for port of significant military equipment the shipment of defense articles be- and classified articles including classi- tween the United States, the Common- fied technical data. A license will not wealth of Puerto Rico, and U.S. posses- be issued until a completed Form DSP– sions. A license is required, however, 83 has been received by the Office of for the export of defense articles from Defense Trade Controls. This form is to these areas to foreign countries. be executed by the foreign consignee, foreign end-user, and the applicant. § 123.13 Domestic aircraft shipments The certificate stipulates that, except via a foreign country. as specifically authorized by prior writ- A license is not required for the ship- ten approval of the Department of ment by air of a defense article from State, the foreign consignee and for- one location in the United States to

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another location in the United States of the importing country. This docu- via a foreign country. The pilot of the ment verifies that the foreign importer aircraft must, however, file a written complied with the import regulations statement with the District Director of of the government of the importing Customs at the port of exit in the country and that the importer declared United States. The original statement the intention not to divert, transship must be filed at the time of exit with or reexport the material described the District Director of Customs. A du- therein without the prior approval of plicate must be filed at the port of re- that government. After delivery of the entry with the District Director of Cus- commodities to the foreign consignee, toms, who will duly endorse it and the Department of State may also re- transmit it to the District Director of quire U.S. exporters to furnish Deliv- Customs at the port of exit. The state- ery Verification documentation from ment will be as follows: the government of the importing country. This documentation verifies that DOMESTIC SHIPMENT VIA A FOREIGN COUNTRY the delivery was in accordance with OF ARTICLES ON THE U.S. MUNITIONS LIST the terms of the approved export li- Under penalty according to Federal law, cense. Both the Import Certificate and the undersigned certifies and warrants that the Delivery Verification must be fur- all the information in this document is true nished to the U.S. exporter by the for- and correct, and that the equipment listed eign importer. below is being shipped from (U.S. port of (c) Triangular transactions. When a exit) via (foreign country) to (U.S. port of entry), which is the final destination in the transaction involves three or more United States. countries that have adopted the IC/DV procedure, the governments of these Description of Equipment countries may stamp a triangular sym- Quantity: llllllllllllllllll bol on the Import Certificate. This Equipment: lllllllllllllllll symbol is usually placed on the Import Value: llllllllllllllllllll Certificate when the applicant for the Signed: lllllllllllllllllll Import Certificate (the importer) Endorsement: Customs Inspector. states either (1) that there is uncer- Port of Exit lllllllllllllllll tainty whether the items covered by Date: llllllllllllllllllll the Import Certificate will be imported Signed: lllllllllllllllllll Endorsement: Customs Inspector. into the country issuing the Import Port of Entry: llllllllllllllll Certificate; (2) that he or she knows Date: llllllllllllllllllll that the items will not be imported into the country issuing the Import § 123.14 Import certificate/delivery Certificate; or (3) that, if the items are verification procedure. to be imported into the country issuing (a) The Import Certificate/Delivery the Import Certificate, they will subse- Verification Procedure is designed to quently be reexported to another des- assure that a commodity imported into tination. All parties, including the ul- the territory of those countries partici- timate consignee in the country of ul- pating in IC/DV procedures will not be timate destination, must be shown on diverted, transshipped, or reexported to the completed Import Certificate. another destination except in accordance with export control regulations of § 123.15 Congressional notification for the importing country. licenses. (b) Exports. The Office of Defense (a) All exports of major defense Trade Controls may require the IC/DV equipment, as defined in § 120.8 of this procedure on proposed exports of de- subchapter, sold under a contract in fense articles to non-government enti- the amount of $14,000,000 or more, or ties in those countries participating in exports of defense articles and defense IC/DV procedures. In such cases, U.S. services sold under a contract in the exporters must submit both an export amount of $50,000,000 or more, may license application (the completed take place only after the Office of De- Form DSP–5) and the original Import fense Trade Controls notifies the ex- Certificate, which must be provided porter through issuance of a license or and authenticated by the government other approval that Congress has not

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enacted a joint resolution prohibiting cense of defense hardware being ex- the export and: ported in furtherance of a manufac- (1) In the case of a license for an ex- turing license agreement, technical as- port to the North Atlantic Treaty Or- sistance agreement, distribution agree- ganization, any member country of ment or an arrangement for distribu- that Organization, or Australia, Japan tion of items identified in Category or New Zealand, 15 calendar days have XIII(b)(1), approved in accordance with elapsed since receipt by the Congress of Part 124, provided that: the certification required by 22 U.S.C. (i) The defense hardware to be ex- 2776(c)(1); or ported supports the activity and is (2) In the case of a license for an ex- identified by item, quantity and value port to any other destination, 30 cal- in the agreement or arrangement; and endar days have elapsed since receipt (ii) Any provisos or limitations by the Congress of the certification re- placed on the authorized agreement or quired by 22 U.S.C. 2776(c)(1). arrangement are adhered to; and (b) Persons who intend to export de- (iii) The exporter certifies on the fense articles and defense services pur- Shipper’s Export Declaration that the suant to any exemption in this sub- export is exempt from the licensing re- chapter under the circumstances de- quirements of this subchapter. This is scribed in the first sentence of para- done by writing, ‘‘22 CFR 123.16(b)(1) graph (a) of this section must notify and the agreement or arrangement the Office of Defense Trade Controls by (identify/state number) applicable’’; letter of the intended export and, prior and to transmittal to Congress, provide a signed contract and a DSP–83 signed by (iv) The total value of all shipments the applicant, the foreign consignee does not exceed the value authorized in and end-user. the agreement or arrangement. (v) In the case of a distribution [62 FR 67275, Dec. 24, 1997, as amended at 64 agreement, export must be made di- FR 17533, Apr. 12, 1999] rectly to the approved foreign distributor. § 123.16 Exemptions of general applicability. (2) District Directors of Customs shall permit the export of components (a) The following exemptions apply or spare parts (for exemptions for fire- to exports of unclassified defense arti- arms and ammunition see § 123.17) with- cles for which no approval is needed out a license when the total value does from the Office of Defense Trade Con- not exceed $500 in a single transaction trols. These exemptions do not apply and: to: Proscribed destinations under § 126.1 of this subchapter; exports for which (i) The components or spare parts are Congressional notification is required being exported to support a defense ar- (see § 123.15 of this subchapter); MTCR ticle previously authorized for export; articles; Significant Military Equip- and ment (SME); and may not be used by (ii) The spare parts or components persons who are generally ineligible as are not going to a distributor, but to a described in § 120.1(c) of this sub- previously approved end-user of the de- chapter. All shipments of defense arti- fense articles; and cles, including those to and from Can- (iii) The spare parts or components ada, require a Shipper’s Export Dec- are not to be used to enhance the capa- laration (SED) or notification letter. If bility of the defense article; the export of a defense article is ex- (iv) exporters shall not split orders so empt from licensing, the SED must as not to exceed the dollar value of this cite the exemption. Refer to § 123.22 for exemption; Shipper’s Export Declaration and let- (v) the exporter may not make more ter notification requirements. than 24 shipments per calender year to (b) The following exports are exempt the previously authorized end user; from the licensing requirements of this (vi) The exporter must certify on the subchapter. Shipper’s Export Declaration that the (1) District Directors of Customs export is exempt from the licensing re- shall permit the export without a li- quirements of this subchapter. This is

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done by writing 22 CFR 123.16(b)(2) ap- subchapter) if the component, part, plicable. tool or test equipment is to be used for (3) District Directors of Customs manufacture, assembly, testing, pro- shall permit the export without a li- duction, or modification provided: cense, of packing cases specially de- (i) The U.S. person is registered with signed to carry defense articles. the Office of Defense Trade Controls (4) District Directors of Customs and complies with all requirements set shall permit the export without a li- forth in part 122 of this subchapter; cense, of unclassified models or mock- (ii) No defense article exported under ups of defense articles, provided that this exemption may be sold or trans- such models or mock-ups are nonoper- ferred without the appropriate license able and do not reveal any technical or other approval from the Office of data in excess of that which is exempt- Defense Trade Controls. ed from the licensing requirements of (10) District Directors shall permit, § 125.4(b) of this subchapter and do not without a license, the permanent ex- contain components covered by the port, and temporary export and return U.S. Munitions List (see § 120.6(b) of to the United States, by accredited this subchapter). Some models or U.S. institutions of higher learning of mockups built to scale or constructed articles fabricated only for funda- of original materials can reveal tech- mental research purposes otherwise nical data. U.S. persons who avail controlled by Category XV (a) or (e) in themselves of this exemption must pro- § 121.1 of this subchapter when all of vide a written certification to the Dis- the following conditions are met: trict Director of Customs that these (i) The export is to an accredited in- conditions are met. This exemption stitution of higher learning, a govern- does not imply that the Office of De- mental research center or an estab- fense Trade Controls will approve the lished government funded private reexport of any defense articles for which search center located within countries models or mocks-ups have been ex- of the North Atlantic Treaty Organiza- ported pursuant to this exemption. tion (NATO) or countries which have (5) District Directors of Customs been designated in accordance with shall permit the temporary export section 517 of the Foreign Assistance without a license of unclassified de- Act of 1961 as a major non-NATO ally fense articles to any public exhibition, (and as defined further in section 644(q) trade show, air show or related event if of that Act) for purposes of that Act that article has previously been li- and the Arms Export Control Act, or censed for a public exhibition, trade countries that are members of the Eu- show, air show or related event and the ropean Space Agency or the European license is still valid. U.S. persons who Union and involves exclusively nation- avail themselves of this exemption als of such countries; must provide a written certification to (ii) All of the information about the the District Director of Customs that article(s), including its design, and all these conditions are met. of the resulting information obtained (6) For exemptions for firearms and through fundamental research involv- ammunition for personal use refer to ing the article will be published and § 123.17. shared broadly within the scientific (7) For exemptions for firearms for community, and is not restricted for personal use of members of the U.S. proprietary reasons or specific U.S. Armed Forces and civilian employees government access and dissemination see § 123.18. controls or other restrictions accepted (8) For exports to Canada refer to by the institution or its researchers on § 126.5 of this subchapter. publication of scientific and technical (9) District Directors of Customs information resulting from the project shall permit the temporary export or activity (See § 120.11 of this sub- without a license by a U.S. person of chapter); and any unclassified component, part, tool (iii) If the article(s) is for permanent or test equipment to a subsidiary, affil- export, the platform or system in iate or facility owned or controlled by which the article(s) may be incor- the U.S. person (see § 122.2(c) of this porated must be a satellite covered by

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§ 125.4(d)(1)(iii) of this subchapter and without a license such firearms in Cat- be exclusively concerned with funda- egory I(a) of § 121.1 of this subchapter mental research and only be launched and ammunition therefor as the foreign into space from countries and by na- person brought into the United States tionals of countries identified in this under the provisions of 27 CFR section. 178.115(d). (The latter provision specifi- [58 FR 39299, July 22, 1993, as amended at 59 cally excludes from the definition of FR 29951, June 10, 1994; 59 FR 45622, Sept. 2, importation the bringing into the 1994; 67 FR 15100, Mar. 29, 2002] United States of firearms and ammunition by certain foreign persons for § 123.17 Exports of firearms and am- specified purposes). munition. (e) District Directors of Customs (a) Except as provided in § 126.1 of shall permit U.S. persons to export this subchapter, District Directors of without a license ammunition for non- Customs shall permit the export with- automatic firearms referred to in para- out a license of components and parts graph (a) of this section if the quantity for Category I(a) firearms, except bar- does not exceed 1,000 cartridges (or rels, cylinders, receivers (frames) or rounds) in any shipment. The ammuni- complete breech mechanisms when the tion must also be for personal use and total value does not exceed $100 whole- not for resale or other transfer of own- sale in any transaction. ership. The foregoing exemption is also (b) District Directors of Customs not applicable to the personnel referred shall permit the export without a li- to in § 123.18. cense of nonautomatic firearms cov- [58 FR 39299, July 22, 1993, as amended at 64 ered by Category I(a) of § 121.1 of this FR 17534, Apr. 12, 1999] subchapter if they were manufactured in or before 1898, or are replicas of such § 123.18 Firearms for personal use of firearms. members of the U.S. Armed Forces (c) District Directors of Customs and civilian employees of the U.S. shall permit U.S. persons to export Government. temporarily from the United States The following exemptions apply to without a license not more than three members of the U.S. Armed Forces and nonautomatic firearms in Category I(a) civilian employees of the U.S. Govern- of § 121.1 of this subchapter and not ment who are U.S. persons (both re- more than 1,000 cartridges therefor, ferred to herein as personnel). The ex- provided that: emptions apply only to such personnel (1) A declaration by the U.S. person if they are assigned abroad for ex- and an inspection by a customs officer tended duty. These exemptions do not is made; apply to dependents. (2) The firearms and accompanying (a) Firearms. District Directors of ammunition must be with the U.S. per- Customs shall permit nonautomatic son’s baggage or effects, whether ac- firearms in Category I(a) of § 121.1 of companied or unaccompanied (but not this subchapter and parts therefor to mailed); and be exported, except by mail, from the (3) They must be for that person’s ex- United States without a license if: clusive use and not for reexport or (1) They are consigned to service- other transfer of ownership. The fore- men’s clubs abroad for uniformed mem- going exemption is not applicable to a bers of the U.S. Armed Forces; or, crew-member of a vessel or aircraft un- (2) In the case of a uniformed member less the crew-member declares the fire- of the U.S. Armed Forces or a civilian arms to a Customs officer upon each employee of the Department of De- departure from the United States, and fense, they are for personal use and not declares that it is his or her intention for resale or other transfer of owner- to return the article(s) on each return ship, and if the firearms are accom- to the United States. It is also not ap- panied by a written authorization from plicable to the personnel referred to in the commanding officer concerned; or § 123.18. (3) In the case of other U.S. Govern- (d) District Directors of Customs ment employees, they are for personal shall permit a foreign person to export use and not for resale or other transfer

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of ownership, and the Chief of the U.S. naval nuclear propulsion, and (3) if it is Diplomatic Mission or his designee in not for use in a naval propulsion plant. the country of destination has approved in writing to Department of § 123.21 Duration, renewal and dis- State the import of the specific types position of licenses. and quantities of firearms into that (a) A license is valid for four years. country. The exporter shall provide a The license expires when the total copy of this written statement to the value or quantity authorized has been District Director of Customs. shipped or when the date of expiration (b) Ammunition. District Directors of has been reached, whichever occurs Customs shall permit not more than first. Defense articles to be shipped 1,000 cartridges (or rounds) of ammuni- thereafter require a new application tion for the firearms referred to in paragraph (a) of this section to be ex- and license. The new application ported (but not mailed) from the should refer to the expired license. It United States without a license when should not include references to any the firearms are on the person of the defense articles other than those of the owner or with his baggage or effects, unshipped balance of the expired li- whether accompanied or unaccom- cense. panied (but not mailed). (b) Unused, expired, expended, suspended, or revoked licenses must be re- § 123.19 Canadian and Mexican border turned immediately to the Department shipments. of State. A shipment originating in Canada or Mexico which incidentally transits the § 123.22 Filing of export licenses and United States en route to a delivery Shipper’s Export Declarations with point in the same country that origi- District Directors of Customs. nated the shipment is exempt from the (a) The exporter must deposit the li- requirement for an in transit license. cense with the District Director of Cus- toms at the port of exit before ship- § 123.20 Nuclear materials. ment, unless paragraph (d) of this sec- (a) The provisions of this subchapter tion or § 125.9 applies (for exports by do not apply to equipment in Category mail, see § 123.24). Licenses for tem- VI(e) and Category XVI of § 121.1 of this porary export or temporary import are subchapter to the extent such equip- to be retained by the exporter and pre- ment is under the export control of the sented to the District Director of Cus- Department of Energy or the Nuclear Regulatory Commission pursuant to toms at the time of import or export the Atomic Energy Act of 1954, as for endorsement. If necessary, the ex- amended, and the Nuclear Non-Pro- port may be made through a port other liferation Act of 1978. than the one designated on the license (b) A license for the export of any if the exporter complies with the pro- machinery, device, component, equip- cedures established by the U.S. Cus- ment, or technical data relating to toms Service. Every license will be re- equipment referred to in Category turned to the Office of Defense Trade VI(e) will not be granted unless the Controls by the District Director of proposed export comes within the scope Customs when the total value or quan- of an existing Agreement for Coopera- tity authorized has been shipped or tion for Mutual Defense Purposes con- when the date of expiration is reached, cluded pursuant to the Atomic Energy whichever occurs first. Act of 1954, as amended, with the gov- (b) Before shipping any defense arti- ernment of the country to which the cle, the exporter must also file a Ship- article is to be exported. Licenses may per’s Export Declaration with the Dis- be granted in the absence of such an trict Director of Customs at the port of agreement only (1) if the proposed ex- exit (unless otherwise exempt from fil- port involves an article which is iden- ing a Shipper’s Export Declaration). tical to that in use in an unclassified The District Director of Customs at civilian nuclear power plant, (2) if the the port of exit must authenticate the proposed export has no relationship to

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Shipper’s Export Declaration, and en- § 123.23 Monetary value of shipments. dorse the license to show the ship- District Directors of Customs shall ments actually made. The District Di- permit the shipment of defense articles rector of Customs will return a copy of identified on any license when the each authenticated Shipper’s Export total value of the export does not ex- Declaration to the Office of Defense ceed the aggregate monetary value Trade Controls. (not quantity) stated on the license by (c) Except for the export of unclassi- more than ten percent, provided that fied technical data, an exporter must the additional monetary value does not file a Shipper’s Export Declaration make the total value of the license or with District Directors of Customs or other approval for the export of any Postmasters in those cases in which no major defense equipment sold under a export license is required because of an contract reach $14,000,000 or more, and exemption under this subchapter. The provided that the additional monetary exporter must certify that the export value does not make defense articles or is exempt from the licensing require- defense services sold under a contract ments of this subchapter by writing 22 reach the amount of $50,000,000 or more. CFR (identify section) and 22 CFR 120.1(b) applicable on the Shipper’s Ex- § 123.24 Shipments by mail. port Declaration, and by identifying A Shipper’s Export Declaration must the section under which an exemption be authenticated before an article is is claimed. A copy of each such dec- actually sent abroad by mail (see laration must be mailed immediately § 123.22(d)). The postmaster or exporter by the exporter to the Office of Defense will endorse each license to show the Trade Controls. shipments made. Every license must be (d) A Shipper’s Export Declaration is returned by the exporter to the Office not required for exports of unclassified of Defense Trade Controls upon com- technical data. Exporters shall notify pletion of the mailings. the Office of Defense Trade Controls of the initial export of the data by either § 123.25 Amendments to licenses. returning the license after self endorse- (a) The Office of Defense Trade Con- ment or by sending a letter to the Of- trols may approve an amendment to a fice of Defense Trade Controls. The let- license for permanent export, tem- ter shall provide the method, date, li- porary export and temporary import of cense number and airway bill number unclassified defense articles. A sug- (if applicable) of the shipment. The let- gested format is available from the Of- ter must be signed by an empowered office of Defense Trade Controls. ficial of the company and provided to (b) The following types of amend- the Office of Defense Trade Controls ments to a license that will be consid- within thirty days of the initial export. ered: Addition of U.S. freight forwarder (e) If a license for the export of un- or U.S. consignor; change due to an ob- classified defense articles, including vious typographical error; change in technical data, is used but not en- source of commodity; and change of dorsed by U.S. Customs or a Post- foreign intermediate consignee if that party is only transporting the equip- master for whatever reason (e.g., elec- ment and will not process (e.g., inte- tronic transmission, unavailability of grate, modify) the equipment. For Customs officer or Postmaster, etc.), changes in U.S. dollar value see § 123.23. the person exporting the article must (c) The following types of amend- self-endorse the license, showing when ments to a license will not be approved: and how the export took place. Every Additional quantity, changes in com- license shall also be returned by the ex- modity, country of ultimate destina- porter to the Office of Defense Trade tion, end-use or end-user, foreign con- Controls when the total value or quan- signee and/or extension of duration. tity authorized has been shipped or The foreign intermediate consignee when the date of expiration is reached, may only be amended if that party is whichever occurs first. acting as freight forwarder and the ex- [58 FR 39299, July 22, 1993, as amended at 61 port does not involve technical data. A FR 48831, Sept. 17, 1996] new license is required for these

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changes. Any new license submission Act and the Arms Export Control Act must reflect only the unshipped bal- (Argentina, Australia, Egypt, Israel, ance of quantity and dollar value. Japan, Jordan, New Zealand and Re- public of Korea). § 123.26 Recordkeeping requirement (2) The proposed exports concern ex- for exemptions. clusively one or more foreign persons When an exemption is claimed for the (e.g., companies or governments) lo- export of unclassified technical data, cated within the territories of the the exporter must maintain a record of countries identified in paragraph (a)(1) each such export. The business record of this section, and one or more com- should include the following informa- mercial communications satellite pro- tion: A description of the unclassified technical data, the name of the recipi- grams included within a list of such ent end-user, the date and time of the persons and programs approved by the export, and the method of trans- U.S. Government for purposes of this mission. section, as signified in a list of such persons and programs that will be pub- § 123.27 Special licensing regime for licly available through the Internet export to U.S. allies of commercial Website of the Office of Defense Trade communications satellite compo- Controls and by other means. nents, systems, parts, accessories, attachments and associated tech- (3) The articles are not major defense nical data. equipment sold under a contract in the amount of $14,000,000 or more or de- (a) U.S. persons engaged in the business of exporting specifically designed fense articles or defense services sold or modified components, systems, under a contract in the amount of parts, accessories, attachments, associ- $50,000,000 or more (for which purpose, ated equipment and certain associated as is customary, exporters may not technical data for commercial commu- split contracts or purchase orders). nications satellites, and who are so Items meeting these statutory thresh- registered with the Office of Defense olds must be submitted on a separate Trade Controls pursuant to part 122 of license application to permit the re- this subchapter, may submit license quired notification to Congress pursu- applications for multiple permanent ant to section 36(c) of the Arms Export and temporary exports and temporary Control Act. imports of such articles for expeditious (4) The articles are not detailed de- consideration without meeting the doc- sign, development, manufacturing or umentary requirements of § 123.1(c)(4) production data and do not involve the and (5) concerning purchase orders, let- manufacture abroad of significant mili- ters of intent, contracts and non-trans- tary equipment. fer and end use certificates, or the doc- (5) The U.S. exporter reports com- umentary requirements of § 123.9, con- plete shipment information to the Of- cerning approval of re-exports or re- fice of Defense Trade Controls within transfers, when all of the following re- 15 days of shipment in accordance with quirements are met: (1) The proposed exports or re-exports section 1302 of the Foreign Relations concern exclusively one or more coun- Authorization Act for Fiscal Years 2000 tries of the North Atlantic Treaty Or- and 2001, and at that time meets the ganization (Belgium, Canada, Czech documentary requirements of Republic, Denmark, France, Germany, § 123.1(c)(4) and (5), the documentary re- Greece, Hungary, Iceland, Italy, Lux- quirements of § 123.9 in the case of re- embourg, The Netherlands, Norway, exports or re-transfers, and, other doc- Poland, Portugal, Spain, Turkey, umentary requirements that may be United Kingdom and United States) imposed as a condition of a license and/or one or more countries which (e.g., parts control plans for MTCR-con- have been designated in accordance trolled items). The shipment informa- with section 517 of the Foreign Assist- tion reported must include a descrip- ance Act of 1961 as a major non-NATO tion of the item and quantity, value, ally (and as defined further in section port of exit and end user and country 644(q) of that Act) for purposes of that of destination of the item.

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(6) At any time in which an item ex- 124.2 Exemptions for training and military ported pursuant to this section is pro- service. posed for re-transfer outside of the ap- 124.3 Exports of technical data in further- proved territory, programs or persons ance of an agreement. 124.4 Deposit of signed agreements with the (e.g., such as in the case of an item in- Office of Defense Trade Controls. cluded in a satellite for launch beyond 124.5 Proposed agreements that are not con- the approved territory), the detailed cluded. requirements of § 123.9 apply with re- 124.6 Termination of manufacturing license gard to obtaining the prior written agreements and technical assistance consent of the Office of Defense Trade agreements. Controls. 124.7 Information required in all manufac- (b) The re-export or re-transfer of the turing license agreements and technical articles authorized for export (includ- assistance agreements. 124.8 Clauses required both in manufac- ing to specified re-export destinations) turing license agreements and technical in accordance with this section do not assistance agreements. require the separate prior written ap- 124.9 Additional clauses required only in proval of the Office of Defense Trade manufacturing license agreements. Controls provided all of the require- 124.10 Nontransfer and use assurances. ments in paragraph (a) of this section 124.11 Certification to Congress for agree- are met. ments. (c) The Office of Defense Trade Con- 124.12 Required information in letters of trols will consider, on a case-by-case transmittal. 124.13 Procurement by United States per- basis, requests to include additional sons in foreign countries (offshore pro- foreign companies and satellite procurement). grams within the geographic coverage 124.14 Exports to warehouses or distribution of a license application submitted pur- points outside the United States. suant to this section from countries 124.15 Special Export Controls for Defense not otherwise covered, who are mem- Articles and Defense Services Controlled bers of the European Space Agency or under Category XV: Space Systems and the European Union. In no case, how- Space Launches. ever, can the provisions of this section AUTHORITY: Sec. 2, 38, and 71, Pub. L. 90– apply or be relied upon by U.S. export- 629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); ers in the case of countries who are E.O. 11958, 42 FR 4311, 3 CFR 1977 Comp. p. 79; subject to the mandatory requirements 22 U.S.C. 2658; Pub. L. 105–261. of section 1514 of the Strom Thurmond SOURCE: 58 FR 39305, July 22, 1993, unless National Defense Authorization Act for otherwise noted. Fiscal Year 1999, concerning national security controls on satellite export li- § 124.1 Manufacturing license agree- censing. ments and technical assistance agreements. (d) Registered U.S. exporters may request at the time of a license applica- (a) The approval of the Office of De- tion submitted pursuant to this section fense Trade Controls must be obtained that additional foreign persons or com- before the defense services described in munications satellite programs be § 120.9(a) of this subchapter may be fur- added to the lists referred to in para- nished. In order to obtain such ap- graph (a)(2) of this section, which addi- proval, the U.S. person must submit a tions, if approved, will be included proposed agreement to the Office of De- within the publicly available lists of fense Trade Controls. Such agreements authorized recipients and programs. are generally characterized as either Manufacturing license agreements, [65 FR 34091, May 26, 2000] technical assistance agreements, distribution agreements or off-shore pro- PART 124—AGREEMENTS, OFF- curement agreements, and may not SHORE PROCUREMENT AND enter into force without the prior writ- OTHER DEFENSE SERVICES ten approval of the Office of Defense Trade Controls. Once approved, the de- Sec. fense services described in the agree- 124.1 Manufacturing license agreements and ments may generally be provided with- technical assistance agreements. out further licensing in accordance

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with §§ 124.3 and 125.4(b)(2) of this sub- § 124.2 Exemptions for training and chapter. The requirements of this sec- military service. tion apply whether or not technical (a) Technical assistance agreements data is to be disclosed or used in the are not required for the provision of performance of the defense services de- training in the basic operation and scribed in § 120.9(a) of this subchapter maintenance of defense articles law- (e.g., all the information relied upon by fully exported or authorized for export the U.S. person in performing the de- to the same recipient. This does not in- fense service is in the public domain or clude training in intermediate and is otherwise exempt from the licensing depot level maintenance. requirements of this subchapter pursu- (b) Services performed as a member ant to § 125.4 of this subchapter). This of the regular military forces of a for- requirement also applies to the train- eign nation by U.S. persons who have ing of any foreign military forces, reg- been drafted into such forces are not ular and irregular, in the use of defense deemed to be defense services for pur- articles. Technical assistance agree- poses of § 120.9 of this subchapter. ments must be submitted in such cases. (c) NATO countries, Australia, In exceptional cases, The Office of De- Japan, and Sweden, in addition to the fense Trade Controls, upon written re- basic maintenance training exemption quest, will consider approving the pro- provided in § 124.2(a) and basic maintenance information exemption in vision of defense services described in § 125.4(b)(5) of this subchapter, no tech- § 120.9(a) of this subchapter by granting nical assistance agreement is required a license under part 125 of this sub- for maintenance training or the per- chapter. Also, see § 126.8 of this sub- formance of maintenance, including chapter for the requirements for prior the export of supporting technical approval of proposals relating to sig- data, when the following criteria can nificant military equipment. be met: (b) Classified Articles. Copies of ap- (1) Defense services are for unclassi- proved agreements involving the re- fied U.S.-origin defense articles law- lease of classified defense articles will fully exported or authorized for export be forwarded by the Office of Defense and owned or operated by and in the in- Trade Controls to the Defense Inves- ventory of NATO or the Federal Gov- tigative Service of the Department of ernments of NATO countries, Aus- Defense. tralia, Japan or Sweden. (c) Amendments. Changes to the scope (2) This defense service exemption of approved agreements, including does not apply to any transaction in- modifications, upgrades, or extensions volving defense services for which con- must be submitted for approval. The gressional notification is required in amendments may not enter into force accordance with § 123.15 and § 124.11 of until approved by the Office of Defense this subchapter. Trade Controls. (3) Maintenance training or the per- (d) Minor Amendments. Amendments formance of maintenance must be limited to inspection, testing, calibration which only alter delivery or perform- or repair, including overhaul, recondi- ance schedules, or other minor admin- tioning and one-to-one replacement of istrative amendments which do not af- any defective items, parts or compo- fect in any manner the duration of the nents; and excluding any modification, agreement or the clauses or informa- enhancement, upgrade or other form of tion which must be included in such alteration or improvement that en- agreements because of the require- hances the performance or capability ments of this part, do not have to be of the defense article. This does not submitted for approval. One copy of all preclude maintenance training or the such minor amendments must be sub- performance of maintenance that mitted to the Office of Defense Trade would result in enhancements or im- Controls within thirty days after they provements only in the reliability or are concluded. maintainability of the defense article,

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such as an increased mean time be- (v) Gas turbine engine hot sections tween failure (MTBF). covered by Categories VI(f) and VIII(b); (4) Supporting technical data must be (vi) Category VIII(f); unclassified and must not include soft- (vii) Category XII(c); ware documentation on the design or (viii) Chemical agents listed in Cat- details of the computer software, soft- egory XIV (a), biological agents in Cat- ware source code, design methodology, egory XIV (b), and equipment listed in engineering analysis or manufacturing Category XIV (c) for dissemination of know-how such as that described in the chemical agents and biological paragraphs (c)4)(i) through (c)(4)(iii) as agents listed in Categories XIV (a) and follows: (b); (i) Design Methodology, such as: The (ix) Nuclear radiation measuring de- underlying engineering methods and vices manufactured to military speci- design philosophy utilized (i.e., the fications listed in Category XIV(d); ‘‘why’’ or information that explains (x) Category XV; the rationale for particular design de- (xi) Nuclear weapons design and test cision, engineering feature, or perform- equipment listed in Category XVI; ance requirement); engineering experi- (xii) Submersible and oceanographic ence (e.g. lessons learned); and the ra- vessels and related articles listed in tionale and associated databases (e.g. Category XX(a) through (d); design allowables, factors of safety, (xiii) Miscellaneous articles covered component life predictions, failure by Category XXI. analysis criteria) that establish the (6) Eligibility criteria for foreign per- operational requirements (e.g., persons. Foreign persons eligible to re- formance, mechanical, electrical, elec- ceive technical data or maintenance tronic, reliability and maintainability) training under this exemption are lim- of a defense article. ited to nationals of the NATO coun- (ii) Engineering Analysis, such as: An- tries, Australia, Japan, or Sweden. alytical methods and tools used to de- [58 FR 39305, July 22, 1993, as amended at 65 sign or evaluate a defense article’s per- FR 45283, July 21, 2000; 66 FR 35899, July 10, formance against the operational re- 2001] quirements. Analytical methods and tools include the development and/or § 124.3 Exports of technical data in use of mockups, computer models and furtherance of an agreement. simulations, and test facilities. (a) Unclassified technical data. Dis- (iii) Manufacturing Know-how, such trict Directors of Customs or postal au- as: Information that provides detailed thorities shall permit the export with- manufacturing processes and tech- out a license of unclassified technical niques needed to translate a detailed data if the export is in furtherance of a design into a qualified, finished defense manufacturing license or technical as- article. sistance agreement which has been ap- (5) This defense service exemption proved in writing by the Office of De- does not apply to maintenance training fense Trade Controls and the technical or the performance of maintenance and data being exported does not exceed service or the transfer of supporting the scope or limitations of the relevant technical data for the following defense agreement. The U.S. party to the articles: agreement must certify on the Ship- (i) All Missile Technology Control pers Export Declaration that the ex- Regime Annex Items; port does not exceed the scope of the (ii) Firearms listed in Category I; and agreement and any limitations im- ammunition listed in Category III for posed pursuant to this part. The ap- the firearms in Category I; proval of the Office of Defense Trade (iii) Nuclear weapons strategic deliv- Controls must be obtained for the ex- ery systems and all components, parts, port of any unclassified technical data accessories and attachments specifi- which may exceed the terms of the cally designed for such systems and as- agreement. sociated equipment; (b) Classified technical data. The ex- (iv) Naval nuclear propulsion equip- port of classified information in fur- ment listed in Category VI(e); therance of an approved manufacturing

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license or technical assistance agree- produced overseas and their disposition ment which provides for the trans- in the foreign country, a description of mittal of classified information does alternative measures and controls to not require further approval from the ensure compliance with restrictions in Office of Defense Trade Controls when: the agreement on production quan- (1) The United States party certifies tities and third-party transfers. to the Department of Defense transmittal authority that the classified in- [62 FR 67276, Dec. 24, 1997] formation does not exceed the tech- § 124.5 Proposed agreements that are nical or product limitations in the not concluded. agreement; and (2) The U.S. party complies with the The United States party to any pro- requirements of the Department of De- posed manufacturing license agree- fense Industrial Security Manual con- ment or technical assistance agree- cerning the transmission of classified ment must inform the Office of Defense information and any other require- Trade Controls if a decision is made ments of cognizant U.S. departments not to conclude the agreement. The in- or agencies. formation must be provided within 60 days of the date of the decision. These § 124.4 Deposit of signed agreements requirements apply only if the ap- with the Office of Defense Trade proval of the Office of Defense Trade Controls. Controls was obtained for the agree- (a) The United States party to a ment to be concluded (with or without manufacturing license or a technical any provisos). assistance agreement must file one copy of the concluded agreement with § 124.6 Termination of manufacturing the Office of Defense Trade Controls license agreements and technical not later than 30 days after it enters assistance agreements. into force. If the agreement is not con- The U. S. party to a manufacturing cluded within one year of the date of license or a technical assistance agree- approval, the Office of Defense Trade ment must inform the Office of Defense Controls must be notified in writing Trade Controls in writing of the im- and be kept informed of the status of pending termination of the agreement the agreement until the requirements not less than 30 days prior to the expi- of this paragraph or the requirements ration date of such agreement. of § 124.5 are satisfied. (b) In the case of concluded agree- § 124.7 Information required in all ments involving coproduction or li- manufacturing license agreements censed production outside of the and technical assistance agree- United States of defense articles of ments. United States origin, a written state- The following information must be ment must accompany filing of the included in all proposed manufacturing concluded agreement with the Office of license agreements and technical as- Defense Trade Controls, which shall in- sistance agreements. The information clude: should be provided in terms which are (1) The identity of the foreign coun- as precise as possible. If the applicant tries, international organization, or believes that a clause or that required foreign firms involved; information is not relevant or nec- (2) A description and the estimated essary, the applicant may request the value of the articles authorized to be omission of the clause or information. produced, and an estimate of the quan- The transmittal letter accompanying tity of the articles authorized to be the agreement must state the reasons produced: for any proposed variation in the (3) A description of any restrictions clauses or required information. on third-party transfers of the foreign- (1) The agreement must describe the manufactured articles; and defense article to be manufactured and (4) If any such agreement does not all defense articles to be exported, in- provide for United States access to and cluding any test and support equip- verification of quantities of articles ment or advanced materials. They

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should be described by military nomen- produced or manufactured from such clature, contract number, National technical data or defense service may Stock Number, nameplate data, or not be transferred to a person in a other specific information. Supporting third country or to a national of a technical data or brochures should be third country except as specifically au- submitted in seven copies. Only defense thorized in this agreement unless the articles listed in the agreement will be prior written approval of the Depart- eligible for export under the exemption ment of State has been obtained.’’ in § 123.16(b)(1) of this subchapter. (6) ‘‘All provisions in this agreement (2) The agreement must specifically which refer to the United States Gov- describe the assistance and technical ernment and the Department of State data, including the design and manu- will remain binding on the parties after facturing know-how involved, to be fur- the termination of the agreement.’’ nished and any manufacturing rights to be granted; § 124.9 Additional clauses required (3) The agreement must specify its only in manufacturing license duration; and agreements. (4) The agreement must specifically (a) Clauses for all manufacturing li- identify the countries or areas in which cense agreements. The following clauses manufacturing, production, processing, must be included only in manufac- sale or other form of transfer is to be turing license agreements: licensed. (1) ‘‘No export, sale, transfer, or other disposition of the licensed article § 124.8 Clauses required both in manu- is authorized to any country outside facturing license agreements and the territory wherein manufacture or technical assistance agreements. sale is herein licensed without the The following statements must be in- prior written approval of the U.S. Gov- cluded both in manufacturing license ernment unless otherwise exempted by agreements and in technical assistance the U.S. Government. Sales or other agreements: transfers of the licensed article shall (1) ‘‘This agreement shall not enter be limited to governments of countries into force, and shall not be amended or wherein manufacture or sale is hereby extended, without the prior written ap- licensed and to private entities seeking proval of the Department of State of to procure the licensed article pursu- the U.S. Government.’’ ant to a contract with any such gov- (2) ‘‘This agreement is subject to all ernment unless the prior written ap- United States laws and regulations re- proval of the U.S. Government is ob- lating to exports and to all administra- tained.’’ tive acts of the U.S. Government pur- (2) ‘‘It is agreed that sales by licensee suant to such laws and regulations.’’ or its sub-licensees under contracts (3) ‘‘The parties to this agreement made through the U.S. Government agree that the obligations contained in will not include either charges for pat- this agreement shall not affect the per- ent rights in which the U.S. Govern- formance of any obligations created by ment holds a royalty-free license, or prior contracts or subcontracts which charges for data which the U.S. Gov- the parties may have individually or ernment has a right to use and disclose collectively with the U.S. Govern- to others, which are in the public do- ment.’’ main, or which the U.S. Government (4) ‘‘No liability will be incurred by has acquired or is entitled to acquire or attributed to the U.S. Government without restrictions upon their use and in connection with any possible in- disclosure to others.’’ fringement of privately owned patent (3) ‘‘If the U.S. Government is obli- or proprietary rights, either domestic gated or becomes obligated to pay to or foreign, by reason of the U.S. Gov- the licensor royalties, fees, or other ernment’s approval of this agreement.’’ charges for the use of technical data or (5) ‘‘The technical data or defense patents which are involved in the man- service exported from the United ufacture, use, or sale of any licensed States in furtherance of this agreement article, any royalties, fees or other and any defense article which may be charges in connection with purchases

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of such licensed article from licensee ten approval of the U.S. Department of or its sub-licensees with funds derived State. through the U.S. Government may not (b) Special clause for agreements relat- exceed the total amount the U.S. Gov- ing to significant military equipment. ernment would have been obligated to With respect to an agreement for the pay the licensor directly.’’ production of significant military (4) ‘‘If the U.S. Government has made equipment, the following additional financial or other contributions to the provisions must be included in the design and development of any licensed agreement: article, any charges for technical as- (1) ‘‘A completed nontransfer and use sistance or know-how relating to the certificate (DSP–83) must be executed item in connection with purchases of by the foreign end-user and submitted such articles from licensee or sub-li- to the Department of State of the censees with funds derived through the U.S. Government must be proportion- United States before any transfer may ately reduced to reflect the U.S. Gov- take place.’’ ernment contributions, and subject to (2) ‘‘The prior written approval of the the provisions of paragraphs (a) (2) and U.S. Government must be obtained be- (3) of this section, no other royalties, fore entering into a commitment for or fees or other charges may be as- the transfer of the licensed article by sessed against U.S. Government funded sale or otherwise to any person or gov- purchases of such articles. However, ernment outside of the approved sales charges may be made for reasonable re- territory.’’ production, handling, mailing, or similar administrative costs incident to the § 124.10 Nontransfer and use assur- furnishing of such data.’’ ances. (5) ‘‘The parties to this agreement (a) Types of agreements requiring assur- agree that an annual report of sales or ances. With respect to any manufac- other transfers pursuant to this agree- turing license agreement or technical ment of the licensed articles, by quan- assistance agreement which relates to tity, type, U.S. dollar value, and pur- significant military equipment or clas- chaser or recipient, shall be provided sified defense articles, including classi- by (applicant or licensee) to the De- fied technical data, a Nontransfer and partment of State.’’ This clause must Use Certificate (Form DSP–83) (see specify which party is obligated to pro- § 123.10 of this subchapter) signed by vide the annual report. Such reports the applicant and the foreign party may be submitted either directly by must be submitted to the Office of De- the licensee or indirectly through the fense Trade Controls. With respect to licensor, and may cover calendar or fis- all agreements involving classified ar- cal years. Reports shall be deemed pro- ticles, including classified technical prietary information by the Depart- data, an authorized representative of ment of State and will not be disclosed the foreign government must sign the to unauthorized persons. See § 126.10(b) DSP–83 (or provide the same assur- of this subchapter. ances in the form of a diplomatic note), (6) (Licensee) agrees to incorporate unless the Office of Defense Trade Con- the following statement as an integral trols has granted an exception to this provision of a contract, invoice or requirement. The Office of Defense other appropriate document whenever Trade controls may require that a the licensed articles are sold or other- DSP–83 be provided in conjunction with wise transferred: an agreement that does not relate to These commodities are authorized for ex- significant military equipment or clas- port by the U.S. Government only to (coun- sified defense articles. The Office of De- try of ultimate destination or approved sales fense Trade Controls may also require territory). They may not be resold, diverted, with respect to any agreement that an transferred, transshipped, or otherwise be disposed of in any other country, either in appropriate authority of the foreign their original form or after being incor- party’s government also sign the DSP– porated through an intermediate process 83 (or provide the same assurances in into other end-items, without the prior writ- the form of a diplomatic note).

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(b) Timing of submission of assurances. by the Congress of the certification re- Submission of a Form DSP–83 and/or quired by 22 U.S.C. 2776(d). diplomatic note must occur as follows: [62 FR 67276, Dec. 24, 1997] (1) Agreements which have been signed by all parties before being sub- § 124.12 Required information in let- mitted to the Office of Defense Trade ters of transmittal. Controls may only be submitted along (a) An application for the approval of with any required DSP–83 and/or diplo- a manufacturing license or technical matic note. assistance agreement with a foreign (2) If an agreement has not been person must be accompanied by an ex- signed by all parties before being sub- planatory letter. The original letter mitted, the required DSP–83 and/or dip- and seven copies of the letter and eight lomatic note must be submitted along copies of the proposed agreement shall with the signed agreement. be submitted to the Office of Defense NOTE: In no case may a transfer occur be- Trade Controls. The explanatory letter fore a required DSP–83 and/or diplomatic shall contain: note has been submitted to the Office of De- (1) A statement giving the appli- fense Trade Controls. cant’s Defense Trade Controls registra- [59 FR 29951, June 10, 1994] tion number. (2) A statement identifying the li- § 124.11 Certification to Congress for censee and the scope of the agreement. agreements. (3) A statement identifying the U.S. Regardless of dollar value, a Tech- Government contract under which the nical Assistance Agreement or a Manu- equipment or technical data was gen- facturing License Agreement that in- erated, improved, or developed and sup- volves the manufacture abroad of any plied to the U.S. Government, and item of significant military equipment whether the equipment or technical (as defined in § 120.7 of this subchapter) data was derived from any bid or other proposal to the U.S. Government. shall be certified to Congress by the (4) A statement giving the military Department as required by 22 U.S.C. security classification of the equip- 2776(d). Additionally, any technical as- ment or technical data. sistance agreement or manufacturing (5) A statement identifying any pat- license agreement providing for the ex- ent application which discloses any of port of major defense equipment, as de- the subject matter of the equipment or fined in § 120.8, sold under a contract in technical data covered by an invention the amount of $14 million or more, or secrecy order issued by the U.S. Patent of defense articles or defense services and Trademark Office. sold under a contract in the amount of (6) A statement of the actual or esti- $50 million or more, shall be certified mated value of the agreement, includ- to Congress by the Department as re- ing the estimated value of all defense quired by 22 U.S.C. 2776(c)(1). The Office articles to be exported in furtherance of Defense Trade Controls will not ap- of the agreement or amendments there- prove agreements requiring Congres- to. If the value is $500,000 or more, an sional notification unless Congress has additional statement must be made re- not enacted a joint resolution prohib- garding the payment of political con- iting the agreement and: tributions, fees or commissions, pursu- (a) In the case of an agreement for or ant to part 130 of this subchapter. in a country which is a member of the (7) A statement indicating whether North Atlantic Treaty Organization or any foreign military sales credits or Australia, Japan, or New Zealand, at loan guarantees are or will be involved least 15 calendar days have elapsed in financing the agreement. since receipt by the Congress of the (8) The agreement must describe any certification required by 22 U.S.C. classified information involved and 2776(d); or identify, from Department of Defense (b) In the case of an agreement for or form DD254, the address and telephone in any other country, at least 30 cal- number of the U.S. Government office endar days have elapsed since receipt that classified the information.

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(9) For agreements that may require procurement of defense articles, pro- the export of classified information, vided that: the Defense Investigative Service cog- (a) The contract or purchase order nizant security offices that have re- for offshore procurement limits deliv- sponsibility for the facilities of the ery of the defense articles to be pro- U.S. parties to the agreement shall be duced only to the person in the United identified. The facility security clear- States or to an agency of the U.S. Gov- ance codes of the U.S. parties shall also ernment; and be provided. (b) The technical data of U.S.-origin (b) The following statements must be to be used in the foreign manufacture made in the letter of transmittal: of defense articles does not exceed that (1) ‘‘If the agreement is approved by required for bid purposes on a build-to- the Department of State, such approval print basis (build-to-print means pro- will not be construed by (the applicant) ducing an end-item (i.e., system, sub- as passing on the legality of the agree- system or component) from technical ment from the standpoint of antitrust drawings and specifications (which con- laws or other applicable statutes, nor tain no process or know-how informa- will (the applicant) construe the De- tion) without the need for additional partment’s approval as constituting ei- technical assistance). Release of sup- ther approval or disapproval of any of porting documentation (e.g., accept- the business terms or conditions be- ance criteria, object code software for tween the parties to the agreement.’’ numerically controlled machines) is (2) ‘‘The (applicant) will not permit permissible. Build-to-print does not in- the proposed agreement to enter into clude the release of any information force until it has been approved by the which discloses design methodology, Department of State.’’ engineering analysis, detailed process (3) ‘‘The (applicant) will furnish the information or manufacturing know- Department of State with one copy of how); and the signed agreement (or amendment) (c) The contract or purchase order within 30 days from the date that the between the person in the United agreement is concluded and will inform States and the foreign person: the Department of its termination not (1) Limits the use of the technical less than 30 days prior to expiration data to the manufacture of the defense and provide information on the con- articles required by the contract or tinuation of any foreign rights or the purchase order only; and flow of technical data to the foreign (2) Prohibits the disclosure of the party. If a decision is made not to con- data to any other person except sub- clude the proposed agreement, the ap- contractors within the same country; plicant will so inform the Department and within 60 days.’’ (3) Prohibits the acquisition of any (4) ‘‘If this agreement grants any rights in the data by any foreign per- rights to sub-license, it will be amend- son; and ed to require that all sub-licensing ar- (4) Provides that any subcontracts rangements incorporate all the provi- between foreign persons in the ap- sions of the basic agreement that refer proved country for manufacture of to the U.S. Government and the De- equipment for delivery pursuant to the partment of State (i.e., 22 CFR 124.9 contract or purchase order contain all and 124.10).’’ the limitations of this paragraph (c); and § 124.13 Procurement by United States (5) Requires the foreign person, in- persons in foreign countries (off- cluding subcontractors, to destroy or shore procurement). return to the person in the United Notwithstanding the other provisions States all of the technical data ex- in part 124 of this subchapter, the Of- ported pursuant to the contract or pur- fice of Defense Trade Controls may au- chase order upon fulfillment of their thorize by means of a license (DSP–5) terms; and the export of unclassified technical (6) Requires delivery of the defense data to foreign persons for offshore articles manufactured abroad only to

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the person in the United States or to articles unless an exemption under an agency of the U.S. Government; and § 123.16(b)(1) of this subchapter is appli- (d) The person in the United States cable. provides the Office of Defense Trade (b) Required Information. Proposed Controls with a copy of each contract, warehousing and distribution agree- purchase order or subcontract for off- ments (and amendments thereto) shall shore procurement at the time it is ac- be submitted to the Office of Defense cepted. Each such contract, purchase Trade Controls for approval. The fol- order or subcontract must clearly iden- lowing information must be included in tify the article to be produced and must identify the license number or ex- all such agreements: emption under which the technical (1) A description of the defense arti- data was exported; and cles involved including test and sup- (e) Licenses issued pursuant to this port equipment covered by the U.S. section must be renewed upon their ex- Munitions List. This shall include piration if offshore procurement is to when applicable the military nomen- be extended beyond the period of valid- clature, the Federal stock number, ity of the original approved license. In nameplate data, and any control num- all instances a license for offshore pro- bers under which the defense articles curement must state as the purpose were developed or procured by the U.S. ‘‘Offshore procurement in accordance Government. Only those defense arti- with the conditions established in the cles specifically listed in the agree- ITAR, including § 124.13. No other use ment will be eligible for export under will be made of the technical data.’’ If the exemption in § 123.16(b)(1) of this the technical data involved in an off- subchapter. shore procurement arrangement is oth- (2) A detailed statement of the terms erwise exempt from the licensing re- and conditions under which the defense quirements of this subchapter (e.g. articles will be exported and distrib- § 126.4), the DSP–5 referred to in the uted; first sentence of this section is not required. However, the exporter must (3) The duration of the proposed comply with the other requirements of agreement; this section and provide a written cer- (4) Specific identification of the tification to the Office of Defense country or countries that comprise the Trade Controls annually of the offshore distribution territory. Distribution procurement activity and cite the ex- must be specifically limited to the gov- emption under which the technical ernments of such countries or to pri- data was exported. The exemptions vate entities seeking to procure de- under § 125.4 of this subchapter may not fense articles pursuant to a contract be used to establish offshore procure- with a government within the distribu- ment arrangements. tion territory or to other eligible enti- [58 FR 39305, July 22, 1993, as amended at 64 ties as specified by the Office of De- FR 17534, Apr. 12, 1999] fense Trade Controls. Consequently, any deviation from this condition must § 124.14 Exports to warehouses or dis- be fully explained and justified. A non- tribution points outside the United transfer and use certificate (DSP–83) States. will be required to the same extent re- (a) Agreements (e.g., contracts) be- quired in licensing agreements under tween U.S. persons and foreign persons § 124.9(b). for the warehousing and distribution of (c) Required statements. The following defense articles must be approved by statements must be included in all the Office of Defense Trade Controls warehousing and distribution agree- before they enter into force. Such ments: agreements will be limited to unclassified defense articles and must contain (1) ‘‘This agreement shall not enter conditions for special distribution, end- into force, and may not be amended or use and reporting. Licenses for exports extended, without the prior written ap- pursuant to such agreements must be proval of the Department of State of obtained prior to exports of the defense U.S. Government.’’

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(2) ‘‘This agreement is subject to all their original form or after being incor- United States laws and regulations re- porated through an intermediate process lated to exports and to all administra- into other end-items, without the prior writ- tive acts of the United States Govern- ten approval of the U.S. Department of ment pursuant to such laws and regula- State. tions. (8) ‘‘All provisions in this agreement (3) ‘‘The parties to this agreement which refer to the United States Gov- agree that the obligations contained in ernment and the Department of State this agreement shall not affect the per- will remain binding on the parties after formance of any obligations created by the termination of the agreement.’’ prior contracts or subcontracts which (9) Additional clause. Unless the arti- the parties may have individually or cles covered by the agreement are in collectively with the U.S. Govern- fact intended to be distributed to pri- ment.’’ vate persons or entities (e.g., sporting (4) ‘‘No liability will be incurred by firearms for commercial resale, cryp- or attributed to the U.S. Government tographic devices and software for fi- in connection with any possible in- nancial and business applications), the fringement of privately owned patent following clause must be included in or proprietary rights, either domestic or foreign by reason of the U.S. Gov- all warehousing and distribution agree- ernment’s approval of this agreement.’’ ments: ‘‘Sales or other transfers of the (5) ‘‘No export, sale, transfer, or licensed article shall be limited to gov- other disposition of the defense articles ernments of the countries in the discovered by this agreement is author- tribution territory and to private enti- ized to any country outside the dis- ties seeking to procure the licensed ar- tribution territory without the prior ticle pursuant to a contract with a gov- written approval of the Office of De- ernment within the distribution terri- fense Trade Controls of the U.S. De- tory, unless the prior written approval partment of State.’’ of the U.S. Department of State is ob- (6) ‘‘The parties to this agreement tained.’’ agree that an annual report of sales or (d) Special clauses for agreements relat- other transfers pursuant to this agree- ing to significant military equipment. ment of the licensed articles, by quan- With respect to agreements for the tity, type, U.S. dollar value, and pur- warehousing and distribution of signifi- chaser or recipient shall be provided by cant military equipment, the following (applicant or licensee) to the Depart- additional provisions must be included ment of State.’’ This clause must speci- in the agreement: fy which party is obligated to provide (1) A completed nontransfer and use the annual report. Such reports may be certificate (DSP–83) must be executed submitted either directly by the li- by the foreign end-user and submitted censee or indirectly through the licen- to the U.S. Department of State before sor, and may cover calendar or fiscal any transfer may take place. years. Reports shall be deemed propri- (2) The prior written approval of the etary information by the Department U.S. Department of State must be ob- of State and will not be disclosed to tained before entering into a commit- unauthorized persons. (See § 126.10(b) of ment for the transfer of the licensed this subchapter.) (7) (Licensee) agrees to incorporate article by sale or otherwise to any per- the following statement as an integral son or government outside the ap- provision of a contract, invoice or proved distribution territory. other appropriate document whenever (e) Transmittal Letters. Requests for the articles covered by this agreement approval of warehousing and distribu- are sold or otherwise transferred: tion agreements with foreign persons must be made by letter. The original These commodities are authorized for ex- letter and seven copies of the letter port by the U.S. Government only to (country of ultimate destination or approved sales and seven copies of the proposed agree- territory). They may not be resold, diverted, ment shall be submitted to the Office transferred, transshipped, or otherwise be of Defense Trade Controls. The letter disposed of in any other country, either in shall contain:

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(1) A statement giving the appli- § 124.15 Special Export Controls for cant’s Defense Trade Controls registra- Defense Articles and Defense Serv- tion number. ices Controlled under Category XV: (2) A statement identifying the for- Space Systems and Space Launches. eign party to the agreement. (a) The export of any satellite or re- (3) A statement identifying the de- lated item (see § 121.1, Category XV(a) fense articles to be distributed under and (e)) or any defense service con- the agreement. trolled by this subchapter associated with the launch in, or by nationals of, (4) A statement identifying any U.S. a country that is not a member of the Government contract under which the North Atlantic Treaty Organization or equipment may have been generated, a major non-NATO ally of the United improved, developed or supplied to the States always requires special exports U.S. Government, and whether the controls, in addition to other export equipment was derived from any bid or controls required by this subchapter, other proposal to the U.S. Government. as follows: (5) A statement that no classified de- (1) All licenses and other requests for fense articles or classified technical approval require a technology transfer data are involved. control plan (TTCP) approved by the (6) A statement identifying any pat- Department of Defense and an ent application which discloses any of encryption technology control plan ap- the subject matter of the equipment or proved by the National Security Agen- related technical data covered by an cy. Drafts reflecting advance discus- invention secrecy order issued by the sions with both agencies must accom- U.S. Patent and Trademark Office. pany submission of the license application or proposed technical assistance (f) Required clauses. The following agreement, and the letter of trans- statements must be made in the letter mittal required in § 124.12 must identify of transmittal: the U.S. Government officials familiar (1) ‘‘If the agreement is approved by with the preparation of the draft the Department of State, such approval TTCPs. The TTCP must require any will not be construed by (applicant) as U.S. person or entity involved in the passing on the legality of the agree- export to notify the Department of De- ment from the standpoint of antitrust fense in advance of all meetings and laws or other applicable statutes, nor interactions with any foreign person or will (the applicant) construe the De- entity that is a party to the export and partment’s approval as constituting ei- require such U.S. person or entity to ther approval or disapproval of any of certify that it has complied with this the business terms or conditions be- notification requirement within 30 tween the parties to the agreement.’’ days after launch. (2) ‘‘The (applicant) will not permit (2) The U.S. person must make ar- the proposed agreement to enter into rangements with the Department of force until it has been approved by the Defense for monitoring. The costs of such monitoring services must be fully Department of State.’’ reimbursed to the Department of De- (3) ‘‘(Applicant) will furnish the De- fense by the U.S. person receiving such partment of State with one copy of the services. The letter of transmittal re- signed agreement (or amendment quired under § 124.12 must also state thereto) within 30 days from the date that such reimbursement arrange- that the agreement is concluded, and ments have been made with the De- will inform the Department of its ter- partment of Defense and identify the mination not less than 30 days prior to specific Department of Defense official expiration. If a decision is made not to with whom these arrangements have conclude the proposed agreement, (ap- been made. As required by Public Law plicant) will so inform the Department 105–261, such monitoring will cover, but within 60 days.’’ not be limited to—

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(i) Technical discussions and activi- the export of any article or defense ties, including the design, develop- service controlled under this sub- ment, operation, maintenance, modi- chapter to any destination may also re- fication, and repair of satellites, sat- quire that the special export controls ellite components, missiles, other identified in paragraphs (a)(1) and (a)(2) equipment, launch facilities, and of this category be applied in further- launch vehicles; ance of the security and foreign policy (ii) Satellite processing and launch of the United States. activities, including launch prepara- (d) Mandatory licenses for exports to tion, satellite transportation, integra- insurance providers and underwriters: tion of the satellite with the launch ve- None of the exemptions or sub-licens- hicle, testing and checkout prior to ing provisions available in this sub- launch, satellite launch, and return of chapter may be used for the export of equipment to the United States; technical data in order to obtain or (iii) Activities relating to launch satisfy insurance requirements. Such failure, delay, or cancellation, includ- exports are always subject to the prior ing post-launch failure investigations approval and re-transfer requirements or analyses with regard to either the of sections 3 and 38 of the Arms Export launcher or the satellite; and Control Act, as applied by relevant pro- (iv) All other aspects of the launch. visions of this subchapter. (b) Mandatory licenses for launch [64 FR 13681, Mar. 22, 1999] failure (crash) investigations or analyses: In the event of a failure of a launch from a foreign country (includ- PART 125—LICENSES FOR THE EX- ing a post liftoff failure to reach proper PORT OF TECHNICAL DATA AND orbit)— CLASSIFIED DEFENSE ARTICLES (1) The activities of U.S. persons or entities in connection with any subse- Sec. quent investigation or analysis of the 125.1 Exports subject to this part. 125.2 Exports of unclassified technical data. failure continue to be subject to the 125.3 Exports of classified technical data controls established under section 38 of and classified defense articles. the Arms Export Control Act, includ- 125.4 Exemptions of general applicability. ing the requirements under this sub- 125.5 Exemptions for plant visits. chapter for express approval prior to 125.6 Certification requirements for exemp- participation in such investigations or tions. analyses, regardless of whether a li- 125.7 Procedures for the export of classified technical data and other classified de- cense was issued under this subchapter fense articles. for the initial export of the satellite or 125.8 Filing of licenses for exports of unclas- satellite component; sified technical data. (2) Officials of the Department of De- 125.9 Filing of licenses and other authoriza- fense must monitor all activities asso- tions for exports of classified technical ciated with the investigation or anal- data and classified defense articles. yses to insure against unauthorized AUTHORITY: Sections 2 and 38, Pub. L. 90– transfer of technical data or services 629, 90 Stat. 744 (22 U.S.C. 2752, 2778); E.O. and U.S. persons must follow the proce- 11958, 42 FR 4311, 3 CFR, 1977 Comp. p.79; 22 dures set forth in paragraphs (a)(1) and U.S.C. 2658. (a)(2) of this Category. SOURCE: 58 FR 39310, July 22, 1993, unless (c) Although Public Law 105–261 does otherwise noted. not require the application of special export controls for the launch of U.S.- § 125.1 Exports subject to this part. origin satellites and components from (a) The controls of this part apply to or by nationals of countries that are the export of technical data and the ex- members of NATO or major non-NATO port of classified defense articles. In- allies, such export controls may none- formation which is in the public do- theless be applied, in addition to any main (see § 120.11 of this subchapter and other export controls required under § 125.4(b)(13)) is not subject to the con- this subchapter, as appropriate in fur- trols of this subchapter. therance of the security and foreign (b) A license for the export of tech- policy of the United States. Further, nical data and the exemptions in § 125.4

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may not be used for foreign production amendments, modifications or supple- purposes or for technical assistance un- ments to such patents, should follow less the approval of the Office of De- the regulations of the U.S. Patent and fense Trade Controls has been ob- Trademark Office in accordance with tained. Such approval is generally pro- 37 CFR part 5. The export of technical vided only pursuant to the procedures data to support the filing and proc- specified in part 124 of this subchapter. essing of patent applications in foreign (c) Technical data authorized for ex- countries is subject to regulations port may not be reexported, trans- issued by the U.S. Patent and Trade- ferred or diverted from the country of mark Office pursuant to 35 U.S.C. 184. ultimate end-use or from the author- (c) Disclosures. Unless otherwise ex- ized foreign end-user (as designated in pressly exempted in this subchapter, a the license or approval for export) or license is required for the oral, visual disclosed to a national of another coun- or documentary disclosure of technical try without the prior written approval data by U.S. persons to foreign persons. of the Office of Defense Trade Controls. A license is required regardless of the (d) The controls of this part apply to manner in which the technical data is the exports referred to in paragraph (a) transmitted (e.g., in person, by tele- of this section regardless of whether phone, correspondence, electronic the person who intends to export the means, etc.). A license is required for technical data produces or manufac- such disclosures by U.S. persons in con- tures defense articles if the technical nection with visits to foreign diplo- data is determined by the Office of De- matic missions and consular offices. fense Trade Controls to be subject to the controls of this subchapter. § 125.3 Exports of classified technical (e) The provisions of this subchapter data and classified defense articles. do not apply to technical data related (a) A request for authority to export to articles in Category VI(e) and Cat- defense articles, including technical egory XVI. The export of such data is data, classified by a foreign govern- controlled by the Department of En- ment or pursuant to Executive Order ergy and the Nuclear Regulatory Com- 12356, successor orders, or other legal mission pursuant to the Atomic En- authority must be submitted to the Of- ergy Act of 1954, as amended, and the fice of Defense Trade Controls for ap- Nuclear Non-Proliferation Act of 1978. proval. The application must contain full details of the proposed transaction. § 125.2 Exports of unclassified tech- It should also list the facility security nical data. clearance code of all U.S. parties on (a) A license (DSP–5) is required for the license and include the Defense In- the export of unclassified technical vestigative Service cognizant security data unless the export is exempt from office of the party responsible for pack- the licensing requirements of this sub- aging the commodity for shipment. A chapter. In the case of a plant visit, de- nontransfer and use certificate (Form tails of the proposed discussions must DSP–83) executed by the applicant, for- be transmitted to the Office of Defense eign consignee, end-user and an author- Trade Controls for an appraisal of the ized representative of the foreign gov- technical data. Seven copies of the ernment involved will be required. technical data or the details of the dis- (b) Classified technical data which is cussion must be provided. approved by the Office of Defense (b) Patents. A license issued by the Trade Controls either for export or re- Office of Defense Trade Controls is reexport after a temporary import will be quired for the export of technical data transferred or disclosed only in accord- whenever the data exceeds that which ance with the requirements in the De- is used to support a domestic filing of partment of Defense Industrial Secu- a patent application or to support a rity Manual. Any other requirements foreign filing of a patent application imposed by cognizant U.S. departments whenever no domestic application has and agencies must also be satisfied. been filed. Requests for the filing of (c) The approval of the Office of De- patent applications in a foreign coun- fense Trade Controls must be obtained try, and requests for the filing of for the export of technical data by a

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U.S. person to a foreign person in the data and such data does not disclose U.S. or in a foreign country unless the the details of design, development, pro- proposed export is exempt under the duction, or manufacture of any defense provisions of this subchapter. article; (d) All communications relating to a (4) Copies of technical data, including patent application covered by an inven- classified information, previously au- tion secrecy order are to be addressed thorized for export to the same recipi- to the U.S. Patent and Trademark Of- ent. Revised copies of such technical fice (see 37 CFR 5.11). data are also exempt if they pertain to the identical defense article, and if the § 125.4 Exemptions of general applica- revisions are solely editorial and do bility. not add to the content of technology (a) The following exemptions apply previously exported or authorized for to exports of technical data for which export to the same recipient; approval is not needed from the Office (5) Technical data, including classi- of Defense Trade Controls. These ex- fied information, in the form of basic emptions, except for paragraph (b)(13) operations, maintenance, and training of this section, do not apply to exports information relating to a defense arti- to proscribed destinations under § 126.1 cle lawfully exported or authorized for of this subchapter or for persons con- export to the same recipient. Inter- sidered generally ineligible under mediate or depot-level repair and § 120.1(c) of this subchapter. The exemp- maintenance information may be ex- tions are also not applicable for pur- ported only under a license or agree- poses of establishing offshore procurement approved specifically for that ment arrangements or producing de- purpose; fense articles offshore (see § 124.13), ex- (6) Technical data, including classi- cept as authorized under § 125.4 (c). If fied information, related to firearms § 126.8 of this subchapter requirements not in excess of caliber .50 and ammu- are applicable, they must be met before nition for such weapons, except de- an exemption under this section may tailed design, development, production be used. Transmission of classified in- or manufacturing information; formation must comply with the requirements of the National Industrial (7) Technical data, including classi- Security Program Operating Manual fied information, being returned to the and the exporter must certify to the original source of import; transmittal authority that the tech- (8) Technical data directly related to nical data does not exceed the tech- classified information which has been nical limitation of the authorized ex- previously exported or authorized for port. export in accordance with this part to (b) The following exports are exempt the same recipient, and which does not from the licensing requirements of this disclose the details of the design, de- subchapter. velopment, production, or manufacture (1) Technical data, including classi- of any defense article; fied information, to be disclosed pursu- (9) Technical data, including classi- ant to an official written request or di- fied information, sent by a U.S. corrective from the U.S. Department of poration to a U.S. person employed by Defense; that corporation overseas or to a U.S. (2) Technical data, including classi- Government agency. This exemption is fied information, in furtherance of a subject to the limitations of § 125.1(b) manufacturing license or technical as- and may be used only if: sistance agreement approved by the (i) The technical data is to be used Department of State under part 124 of overseas solely by U.S. persons; this subchapter and which meet the re- (ii) If the U.S. person overseas is an quirements of § 124.3 of this subchapter; employee of the U.S. Government or is (3) Technical data, including classi- directly employed by the U.S. corpora- fied information, in furtherance of a tion and not by a foreign subsidiary; contract between the exporter and an and agency of the U.S. Government, if the (iii) The classified information is contract provides for the export of the sent overseas in accordance with the

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requirements of the Department of De- (c) Defense services and related un- fense Industrial Security Manual. classified technical data are exempt (10) Disclosures of unclassified tech- from the licensing requirements of this nical data in the U.S. by U.S. institu- subchapter, to nationals of NATO tions of higher learning to foreign per- countries, Australia, Japan, and Swe- sons who are their bona fide and full den, for the purposes of responding to a time regular employees. This exemp- written request from the Department tion is available only if: of Defense for a quote or bid proposal. (i) The employee’s permanent abode Such exports must be pursuant to an throughout the period of employment official written request or directive is in the United States; from an authorized official of the U.S. (ii) The employee is not a national of Department of Defense. The defense a country to which exports are prohib- services and technical data are limited ited pursuant to § 126.1 of this sub- to paragraphs (c)(1), (c)(2), and (c)(3) of chapter; and this section and must not include para- (iii) The institution informs the indi- graphs (c)(4), (c)(5), and (c)(6) of this vidual in writing that the technical section which follow: data may not be transferred to other (1) Build-to-Print. ‘‘Build-to-Print’’ foreign persons without the prior writ- means that a foreign consignee can ten approval of the Office of Defense produce a defense article from engi- Trade Controls; neering drawings without any tech- (11) Technical data, including classi- nical assistance from a U.S. exporter. fied information, for which the ex- This transaction is based strictly on a porter, pursuant to an arrangement ‘‘hands-off’’ approach since the foreign with the Department of Defense, De- consignee is understood to have the in- partment of Energy or NASA which re- herent capability to produce the de- quires such exports, has been granted fense article and only lacks the nec- an exemption in writing from the li- essary drawings. Supporting docu- censing provisions of this part by the mentation such as acceptance criteria, Office of Defense Trade Controls. Such and specifications, may be released on an exemption will normally be granted an as-required basis (i.e. ‘‘must have’’) only if the arrangement directly implements an international agreement to such that the foreign consignee would which the United States is a party and not be able to produce an acceptable if multiple exports are contemplated. defense article without this additional The Office of Defense Trade Controls, supporting documentation. Docu- in consultation with the relevant U.S. mentation which is not absolutely nec- Government agencies, will determine essary to permit manufacture of an ac- whether the interests of the United ceptable defense article (i.e. ‘‘nice to States Government are best served by have’’) is not considered within the expediting exports under an arrange- boundaries of a ‘‘Build-to-Print’’ data ment through an exemption (see also package; paragraph (b)(3) of this section for a re- (2) Build/Design-to-Specification. lated exemption); ‘‘Build/Design-to-Specification’’ means (12) Technical data which is specifi- that a foreign consignee can design and cally exempt under part 126 of this sub- produce a defense article from require- chapter; or ment specifications without any tech- (13) Technical data approved for pub- nical assistance from the U.S. exporter. lic release (i.e., unlimited distribution) This transaction is based strictly on a by the cognizant U.S. Government de- ‘‘hands-off’’ approach since the foreign partment or agency or Directorate for consignee is understood to have the in- Freedom of Information and Security herent capability to both design and Review. This exemption is applicable produce the defense article and only to information approved by the cog- lacks the necessary requirement infor- nizant U.S. Government department or mation; agency for public release in any form. (3) Basic Research. ‘‘Basic Research’’ It does not require that the informa- means a systemic study directed to- tion be published in order to qualify for ward greater knowledge or under- the exemption. standing of the fundamental aspects of

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phenomena and observable facts with- exclusively to nationals of such coun- out specific applications towards proc- tries when engaged in international esses or products in mind. It does not fundamental research conducted under include ‘‘Applied Research’’ (i.e. a sys- the aegis of an accredited U.S. institu- temic study to gain knowledge or un- tion of higher learning; and derstanding necessary to determine the (ii) In direct support of fundamental means by which a recognized and spe- research as defined in § 120.11(8) of this cific need may be met. It is a system- subchapter being conducted either at atic application of knowledge toward accredited U.S. institutions of higher the production of useful materials, de- learning or an accredited institution of vices, and systems or methods, includ- higher learning, a governmental re- ing design, development, and improve- search center or an established government of prototypes and new processes ment funded private research center lo- to meet specific requirements.); cated within the countries identified in (4) Design Methodology, such as: The § 123.16(b)(10)(i) of this subchapter; and underlying engineering methods and (iii) Limited to discussions on assem- design philosophy utilized (i.e., the bly of any article described in ‘‘why’’ or information that explains § 123.16(b)(10) of this subchapter and or the rationale for particular design de- integrating any such article into a sci- cision, engineering feature, or perform- entific, research, or experimental sat- ance requirement); engineering experi- ellite. ence (e.g. lessons learned); and the ra- (2) The exemption in paragraph (d)(1) tionale and associated databases (e.g. of this section, while allowing accred- design allowables, factors of safety, ited U.S. institutions of higher learn- component life predictions, failure ing to participate in technical meet- analysis criteria) that establish the ings with foreign nationals from coun- operational requirements (e.g., per- tries specified in § 123.16(b)(10)(i) of this formance, mechanical, electrical, elec- subchapter for the purpose of con- tronic, reliability and maintainability) ducting space scientific fundamental of a defense article. (Final analytical research either in the United States or results and the initial conditions and in these countries when working with parameters may be provided.) information that meets the require- (5) Engineering Analysis, such as: Ana- ments of § 120.11 of this subchapter in lytical methods and tools used to de- activities that would generally be con- sign or evaluate a defense article’s per- trolled as a defense service in accord- formance against the operational re- ance with § 124.1(a) of this subchapter, quirements. Analytical methods and does not cover: tools include the development and/or (i) Any level of defense service or in- use of mockups, computer models and formation involving launch activities simulations, and test facilities. (Final including the integration of the sat- analytical results and the initial condi- ellite or spacecraft to the launch vehi- tions and parameters may be provided.) cle; (6) Manufacturing Know-how, such as: (ii) Articles and information listed in information that provides detailed the Missile Technology Control Regime manufacturing processes and tech- (MTCR) Annex or classified as signifi- niques needed to translate a detailed cant military equipment; or design into a qualified, finished defense (iii) The transfer of or access to tech- article. (Information may be provided nical data, information, or software in a build-to-print package that is nec- that is otherwise controlled by this essary in order to produce an accept- subchapter. able defense article.) (d)(1) Defense services for the items [58 FR 39310, July 22, 1993, as amended at 65 identified in § 123.16(b)(10) of this sub- FR 45284, July 21, 2000; 66 FR 35900, July 10, chapter exported by accredited U.S. in- 2001; 67 FR 15101, Mar. 29, 2002] stitutions of higher learning are exempt from the licensing requirements § 125.5 Exemptions for plant visits. of this subchapter when the export is: (a) A license is not required for the (i) To countries identified in oral and visual disclosure of unclassi- § 123.16(b)(10)(i) of this subchapter and fied technical data during the course of

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a classified plant visit by a foreign per- § 125.6 Certification requirements for son, provided (1) the classified visit has exemptions. itself been authorized pursuant to a li- (a) To claim an exemption for the ex- cense issued by the Office of Defense port of technical data under the provi- Trade Controls; or (2) the classified sions of §§ 125.4 and 125.5, an exporter visit was approved in connection with must certify that the proposed export an actual or potential government-to- is covered by a relevant paragraph of government program or project by a that section. For § 125.4, certification U.S. Government agency having classi- consists of marking the package or let- fication jurisdiction over the classified ter containing the technical data: ‘‘22 defense article or classified technical CFR 125.4 (identify subsection) applica- data involved under Executive Order ble.’’ This certification must be made 12356 or other applicable Executive in written form and retained in the ex- Order; and (3) the unclassified informa- porter’s files for a period of five years. tion to be released is directly related A Shippers Export Declaration is not to the classified defense article or tech- required for exports of unclassified nical data for which approval was ob- technical data (see § 123.22 (d) of this tained and does not disclose the details subchapter. of the design, development, production (b) If a District Director of Customs or manufacture of any other defense or Postmaster is unavailable at the time of export, or if the export is via articles. In the case of visits involving oral, visual, or electronic means, the classified information, the require- exporter must also complete a written ments of the Defense Industrial Secu- certification as indicated in paragraph rity Manual (Department of Defense (a) of this section. Manual 5220.22M) must be met. (b) The approval of the Office of De- § 125.7 Procedures for the export of fense Trade Controls is not required for classified technical data and other the disclosure of oral and visual classi- classified defense articles. fied information to a foreign person (a) All applications for the export or during the course of a plant visit ap- temporary import of classified tech- proved by the appropriate U.S. Govern- nical data or other classified defense ment agency if (1) the requirements of articles must be submitted to the Of- the Defense Industrial Security Manual fice of Defense Trade Controls on Form have been met, (2) the classified infor- DSP–85. mation is directly related to that (b) An application for the export of which was approved by the U.S. Gov- classified technical data or other clas- ernment agency, (3) it does not exceed sified defense articles must be accom- that for which approval was obtained, panied by seven copies of the data and and (4) it does not disclose the details a completed Form DSP–83 (see § 123.10 of the design, development, production of this subchapter). Only one copy of or manufacture of any defense articles. the data or descriptive literature must be provided if a renewal of the license (c) A license is not required for the is requested. All classified materials disclosure to a foreign person of un- accompanying an application must be classified technical data during the transmitted to the Office of Defense course of a plant visit (either classified Trade Controls in accordance with the or unclassified) approved by the Office requirements of the Defense Industrial of Defense Trade Controls or a cog- Security Manual (Department of De- nizant U.S. Government agency pro- fense Manual Number 5220.22–M). vided the technical data does not contain information in excess of that ap- § 125.8 Filing of licenses for exports of proved for disclosure. This exemption unclassified technical data. does not apply to technical data which (a) Licenses for the export of unclas- could be used for design, development, sified technical data must be presented production or manufacture of a defense to the appropriate District Director of article. Customs or Postmaster at the time of

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shipment or mailing. The District Di- 126.7 Denial, revocation, suspension or rector of Customs or Postmaster will amendment of licenses and other approv- endorse and transmit the licenses to als. the Office of Defense Trade Controls in 126.8 Proposals to foreign persons relating accordance with the instructions con- to significant military equipment. tained on the reverse side of the li- 126.9 Advisory opinions and related author- cense. izations. 126.10 Disclosure of information. (b) If a license for the export of un- 126.11 Relation to other provisions of law. classified technical data is used but not 126.12 Continuation in force. endorsed by U.S. Customs or a Post- 126.13 Required information. master for whatever reason (e.g., elec- 126.14 Special comprehensive export author- tronic transmission, unavailability of izations for NATO, Australia, and Japan. Customs officer or Postmaster, etc.), the person exporting the data must AUTHORITY: Secs. 2, 38, 40, 42, and 71, Pub. self-endorse the license, showing when L. 90–629, 90 Stat. 744 (22 U.S.C. 2752, 2778, and how the export took place. Every 2780, 2791, and 2797); 22 U.S.C. 2778; E.O. 11958, license must be returned to the Office 42 FR 4311; 3 CFR, 1977 Comp., p. 79; 22 U.S.C. 2658; 22 U.S.C. 287c; E.O. 12918, 59 FR 28205, 3 of Defense Trade Controls when the CFR, 1994 Comp., p. 899. total value authorized has been shipped or when the date of expiration has been SOURCE: 58 FR 39312, July 22, 1993, unless reached, whichever occurs first. otherwise noted.

§ 125.9 Filing of licenses and other au- § 126.1 Prohibited exports and sales to thorizations for exports of classified certain countries. technical data and classified de- (a) General. It is the policy of the fense articles. United States to deny licenses, other Licenses and other authorizations for approvals, exports and imports of de- the export of classified technical data fense articles and defense services, des- or classified defense articles will be tined for or originating in certain forwarded by the Office of Defense countries. This policy applies to Af- Trade Controls to the Defense Inves- ghanistan, Belarus, Cuba, Iran, Iraq, tigative Service of the Department of Libya, North Korea, Syria, and Viet- Defense in accordance with the provi- nam. This policy also applies to coun- sions of the Department of Defense In- tries with respect to which the United dustrial Security Manual. The Office of States maintains an arms embargo (e.g. Defense Trade Controls will forward a Burma, China, Haiti, Liberia, Rwanda, copy of the license to the applicant for Somalia, Sudan and Democratic Re- the applicant’s information. The De- public of the Congo (formerly Zaire)) or fense Investigative Service will return the endorsed license to the Office of whenever an export would not other- Defense Trade Controls upon comple- wise be in furtherance of world peace tion of the authorized export or expira- and the security and foreign policy of tion of the license, whichever occurs the United States. Comprehensive arms first. embargoes are normally the subject of a State Department notice published in PART 126—GENERAL POLICIES AND the FEDERAL REGISTER. The exemptions provided in the regulations in PROVISIONS this subchapter, except §§ 123.17 and 125.4(b)(13) of this subchapter, do not Sec. 126.1 Prohibited exports and sales to certain apply with respect to articles origi- countries. nating in or for export to any pro- 126.2 Temporary suspension or modification scribed countries or areas. of this subchapter. (b) Shipments. A defense article li- 126.3 Exceptions. censed for export under this subchapter 126.4 Shipments by or for United States may not be shipped on a vessel, aircraft Government agencies. 126.5 Canadian exemptions. or other means of conveyance which is 126.6 Foreign-owned military aircraft and owned or operated by, or leased to or naval vessels, and the Foreign Military from, any of the proscribed countries Sales program. or areas.

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(c) Exports and sales prohibited by such articles, services or data must im- United Nations Security Council embar- mediately inform the Office of Defense goes. Whenever the United Nations Se- Trade Controls. curity Council mandates an arms em- (f) Angola. Consistent with U.N. Secu- bargo, all transactions which are pro- rity Council Resolution 864 of Sep- hibited by the embargo and which in- tember 15, 1993, an arms embargo exists volve U.S. persons anywhere, or any with respect to UNITA. Accordingly, person in the United States, and de- exports subject to this subchapter are fense articles and services of a type prohibited in accordance with Security enumerated on the United States Mu- Council Resolution 864, Executive nitions List (22 CFR part 121), irrespec- Order 12865 of September 29, 1993, and tive of origin, are prohibited under the the UNITA (Angola) Sanctions Regula- ITAR for the duration of the embargo, tions issued by the Office of Foreign unless the Department of State pub- Assets Control, Department of the lishes a notice in the FEDERAL REG- Treasury, on December 10, 1993 (58 FR ISTER specifying different measures. 64904). This would include, but is not limited to, transactions involving trade by [58 FR 39312, July 22, 1993, as amended at 59 U.S. persons who are located inside or FR 15625, Apr. 4, 1994; 59 FR 42158, Aug. 17, outside of the United States in defense 1994; 61 FR 6113, Feb. 16, 1996; 61 FR 36625, July 12, 1996; 61 FR 41499, Aug. 9, 1996; 62 FR articles and services of U.S. or foreign 37133, July 11, 1997; 67 FR 1075, Jan. 9, 2002; 67 origin which are located inside or out- FR 15101, Mar. 29, 2002] side of the United States. (d) Terrorism. Exports to countries § 126.2 Temporary suspension or modi- which the Secretary of State has deter- fication of this subchapter. mined to have repeatedly provided sup- The Director, Office of Defense Trade port for act of international terrorism Controls, may order the temporary sus- are contrary to the foreign policy of pension or modification of any or all of the United States and are thus subject the regulations of this subchapter in to the policy specified in paragraph (a) the interest of the security and foreign of this section and the requirements of policy of the United States. section 40 of the Arms Export Control Act (22 U.S.C. 2780) and the Omnibus § 126.3 Exceptions. Diplomatic Security and Anti-Ter- rorism Act of 1986 (22 U.S.C. 4801, note). In a case of exceptional or undue The countries in this category are: hardship, or when it is otherwise in the Cuba, Iran, Iraq, Libya, North Korea, interest of the United States Govern- Sudan and Syria. The same countries ment, the Director, Office of Defense are identified pursuant to section 6(j) Trade Controls may make an exception of the Export Administration Act, as to the provisions of this subchapter. amended (50 U.S.C. App. 2405(j)). (e) Proposed sales. No sale or transfer § 126.4 Shipments by or for United and no proposal to sell or transfer any States Government agencies. defense articles, defense services or (a) A license is not required for the technical data subject to this sub- temporary import, or temporary ex- chapter may be made to any country port, of any defense article, including referred to in this section (including technical data or the performance of a the embassies or consulates of such a defense service, by or for any agency of country), or to any person acting on its the U.S. Government (1) for official use behalf, whether in the United States or by such an agency, or (2) for carrying abroad, without first obtaining a li- out any foreign assistance, cooperative cense or written approval of the Office project or sales program authorized by of Defense Trade Controls. However, in law and subject to control by the Presi- accordance with paragraph (a) of this dent by other means. This exemption section, it is the policy of the Depart- applies only when all aspects of a ment of State to deny licenses and ap- transaction (export, carriage, and de- provals in such cases. Any person who livery abroad) are effected by a United knows or has reason to know of such a States Government agency or when the proposed or actual sale, or transfer, of export is covered by a United States

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Government Bill of Lading. This ex- quirements have been met must be pre- emption, however, does not apply when sented at the time of export to the ap- a U.S. Government agency acts as a propriate District Director of Customs transmittal agent on behalf of a pri- or Department of Defense transmittal vate individual or firm, either as a con- authority. A copy of the SED and the venience or in satisfaction of security written certification statement shall requirements. The approval of the Of- be provided to the Office of Defense fice of Defense Trade Controls must be Trade Controls immediately following obtained before defense articles pre- the export. viously exported pursuant to this exemption are permanently transferred § 126.5 Canadian exemptions. (e.g., property disposal of surplus de- (a) Temporary import of defense arti- fense articles overseas) unless (i) the transfer is pursuant to a grant, sale, cles. District Director of Customs and lease, loan or cooperative project under postmasters shall permit the tem- the Arms Export Control Act or a sale, porary import and return to Canada lease or loan under the Foreign Assist- without a license of any unclassified ance Act of 1961, as amended, or (ii) the defense articles (see § 120.6 of this sub- defense articles have been rendered chapter) that originate in Canada for useless for military purposes beyond temporary use in the United States and the possibility of restoration. return to Canada. All other temporary NOTE: Special definition. For purposes of imports shall be in accordance with this section, defense articles exported abroad §§ 123.3 and 123.4 of this subchapter. for incorporation into a foreign launch vehi- (b) Permanent and temporary export of cle or for use on a foreign launch vehicle or defense articles. Except for the defense satellite that is to be launched from a for- articles and related technical data, and eign country shall be considered a perma- defense services identified in para- nent export. graphs (b) (1) through (20) of this sec- (b) This section does not authorize any department or agency of the U.S. tion, for exports that transit third Government to make any export which countries, and provided the require- is otherwise prohibited by virtue of ments of this subchapter are met, (to other administrative provisions or by include § 120.1 (c) and (d), parts 122 and any statute. 123 (except insofar as exemption from (c) A license is not required for the licensing requirements is herein au- temporary import, or temporary or thorized) and § 126.1, and the require- permanent export, of any classified or ment to obtain non-transfer and use as- unclassified defense articles, including surances for all significant military technical data or the performance of a equipment), District Director of Cus- defense service, for end-use by a U.S. toms and postmasters shall permit, Government Agency in a foreign coun- when for end-use in Canada by Cana- try under the following circumstances: dian Federal or Provincial govern- (1) The export or temporary import is mental authorities acting in an official pursuant to a contract with, or written capacity or by a Canadian-registered direction by, an agency of the U.S. person or return to the United States, Government; and the permanent and temporary export (2) The end-user in the foreign coun- to Canada without a license of defense try is a U.S. Government agency or fa- articles and related technical data cility, and the defense articles or tech- identified in § 121.1 of this subchapter, nical data will not be transferred to except as described in paragraphs (b)(1) any foreign person; and through (20) of this section, and the de- (3) The urgency of the U.S. Govern- fense services and technical data de- ment requirement is such that the ap- scribed in paragraph (c) of this section. propriate export license or U.S. Gov- For purposes of this section, ‘‘Cana- ernment Bill of Lading could not have dian-registered person’’ is any Cana- been obtained in a timely manner. dian national (including Canadian busi- (d) A Shipper’s Export Declaration ness entities organized under the laws (SED), required under § 123.22(c) of this of Canada), dual national, and perma- subchapter, and a written statement by nent resident registered in Canada in the exporter certifying that these re- accordance with the Canadian Defence

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Production Act, and such other Cana- agents listed in Category XIV(a) and dian Crown Corporations as may be (b). identified by the Department of State. (13) Nuclear radiation measuring de- The defense articles, related technical vices manufactured to military speci- data, and defense services identified in fications listed in Category XIV(d). § 121.1 of this subchapter continuing to (14) All spacecraft in Category XV(a), require a license are: except commercial communications (1) All classified articles, technical satellites. data and defense services covered by (15) Category XV(c), except end items § 121.1 of this subchapter. (see § 121.8 of this subchapter) for end (2) All Missile Technology Control use by the Federal Government of Can- Regime (MTCR) Annex Items. ada exported directly or indirectly (3) Defense services covered by part through a Canadian-registered person. 124 of this subchapter, except for those (16) Category XV(d). in paragraph (c) of this section. (17) The following systems, compo- (4) Any transaction involving the ex- nents and parts included within the port of defense articles and defense coverage of Category XV(e): services for which congressional notifi- (i) Anti-jam systems with the ability cation is required in accordance with to respond to incoming interference by § 123.15 and § 124.11 of this subchapter. adaptively reducing antenna gain (5) All technical data and defense (nulling) in the direction of the inter- services for gas turbine engine hot sec- ference. tions covered by Categories VI(f) and (ii) Antennas: VIII(b). (This does not include hard- (A) With aperture (overall dimension ware). of the radiating portions of the an- (6) Firearms listed in Category I. tenna) greater than 30 feet; or (7) Ammunition listed in Category III (B) With all sidelobes less than or for the firearms in Category I. equal to ¥35dB, relative to the peak of (8) Nuclear weapons strategic deliv- the main beam; or ery systems and all components, parts, (C) Designed, modified, or configured accessories and attachments specifi- to provide coverage area on the surface cally designed for such systems and as- of the earth less than 200 nautical sociated equipment. miles in diameter, where ‘‘coverage (9) Naval nuclear propulsion equip- area’’ is defined as that area on the ment listed in Category VI(e). surface of the earth that is illuminated (10) Aircraft listed in Category by the main beam width of the antenna VIII(a) and developmental aircraft, en- (which is the angular distance between gines and components identified in half power points of the beam). Category VIII(f). (iii) Optical intersatellite data links (11) All Category XII(c), except any (cross links) and optical ground sat- 1st- and 2nd-generation image inten- ellite terminals. sification tube and 1st- and 2nd-genera- (iv) Spaceborne regenerative tion image intensification night sight- baseband processing (direct up and ing equipment. End items (see § 121.8 of down conversion to and from baseband) this subchapter) in Category XII(c) and equipment. related technical data limited to basic (v) Propulsion systems which permit operations, maintenance and training acceleration of the satellite on-orbit information as authorized under the (i.e., after mission orbit injection) at exemption in § 125.4(b)(5) of this sub- rates greater than 0.1g. chapter may be exported directly to a (vi) Attitude control and determina- Canadian Government entity (i.e. fed- tion systems designed to provide space- eral, provincial, territorial, or munic- craft pointing determination and con- ipal) without a license. trol or payload pointing system control (12) Chemical agents listed in Cat- better than 0.02 degrees per axis. egory XIV(a), biological agents in Cat- (vii) All specifically designed or egory XIV(b), and equipment listed in modified systems, components, parts, Category XIV(c) for dissemination of accessories, attachments, and associ- the chemical agents and biological ated equipment for all Category XV(a)

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items, except when specifically de- ment or Agency of the United States signed or modified for use in commer- Federal Government; a Canadian-reg- cial communications satellites. istered person authorized in writing to (18) Nuclear weapons design and test manufacture defense articles by and for equipment listed in Category XVI. the Government of Canada; a Canadian (19) Submersible and oceanographic Federal, Provincial, or Territorial Gov- vessels and related articles listed in ernment; and Category XX(a) through (d). (ii) Prohibit the disclosure of the (20) Miscellaneous articles covered by technical data to any other contractor Category XXI. or subcontractor who is not a Cana- (c) Defense service exemption. A de- dian-registered person; and fense service is exempt from the licens- (iii) Provide that any subcontract ing requirements of part 124 of this contain all the limitations of this sec- subchapter, when the following criteria tion; and can be met. (iv) Require that the Canadian con- (1) The item, technical data, defense tractor, including subcontractors, de- service and transaction is not identi- stroy or return to the U.S. exporter in fied in paragraphs (b)(1) through (20) of the United States all of the technical this section; and data exported pursuant to the contract (2) The transfer of technical data and or purchase order upon fulfillment of provision of defense service is limited the contract, unless for use by a Cana- to the following activities: dian or United States Government en- (i) Canadian-registered person or a tity that requires in writing the tech- registered and eligible U.S. company nical data be maintained. The U.S. ex- (in accordance with part 122 of this porter must be provided written certifi- subchapter) preparing a quote or bid cation that the technical data is being proposal in response to a written re- retained or destroyed; and quest from a Department or Agency of the United States Federal Government (v) Include a clause requiring that all or from a Canadian Federal, Provin- documentation created from U.S. tech- cial, or Territorial Government; or nical data contain the statement ‘‘This (ii) Produce, design, assemble, main- document contains technical data, the tain or service a defense article (i.e. use of which is restricted by the U.S. hardware, technical data) for use by a Arms Export Control Act. This data registered U.S. company; or, a U.S. has been provided in accordance with, Federal Government Program; or for and subject to, the limitations speci- end use in a Canadian Federal, Provin- fied in ¶126.5 of the International Traf- cial, or Territorial Government Pro- fic In Arms Regulations (ITAR). By ac- gram; and cepting this data, the consignee agrees (iii) The defense services and tech- to honor the requirements of the nical data are limited to that defined ITAR’’; and in paragraph (c)(6) of this section; and (5) The U.S. exporter must provide (3) The Canadian contractor and sub- the Office of Defense Trade Controls a contractor certify, in writing, to the semi-annual report of all their on- U.S. exporter that the technical data going activities authorized under this and defense service being exported will section. The report shall include the be used only for an activity identified article(s) being produced; the end in paragraph (c)(2) of this section; and user(s) (i.e. name of U.S. or Canadian (4) A written arrangement between company); the end item into which the the U.S. exporter and the Canadian re- product is to be incorporated; the in- cipient (such as a consummated Non- tended end use of the product (e.g., Disclosure or other multi-party agree- United States or Canadian Defense con- ment, Technology Transfer Control tract number and identification of pro- Plan, contract or purchase order) must: gram); the name and address of all the (i) Limit delivery of the defense arti- Canadian contractors and subcontrac- cles being produced directly to an iden- tors; and tified manufacturer in the United (6) The defense services and technical States registered in accordance with data are limited to those in paragraphs part 122 of this subchapter; a Depart- (c)(6)(i), (ii), (iii) and (iv), and do not

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include paragraphs (c)(6)(v), (vi) and (iv) Maintenance (i.e., inspection, (vii) of this section: testing, calibration or repair, including (i) Build-to-Print. Build-to-Print overhaul, reconditioning and one-to- means that a foreign consignee can one replacement of any defective produce a defense article from engi- items, parts or components, but ex- neering drawings without any tech- cluding any modification, enhance- nical assistance from a U.S. exporter. ment, upgrade or other form of alter- This transaction is based strictly on a ation or improvement that changes the ‘‘hand-off’’ approach because the for- basic performance of the item); and eign consignee is understood to have does not include the inherent capability to produce the (v) Design Methodology, such as: The defense article and only lacks the nec- underlying engineering methods and essary drawings. Supporting docu- design philosophy utilized (i.e., the mentation such as acceptance criteria, ‘‘why’’ or information that explains and specifications, may be released on the rationale for particular design de- an as-required basis (i.e. ‘‘must have’’) cision, engineering feature, or perform- such that the foreign consignee would ance requirement); engineering experi- not be able to produce an acceptable ence (e.g. lessons learned); and the ra- defense article without this additional tionale and associated databases (e.g. supporting documentation. Docu- design allowables, factors of safety, mentation which is not absolutely nec- component life predictions, failure essary to permit manufacture of an ac- analysis criteria) that establish the ceptable defense article (i.e. ‘‘nice to operational requirements (e.g., per- have’’) is not considered within the formance, mechanical, electrical, elec- boundaries of a ‘‘Build-to Print’’ data tronic, reliability and maintainability) package; and/or of a defense article. (Final analytical (ii) Build/Design-to-Specification. results and the initial conditions and ‘‘Build/Design-to-Specification’’ means parameters may be provided.) that a foreign consignee can design and (vi) Engineering Analysis, such as: An- produce a defense article from require- alytical methods and tools used to de- ment specifications without any tech- sign or evaluate a defense article’s per- nical assistance from the U.S. exporter. formance against the operational re- This transaction is based strictly on a quirements. Analytical methods and ‘‘hands-off’’ approach since the foreign tools include the development and/or consignee is understood to have the in- use of mockups, computer models and herent capability to both design and simulations, and test facilities. (Final produce the defense article and only analytical results and the initial condi- lacks the necessary requirement infor- tions and parameters may be provided.) mation; and/or (vii) Manufacturing Know-how, such (iii) Basic Research. ‘‘Basic Re- as: Information that provides detailed search’’—means a systemic study di- manufacturing processes and tech- rected toward greater knowledge or un- niques needed to translate a detailed derstanding of the fundamental aspects design into a qualified, finished defense of phenomena and observable facts article. (Information may be provided without specific applications towards in a build-to-print package identified processes or products in mind. It does in paragraph (c)(6)(i) of this section not include ‘‘Applied Research’’ (i.e. a that is necessary in order to produce systemic study to gain knowledge or an acceptable defense article.). understanding necessary to determine (d) Reexports/retransfer. Rexport/re- the means by which a recognized and transfer in Canada to another end user specific need may be met. It is a sys- or end use or from Canada to another tematic application of knowledge to- destination, except the United States, ward the production of useful mate- must in all instances have the prior ap- rials, devices, and systems or methods, proval of the Office of Defense Trade including design, development, and im- Controls. Unless otherwise exempt in provement of prototypes and new proc- this subchapter, the original exporter esses to meet specific requirements.); is responsible, upon request from a Ca- and nadian-registered person for obtaining

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or providing reexport/retransfer ap- Act or the Foreign Assistance Act of proval. In any instance when the U.S. 1961, as amended, and exporter is no longer available to the (2) The article or technical data is de- Canadian end user the request for reex- livered to representatives of such a port/retransfer may be made directly country or organization in the United to Department of State, Office of De- States; and fense Trade Controls. All requests must (3) The article or technical data is to include the information in § 123.9(c) of be exported from the United States on this subchapter. Reexport/retransfer a military aircraft or naval vessel of approval is acquired by: that government or organization or via (1) If the reexport/retransfer being re- the Defense Transportation Service quested could be made pursuant to this (DTS). section (i.e., a retransfer within Canada (b) Foreign military aircraft and naval to another eligible Canadian recipient vessels. A license is not required for the under this section) if exported directly entry into the United States of mili- from the U.S., upon receipt by the U.S. tary aircraft or naval vessels of any company of a request by a Canadian foreign state if no overhaul, repair, or end user, the original U.S. exporter is modification of the aircraft or naval authorized to grant on behalf of the vessel is to be performed. However, De- U.S. Government by confirming in partment of State approval for over- writing to the Canadian requester that flight (pursuant to the 49 U.S.C. 1508) the reexport/retransfer is authorized and naval visits must be obtained from subject to the conditions of this sec- the Bureau of Political-Military Af- tion; or fairs, Office of International Security (2) If the reexport/retransfer is to an Operations. end use or end user that, if directly ex- (c) Foreign Military Sales Program. A ported from the U.S. requires a license, license from the Office of Defense retransfer must be handled in accord- Trade Controls is not required if the ance with § 123.9 of this subchapter. defense article or technical data or a NOTES TO § 126.5: defense service to be transferred was 1. In any instance when the exporter has sold, leased or loaned by the Depart- knowledge that the defense article exempt ment of Defense to a foreign country or from licensing is being exported for use other international organization under the than by a qualified Canadian-registered per- Foreign Military Sales (FMS) Program son or for export to another foreign destination, other than the United States, in its of the Arms Export Control Act pursu- original form or incorporated into another ant to an Letter of Offer and Accept- item, an export license must be obtained ance (LOA) authorizing such transfer prior to the transfer to Canada. which meets the criteria stated below: 2. Additional exemptions exist in other sec- (1) Transfers of the defense articles, tions of this subchapter that are applicable technical data or defense services using to Canada, for example §§ 123.9, 125.4 and 124.2 this exemption may take place only which allows for the performance of defense during the period which the FMS Let- services related to training in basic operations and maintenance, without a license, ter of Offer and Acceptance (LOA) and for defense articles lawfully exported, in- implementing USG FMS contracts and cluding those identified in paragraphs (b)(1) subcontracts are in effect and serve as through (20) of this section. authorization for the transfers here- [66 FR 10576, Feb. 16, 2001; 66 FR 36834, July under in lieu of a license. After the 13, 2001] USG FMS contracts and subcontracts have expired and the LOA no longer § 126.6 Foreign-owned military aircraft serves as such authorization, any fur- and naval vessels, and the Foreign ther provision of defense articles, tech- Military Sales program. nical data or defense services shall not (a) A license from the Office of De- be covered by this section and shall in- fense Trade Controls is not required if: stead be subject to other authorization (1) The article or technical data to be requirements of this subchapter; and exported was sold, leased, or loaned by (2) The defense article, technical data the Department of Defense to a foreign or defense service to be transferred are country or international organization specifically identified in an executed pursuant to the Arms Export Control LOA, in furtherance of the Foreign

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Military Sales Program signed by an (A) Specifically defines the scope of authorized Department of Defense Rep- the defense service to be transferred; resentative and an authorized rep- (B) Identifies the FMS case identi- resentative of the foreign government, fier, and (C) Identifies the foreign recipients of (3) The transfer of the defense article the defense service and related technical data is effected (D) Identifies any other U.S. or for- during the duration of the relevant eign parties that may be involved and Letter of Offer and Acceptance (LOA), their roles/responsibilities, to the ex- similarly a defense service is to be pro- tent known when the contract is exe- vided only during the duration of the cuted, USG FMS contract or subcontract and (E) Provides a specified period of du- not to exceed the specified duration of ration in which the defense service the LOA, and may be performed, and (4) The transfer is not to a country (ii) The U.S. person(s) identified in identified in § 126.1 of this subchapter, the contract maintain a registration and with the Office of Defense Trade Con- (5) The U.S. person responsible for trols for the entire time that the de- the transfer maintains records of all fense service is being provided. In any transfers in accordance with Part 122 of instance when the U.S. registered per- this subchapter, and son(s) identified in the contract em- (6) For transfers of defense articles ploys a subcontractor, the subcon- and technical data, tractor may only use this exemption (i) The transfer is made by the rel- when registered with DTC, and when evant foreign diplomatic mission of the such subcontract meets the above stat- purchasing country or its authorized ed requirements, and freight forwarder, provided that the (iii) In instances when the defense freight forwarder is registered with the service involves the transfer of classi- Office of Defense Trade Controls pursu- fied technical data, the U.S. person ant to Part 122 of this subchapter, and transferring the defense service must (ii) At the time of shipment, the Dis- have the appropriate USG security trict Director of Customs is provided clearance and a transportation plan, if an original and properly executed DSP– appropriate, in compliance with the 94 accompanied by a copy of the LOA Department of Defense National Indus- and any other documents required by trial Security Program Operating Man- U.S. Customs in carrying out their re- ual, and sponsibilities. The Shippers Export (iv) The U.S. person responsible for Declaration or, if authorized, the out- the transfer reports the initial trans- bound manifest, must be annotated fer, citing this section of the ITAR, the ‘‘This shipment is being exported under FMS case identifier, contract and sub- the authority of Department of State contract number, the foreign country, Form DSP–94. It covers FMS Case [in- and the duration of the service being sert case identification], expiration [in- provided to the Office of Defense Trade sert date]. 22 CFR 126.6 applicable. The Controls using DTC’s Direct Shipment U.S. Government point of contact is Verification Program. lll, telephone number lll,’’ and [65 FR 45287, July 21, 2000] (iii) If, classified hardware and related technical data are involved the § 126.7 Denial, revocation, suspension transfer must have the requisite USG or amendment of licenses and other security clearance and transportation approvals. plan and be shipped in accordance with (a) Policy. Licenses or approvals shall the Department of Defense National In- be denied or revoked whenever required dustrial Security Program Operating by any statute of the United States Manual, or (see §§ 127.6 and 127.10 of this sub- (7) For transfers of defense services: chapter). Any application for an export (i) A contract or subcontract between license or other approval under this the U.S. person(s) responsible for pro- subchapter may be disapproved, and viding the defense service and the USG any license or other approval or exemp- exists that: tion granted under this subchapter

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may be revoked, suspended, or amend- ization Act for FY 1991 (Pub. L. 101– ed without prior notice whenever: 510); the Chemical and Biological (1) The Department of State deems Weapons Control and Warfare Elimi- such action to be in furtherance of nation Act of 1991 (Pub. L. 102–182); or world peace, the national security or the Iran-Iraq Arms Non-Proliferation the foreign policy of the United States, Act of 1992 (Pub. L. 102–484)). or is otherwise advisable; or (b) Notification. The Office of Defense (2) The Department of State believes Trade Controls will notify applicants that 22 U.S.C. 2778, any regulation con- or licensees or other appropriate tained in this subchapter, or the terms United States persons of actions taken of any U.S. Government export author- pursuant to paragraph (a) of this sec- ization (including the terms of a manufacturing license or technical assist- tion. The reasons for the action will be ance agreement, or export authoriza- stated as specifically as security and tion granted pursuant to the Export foreign policy considerations permit. Administration Act, as amended) has (c) Reconsideration. If a written re- been violated by any party to the ex- quest for reconsideration of an adverse port or other person having significant decision is made within 30 days after a interest in the transaction; or person has been informed of the deci- (3) An applicant is the subject of an sion, the U.S. person will be accorded indictment for a violation of any of the an opportunity to present additional U.S. criminal statutes enumerated in information. The case will then be re- § 120.27 of this subchapter; or viewed by the Office of Defense Trade (4) An applicant or any party to the Controls. export or the agreement has been con- (d) Reconsideration of certain applica- victed of violating any of the U.S. tions. Applications for licenses or other criminal statutes enumerated in § 120.27 requests for approval denied for re- of this subchapter; or peated failure to provide information (5) An applicant is ineligible to con- or documentation expressly required tract with, or to receive a license or will normally not be reconsidered dur- other authorization to import defense ing the thirty day period following de- articles or defense services from, any agency of the U.S. Government; or nial. They will be reconsidered after (6) An applicant, any party to the ex- this period only after a final decision is port or agreement, any source or man- made on whether the applicant will be ufacturer of the defense article or de- subject to an administrative penalty fense service or any person who has a imposed pursuant to this subchapter. significant interest in the transaction Any request for reconsideration shall has been debarred, suspended, or other- be accompanied by a letter explaining wise is ineligible to receive an export the steps that have been taken to cor- license or other authorization from any rect the failure and to ensure compli- agency of the U.S. government (e.g., ance with the requirements of this sub- pursuant to debarment by the Depart- chapter. ment of Commerce under 15 CFR part (e) Special definition. For purposes of 388 or by the Department of State this section, the term party to the ex- under part 127 or 128 of this sub- port means: chapter); or (1) The chief executive officer, presi- (7) An applicant has failed to include dent, vice-presidents, other senior offi- any of the information or documenta- cers and officials (e.g., comptroller, tion expressly required to support a li- treasurer, general counsel) and any cense application or other request for member of the board of directors of the approval under this subchapter or as applicant; required in the instructions in the applicable Department of State form; or (2) The freight forwarders or des- (8) An applicant is subject to sanc- ignated exporting agent of the appli- tions under other relevant U.S. laws cant; and (e.g., the Missile Technology Controls (3) Any consignee or end-user of any title of the National Defense Author- item to be exported.

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§ 126.8 Proposals to foreign persons re- posal or presentation designed to con- lating to significant military equip- stitute a basis for a decision on the ment. part of any foreign person to enter into (a) Certain proposals to foreign per- any manufacturing license agreement sons for the sale or manufacture or technical assistance agreement for abroad of significant military equip- the production or assembly of signifi- ment require either the prior approval cant military equipment, regardless of of, or prior notification to, the Office of dollar value, in any foreign country, Defense Trade Controls. whenever: (1) Sale of significant military equip- (i) The equipment is intended for use ment: Prior approval requirement. The by the armed forces of any foreign approval of the Office of Defense Trade country; and Controls is required before a U.S. per- (ii) The agreement would involve the son may make a proposal or presen- export from the United States of any tation designed to constitute a basis defense article or the furnishing abroad for a decision on the part of any for- of any defense service including tech- eign person to purchase significant nical data. military equipment on the U.S. Muni- (b) Definition of proposal or presen- tions List whenever all the following tation. The terms proposal or presen- conditions are met: tation (designed to constitute a basis (i) The value of the significant mili- for a decision to purchase and to enter tary equipment to be sold is $14,000,000 into any agreement) mean the commu- or more; and nication of information in sufficient (ii) The equipment is intended for use detail that the person communicating by the armed forces of any foreign that information knows or should country other than a member of the know that it would permit an intended North Atlantic Treaty Organization, purchaser to decide either to acquire Australia, New Zealand, or Japan; and the particular equipment in question (iii) The sale would involve the ex- or to enter into the manufacturing li- port from the United States of any de- cense agreement or technical assist- fense article or the furnishing abroad ance agreement. For example, a pres- of any defense service including tech- entation which describes the equip- nical data; and ment’s performance characteristics, (iv) The identical significant military equipment has not been pre- price, and probable availability for de- viously licensed for permanent export livery would require prior notification or approved for sale under the Foreign or approval, as appropriate, where the Military Sales Program of the Depart- conditions specified in paragraph (a) of ment of Defense, to any foreign coun- this section are met. By contrast, the try. following would not require prior noti- (2) Sale of significant military equip- fication or approval: Advertising or ment: Prior notification requirement. other reporting in a publication of gen- The Office Defense Trade Controls eral circulation; preliminary discus- must be notified in writing at least sions to ascertain market potential; or thirty days in advance of any proposal merely calling attention to the fact or presentation concerning the sale of that a company manufactures a par- significant military equipment when- ticular item of significant military ever the conditions specified in para- equipment. graphs (a)(1) (i) through (iii) of this (c) Satisfaction of requirements. (1) The section are met and the identical requirement of this section for prior equipment has been previously licensed approval is met by any of the fol- for permanent export or approved for lowing: sale under the FMS Program to any (i) A written statement from the Of- foreign country. fice of Defense Trade Controls approv- (3) Manufacture abroad of significant ing the proposed sale or agreement or military equipment: Prior approval re- approving the making of a proposal or quirement. The approval of the Office presentation. of Defense Trade Controls is required (ii) A license issued under § 125.2 or before a U.S. person may make a pro- § 125.3 of this subchapter for the export

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of technical data relating to the pro- (i) Refers to a specific notification posed sale or agreement to the country made or approval previously granted concerned. with respect to the transaction; or (iii) A temporary export license (ii) Certifies that no proposal or pres- issued under § 123.5 of this subchapter entation requiring prior notification or relating to the proposed sale or agree- approval has been made. ment for a demonstration to the armed (2) The Department of State may re- forces of the country of export. quire a similar statement from the (iv) With respect to manufacturing Foreign Military Sales contractor con- license agreements or technical assist- cerned in any case where the United ance agreements, the application for States Government receives a request export licenses pursuant to the two for a letter of offer for a sale which preceding subparagraphs must state meets the criteria specified in para- that they are related to possible agree- graph (a) of this section. ments of this kind. (f) Penalties. In addition to other rem- (2) The requirement of this section edies and penalties prescribed by law or for prior notification is met by inform- this subchapter, a failure to satisfy the ing the Office of Defense Trade Con- prior approval or prior notification re- trols by letter at least 30 days before quirements of this section may be con- making the proposal or presentation. sidered to be a reason for disapproval The letter must comply with the proce- of a license, agreement or sale under dures set forth in paragraph (d) of this the FMS program. section and must identify the relevant (g) License for technical data. Nothing license, approval, or FMS case by in this section constitutes or is to be which the identical equipment had pre- construed as an exemption from the li- viously been authorized for permanent censing requirement for the export of export or sale. The Office of Defense technical data that is embodied in any proposal or presentation made to any Trade Controls will provide written ac- foreign persons. knowledgement of such prior notification to confirm compliance with this § 126.9 Advisory opinions and related requirement and the commencement of authorizations. the 30-day notification period. (a) Any person desiring information (d) Procedures. Unless a license has as to whether the Office of Defense been obtained pursuant to § 126.8(c)(1) Trade controls would be likely to grant (ii) or (iii), a request for prior approval a license or other approval for the ex- to make a proposal or presentation port or approval of a particular defense with respect to significant military article or defense service to a par- equipment, or a 30-day prior notifica- ticular country may request an advi- tion regarding the sale of such equip- sory opinion from the Office of Defense ment, must be made by letter to the Trade Controls. These opinions are not Office of Defense Trade Controls. The binding on the Department of State letter must outline in detail the in- and are revocable. A request for an ad- tended transaction, including usage of visory opinion must be made in writing the equipment involved and the coun- and must outline in detail the equip- try (or countries) involved. Seven cop- ment, its usage, the security classifica- ies of the letter should be provided as tion (if any) of the articles or related well as seven copies of suitable descrip- technical data, and the country or tive information concerning the equip- countries involved. An original and ment. seven copies of the letter must be pro- (e) Statement to accompany licensing vided along with seven copies of suit- requests. (1) Every application for an able descriptive information con- export license or other approval to im- cerning the defense article or defense plement a sale or agreement which service meets the criteria specified in para- (b) Related authorizations. The Office graph (a) of this section must be ac- of Defense Trade Controls may, as ap- companied by a statement from the appropriate, in accordance with the pro- plicant which either: cedures set forth in paragraph (a) of

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this section, provide export authoriza- (2) Furnishing information to foreign tion, subject to all other relevant re- governments and other agencies of the quirements of this subchapter, both for U.S. Government in the context of transactions that have been the subject multilateral or bilateral export re- of advisory opinions requested by pro- gimes (e.g., the Missile Technology spective U.S. exporters, or for the Of- Control Regime, the Australia Group, fice’s own initiatives. Such initiatives and CoCoM). may cover pilot programs, or specifically anticipated circumstances for [58 FR 39312, July 22, 1993, as amended at 62 FR 67276, Dec. 24, 1997] which the Office considers special authorizations appropriate. § 126.11 Relations to other provisions [65 FR 45285, July 21, 2000] of law. The provisions in this subchapter are § 126.10 Disclosure of information. in addition to, and are not in lieu of, (a) Freedom of Information. Sub- any other provisions of law or regula- chapter R of this title contains regulations. The sale of firearms in the tions on the availability to the public United States, for example, remains of information and records of the De- subject to the provisions of the Gun partment of State. The provisions of Control Act of 1968 and regulations ad- subchapter R apply to such disclosures ministered by the Department of the by the Office of Defense Trade Con- Treasury. The performance of defense trols. services on behalf of foreign govern- (b) Determinations required by law. ments by retired military personnel Section 38(e) of the Arms Export Con- continues to require consent pursuant trol Act (22 U.S.C. 2778) provides by ref- to Part 3a of this title. Persons who in- erence to certain procedures of the Ex- tend to export defense articles or fur- port Administrative Act that certain nish defense services should con- information required by the Depart- sequently not assume that satisfying ment of State in connection with the the requirements of this subchapter re- licensing process may generally not be lieves one of other requirements of law. disclosed to the public unless certain determinations relating to the national § 126.12 Continuation in force. interest are made in accordance with the procedures specified in that provi- All determinations, authorizations, sion, except that the names of the licenses, approvals of contracts and countries and the types and quantities agreements and other action issued, of defense articles for which licenses authorized, undertaken, or entered into are issued under this section shall not by the Department of State pursuant be withheld from public disclosure un- to section 414 of the Mutual Security less the President determines that re- Act of 1954, as amended, or under the lease of such information would be con- previous provisions of this subchapter, trary to the national interest. Deter- continue in full force and effect until minations required by section 38(e) or unless modified, revoked or super- shall be made by the Assistant Sec- seded by the Department of State. retary for Political-Military Affairs. (c) Information required under part 130. § 126.13 Required information. Part 130 of this subchapter contains (a) All applications for licenses specific provisions on the disclosure of (DSP–5, DSP–61, DSP–73, and DSP–85), information described in that part. all requests for approval of agreements (d) National Interest Determinations. In and amendments thereto under part 124 accordance with section 38(e) of the of this subchapter, all requests for Arms Export Control Act (22 U.S.C. other written authorizations, and all 2778(e)), the Secretary of State has de- 30-day prior notifications of sales of termined that the following disclosures significant military equipment under are in the national interest of the § 126.8(c) must include a letter signed United States: by a responsible official empowered by (1) Furnishing information to foreign the applicant and addressed to the Di- governments for law enforcement or rector, Office of Defense Trade Con- regulatory purposes; and trols, stating whether:

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(1) The applicant or the chief execu- warders, and all the required informa- tive officer, president, vice-presidents, tion cannot be included on the applica- other senior officers or officials (e.g., tion form, an addendum sheet and comptroller, treasurer, general coun- seven copies containing this informa- sel) or any member of the board of di- tion must be provided. The addendum rectors is the subject of an indictment sheet must be marked at the top as fol- for or has been convicted of violating lows: ‘‘Attachment to Department of any of the U.S. criminal statutes enu- State License From (insert DSP–5, 61, merated in § 120.27 of this subchapter 73, or 85, as appropriate) for Export of since the effective date of the Arms Ex- (insert commodity) valued at (insert port Control Act, Public Law 94–329, 90 U.S. dollar amount) to (insert country Stat. 729 (June 30, 1976); of ultimate destination).’’ The Office of (2) The applicant or the chief execu- Defense Trade Controls will impress tive officer, president, vice-presidents, one copy of the addendum sheet with other senior officers or officials (e.g., the Department of State seal and re- comptroller, treasurer, general coun- turn it to the applicant with each li- sel) or any member of the board of di- cense. The sealed addendum sheet must rectors is ineligible to contract with, remain attached to the license as an or to receive a license or other ap- integral part thereof. District Direc- proval to import defense articles or de- tors of Customs and Department of De- fense services from, or to receive an ex- fense transmittal authorities will per- port license or other approval from, mit only those U.S. consignors or any agency of the U.S. Government; freight forwarders listed on the license (3) To the best of the applicant’s or sealed addendum sheet to make knowledge, any party to the export as shipments under the license, and only defined in § 126.7(e) has been convicted to those foreign consignees named on of violating any of the U.S. criminal the documents. Applicants should list statutes enumerated in § 120.27 of this all freight forwarders who may be in- subchapter since the effective date of the Arms Export Control Act, Public volved with shipments under the li- Law 94–329, 90 Stat. 729 (June 30, 1976), cense to ensure that the list is com- or is ineligible to contract with, or to plete and to avoid the need for amend- receive a license or other approval to ments to the list after the license has import defense articles or defense serv- been approved. If there are unusual or ices from, or to receive an export li- extraordinary circumstances that pre- cense or other approval from any agen- clude the specific identification of all cy of the U.S. government; and the U.S. consignors and freight for- (4) The natural person signing the ap- warders and all foreign consignees, the plication, notification or other request applicant must provide a letter of ex- for approval (including the statement planation with each application. required by this subsection) is a citizen (c) In cases when foreign nationals or national of the United States, has are employed at or assigned to secu- been lawfully admitted to the United rity-cleared facilities, provision by the States for permanent residence (and applicant of a Technology Control Plan maintains such a residence) under the (available from the Defense Investiga- Immigration and Nationality Act, as tive Service) will facilitate processing. amended (8 U.S.C. 1101(a), section 101(a)20, 60 Stat. 163), or is an official of § 126.14 Special comprehensive export a foreign government entity in the authorizations for NATO, Australia, and Japan. United States. (b) In addition, all applications for li- (a) With respect to NATO members, censes must include, on the application Australia, Japan, and Sweden, the Of- or an addendum sheet, the complete fice of Defense Trade Controls may pro- names and addresses of all U.S. con- vide the comprehensive authorizations signors and freight forwarders, and all described in paragraphs (a) and (b) of foreign consignees and foreign inter- this section for circumstances where mediate consignees involved in the the full parameters of a commercial ex- transaction. If there are multiple con- port endeavor including the needed de- signors, consignees or freight for- fense exports can be well anticipated

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and described in advance, thereby mak- (3)(i) Global Project Authorization. ing use of such comprehensive author- With respect to NATO members, Aus- izations appropriate. tralia, Japan, and Sweden, the Office of (1) Major Project Authorization. With Defense Trade Controls may provide a respect to NATO members, Australia, comprehensive ‘‘Global Project Au- Japan, and Sweden, the Office of De- thorization’’ to registered U.S. export- fense Trade Controls may provide com- ers for exports of defense articles, tech- prehensive authorizations for well cir- nical data or defense services in sup- cumscribed commercially developed port of government to government co- ‘‘major projects’’, where a principal operative projects (covering research registered U.S. exporter/prime con- and development or production) with tractor identifies in advance the broad one of these countries undertaken pur- parameters of a commercial project in- suant to an agreement between the cluding defense exports needed, other USG and the government of such coun- participants (e.g., exporters with whom try, or a memorandum of under- they have ‘‘teamed up’’, subcontrac- standing between the Department of tors), and foreign government end Defense and the country’s Ministry of users. Projects eligible for such author- Defense. ization may include a commercial ex- (ii) A set of standard terms and con- port of a major weapons system for a ditions derived from and corresponding foreign government involving, for ex- to the breadth of the activities and ample, multiple U.S. suppliers under a phases covered in such a cooperative commercial teaming agreement to de- MOU will provide the basis for this sign, develop and manufacture defense comprehensive authorization for all articles to meet a foreign government’s U.S. exporters (and foreign end users) requirements. U.S. exporters seeking identified by DoD as participating in such authorization must provide de- such cooperative project. Such author- tailed information concerning the izations may cover a broad range of de- scope of the project, including other fined activities in support of such pro- exporters, U.S. subcontractors, and grams including multiple shipments of planned exports (including re-exports) defense articles and technical data and of defense articles, defense services, performance of defense services for ex- and technical data, and meet the other tended periods, and re-exports to ap- requirements set forth in paragraph (b) proved end users. of this section. (2) Major Program Authorization. With (iii) Eligible end users will be limited respect to NATO members, Australia, to ministries of defense of MOU signa- Japan, and Sweden, the Office of De- tory countries and foreign companies fense Trade Controls may provide com- serving as contractors of such coun- prehensive authorizations for well cir- tries. cumscribed commercially developed (iv) Any requirement for non-transfer ‘‘major program’’. This variant would and use assurances from a foreign gov- be available where a single registered ernment may be deemed satisfied by U.S. exporter defines in advance the the signature by such government of a parameters of a broad commercial pro- cooperative agreement or by its min- gram for which the registrant will be istry of defense of a cooperative MOU providing all phases of the necessary where the agreement or MOU contains support (including the needed hard- assurances that are comparable to that ware, tech data, defense services, de- required by a DSP–83 with respect to velopment, manufacturing, and logistic foreign governments and that clarifies support). U.S. exporters seeking such that the government is undertaking re- authorization must provide detailed in- sponsibility for all its participating formation concerning the scope of the companies. The authorized non-govern- program, including planned exports ment participants or end users (e.g., (including re-exports) of defense arti- the participating government’s con- cles, defense services, and technical tractors) will still be required to exe- data, and meet the other requirements cute DSP–83’s. set forth in paragraph (b) of this sec- (4) Technical Data Supporting an Ac- tion. quisition, Teaming Arrangement, Merger,

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Joint Venture Authorization. With re- (iv) Projected duration of same, with- spect to NATO member countries, Aus- in permissible limits; and tralia, Japan, and Sweden, the Office of (v) Description of the exporter’s plan Defense Trade Controls may provide a for record keeping and auditing of all registered U.S. defense company a phases of the program or project; and comprehensive authorization to export (vi) In the case of authorizations for technical data in support of the U.S. exports in support of government to exporter’s consideration of entering government cooperative projects, iden- into a teaming arrangement, joint ven- tification of the cooperative project. ture, merger, acquisition, or similar ar- (2) Amendments to the requested au- rangement with prospective foreign thorization may be requested in writ- partners. Specifically the authoriza- ing as appropriate, and should include tion is designed to permit the export of a broadly defined set of technical data a detailed description of the aspects of to qualifying well established foreign the activities being proposed for defense firms in NATO countries, Aus- amendment. tralia, Japan, or Sweden in order to (3) The comprehensive authorizations better facilitate a sufficiently in depth set forth in paragraph (a) of this sec- assessment of the benefits, opportuni- tion may be made valid for the dura- ties and other relevant considerations tion of the major commercial program presented by such prospective arrange- or project, or cooperative project, not ments. U.S exporters seeking such au- to exceed 10 years. thorization must provide detailed in- (4) Included among the criteria re- formation concerning the arrangement, quired for such authorizations are joint venture, merger or acquisition, those set out in Part 124, e.g., §§ 124.7, including any planned exports of de- 124.8 and 124.9, as well as §§ 125.4 (tech- fense articles, defense services, and nical data exported in furtherance of technical data, and meet the other re- an agreement) and 123.16 (hardware quirements set forth in paragraph (b) being included in an agreement). Provi- of this section. sions required will also take into ac- (b) Provisions and Requirements for count the congressional notification Comprehensive Authorizations. Requests requirements in §§ 123.15 and 124.11 of for the special comprehensive author- the ITAR. Specifically, comprehensive izations set forth in paragraph (a) of congressional notifications cor- this section should be by letter ad- responding to the comprehensive pa- dressed to the Office of Defense Trade rameters for the major program or Control. With regard to a commercial project or cooperative project should major program or project authoriza- be possible, with additional notification, or technical data supporting a tions such as those required by law for teaming arrangement, merger, joint changes in value or other significant venture or acquisition, registered U.S. modifications. exporters may consult the Director of the Office of Defense Trade Controls (5) All authorizations will be con- about eligibility for and obtaining sistent with all other applicable re- available comprehensive authoriza- quirements of the ITAR, including re- tions set forth in paragraph (a) of this quirements for non-transfer and use as- section or pursuant to § 126.9(b). surances (see §§ 123.10 and 124.10), con- (1) Requests for consideration of all gressional notifications (e.g., §§ 123.15 such authorizations should be formu- and 124.11), and other documentation lated to correspond to one of the au- (e.g., §§ 123.9 and 126.13). thorizations set out in paragraph (a) of (6) Special auditing and reporting re- this section, and should include: quirements will also be required for (i) A description of the proposed pro- these authorizations. Exporters using gram or project, including where ap- special authorizations are required to propriate a comprehensive description establish an electronic system for of all phases or stages; and keeping records of all defense articles, (ii) Its value; and defense services and technical data ex- (iii) Types of exports needed in supported and comply with all applicable port of the program or project; and requirements for submitting shipping

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or export information within the allot- (4) To violate any of the terms or ted time. conditions of licenses or approvals [65 FR 45285, July 21, 2000, as amended at 66 granted pursuant to this subchapter. FR 35900, July 10, 2001] (b) Any person who is granted a license or other approval under this sub- PART 127—VIOLATIONS AND chapter is responsible for the acts of PENALTIES employees, agents, and all authorized persons to whom possession of the li- Sec. censed defense article or technical data 127.1 Violations. has been entrusted regarding the oper- 127.2 Misrepresentation and omission of ation, use, possession, transportation, facts. and handling of such defense article or 127.3 Penalties for violations. technical data abroad. All persons 127.4 Authority of U.S. Customs Service of- abroad subject to U.S. jurisdiction who ficers. obtain temporary custody of a defense 127.5 Authority of the Defense Investigative article exported from the United States Service. 126.6 Seizure and forfeiture in attempts at or produced under an agreement de- illegal exports. scribed in part 124 of this subchapter, 127.7 Debarment. and irrespective of the number of inter- 127.8 Interim suspension. mediate transfers, are bound by the 127.9 Applicability of orders. regulations of this subchapter in the 127.10 Civil penalty. same manner and to the same extent as 127.11 Past violations. the original owner or transferer. 127.12 Voluntary disclosures. (c) A person with knowledge that an- AUTHORITY: Secs. 2, 38, and 42, Pub. L. 90– other person is then ineligible pursuant 629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2791); to §§ 120.1(c) of this subchapter or 126.7 E.O. 11958, 42 FR 4311, 3 CFR, 1977 Comp., p. 79; 22 U.S.C. 401; 22 U.S.C. 2658; 22 U.S.C. of this chapter, is then subject to an 2779a; 22 U.S.C. 2780. order of debarment, or interim suspension, may not, directly or indirectly, in SOURCE: 58 FR 39316, July 22, 1993, unless otherwise noted. any manner or capacity, without prior disclosure of the facts to, and written § 127.1 Violations. authorization from, the Office of De- (a) It is unlawful: fense Trade Controls: (1) To export or attempt to export (1) Apply for, obtain, or use any ex- from the United States any defense ar- port control document as defined in ticle or technical data or to furnish § 127.2(b) for such debarred, suspended, any defense service for which a license or ineligible person; or or written approval is required by this (2) Order, buy, receive, use, sell, de- subchapter without first obtaining the liver, store, dispose of, forward, trans- required license or written approval port, finance, or otherwise service or from the Office of Defense Trade Con- participate in any transaction which trols; may involve any defense article or the (2) To import or attempt to import furnishing of any defense service for any defense article whenever a license which a license or approval is required is required by this subchapter without by this subchapter for export, where first obtaining the required license or such debarred, suspended, or ineligible written approval from the Office of De- person may obtain any benefit there- fense Trade Controls; from or have any direct or indirect in- (3) To conspire to export, import, re- terest therein. export or cause to be exported, im- (d) No person may willfully cause, or ported or reexported, any defense arti- aid, abet, counsel, demand, induce, pro- cle or to furnish any defense service for cure or permit the commission of any which a license or written approval is act prohibited by, or the omission of required by this subchapter without first obtaining the required license or any act required by 22 U.S.C. 2778, 22 written approval from the Office of De- U.S.C. 2779, or any regulation, license, fense Trade Controls; or approval, or order issued thereunder.

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§ 127.2 Misrepresentation and omis- conviction, be subject to a fine or im- sion of facts. prisonment, or both, as prescribed by (a) It is unlawful to use any export or 22 U.S.C. 2778(c). temporary import control document § 127.4 Authority of U.S. Customs Serv- containing a false statement or mis- ice officers. representing or omitting a material fact for the purpose of exporting any (a) U.S. Customs Service officers may defense article or technical data or the take appropriate action to ensure ob- furnishing of any defense service for servance of this subchapter as to the which a license or approval is required export or the attempted export of any by this subchapter. Any false state- defense article or technical data, in- ment, misrepresentation, or omission cluding the inspection of loading or un- of material fact in an export or tem- loading of any vessel, vehicle, or air- porary import control document will craft. This applies whether the export be considered as made in a matter is authorized by license or by written within the jurisdiction of a department approval issued under this subchapter. or agency of the United States for the (b) U.S. Customs Service officers purposes of 18 U.S.C. 1001, 22 U.S.C. 2778 have the authority to investigate, de- and 22 U.S.C. 2779. tain or seize any export or attempted (b) For the purpose of this section, export of defense articles or technical export or temporary import control docu- data contrary to this subchapter. ments include the following: (c) Upon the presentation to a Cus- (1) An application for a permanent toms Officer of a license or written ap- export or a temporary import license proval authorizing the export of any and supporting documents. defense article, the customs officer (2) Shipper’s Export Declaration. may require the production of other (3) Invoice. relevant documents and information (4) Declaration of destination. relating to the proposed export. This (5) Delivery verification. includes an invoice, order, packing list, (6) Application for temporary export. shipping document, correspondence, in- (7) Application for registration. structions, and the documents other- (8) Purchase order. wise required by the U.S. Customs (9) Foreign import certificate. Service. (10) Bill-of-lading. (11) Airway bill. § 127.5 Authority of the Defense Inves- (12) Nontransfer and use certificate. tigative Service. (13) Any other document used in the In the case of exports involving clas- regulation or control of a defense arti- sified technical data or defense article, defense service or technical data cles, the Defense Investigative Service for which a license or approval is re- may take appropriate action to ensure quired by this subchapter. compliance with the Department of De- fense Industrial Security Manual. Upon § 127.3 Penalties for violations. a request to the Defense Investigative Any person who willfully: Service regarding the export of any (a) Violates any provision of section classified defense article or technical 38 or section 39 of the Arms Export data, the Defense Investigative Service Control Act (22 U.S.C. 2778 and 2779), or official or a designated government any undertaking specifically required transmittal authority may require the by part 124 of this subchapter; or production of other relevant docu- (b) In a registration, license applica- ments and information relating to the tion or report required by section 38 or proposed export. section 39 of the Arms Export Control Act (22 U.S.C. 2278 and 2779) or by any § 127.6 Seizure and forfeiture in at- rule or regulation issued under either tempts at illegal exports. section, makes any untrue statement (a) An attempt to export from the of a material fact or omits a material United States any defense articles in fact required to be stated therein or violation of the provisions of this sub- necessary to make the statements chapter constitutes an offense punish- therein not misleading, shall, upon able under section 401 of title 22 of the

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United States Code. Whenever it is the violator cannot be relied upon to known or there is probable cause to be- comply with the statute or these rules lieve that any defense article is in- or regulations in the future, and when tended to be or is being or has been ex- such violation is established in accord- ported or removed from the United ance with part 128 of this subchapter. States in violation of law, such article (c) Statutory Debarment. Section and any vessel, vehicle or aircraft in- 38(g)(4) of the Arms Export Control Act volved in such attempt is subject to prohibits the issuance of licenses to seizure, forfeiture and disposition as persons who have been convicted of provided in section 401 of title 22 of the violating the U.S. criminal statutes United States Code. enumerated in § 120.27 of this sub- (b) Similarly, an attempt to violate chapter. Discretionary authority to any of the conditions under which a issue licenses is provided, but only if temporary export or temporary import certain statutory requirements are license was issued pursuant to this sub- met. It is the policy of the Department chapter or to violate the requirements of State not to consider applications of § 123.2 of this subchapter also con- for licenses or requests for approvals stitutes an offense punishable under involving any person who has been con- section 401 of title 22 of the United victed of violating the Arms Export States Code, and such article, together Control Act or convicted of conspiracy with any vessel, vehicle or aircraft in- to violate that Act for a three year pe- volved in any such attempt is subject riod following conviction. Such indi- to seizure, forfeiture, and disposition viduals shall be notified in writing that as provided in section 401 of title 22 of they are debarred pursuant to this pol- the United States Code. icy. A list of persons who have been convicted of such offenses and debarred § 127.7 Debarment. for this reason shall be published peri- (a) In implementing section 38 of the odically in the FEDERAL REGISTER. De- Arms Export Control Act, the Assist- barment in such cases is based solely ant Secretary of State for Politico- upon the outcome of a criminal pro- Military Affairs may prohibit any per- ceeding, conducted by a court of the son from participating directly or indi- United States, that established guilt rectly in the export of defense articles, beyond a reasonable doubt in accord- including technical data or in the fur- ance with due process. The procedures nishing of defense services for which a of part 128 of this subchapter are not license or approval is required by this applicable in such cases. subchapter for any of the reasons listed (d) Appeals. Any person who is ineli- below. Any such prohibition is referred gible pursuant to paragraph (c) of this to as a debarment for purposes of this section may appeal to the Under Sec- subchapter. The Assistant Secretary of retary of State for International Secu- State for Politico-Military Affairs rity Affairs for reconsideration of the shall determine the appropriate period ineligibility determination. The proce- of time for debarment, which shall gen- dures specified in § 128.13 of this sub- erally be for a period of three years. chapter are applicable in such appeals. (b) Grounds. (1) The basis for a statutory debarment, as described in para- § 127.8 Interim suspension. graph (c) of this section, is any convic- (a) The Director of the Office of De- tion for violating the Arms Export fense Trade Controls is authorized to Control Act (see § 127.3 of this sub- order the interim suspension of any chapter) or any conspiracy to violate person when the Director believes that the Arms Export Control Act. grounds for debarment (as defined in (2) The basis for administrative de- § 127.6 of this part) exist and where and barment, described in part 128 of this to the extent the Director finds that subchapter, is any violation of 22 interim suspension is reasonably nec- U.S.C. 2778 or any rule or regulation essary to protect world peace or the se- issued thereunder when such a viola- curity or foreign policy of the United tion is of such a character as to provide States. The interim suspension orders a reasonable basis for the Office of De- prohibit that person from participating fense Trade Controls to believe that directly or indirectly in the export of

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any defense article or defense service 2779a and 2780 for each violation of 22 for which a license or approval is re- U.S.C. 2778, 2779a and 2780, or any regu- quired by this subchapter. The sus- lation, order, license or approval issued pended person shall be notified in writ- thereunder. This civil penalty may be ing as provided in § 127.6(c) of this part either in addition to, or in lieu of, any (statutory debarment) or § 128.3 of this other liability or penalty which may be subchapter (administrative debar- imposed. ment), whichever is appropriate. In (b) The Office of Defense Trade Con- both cases, a copy of the interim sus- trols may make: pension order will be served upon that (1) The payment of a civil penalty person in the same manner as provided under this section or in § 128.3 of this subchapter. The in- (2) The completion of any adminis- terim suspension order may be made trative action pursuant to this part 127 immediately effective, without prior or 128 of this subchapter a prior condi- notice. The order will state the rel- tion for the issuance, restoration, or evant facts, the grounds for issuance of continuing validity of any export li- the order, and describe the nature and cense or other approval. duration of the interim suspension. No [58 FR 39316, July 22, 1993, as amended at 62 person may be suspended for a period FR 67276, Dec. 24, 1997] exceeding 60 days unless proceedings under § 127.6(c) of this part or under § 127.11 Past violations. part 128 of this subchapter, or criminal (a) Pursuant to section 38 of the proceedings, are initiated before the Arms Export Control Act, licenses or expiration of that period. other approvals may not be granted to (b) A motion or petition to vacate or persons who have been convicted of modify an interim suspension order violating any of the U.S. criminal stat- may be filed at any time with the utes enumerated in § 120.27 of this sub- Under Secretary of State for Inter- chapter or who are ineligible to receive national Security Affairs. After a final any export licenses from any agency of decision is reached, the Director of the the U.S. government, subject to a nar- Office of Defense Trade Controls will rowly defined statutory exception. This issue an appropriate order disposing of provision establishes a presumption of the motion or petition and will denial for licenses or other approvals promptly inform the respondent ac- involving such persons. This presump- cordingly. tion is applied by the Office of Defense Trade Controls to all persons convicted § 127.9 Applicability of orders. or deemed ineligible in this manner For the purpose of preventing eva- since the effective date of the Arms Ex- sion, orders of the Assistant Secretary port Control Act (Pub. L. 94–329; 90 of State for Politico-Military Affairs, Stat. 729) (June 30, 1976). debarring a person under § 127.6 and or- (b) Policy. An exception to the policy ders of the Director, Office of Defense of the Department of State to deny ap- Trade Controls, suspending a person plications for licenses or other approv- under § 127.7 may be made applicable to als that involve persons described in any other person who may then or paragraph (a) of this section shall not thereafter (during the term of the be considered unless there are extraor- order) be related to the debarred person dinary circumstances surrounding the by affiliation, ownership, control, posi- conviction or ineligibility to export, tion of responsibility, or other com- and only if the applicant demonstrates, mercial connection. Appropriate notice to the satisfaction of the Bureau of Po- and opportunity to respond to charges litico-Military Affairs, that the appli- will be given. cant has taken appropriate steps to mitigate any law enforcement and § 127.10 Civil penalty. other legitimate concerns, and to deal (a) The Assistant Secretary of State with the causes that resulted in the for Political-Military Affairs, Depart- conviction, ineligibility, or debarment. ment of State, is authorized to impose Any person described in paragraph (a) a civil penalty in an amount not to ex- of this section who wishes to request ceed that authorized by 22 U.S.C. 2778, consideration of any application must

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explain, in a letter to the Director, Of- that either the Department of State or fice of Defense Trade Controls, the rea- any other agency, bureau or depart- sons why the application should be ment of the United States Government considered. If the Bureau of Politico- obtains knowledge of either the same Military Affairs concludes that the ap- or substantially similar information plication and written explanation have from another source and commenced sufficient merit, it shall consult with an investigation or inquiry that in- the Office of the Legal Adviser and the volves that information, and that is in- Department of the Treasury regarding tended to determine whether the Arms law enforcement concerns, and may Export Control Act or these regula- also request the views of other depart- tions, or any other license, order or ments, including the Department of other authorization issued under the Justice. If the Office of Defense Trade Arms Export Control Act has been vio- Controls does grant the license or lated. other approval, subsequent applica- (3) It is possible that the activity in tions from the same person need not question—despite voluntary disclo- repeat the information previously pro- sure—might merit penalties, adminis- vided but should instead refer to the fa- trative actions, sanctions, or referrals vorable decision. to the Department of Justice for con- (c) Debarred persons. Persons debarred sideration as to whether criminal pros- pursuant to § 127.6(c) (statutory debar- ecution is warranted. In the latter ment) may not utilize the procedures case, the Office of Defense Trade Con- provided by this section while the de- trols will notify the Department of barment is in force. Such persons may Justice of the voluntary nature of the utilize only the procedures provided by disclosure although the Department of § 127.7(d) of this part. Justice is not required to give that fact any weight. The Office of Defense § 127.12 Voluntary disclosures. Trade Controls has the sole discretion (a) General policy. The Department to consider whether ‘‘voluntary disclo- strongly encourages the disclosure of sure,’’ in context with other relevant information to the Office of Defense information in a particular case, Trade Controls by persons, firms or should be a mitigating factor in deter- any organization that believe they may mining what, if any, administrative ac- have violated any export control provi- tion will be imposed. Some of the miti- sion of the Arms Export Control Act, gating factors the Office of Defense or any regulations, order, license, or Trade Controls may consider are: other authorization issued under the (i) Whether the transaction would Arms Export Control Act. Voluntary have been authorized had proper appli- self-disclosure may be considered a cation been made; mitigating factor in determining the (ii) Why the violation(s) occurred; administrative penalties, if any, that (iii) The degree of cooperation with should be imposed by the Department. the ensuing investigation; Failure to report such violation(s) may (iv) Whether the person or firm has result in circumstances detrimental to instituted or improved an internal U.S. national security and foreign pol- compliance program to reduce the like- icy interests. lihood of future violation(s); (b) Limitations. (1) The provisions of (v) Whether the person making the this section apply only when informa- disclosure did so with the full knowl- tion is provided to the Office of Defense edge and authorization of the firm’s Trade Controls for its review in deter- senior management. (If not, then a mining whether to take administrative firm will not be deemed to have made action under part 128 of this subchapter a disclosure as covered in this section.) concerning violation(s) of the export (4) The provisions of this section do control provisions of the Arms Export not, nor should they be relied on, to Control Act and these regulations. create, confer, or grant any rights, ben- (2) The provisions of this section efits, privileges, or protection enforce- apply only when information is re- able at law or in equity by any person, ceived by the Office of Defense Trade business, or entity in any civil, crimi- Controls for review prior to such time nal, administrative, or other matter.

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(c) Notification. (1) Any person or firm stantiate it. Where appropriate, the wanting to disclose information that documentation should include, but is constitutes a voluntary self-disclosure not limited to: should, in the manner outlined below, (i) Licensing documents (e.g., license initially notify the Office of Defense applications, export licenses and end- Trade Controls as soon as possible after user statements); violation(s) are discovered and then (ii) Shipping documents (e.g., ship- conduct a thorough review of all ex- per’s export declarations, airway bills port-related transactions where viola- and bills of lading); tion(s) are suspected. (iii) Any other relevant documents (2) Notification of violation(s) must must be retained by the person making be in writing and should include the the disclosure until the Office of De- following information: fense Trade Controls requests them or (i) A precise description of the nature until a final decision on the disclosed and extent of the violation(s) (e.g., an information has been made. unauthorized shipment, doing business (e) Certification. A certification must with a party denied U.S. export privi- be submitted stating that all of the leges, etc.); representations made in connection (ii) The exact circumstances sur- with the voluntary self-disclosure are rounding the violation(s) (a thorough true and correct to the best of that per- explanation of why, when, where, and son’s knowledge and belief. Certifi- how the violation(s) occurred); cations made by a firm, corporation or (iii) The complete identities and ad- any other organization should be exe- dresses of all individuals and organiza- cuted by someone with the authority tions, whether foreign or domestic, in- to do so. volved in the activities giving rise to (f) Oral presentations. It is generally the violation(s); not necessary to augment the written (iv) Export license numbers, if appli- presentation with an oral presentation. cable; However, if the person making the dis- (v) U.S. Munitions List category and closure believes a meeting is desirable, subcategory, product descriptions, a request for one should be included quantities, and characteristics of the with the written presentation. commodities or technical data in- (g) Voluntary disclosures should be volved; sent to: (vi) A description of any corrective Compliance Analysis Division, PM/DTC, actions already undertaken; SA–6, room 200, Office of Defense Trade Con- (vii) The name and address of the per- trols, Bureau of Politico-Military Affairs, son(s) making the disclosure and a U.S. Department of State, Washington, DC point of contact, if different, should 20522–0602. further information be needed. (3) Factors to be considered include, PART 128—ADMINISTRATIVE for example, whether the violation(s) PROCEDURES were intentional or inadvertent; the degree to which the person or firm re- Sec. sponsible for the violation(s) making 128.1 Exclusion of functions from the Ad- the disclosure was familiar with the ministrative Procedure Act. laws and regulations; and whether the 128.2 Administrative Law Judge. violator was the subject of prior ad- 128.3 Institution of Administrative Pro- ceedings. ministrative or criminal action under 128.4 Default. the AECA. In addition to immediately 128.5 Answer and demand for oral hearing. providing written notification, persons, 128.6 Discovery. firms, companies and organizations are 128.7 Prehearing conference. strongly urged to conduct a thorough 128.8 Hearings. review of all export-related trans- 128.9 Proceedings before and report of Ad- actions where possible violation(s) are ministrative Law Judge. 128.10 Disposition of proceedings. suspected. 128.11 Consent agreements. (d) Documentation. (1) The written 128.12 Rehearings. disclosure should be accompanied by 128.13 Appeals. copies of those documents that sub- 128.14 Confidentiality of proceedings.

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128.15 Orders containing probationary peri- § 128.3 Institution of Administrative ods. Proceedings. 128.16 Extension of time. 128.17 Availability of orders. (a) Charging letters. The Director, Of- fice of Defense Trade Controls, with AUTHORITY: Secs. 2, 38, 40, 42, and 71, Arms the concurrence of the Office of the Export Control Act. 90 Stat. 744 (22 U.S.C. Legal Adviser, Department of State, 2752, 2778, 2780, 2791, and 2797); E.O. 11958, 42 may initiate proceedings to impose de- FR 4311: 22 U.S.C. 2658; E.O. 12291, 46 FR 1981. barment or civil penalties in accord- SOURCE: 58 FR 39320, July 22, 1993, unless ance with § 127.7 or § 127.10 of this sub- otherwise noted. chapter respectively. Administrative proceedings shall be initiated by means § 128.1 Exclusion of functions from the of a charging letter. The charging let- Administrative Procedure Act. ter will state the essential facts consti- The Arms Export Control Act au- tuting the alleged violation and refer thorizes the President to control the to the regulatory or other provisions import and export of defense articles involved. It will give notice to the re- and services in furtherance of world spondent to answer the charges within peace and the security and foreign pol- 30 days, as provided in § 128.5(a), and in- icy of the United States. It authorizes dicate that a failure to answer will be the Secretary of State to make deci- taken as an admission of the truth of sions on whether license applications the charges. It will inform the respond- or other written requests for approval ent that he or she is entitled to an oral shall be granted, or whether exemp- hearing if a written demand for one is filed with the answer or within seven tions may be used. It also authorizes (7) days after service of the answer. the Secretary of State to revoke, sus- The respondent will also be informed pend or amend licenses or other writ- that he or she may, if so desired, be ten approvals whenever the Secretary represented by counsel of his or her deems such action to be advisable. The choosing. Charging letters may be administration of the Arms Export amended from time to time, upon rea- Control Act is a foreign affairs func- sonable notice. tion encompassed within the meaning (b) Service. A charging letter is served of the military and foreign affairs ex- upon a respondent: clusion of the Administrative Proce- (1) If the respondent is a resident of dure Act and is thereby expressly ex- the United States, when it is mailed empt from various provisions of that postage prepaid in a wrapper addressed Act. Because the exercising of the for- to the respondent at that person’s last eign affairs function, including the de- known address; or when left with the cisions required to implement the respondent or the agent or employee of Arms Export Control Act, is highly dis- the respondent; or when left at the re- cretionary, it is excluded from review spondent’s dwelling with some person under the Administrative Procedure of suitable age and discretion then re- Act. siding herein; or (2) If the respondent is a non-resident [61 FR 48831, Sept. 17, 1996] of the United States, when served upon § 128.2 Administrative Law Judge. the respondent by any of the foregoing means. If such methods of service are The Administrative Law Judge re- not practicable or appropriate, the ferred to in this part is an Administra- charging letter may be tendered for tive Law Judge appointed by the De- service on the respondent to an official partment of State or of the Depart- of the government of the country ment of Commerce, as provided in 15 wherein the respondent resides, pro- CFR 788.2. The Administrative Law vided that there is an agreement or un- Judge is authorized to exercise the derstanding between the United States powers and perform the duties provided Government and the government of the for in §§ 127.7, 127.8, and 128.3 through country wherein the respondent resi- 128.16 of this subchapter. dent permitting this action. [61 FR 48831, Sept. 17, 1996] [61 FR 48831, Sept. 17, 1996]

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§ 128.4 Default. fense or claim of mitigation. Any de- (a) Failure to answer. If the respond- fense or partial defense not specifically ent fails to answer the charging letter, set forth in an answer shall be deemed the respondent may be held in default. waived. Evidence offered thereon by The case shall then be referred to the the respondent at a hearing may be re- Administrative Law Judge for consid- fused except upon good cause being eration in a manner as the Administra- shown. If the respondent does not de- tive Law Judge may consider appro- mand an oral hearing, he or she shall priate. Any order issued shall have the transmit, within seven (7) days after same effect as an order issued fol- the service of his or her answer, origi- lowing the disposition of contested nal or photocopies of all correspond- charges. ence, papers, records, affidavits, and (b) Petition to set aside defaults. Upon other documentary or written evidence showing good cause, any respondent having any bearing upon or connection against whom a default order has been with the matters in issue. If any such issued may apply to set aside the de- materials are in language other than fault and vacate the order entered English, translations into English shall thereon. The petition shall be sub- be submitted at the same time. mitted to duplicate to the Assistant (c) Submission of answer. The answer, Secretary for Political-Military Af- written demand for oral hearing (if fairs, U.S. Department of State, 2201 C any) and supporting evidence required Street, NW., Washington, DC 20520. The by § 128.5(b) shall be in duplicate and Director will refer the petition to the mailed or delivered to the Office of Ad- Administrative Law Judge for consid- ministrative Law Judge, United States eration and a recommendation. The Department of Commerce, Room H– Administrative law Judge will consider 6716. 14th Street and Constitution Ave- the application and may order a hear- nue, NW., Washington, DC 20230. A copy ing and require the respondent to sub- shall be simultaneously mailed to the mit further evidence in support of his Director, Office of Defense Trade Con- or her petition. The filing of a petition trols, SA–6, Room 200, Department of to set aside a default does not in any State, Washington, DC 20522–0602, or manner affect an order entered upon delivered to the 21st street entrance of default and such order continues in full the Department of State, 2201 C Street, force and effect unless a further order NW., Washington, DC addressed to Di- is made modifying or terminating it. rector, Office of Defense Trade Con- [61 FR 48832, Sept. 17, 1996] trols, SA–6, Room 200, Department of State, Washington, DC 20522–0602. § 128.5 Answer and demand for oral hearing. [58 FR 39320, July 22, 1993, as amended at 61 FR 48832, Sept. 17, 1996] (a) When to answer. The respondent is required to answer the charging letter § 128.6 Discovery. within 30 days after service. (b) Contents of answer. An answer (a) Discovery by the respondent. The must be responsive to the charging let- respondent, through the Administra- ter. It must fully set forth the nature tive Law Judge, may request from the of the respondent’s defense or defenses. Office of Defense Trade Controls any In the answer, the respondent must relevant information, not privileged, admit or deny specifically each sepa- that may be necessary or helpful in rate allegation of the charging letter, preparing a defense. The Office of De- unless the respondent is without fense Trade Controls may provide any knowledge, in which case the respond- relevant information, not privileged, ent’s answer shall so state and the that may be necessary or helpful in statement shall operate as denial. Fail- preparing a defense. The Office of De- ure to deny or controvert any par- fense Trade Controls may supply sum- ticular allegation will be deemed an maries in place or original documents admission thereof. The answer may set and may withhold information from forth such additional or new matter as discovery if the interests of national the respondent believes support a de- security or foreign policy so require, or

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if necessary to comply with any stat- fair hearing may not be held without ute, executive order or regulation re- it, the Administrative Law Judge shall quiring that the information may not dismiss the charges. be disclosed. The respondent may re- [61 FR 48832, Sept. 17, 1996] quest the Administrative Law Judge to request any relevant information, § 128.7 Prehearing conference. books, records, or other evidence, from (a)(1) The Administrative Law Judge any other person or government agen- may, upon his own motion or upon mo- cy so long as the request is reasonable tion of any party, request the parties in scope and not unduly burdensome. or their counsel to a prehearing con- (b) Discovery by the Office of Defense ference to consider: Trade Controls. The Office of Defense (i) Simplification of issues; Trade Controls or the Administrative (ii) The necessity of desirability of Law Judge may request from the re- amendments to pleadings; spondent admissions of facts, answers (iii) Obtaining stipulations of fact to interrogatories, the production of and of documents to avoid unnecessary books, records, or other relevant evi- proof; or dence, so long as the request is rel- (iv) Such other matter as may expe- evant and material, reasonable in dite the disposition of the proceeding. scope, and not unduly burdensome. (2) The Administrative Law Judge (c) Subpoenas. At the request of any will prepare a summary of the action party, the Administrative Law Judge agreed upon or taken at the con- may issue subpoenas, returnable before ference, and will incorporate therein him, requiring the attendance of wit- any written stipulations or agreements nesses and the production of books, made by the parties. records, and other documentary or (3) The conference proceedings may physical evidence determined by he Ad- be recorded magnetically or taken by a ministrative Law Judge to be relevant reporter and transcribed, and filed with and material to the proceedings, rea- the Administrative Law Judge. sonable in scope, and not unduly bur- (b) If a conference is impracticable , densome. the Administrative Law Judge may re- (d) Enforcement of discovery rights. If quest the parties to correspond with the Office of Defense Trade Controls the person to achieve the purposes of a fails to provide the respondent with in- conference. The Administrative Law formation in its possession which is Judge shall prepare a summary of ac- not otherwise available and which is tion taken as in the case of a con- necessary to the respondent’s defense, ference. the Administrative Law Judge may dismiss the charges on her or his own [61 FR 48832, Sept. 17, 1996] motion or on a motion of the respondent. If the respondent fails to respond § 128.8 Hearings. with reasonable diligence to the re- (a) A respondent who had not filed a quests for discovery by the Office of timely written answer is not entitled Defense Trade Controls or the Adminis- to a hearing, and the case may be con- trative Law Judge, on her or his own sidered by the Administrative Law motion or motion of the Office of De- Judge as provided in § 128.4(a). If any fense Trade Controls, and upon such answer is filed, but no oral hearing de- notice to the respondent as the Admin- manded, the Administrative Law Judge istrative Law Judge may direct, may may proceed to consider the case upon strike respondent’s answer and declare the written pleadings and evidence the respondent in default, or make any available. The Administrative Law other ruling which the Administrative Judge may provide for the making of Law Judge deems necessary and just the record in such manner as the Ad- under the circumstances. If a third ministrative Law Judge deems appro- party fails to respond to the request for priate. If respondent answers and de- information, the Administrative Law mands an oral hearing, the Administra- Judge shall consider whether the evi- tive Law Judge, upon due notice, shall dence sought is necessary to a fair set the case for hearing, unless a rehearing, and if it is so necessary that a spondent has raised in his answer no

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issues of material fact to be deter- debarring the respondent from partici- mined. If respondent fails to appear at pating in the export of defense articles a scheduled hearing, the hearing never- or technical data or the furnishing of theless may proceed in respondent’s ab- defense services as provided in § 127.7 of sence. The respondent’s failure to ap- this subchapter, impose a civil penalty pear will not affect the validity of the as provided in § 127.10 of this sub- hearing or any proceedings or action chapter or take such action as the Ad- thereafter. ministrative Law Judge deems appro- (b) The Administrative Law Judge priate. Any debarment order will be ef- may administer oaths and affirma- fective for the period of time specified tions. Respondent may be represented therein and may contain such addi- by counsel. Unless otherwise agreed by tional terms and conditions as are the parties and the Administrative deemed appropriate. A copy of the Law Judge the proceeding will be order together with a copy of the Ad- taken by a reporter or by magnetic re- ministrative Law Judge’s report will be cording, transcribed, and filed with the served upon the respondent. Administrative Law Judge. Respondent [61 FR 48833, Sept. 17, 1996] may examine the transcript and may obtain a copy upon payment of proper § 128.11 Consent agreements. costs. (a) The Office of Defense Trade Con- [61 FR 48833, Sept. 17, 1996] trols and the respondent may, by agreement, submit to the Administra- § 128.9 Proceedings before and report tive Law Judge a proposal for the of Administrative Law Judge. issuance of a consent order. The Ad- (a) The Administrative Law Judge ministrative Law Judge will review the may conform any part of the pro- facts of the case and the proposal and ceedings before him or her to the Fed- may conduct conferences with the par- eral Rules of Civil Procedure. The ties and may require the presentation record may be made available in any of evidence in the case. If the Adminis- other administrative or other pro- trative Law Judge does not approve the ceeding involving the same respondent. proposal, the Administrative Law (b) The Administrative Law Judge, Judge will notify the parties and the after considering the record, will pre- case will proceed as though no consent pare a written report. The report will proposal had been made. If the proposal include findings of fact, findings of law, is approved, the Administrative Law a finding whether a law or regulation Judge will report the facts of the case has been violated, and the Administra- along with recommendations to the As- tive Law Judge’s recommendations. It sistant Secretary for Political-Military shall be transmitted to the Assistant Affairs. If the Assistant Secretary for Secretary for Political-Military Af- Political-Military Affairs does not ap- fairs, Department of State. prove the proposal, the case will pro- [61 FR 48833, Sept. 17, 1996] ceed as though no consent proposal had been made. If the Assistant Secretary § 128.10 Disposition of proceedings. for Political-Military Affairs approves Where the evidence is not sufficient the proposal, an appropriate order may to support the charges, the Director, be issued. Office of Defense Trade Controls or the (b) Cases may also be settled prior to Administrative Law Judge will dismiss service of a charging letter. In such an the charges. Where the Administrative event, a proposed charging letter shall Law Judge finds that a violation has be prepared, and a consent agreement been committed, the Administrative and order shall be submitted for the ap- Law Judge’s recommendation shall be proval and signature of the Assistant advisory only. The Assistant Secretary Secretary for Political-Military Af- for Political-Military Affairs will re- fairs, and no action by the Administra- view the record, consider the report of tive Law Judge shall be required. Cases the Administrative Law Judge, and which are settled may not be reopened make an appropriate disposition of the or appealed. case. The Director may issue an order [61 FR 48833, Sept. 17, 1996]

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§ 128.12 Rehearings. record consists of (but is not limited The Administrative Law Judge may to) the charging letter, the respond- grant a rehearing or reopen a pro- ent’s answer, the transcript or mag- ceeding at any time for the purpose of netic recording of the hearing before hearing any relevant and material evi- the Administrative Law Judge, the re- dence which was not known or obtain- port of the Administrative Law Judge, able at the time of the original hear- the order of the Assistant Secretary for ing. A report for rehearing or reopen- Political-Military Affairs, and any ing must contain a summary of such other relevant documents involved in evidence, and must explain the reasons the proceedings before the Administra- why it could not have been presented tive Law Judge. The Under Secretary at the original hearing. The Adminis- of State for Arms Control and Inter- trative Law Judge will inform the par- national Security Affairs may direct a ties of any further hearing, and will rehearing and reopening before the Ad- conduct such hearing and submit a re- ministrative Law Judge if he or she port and recommendations in the same finds that the record is insufficient or manner as provided for the original that new evidence is relevant and ma- proceeding (Described in § 128.10). terial to the issues and was not known and was not available to the respond- [61 FR 48833, Sept. 17, 1996] ent at the time of the original hearings. § 128.13 Appeals. (d) Effect of appeals. The taking of an (a) Filing of appeals. An appeal must appeal will not stay the operation of be in writing, and be addressed to and any order. filed with the Under Secretary of State (e) Preparation of appeals.—(1) General for Arms Control and International Se- requirements. An appeal shall be in let- curity Affairs, Department of State, ter form. The appeal and accompanying Washington, DC 20520. An appeal from material should be filed in duplicate, a final order denying export privileges unless otherwise indicated, and a copy or imposing civil penalties must be simultaneously mailed to the Director, filed within 30 days after receipt of a Office of Defense Trade Controls, SA–6, copy of the order. If the Under Sec- Room 200, Department of State, Wash- retary cannot for any reason act on the ington, DC 20522–0620 or delivered to appeal, he or she may designate an- the 21st street entrance of the Depart- other Department of State official to ment of State, 2201 C Street, NW., receive and act on the appeal. Washington, DC addressed to Director, (b) Grounds and conditions for appeal. Office of Defense Trade Controls, SA–6, The respondent may appeal from the Room 200, Department of State, Wash- debarment or from the imposition of a ington, DC 20522–0602. civil penalty (except the imposition of (2) Oral presentation. The Under Sec- civil penalties pursuant to a consent retary of State for Arms Control and order pursuant to § 128.11) upon the International Security Affairs may ground: (1) That the findings of a viola- grant the appellant an opportunity for tion are not supported by any substan- oral argument and will set the time tial evidence; (2) that a prejudicial and place for oral argument and will error of law was committed: or (3) that notify the parties, ordinarily at least the provisions of the order are arbi- 10 days before the date set. trary, capricious, or an abuse of discretion. The appeal must specify upon (f) Decisions. All appeals will be con- which of these grounds the appeal is sidered and decided within a reasonable based and must indicate from which time after they are filed. An appeal provisions of the order the appeal is may be granted or denied in whole or taken. An appeal from an order issued in part, or dismissed at the request of upon default will not be entertained if the appellant. The decision of the the respondent has failed to seek relief Under Secretary of State for Arms as provided in § 128.4(b). Control and International Security Af- (c) Matters considered on appeal. An fairs will be final. appeal will be considered upon the [58 FR 39320, July 22, 1993, as amended at 61 basis of the assembled record. This FR 48833, Sept. 17, 1996]

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§ 128.14 Confidentiality of pro- fice of Defense Trade Controls. Denials ceedings. and admissions, as well as any miti- Proceedings under this part are con- gating circumstances, which the person fidential. The documents referred to in affected intends to present must be set § 128.17 are not, however, deemed to be forth in or accompany the letter of ob- confidential. Reports of the Adminis- jection and must be supported by evi- trative Law Judge and copies of tran- dence. A request for an oral hearing scripts or recordings of hearings will be may be made at the time of filing ob- available to parties and, to the extent jections. of their own testimony, to witnesses. (4) Determination. The application and All records are available to any U.S. objections thereto will be referred to Government agency showing a proper the Administrative Law Judge. An oral interest therein. hearing if requested, will be conducted at an early convenient date, unless the [61 FR 48834, Sept. 17, 1996] objections filed raise no issues of material fact to be determined. The Admin- § 128.15 Orders containing proba- istrative Law Judge will report the tionary periods. facts and make a recommendation to (a) Revocation of probationary periods. the Assistant Secretary for Political- A debarment or interim suspension Military Affairs, who will determine order may set a probationary period whether the application should be during which the order may be held in granted or denied and will issue an ap- abeyance for all or part of the debar- propriate order. A copy of the order ment or suspension period, subject to and of the Administrative Law Judge’s the conditions stated therein. The Di- report will be furnished to any person rector, Office of Defense Trade Con- affected thereby. trols, may apply without notice to any (5) Effect of revocation on other actions. person to be affected thereby, to the The revocation of a probationary pe- Administrative Law Judge for an order riod will not preclude any other action revoking probation when it appears concerning a further violation, even that the conditions of the probation where revocation is based on the fur- have been breached. The facts in sup- ther violation. port of the application will be pre- [61 FR 48834, Sept. 17, 1996] sented to the Administrative Law Judge, who will report thereon and § 128.16 Extension of time. make a recommendation to the Assist- ant Secretary for Political-Military Af- The Administrative Law Judge, for fairs. The latter will make a deter- good cause shown, may extend the time mination whether to revoke probation within which to prepare and submit an and will issue an appropriate order. answer to a charging letter or to perform any other act required by this (b) Hearings—(1) Objections upon no- part. tice. Any person affected by an application upon notice to revoke probation, [61 FR 48834, Sept. 17, 1996] within the time specified in the notice, may file objections with the Adminis- § 128.17 Availability of orders. trative Law Judge. All charging letters, debarment or- (2) Objections to order without notice. ders, orders imposing civil penalties, Any person adversely affected by an probationary periods, and interim sus- order revoking probation, without no- pension orders are available for public tice may request that the order be set inspection in the Public Reading Room aside by filing his objections thereto of the Department of State. with the Administrative Law Judge. The request will not stay the effective PART 129—REGISTRATION AND date of the order or revocation. LICENSING OF BROKERS (3) Requirements for filing objections. Objections filed with the Administra- Sec. tive Law Judge must be submitted in 129.1 Purpose. writing and in duplicate. A copy must 129.2 Definitions. be simultaneously submitted to the Of- 129.3 Requirement to register.

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129.4 Registration statement and fees. whether such article or service con- 129.5 Policy on embargoes and other pro- tains United States origin components. scriptions. 129.6 Requirement for license/approval. § 129.3 Requirement to Register. 129.7 Prior approval (license). 129.8 Prior notification. (a) Any U.S. person, wherever lo- 129.9 Reports. cated, and any foreign person located 129.10 Guidance. in the United States or otherwise subject to the jurisdiction of the United AUTHORITY: Sec. 38, Pub. L. 104–164, 110 States (notwithstanding § 120.1(c)), who Stat. 1437, (22 U.S.C. 2778). engages in the business of brokering SOURCE: 62 FR 67276, Dec. 24, 1997, unless activities (as defined in this part) with otherwise noted. respect to the manufacture, export, import, or transfer of any defense article § 129.1 Purpose. or defense service subject to the con- Section 38(b)(1)(A)(ii) of the Arms Ex- trols of this subchapter (see § 121) or port Control Act (22 U.S.C. 2778) pro- any ‘‘foreign defense article or defense vides that persons engaged in the busi- service’’ (as defined in § 129.2) is re- ness of brokering activities shall reg- quired to register with the Office of De- ister and pay a registration fee as pre- fense Trade Controls. scribed in regulations, and that no per- (b) Exemptions. Registration under son may engage in the business of this section is not required for: brokering activities without a license (1) Employees of the United States issued in accordance with the Act. Government acting in official capacity. (2) Employees of foreign governments § 129.2 Definitions. or international organizations acting (a) Broker means any person who acts in official capacity. as an agent for others in negotiating or (3) Persons exclusively in the business arranging contracts, purchases, sales of financing, transporting, or freight for- or transfers of defense articles or de- warding, whose business activities do not fense services in return for a fee, com- also include brokering defense articles or mission, or other consideration. defense services. For example, air car- (b) Brokering activities means acting riers and freight forwarders who mere- as a broker as defined in § 129.2(a), and ly transport or arrange transportation includes the financing, transportation, for licensed United States Munitions freight forwarding, or taking of any List items are not required to register, other action that facilitates the manu- nor are banks or credit companies who facture, export, or import of a defense merely provide commercially available article or defense service, irrespective lines or letters of credit to persons reg- of its origin. For example, this in- istered in accordance with Part 122 of cludes, but is not limited to, activities this subchapter required to register. by U.S. persons who are located inside However, banks, firms, or other per- or outside of the United States or for- sons providing financing for defense ar- eign persons subject to U.S. jurisdic- ticles or defense services would be re- tion involving defense articles or de- quired to register under certain cir- fense services of U.S. or foreign origin cumstances, such as where the bank or which are located inside or outside of its employees are directly involved in the United States. But, this does not arranging arms deals as defined in include activities by U.S. persons that § 129.2(a) or hold title to defense arti- are limited exclusively to U.S. domes- cles, even when no physical custody of tic sales or transfers (e.g., not for ex- defense articles is involved. port or re-transfer in the United States or a foreign person). § 129.4 Registration statement and (c) The term ‘‘foreign defense article fees. or defense service’’ includes any non- (a) General. The Department of State United States defense article or de- Form DSP–9 (Registration Statement) fense service of a nature described on and a transmittal letter meeting the the United States Munitions List re- requirements of § 122.2(b) of this sub- gardless of whether such article or chapter must be submitted by an in- service is of United States origin or tended registrant with a payment by

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check or money order payable to the may be carried out or pursued by any Department of State of one of the fees person without the prior written ap- prescribed in § 122.3(a) of this sub- proval of the Office of Defense Trade chapter. The Registration Statement Controls in the case of other countries and transmittal letter must be signed or persons identified from time to time by a senior officer who has been em- by the Department of State through powered by the intended registrant to notice in the FEDERAL REGISTER, with sign such documents. The intended reg- respect to which certain limitations on istrant shall also submit documenta- defense articles or defense services are tion that demonstrates that it is incor- imposed for reasons of U.S. national se- porated or otherwise authorized to do curity or foreign policy (e.g., Cyprus, business in the United States. Guatemala, Yemen) or law enforce- (b) A person required to register ment interests (e.g., an individual sub- under this part who is already reg- ject to debarment pursuant to § 127.7 of istered as a manufacturer or exporter this subchapter). in accordance with part 122 of this sub- (d) No brokering activities or chapter must also provide notification brokering proposal may be carried out of this additional activity by submit- with respect to countries which are ting to the Office of Defense Trade Con- subject to United Nations Security trols by registered mail a transmittal Council arms embargo (see also letter meeting the requirements of § 121.1(c)). § 122.2(b) and citing the existing reg- (e) In cases involving countries or istration, and must pay an additional persons subject to paragraph (b), (c), or fee according to the schedule pre- (d), above, it is the policy of the De- scribed in § 122.3(a). Any person who partment of State to deny requests for registers coincidentally as a broker as approval, and exceptions may be grant- defined in § 129.2 of this subchapter and ed only rarely, if ever. Any person who as a manufacturer or exporter must knows or has reason to know of submit a Registration Statement that brokering activities involving such reflects the brokering activities, the countries or persons must immediately § 122.2(b) transmittal letter, as well as inform the Office of Defense Trade Con- the additional fee for registration as a trols. broker. (c) Other provisions of part 122, in § 129.6 Requirement for License/Ap- particular, § 122.4 concerning notifica- proval. tion of changes in information fur- (a) No person may engage in the busi- nished by registrants and § 122.5 con- ness of brokering activities without cerning maintenance of records by reg- the prior written approval (license) of, istrants, apply equally to registration or prior notification to, the Office of under this part (part 129). Defense Trade Controls, except as follows: § 129.5 Policy on embargoes and other (b) A license will not be required for: proscriptions. (1) Brokering activities undertaken (a) The policy and procedures set by or for an agency of the United forth in this subparagraph apply to States Government— brokering activities defined in § 129.2 of (i) For use by an agency of the this subchapter, regardless of whether United States Government; or the persons involved in such activities (ii) For carrying out any foreign as- have registered or are required to reg- sistance or sales program authorized ister under § 129.3 of this subchapter. by law and subject to the control of the (b) No brokering activities or President by other means. brokering proposals involving any (2) Brokering activities that are ar- country referred to in § 126.1 of this ranged wholly within and destined ex- subchapter may be carried out by any clusively for the North Atlantic Treaty person without first obtaining the Organization, any member country of written approval of the Office of De- that Organization, Japan, Australia, or fense Trade Controls. New Zealand, except in the case of the (c) No brokering activities or pro- defense articles or defense services posal to engage in brokering activities specified in § 129.7(a) of this subchapter,

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for which prior approval is always result of the articles or services being quired. brokered; or (iv) The recipient or end user is not a § 129.7 Prior Approval (License). foreign government or international (a) The following brokering activities organization. require the prior written approval of (b) The requirements of this section the Office of Defense Trade Controls: for prior written approval are met by (1) Brokering activities pertaining to any of the following: certain defense articles (or associated (1) A license or other written ap- defense services) covered by or of a na- proval issued under parts 123, 124, or 125 ture described by Part 121, to or from of this subchapter for the permanent or any country, as follows: temporary export or temporary import (i) Fully automatic firearms and of the particular defense article, de- components and parts therefor; fense service or technical data subject (ii) Nuclear weapons strategic deliv- to prior approval under this section, ery systems and all components, parts, provided the names of all brokers have accessories, attachments specifically been identified in an attachment ac- designed for such systems and associ- companying submission of the initial ated equipment; application; or (iii) Nuclear weapons design and test (2) A written statement from the Of- equipment of a nature described by fice of Defense Trade Controls approv- Category XVI of Part 121; ing the proposed activity or the mak- (iv) Naval nuclear propulsion equip- ing of a proposal or presentation. ment of a nature described by Category (c) Requests for approval of VI(e); brokering activities shall be submitted (v) Missile Technology Control Re- in writing to the Office of Defense gime Category I items (§ 121.16); Trade Controls by an empowered offi- (vi) Classified defense articles, serv- cial of the registered broker; the letter ices and technical data; shall also meet the requirements of (vii) Foreign defense articles or de- § 126.13 of this subchapter. fense services (other than those that (d) The request shall identify all par- are arranged wholly within and des- ties involved in the proposed trans- tined exclusively for the North Atlan- action and their roles, as well as out- tic Treaty Organization, Japan, Aus- line in detail the defense article and re- tralia, or New Zealand (see §§ 129.6(b)(2) lated technical data (including manu- and 129.7(a)). facturer, military designation and (2) Brokering activities involving de- model number), quantity and value, fense articles or defense services cov- the security classification, if any, of ered by, or of a nature described by, the articles and related technical data, Part 121, in addition to those specified the country or countries involved, and in § 129.7(a), that are designated as sig- the specific end use and end user(s). nificant military equipment under this subchapter, for or from any country (e) The procedures outlined in not a member of the North Atlantic § 126.8(c) through (g) are equally appli- Treaty Organization, Australia, New cable with respect to this section. Zealand, or Japan whenever any of the following factors are present: § 129.8 Prior Notification. (i) The value of the significant mili- (a) Prior notification to the Office of tary equipment is $1,000,000 or more; Defense Trade Controls is required for (ii) The identical significant military brokering activities with respect to equipment has not been previously li- significant military equipment valued censed for export to the armed forces of at less than $1,000,000, except for shar- the country concerned under this sub- ing of basic marketing information chapter or approved for sale under the (e.g., information that does not include Foreign Military Sales Program of the performance characteristics, price and Department of Defense; probable availability for delivery) by (iii) Significant military equipment U.S. persons registered as exporters would be manufactured abroad as a re- under Part 122.

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(b) The requirement of this section 130.13 Information to be furnished to appli- for prior notification is met by inform- cant, supplier or vendor by a recipient of ing the Office of Defense Trade Con- a fee or commission. trols by letter at least 30 days before 130.14 Recordkeeping. 130.15 Confidential business information. making a brokering proposal or presen- 130.16 Other reporting requirements. tation. The Office of Defense Trade 130.17 Utilization of and access to reports Controls will provide written acknowl- and records. edgment of such prior notification to confirm compliance with this require- AUTHORITY: Sec. 39, Arms Export Control Act, 90 Stat. 767 (22 U.S.C. 2779); E.O. 11958, 42 ment and the commencement of the 30- FR 4311, 3 CFR, 1977 Comp. p.79; 22 U.S.C. day notification period. 2658. (c) The procedures outlined in § 126.8(c) through (g) are equally appli- SOURCE: 58 FR 39323, July 22, 1993, unless otherwise noted. cable with respect to this section. § 130.1 Purpose. § 129.9 Reports. Section 39(a) of the Arms Export (a) Any person required to register Control Act (22 U.S.C. 2779) provides under this part shall provide annually that the Secretary of State shall pre- a report to the Office of Defense Trade scribe regulations with respect to re- Controls enumerating and describing porting on certain payments relating its brokering activities by quantity, to sales of defense articles and defense type, U.S. dollar value, and pur- services. The provisions of this part chaser(s) and recipient(s), license(s) implement that requirement. Defini- numbers for approved activities and tions which apply to this part are con- any exemptions utilized for other cov- tained in §§ 130.2 through 130.8. ered activities. § 130.2 Applicant. § 129.10 Guidance. Applicant means any person who ap- (a) Any person desiring guidance on plies to the Office of Defense Trade issues related to this part, such as Controls for any license or approval re- whether an activity is a brokering acquired under this subchapter for the tivity within the scope of this Part, or export of defense articles or defense whether a prior approval or notifica- services valued in an amount of $500,000 tion requirement applies, may seek or more which are being sold commer- guidance in writing from the Office of cially to or for the use of the armed Defense Trade Controls. The proce- forces of a foreign country or inter- dures and conditions stated in § 126.9 national organization. This term also apply equally to requests under this includes a person to whom the required section. license or approval has been given.

PART 130—POLITICAL CONTRIBU- § 130.3 Armed forces. TIONS, FEES AND COMMISSIONS Armed forces means the army, navy, marine, air force, or coast guard, as Sec. well as the national guard and national 130.1 Purpose. police, of a foreign country. This term 130.2 Applicant. 130.3 Armed forces. also includes any military unit or mili- 130.4 Defense articles and defense services. tary personnel organized under or as- 130.5 Fee or commission. signed to an international organiza- 130.6 Political contribution. tion. 130.7 Supplier. 130.8 Vendor. § 130.4 Defense articles and defense 130.9 Obligation to furnish information to services. the Office of Defense Trade Controls. Defense articles and defense services 130.10 Information to be furnished by appli- have the meaning given those terms in cant or supplier to the Office of Defense Trade Controls. paragraphs (3), (4) and (7) of section 47 130.11 Supplementary reports. of the Arms Export Control Act (22 130.12 Information to be furnished by ven- U.S.C. 2794 (3), (4), and (7)). When used dor to applicant or supplier. with reference to commercial sales, the

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definitions in §§ 120.6 and 120.9 of this ignated as an employee or officer subchapter apply. thereof; and (b) For the solicitation or promotion § 130.5 Fee or commission. or otherwise to secure the conclusion (a) Fee or commission means, except as of a sale of defense articles or defense provided in paragraph (b) of this sec- services to or for the use of the armed tion, any loan, gift, donation or other forces of a foreign country or inter- payment of $1,000 or more made, or of- national organization. Taxes, customs fered or agreed to be made directly or duties, license fees, and other charges indirectly, whether in cash or in kind, required to be paid by applicable law or and whether or not pursuant to a writ- regulation are not regarded as political ten contract, which is: contributions. (1) To or at the direction of any person, irrespective of nationality, wheth- § 130.7 Supplier. er or not employed by or affiliated with Supplier means any person who enters an applicant, a supplier or a vendor; into a contract with the Department of and Defense for the sale of defense articles (2) For the solicitation or promotion or defense services valued in an or otherwise to secure the conclusion amount of $500,000 or more under sec- of a sale of defense articles or defense tion 22 of the Arms Export Control Act services to or for the use of the armed (22 U.S.C. 2762). forces of a foreign country or international organization. § 130.8 Vendor. (b) The term fee or commission does (a) Vendor means any distributor or not include: manufacturer who, directly or indi- (1) A political contribution or a pay- rectly, furnishes to an applicant or ment excluded by § 130.6 from the defi- supplier defense articles valued in an nition of political contribution: amount of $500,000 or more which are (2) A normal salary (excluding con- end-items or major components as de- tingent compensation) established at fined in § 121.8 of this subchapter. It an annual rate and paid to a regular also means any person who, directly or employee of an applicant, supplier or indirectly, furnishes to an applicant or vendor; supplier defense articles or services (3) General advertising or pro- valued in an amount of $500,000 or more motional expenses not directed to any when such articles or services are to be particular sale or purchaser; or delivered (or incorporated in defense (4) Payments made, or offered or articles or defense services to be deliv- agreed to be made, solely for the pur- ered) to or for the use of the armed chase by an applicant, supplier or ven- forces of a foreign country or inter- dor of specific goods or technical, oper- national organization under: ational or advisory services, which (1) A sale requiring a license or ap- payments are not disproportionate in proval from the Office of Defense Trade amount with the value of the specific Controls under this subchapter; or goods or services actually furnished. (2) A sale pursuant to a contract with the Department of Defense under sec- § 130.6 Political contribution. tion 22 of the Arms Export Control Act Political contribution means any loan, (22 U.S.C. 2762). gift, donation or other payment of (b) [Reserved] $1,000 or more made, or offered or agreed to be made, directly or indi- § 130.9 Obligation to furnish informa- rectly, whether in cash or in kind, tion to the Office of Defense Trade which is: Controls. (a) To or for the benefit of, or at the (a)(1) Each applicant must inform the direction of, any foreign candidate, Office of Defense Trade Controls as to committee, political party, political whether applicant or its vendors have faction, or government or govern- paid, or offered or agreed to pay, in re- mental subdivision, or any individual spect of any sale for which a license or elected, appointed or otherwise des- approval is requested:

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(i) Political contributions in an ag- son to whom the applicant, supplier or gregate amount of $5,000 or more, or vendor has paid, or offered or agreed to (ii) Fees or commissions in an aggre- pay, a fee or commission in respect of gate amount of $100,000 or more. the sale. Any such political contribu- If so, applicant must furnish to the Of- tions are deemed for purposes of this fice of Defense Trade Controls the in- part to be political contributions by formation specified in § 130.10. The fur- the applicant, supplier or vendor who nishing of such information or an ex- paid or offered or agreed to pay the fee planation satisfactory to the Director or commission. of the Office of Defense Trade Controls (d) Any applicant or supplier which as to why all the information cannot has informed the Office of Defense be furnished at that time is a condition Trade Controls under this section that precedent to the granting of the rel- neither it nor its vendors have paid, or evant license or approval. offered or agreed to pay, political con- (2) The requirements of this para- tributions or fees or commissions in an graph do not apply in the case of an ap- aggregate amount requiring the infor- plication with respect to a sale for which all the information specified in mation specified in § 130.10 to be fur- § 130.10 which is required by this sec- nished, must subsequently furnish such tion to be reported shall already have information within 30 days after learn- been furnished. ing that it or its vendors had paid, or (b) Each supplier must inform the Of- offered or agreed to pay, political con- fice of Defense Trade Controls as to tributions or fees or commissions in re- whether the supplier or its vendors spect of a sale in an aggregate amount have paid, or offered or agreed to pay, which, if known to applicant or sup- in respect of any sale: plier at the time of its previous com- (1) Political contributions in an ag- munication with the Office of Defense gregate amount of $5,000 or more, or Trade Controls, would have required (2) Fees or commissions in an aggre- the furnishing of information under gate amount of $100,000 or more. § 130.10 at that time. Any report fur- If so, supplier must furnish to the Of- nished under this paragraph must, in fice of Defense Trade Controls the in- addition to the information specified in formation specified in § 130.10. The in- § 130.10, include a detailed statement of formation required to be furnished pur- the reasons why applicant or supplier suant to this paragraph must be so fur- did not furnish the information at the nished no later than 30 days after the time specified in paragraph (a) or para- contract award to such supplier, or graph (b) of this section, as applicable. such earlier date as may be specified by the Department of Defense. For pur- § 130.10 Information to be furnished poses of this paragraph, a contract by applicant or supplier to the Of- award includes a purchase order, exer- fice of Defense Trade Controls. cise of an option, or other procurement (a) Every person required under action requiring a supplier to furnish § 130.9 to furnish information specified defense articles or defense services to in this section in respect to any sale the Department of Defense for the pur- must furnish to the Office of Defense poses of section 22 of the Arms Export Trade Controls: Control Act (22 U.S.C. 2762). (c) In determining whether an appli- (1) The total contract price of the cant or its vendors, or a supplier or its sale to the foreign purchaser; vendors, as the case may be, have paid, (2) The name, nationality, address or offered or agreed to pay, political and principal place of business of the contributions in an aggregate amount applicant or supplier, as the case may of $5,000 or more in respect of any sale be, and, if applicable, the employer and so as to require a report under this sec- title; tion, there must be included in the (3) The name, nationality, address computation of such aggregate amount and principal place of business, and if any political contributions in respect applicable, employer and title of each of the sale which are paid by or on be- foreign purchaser, including the ulti- half of, or at the direction of, any per- mate end-user involved in the sale;

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(4) Except as provided in paragraph (a) and (b) of this section must respond (c) of this section, a statement setting fully to each subdivision of those para- forth with respect to such sale: graphs and, where the correct response (i) The amount of each political con- is none or not applicable,’’ must so tribution paid, or offered or agreed to state. be paid, or the amount of each fee or commission paid, or offered or agreed § 130.11 Supplementary reports. to be paid; (a) Every applicant or supplier who is (ii) The date or dates on which each required under § 130.9 to furnish the in- reported amount was paid, or offered or formation specified in § 130.10 must sub- agreed to be paid; mit a supplementary report in connec- (iii) The recipient of each such tion with each sale in respect of which amount paid, or intended recipient if applicant or supplier has previously not yet paid; been required to furnish information if: (iv) The person who paid, or offered (1) Any political contributions aggre- or agreed to pay such amount; and gating $2,500 or more or fees or com- (v) The aggregate amounts of polit- missions aggregating $50,000 or more ical contributions and of fees or com- not previously reported or paid, or of- mission, respectively, which shall have fered or agreed to be paid by applicant been reported. or supplier or any vendor; (b) In responding to paragraph (a)(4) (2) Subsequent developments cause of this section, the statement must: the information initially reported to be (1) With respect to each payment re- no longer accurate or complete (as in ported, state whether such payment the case where a payment actually was in cash or in kind. If in kind, it made is substantially different in must include a description and valu- amount from a previously reported es- ation thereof. Where precise amounts timate of an amount offered or agreed are not available because a payment to be paid); or has not yet been made, an estimate of (3) Additional details are requested the amount offered or agreed to be paid by the Office of Defense Trade Controls must be provided; with respect to any miscellaneous pay- (2) With respect to each recipient, ments reported under § 130.10(c). state: (b) Supplementary reports must be (i) Its name; sent to the Office of Defense Trade (ii) Its nationality; Controls within 30 days after the pay- (iii) Its address and principal place of ment, offer or agreement reported business; therein or, when requested by the Of- (iv) Its employer and title; and fice of Defense Trade Controls, within (v) Its relationship, if any, to appli- 30 days after such request, and must in- cant, supplier, or vendor, and to any clude: foreign purchaser or end-user. (1) Any information specified in (c) In submitting a report required by § 130.10 required or requested to be re- § 130.9, the detailed information speci- ported and which was not previously fied in paragraph (a)(4) and (b) of this reported; and section need not be included if the pay- (2) The Defense Trade Control license ments do not exceed: number, if any, and the Department or (1) $2,500 in the case of political con- Defense contract number, if any, re- tributions; and lated to the sale. (2) $50,000 in the case of fees or commissions. § 130.12 Information to be furnished In lieu of reporting detailed informa- by vendor to applicant or supplier. tion with respect to such payments, (a) In order to determine whether it the aggregate amount thereof must be is obliged under § 130.9 to furnish the reported, identified as miscellaneous information specified in § 130.10 with re- political contributions or miscella- spect to a sale, every applicant or sup- neous fees or commissions, as the case plier must obtain from each vendor, may be. from or through whom the applicant (d) Every person required to furnish acquired defense articles or defense the information specified in paragraphs services forming the whole or a part of

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the sale, a full disclosure by the vendor from the vendor the initial statement of all political contributions or fees or required under paragraph (a) of this commission paid, by vendor with re- section; spect to such sale. Such disclosure (ii) Vendor’s failure to comply with must include responses to all the infor- this section; and mation pertaining to vendor required (iii) The amount of time which has to enable applicant or supplier, as the elapsed between the date of applicant’s case may be, to comply fully with or supplier’s request and the date of §§ 130.9 and 130.10. If so required, they the signed statement; must include the information furnished (2) The failure of a vendor to comply by each vendor in providing the infor- with this section does not relieve any mation specified. applicant or supplier otherwise re- (b) Any vendor which has been required by § 130.9 to submit a report to quested by an applicant or supplier to the Office of Defense Trade Controls furnish an initial statement under from submitting such a report. paragraph (a) of this section must, except as provided in paragraph (c) of § 130.13 Information to be furnished to this section, furnish such statement in applicant, supplier or vendor by a a timely manner and not later than 20 recipient of a fee or commission. days after receipt of such request. (a) Every applicant or supplier, and (c) If the vendor believes that fur- each vendor thereof; nishing information to an applicant or supplier in a requested statement (1) In order to determine whether it would unreasonably risk injury to the is obliged under § 130.9 or § 130.12 to fur- vendor’s commercial interests, the ven- nish information specified in § 130.10 dor may furnish in lieu of the state- with respect to a sale; and ment an abbreviated statement dis- (2) Prior to furnishing such informa- closing only the aggregate amount of tion, must obtain from each person, if all political contributions and the ag- any, to whom it has paid, or offered or gregate amount of all fees or commis- agreed to pay, a fee or commission in sions which have been paid, or offered respect of such sale, a timely state- or agreed to be paid, or offered or ment containing a full disclosure by agreed to be paid, by the vendor with such a person of all political contribu- respect to the sale. Any abbreviated tions paid, or offered or agreed to be statement furnished to an applicant or paid, by it or on its behalf, or at its di- supplier under this paragraph must be rection, in respect of such sale. Such accompanied by a certification that disclosure must include responses to the requested information has been re- all the information required to enable ported by the vendor directly to the Of- the applicant, supplier or vendor, as fice of Defense Trade Controls. The the case may be, to comply fully with vendor must simultaneously report §§ 130.9, 130.10, and 130.12. fully to the Office of Defense Trade (b) In obtaining information under Controls all information which the paragraph (a) of this section, the appli- vendor would otherwise have been re- cant, supplier or vendor, as the case quired to report to the applicant or may be, must also require each person supplier under this section. Each such to whom a fee or commission is paid, or report must clearly identify the sale offered or agreed to be paid, to furnish with respect to which the reported in- from time to time such reports of its formation pertains. political contributions as may be nec- (d)(1) If upon the 25th day after the essary to enable the applicant, supplier date of its request to vendor, an appli- or vendor, as the case may be, to com- cant or supplier has not received from ply fully with §§ 130.9, 130.10, 130.11, and the vendor the initial statement re- 130.12. quired by paragraph (a) of this section, (c) The applicant supplier or vendor, the applicant or supplier must submit as the case may be, must include any to the Office of Defense Trade Controls political contributions paid, or offered a signed statement attesting to: or agreed to be paid, by or on behalf of, (i) The manner and extent of appli- or at the direction of, any person to cant’s or supplier’s attempt to obtain whom it has paid, or offered or agreed

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to pay a fee or commission in deter- § 130.16 Other reporting requirements. mining whether applicant, supplier or The submission of reports under this vendor is required by §§ 130.9, 130.11, and 130.12 to furnish information specified part does not relieve any person of any in § 130.10. requirements to furnish information to any federal, state, or municipal agen- § 130.14 Recordkeeping. cy, department or other instrumen- Each applicant, supplier and vendor tality as required by law, regulation or must maintain a record of any infor- contract. mation it was required to furnish or obtain under this part and all records § 130.17 Utilization of and access to re- upon which its reports are based for a ports and records. period of not less than five years fol- (a) All information reported and lowing the date of the report to which records maintained under this part will they pertain. be made available, upon request for utilization by standing committees of § 130.15 Confidential business informa- the Congress and subcommittees there- tion. of, and by United States Government (a) Any person who is required to fur- agencies, in accordance with section nish information under this part may 39(d) of the Arms Export Control Act identify any information furnished (22 U.S.C. 2779(d)), and reports based hereunder which the person considers upon such information will be sub- to be confidential business informa- mitted to Congress in accordance with tion. No person, including any appli- sections 36(a)(8) and 36(b)(1) of that Act cant or supplier, shall publish, divulge, (22 U.S.C. 2776 (a)(8) and (b)(1)). disclose, or make known in any manner, any information so identified by a (b) All confidential business informa- vendor or other person unless author- tion provided pursuant to this part ized by law or regulation. shall be protected against disclosure to (b) For purposes of this section, con- the extent provided by law. fidential business information means (c) Nothing in this section shall pre- commercial or financial information clude the furnishing of information to which by law is entitled to protection foreign governments for law enforce- from disclosure. (See, e.g., 5 U.S.C. ment or regulatory purposes under 552(b) (3) and (4); 18 U.S.C. 1905; 22 international arrangements between U.S.C. 2778(e); Rule 26(c)(7), Federal the United States and any foreign gov- Rules of Civil Procedure.) ernment.

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