Proposed Rule2022-01889
International Traffic in Arms Regulations: Corrections and Clarifications for Export and Reexport; Canadian Exemptions; Exemptions Regarding Intra-Company, Intra-Organization, and Intra-Governmental Transfers to Employees Who Are Dual Nationals or Third-Country Nationals; and Voluntary Disclosures
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 2, 2022
Issuing agencies
State Department
Abstract
The Department of State (DOS) proposes to amend the International Traffic in Arms Regulations (ITAR) to clarify the definitions of export and reexport. Further, the Department proposes to replace the term "national" with "person" in the Canadian exemptions; revise the exemption for intra-company, intra-organization, and intra-governmental transfers to dual nationals or third-country nationals; and correct administrative errors in the section on voluntary disclosures.
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 22 (Wednesday, February 2, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 22 (Wednesday, February 2, 2022)]
[Proposed Rules]
[Pages 5759-5761]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-01889]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF STATE
22 CFR Parts 120, 126, and 127
[Public Notice: 11532]
RIN 1400-AF39
International Traffic in Arms Regulations: Corrections and
Clarifications for Export and Reexport; Canadian Exemptions; Exemptions
Regarding Intra-Company, Intra-Organization, and Intra-Governmental
Transfers to Employees Who Are Dual Nationals or Third-Country
Nationals; and Voluntary Disclosures
AGENCY: Department of State.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Department of State (DOS) proposes to amend the
International Traffic in Arms Regulations (ITAR) to clarify the
definitions of export and reexport. Further, the Department proposes to
replace the term ``national'' with ``person'' in the Canadian
exemptions; revise the exemption for intra-company, intra-organization,
and intra-governmental transfers to dual nationals or third-country
nationals; and correct administrative errors in the section on
voluntary disclosures.
DATES: The Department of State will accept comments on this proposed
rule until April 4, 2022.
ADDRESSES: Interested parties may submit comments by one of the
following methods:
<bullet> Email: <a href="/cdn-cgi/l/email-protection#06424252455673646a6f6545696b6b6368727546757267726328616970"><span class="__cf_email__" data-cfemail="e1a5a5b5a2b194838d8882a28e8c8c848f9592a19295809584cf868e97">[email protected]</span></a> with the subject line:
``Regulatory Change: ITAR Sections 120, 126 and 127''
<bullet> Internet: At <a href="http://www.regulations.gov">www.regulations.gov</a>, search for this notice,
Docket DOS-2021-0031. Comments received after that date may be
considered if feasible, but consideration cannot be assured. Those
submitting comments should not include any personally identifying
information they do not desire to be made public or information for
which a claim of confidentiality is asserted, because comments and/or
transmittal emails will be made available for public inspection and
copying after the close of the comment period via the Directorate of
Defense Trade Controls website at <a href="http://www.pmddtc.state.gov">www.pmddtc.state.gov</a>. Parties who
wish to comment anonymously may do so by submitting their comments via
<a href="http://www.regulations.gov">www.regulations.gov</a>, leaving the fields that would identify the
commenter blank and including no identifying information in the comment
itself.
FOR FURTHER INFORMATION CONTACT: Ms. Engda Wubneh, Foreign Affairs
Officer, Office of Defense Trade Controls Policy, U.S. Department of
State, telephone (202) 663-1809; email <a href="/cdn-cgi/l/email-protection#abefefffe8e8ded8dfc4c6ced9f8ced9ddc2c8ceebd8dfcadfce85ccc4dd"><span class="__cf_email__" data-cfemail="88ccccdccbcbfdfbfce7e5edfadbedfafee1ebedc8fbfce9fceda6efe7fe">[email protected]</span></a>.
ATTN: Regulatory Change, ITAR parts 120, 126, and 127.
SUPPLEMENTARY INFORMATION: The Department of State proposes to amend
the International Traffic in Arms Regulations (ITAR) to revise the
definitions of export (ITAR Sec. 120.17) and reexport (ITAR Sec.
120.19) to clarify that any release of technical data to a foreign
person described within the respective definitions is a release only to
any countries in which that foreign person currently holds citizenship
or permanent residency. Since the Department published ``International
Traffic in Arms Regulations: Revisions to Definition of Export and
Related Definitions'' (81 FR 35611) in 2016, the Department has changed
its assessment that inclusion of prior citizenship or permanent
residency in ITAR Sec. Sec. 120.17(b) and 120.19(b) is necessary based
on its experience with this provision. The Department assesses that a
foreign person's former citizenship or permanent residency status in a
country should not be deemed to automatically result in an export or
reexport to that country. The Department proposes this change to better
align with our policy and requirements in Section 126.18 and to provide
greater opportunities for foreign persons who are no longer citizens or
permanent residents of certain countries to participate in ITAR-
regulated activities.
Further, the Department proposes to replace the term ``national''
with the ITAR-defined term ``person'' in ITAR Sec. 126.5(b) of the
Canadian exemption to be consistent with how foreign persons are
defined in the ITAR. The Department also proposes to remove the phrase
``although nationality does not, in and of itself, prohibit access to
defense articles'' from ITAR Sec. 126.18(c)(2) as the definitions of
export and reexport provide that a release to a foreign person
constitutes an export or reexport, as applicable, to all countries in
which the foreign person holds citizenship or permanent residency. This
proposed change is not intended to convey any change to the
Department's long-standing position that the purpose of vetting
employees from countries listed in ITAR Sec. 126.1 is to mitigate
diversion. Further, simply identifying nationalities with no
substantive contacts with ITAR Sec. 126.1 countries is not a
precondition to rely on to use the exemption for intra-company, intra-
organization, and intra-governmental transfers to dual or third-country
nationals. The Department also proposes to clarify ITAR Sec.
126.18(c)(2) by stating that the screened employee, not the end-user or
consignee, must execute a nondisclosure agreement to provide assurances
that said employee will not transfer any unclassified defense articles
to unauthorized persons.
Lastly, the Department proposes to correct administrative errors in
the voluntary disclosures section of the ITAR by providing the correct
references to exemptions pursuant to the Defense Trade Cooperation
Treaties between the United States and Australia and the United States
and the United Kingdom in ITAR Sec. Sec. 126.16 and 126.17,
respectively. Additionally, the Department proposes to streamline the
section on voluntary disclosures by simply referencing the relevant
ITAR sections, Sec. Sec. 126.1(e), 126.16(h)(8), and 126.17(h)(8),
that describe the duties of persons to notify the Directorate of
[[Page 5760]]
Defense Trade Controls of particular activities.
Regulatory Analysis and Notices
Administrative Procedure Act
The Department of State is of the opinion that controlling the
import and export of defense articles and services is a foreign affairs
function of the United States Government and that rules implementing
this function are exempt from sections 553 (rulemaking) and 554
(adjudications) of the Administrative Procedure Act (APA), pursuant to
5 U.S.C. 553(a)(1). Since the Department is of the opinion that this
rule is exempt from 5 U.S.C. 553, it is the view of the Department that
the provisions of Section 553(d) do not apply to this rulemaking.
Regulatory Flexibility Act
Notwithstanding the Department's publication of this rulemaking as
a proposed rule, this rule is exempt from the notice-and-comment
rulemaking provisions of 5 U.S.C. 553 as a foreign affairs function.
Therefore, it does not require analysis under the Regulatory
Flexibility Act.
Unfunded Mandates Reform Act of 1995
This rulemaking does not involve a mandate that will result in the
expenditure by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any year and it
will not significantly or uniquely affect small governments. Therefore,
no actions are deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
Executive Orders 12372 and 13132
This rulemaking will not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with Executive
Order 13132, it is determined that this proposed amendment does not
have sufficient federalism implications to require consultations or
warrant the preparation of a federalism summary impact statement. The
regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this rulemaking.
Executive Orders 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributed impacts, and equity). This
rule's scope does not impose additional regulatory requirements or
obligations; therefore, the Department believes costs associated with
this rule will be minimal. Although the Department cannot determine
based on available data how many fewer licenses will be submitted as a
result of this rule, the amendments to the definitions of export and
reexport will inherently relieve the licensing burden for some
exporters. Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility. This rule has been designated as a
``nonsignificant regulatory action'' by the Office and Information and
Regulatory Affairs under Executive Order 12866.
Executive Order 12988
The Department of State has reviewed this rulemaking in light of
Executive Order 12988 to eliminate ambiguity, minimize litigation,
establish clear legal standards, and reduce burden.
Executive Order 13175
The Department of State has determined that this rulemaking will
not have tribal implications, will not impose substantial direct
compliance costs on Indian tribal governments, and will not preempt
tribal law. Accordingly, Executive Order 13175 does not apply to this
rulemaking.
Paperwork Reduction Act
This rulemaking does not impose or revise any information
collections subject to 44 U.S.C. Chapter 35.
List of Subjects in 22 CFR Parts 120, 126, and 127
Arms and munitions, Classified information, Crime, Exports,
Penalties, Seizures and forfeitures.
For the reasons set forth above, the Department of State proposes
to amend 22 CFR parts 120, 126, and 127 as follows:
PART 120--PURPOSE and DEFINITIONS
0
1. The authority citation for part 120 continues to read as follows:
Authority: Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744
(22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2794; 22 U.S.C. 2651a; Pub.
L. 105-261, 112 Stat. 1920; Pub. L. 111-266; Section 1261, Pub. L.
112-239; E.O. 13637, 78 FR 16129.
0
2. Amend Sec. 120.17 by revising paragraph (b) to read as follows:
Sec. 120.17 Export.
* * * * *
(b) Any release in the United States of technical data to a foreign
person is deemed to be an export to all countries in which the foreign
person holds citizenship or permanent residency.
* * * * *
0
3. Amend Sec. 120.19 by revising paragraph (b) to read as follows:
Sec. 120.19 Reexport.
* * * * *
(b) Any release outside the United States of technical data to a
foreign person is deemed to be a reexport to all countries in which the
foreign person holds citizenship or permanent residency.
* * * * *
PART 126--GENERAL POLICIES AND PROVISIONS
0
4. The authority citation for part 126 continues to read as follows:
Authority: 22 U.S.C. 2752, 2778, 2780, 2791, and 2797; 22
U.S.C. 2651a; 22 U.S.C. 287c; Sec. 1225, Pub. L. 108-375; Sec. 7089,
Pub. L. 111-117; Pub. L. 111-266; Sections 7045 and 7046, Pub. L.
112-74; E.O. 13637, 78 FR 16129.
0
5. Amend Sec. 126.5 by revising paragraph (b) to read as follows:
Sec. 126.5 Canadian exemptions.
* * * * *
(b) Permanent and temporary export of defense articles. Except as
provided in Supplement No. 1 to part 126 of this subchapter and for
exports that transit third countries, Port Directors of U.S. Customs
and Border Protection and postmasters shall permit, when for end-use in
Canada by Canadian Federal or Provincial governmental authorities
acting in an official capacity or by a Canadian-registered person, or
for return to the United States, the permanent and temporary export to
Canada without a license of unclassified defense articles and defense
services identified on the U.S. Munitions List (22 CFR 121.1). The
exceptions are subject to meeting the requirements of this subchapter,
to include 22 CFR 120.1(c) and (d), parts 122 and 123 (except insofar
as exemption from licensing requirements is herein authorized) and
Sec. 126.1, and the requirement to obtain non-transfer and use
assurances for all significant military equipment. For purposes of this
section, ``Canadian-registered person'' is any Canadian person
(including Canadian business entities organized under the laws of
[[Page 5761]]
Canada), dual citizen of Canada and a third country other than a
country listed in Sec. 126.1 of this subchapter unless the conditions
of Sec. 126.18(c) are satisfied, or permanent resident registered in
Canada in accordance with the Canadian Defense Production Act, and such
other Canadian Crown Corporations identified by the Department of State
in a list of such persons publicly available through the website of the
Directorate of Defense Trade Controls and by other means.
* * * * *
0
6. Amend Sec. 126.18 by revising paragraph (c)(2) to read as follows:
Sec. 126.18 Exemptions regarding intra-company, intra-organization,
and intra-governmental transfers to employees who are dual nationals or
third-country nationals.
* * * * *
(c) * * *
(2) The end-user or consignee to have in place a process to screen
its employees and for the employees to have executed a nondisclosure
agreement that provides assurances that the employee will not transfer
any defense articles to persons unless specifically authorized. The
end-user or consignee must screen its employees for substantive
contacts with restricted or prohibited countries listed in Sec. 126.1.
Substantive contacts include regular travel to such countries, recent
or continuing contact with agents, brokers, and nationals of such
countries, continued demonstrated allegiance to such countries,
maintenance of business relationships with persons from such countries,
maintenance of a residence in such countries, receiving salary or other
continuing monetary compensation from such countries, or acts otherwise
indicating a risk of diversion. An employee who has substantive
contacts with persons from countries listed in Sec. 126.1(d)(1) shall
be presumed to raise a risk of diversion, unless DDTC determines
otherwise. End-users and consignees must maintain a technology
security/clearance plan that includes procedures for screening
employees for such substantive contacts and maintain records of such
screening for five years. The technology security/clearance plan and
screening records shall be made available to DDTC or its agents for
civil and criminal law enforcement purposes upon request.
* * * * *
PART 127--VIOLATIONS AND PENALTIES
0
7. The authority citation for part 127 continues to read as follows:
Authority: Sections 2, 38, and 42, Pub. L. 90-629, 90 Stat. 744
(22 U.S.C. 2752, 2778, 2791); 22 U.S.C. 401; 22 U.S.C. 2651a; 22
U.S.C. 2779a; 22 U.S.C. 2780; E.O. 13637, 78 FR 16129; Pub. L. 114-
74, 129 Stat. 584.
0
8. Amend Sec. 127.12 by revising paragraph (b)(5) to read as follows:
Sec. 127.12 Voluntary disclosures.
* * * * *
(b) * * *
(5) Nothing in this section shall be interpreted to negate or
lessen the obligations imposed pursuant to Sec. Sec. 126.1(e),
126.16(h)(8), and 126.17(h)(8) of this subchapter.
* * * * *
Bonnie Jenkins,
Under Secretary, Arms Controls and International Security, Department
of State.
[FR Doc. 2022-01889 Filed 2-1-22; 8:45 am]
BILLING CODE 4710-25-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on February 2, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.