Rule2024-29032
International Traffic in Arms Regulations: Registration Fees
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
December 10, 2024
Effective
January 9, 2025
Issuing agencies
State Department
Abstract
The Department of State published a proposed rule on April 24, 2024, requesting comment on proposals to amend the International Traffic in Arms Regulations (ITAR) by increasing and specifying the fees required for registration with the Directorate of Defense Trade Controls (DDTC). The Department now responds to the public comments received in response to that proposed rule and issues this final rule.
Full Text
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<title>Federal Register, Volume 89 Issue 237 (Tuesday, December 10, 2024)</title>
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[Federal Register Volume 89, Number 237 (Tuesday, December 10, 2024)]
[Rules and Regulations]
[Pages 99081-99085]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-29032]
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DEPARTMENT OF STATE
22 CFR Parts 122 and 129
[Public Notice: 12542]
RIN 1400-AF78
International Traffic in Arms Regulations: Registration Fees
AGENCY: Department of State.
ACTION: Final rule.
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SUMMARY: The Department of State published a proposed rule on April 24,
2024, requesting comment on proposals to amend the International
Traffic in Arms Regulations (ITAR) by increasing and specifying the
fees required for registration with the Directorate of Defense Trade
Controls (DDTC). The Department now responds to the public comments
received in response to that proposed rule and issues this final rule.
DATES: This rule is effective January 9, 2025.
FOR FURTHER INFORMATION CONTACT: Allison Smith, Director, Office of
Defense Trade Controls Management, Department of State, telephone (202)
663-1282; email <a href="/cdn-cgi/l/email-protection#6d2929392e2e181e190200081f3e081f1b040e082d1e190c1908430a021b"><span class="__cf_email__" data-cfemail="9dd9d9c9dedee8eee9f2f0f8efcef8efebf4fef8ddeee9fce9f8b3faf2eb">[email protected]</span></a>. ATTN: Registration Fee
Change.
SUPPLEMENTARY INFORMATION:
Overview
This final rule implements a change and increase in registration
fees for certain persons required under 22 U.S.C. 2778(b) to register
with the Department of State's Directorate of Defense Trade Controls
(DDTC) and pay a registration fee. It also returns the amount of fees
registrants must pay to the International Traffic in Arms Regulations
(ITAR) (22 CFR parts 120 through 130) and makes clarifying revisions to
part 122 of the ITAR. This final rule follows a proposed rule (89 FR
31119), published on April 24, 2024, which included the proposed
revisions to DDTC's registration fees and corresponding amendments to
the ITAR.
As noted in its proposed rule, for the first time in fifteen years,
the Department proposed to revise and increase the registration fees
(also referred to as ``fees'') charged to those required to register
with DDTC. This increase is necessary because DDTC operations are
primarily funded by fees. Without a sufficient increase to meet
operational costs that have significantly risen since 2008, DDTC would
be faced with untenable budget deficits and would be forced to reduce
its services.
In accordance with section 38(b) of the Arms Export Control Act
(AECA) (22 U.S.C. 2778(b)) and ITAR Sec. 122.1 (22 CFR 122.1), every
person who engages in the business of manufacturing, exporting,
temporarily importing, or brokering any defense articles or defense
services is required to register with DDTC, the agency charged with
administering the relevant sections of the AECA. Section 38(b) of the
AECA also requires that every person required to register pay a
registration fee. As the ITAR implements section 38 of the AECA, and as
its parts 122 and 129 (22 CFR parts 122 and 129) address registration,
the Department proposed to revise those provisions to restate
registration requirements without substantive change, to revise the
Department's methodology for determining the fees paid by certain
registrants, to increase registration fees, and to reinsert the actual
amount of fees within the ITAR itself. The Department now provides
responses to comments received on the proposed rule and amends the ITAR
as of the effective date of this rule, with one correction from the
proposed rule.
Summary of Changes From the Proposed Rule
In this final rule, the Department makes the changes it previously
proposed, with one minor change. Due to a typographical error, the Tier
3 fee multiplier for favorable determinations was misidentified in two
places as $1,110 instead of the correct amount of $1,100. The Tier 3
fee multiplier was correctly introduced in the preamble as $1,100 (89
FR 31121), but a subsequent preamble reference to the Tier 3 fee
multiplier was misidentified as $1,110 (89 FR 31122). In addition, the
incorrect reference was carried forward to amendatory instruction 3 of
the proposed rule and identified the Tier 3 fee multiplier at proposed
Sec. 122.3(a)(3) as $1,110 (89 FR 31124). This final rule adopts the
correct Tier 3 fee multiplier of $1,100 at ITAR Sec. 122.3(a)(3).
Response to Comments
During the 45-day public comment period (April 24, 2024, through
June 10, 2024) DDTC received 19 separate submissions from individuals,
corporations, and industry associations in response to the notice of
proposed rulemaking, some of which discussed more than one aspect of
the proposed rule. All relevant comments addressed only ITAR Sec.
122.3, which included proposed changes to the registration fees. The
Department received no questions or comments on other changes in the
proposed rule.
Several commenters expressed a view that the proposed increase is
an unjust burden on small business and may be a barrier to entry for
new small business registrants. One commenter in particular claimed
that the increase in registration fees would be especially difficult
for manufacturers who do not export but are required by large
corporations to be registered with DDTC to do business with them and
advised the new registration fee would subject their company to paying
1 percent of their gross revenue to be able to sell products
domestically for DoD end-use. As a threshold matter, the Department is
aware that some private sector businesses elect to have their own
separate requirement for businesses with which they contract to be
registered with DDTC, even when those contracting businesses are not
legally required to register with DDTC under ITAR Sec. 122.1. Such
varying requirements by some private sector businesses are outside of
the scope of ITAR Sec. 122.1. Pursuant to ITAR Sec. 122.1, persons
who are not engaged in the business of manufacturing, exporting, or
temporarily importing defense articles are not required by ITAR Sec.
122.1 to register with DDTC. With respect to the fee amount, the
Department notes that registrants who do not export fall within Tier 1
and pay the base fee of $3,000. That base fee represents a 33.1 percent
increase from the prior Tier 1 fee, which is approximately 12 percent
less than the increase for Tier 2 and is slightly less than it would
have been had the Department used the 40.1 percent inflation adjustment
based on 2008 dollars, when the registration fees were last amended.
The Department acknowledges and understands the commenters'
concerns regarding small businesses. In response,
[[Page 99082]]
the Department is instituting a planned one-year initiative for
qualifying Tier 1 registrants, during which the Department will assess
impact and consider extension. Tier 1 registrants may petition DDTC for
consideration of a $500 discount (for a total registration fee of
$2,500). To qualify, registrants must provide some form of proof that
$3,000 was 1 percent or more of their total revenue for the last
calendar year. ``Total revenue'' is the total amount of income and is
not limited to sales of items controlled on the U.S. Munitions List
(USML). Applicants must submit a complete request for special
consideration to DDTC at least 30 calendar days prior to expiration of
their current registration term. More information is available on the
DDTC website, by searching ``registration fee.'' Moreover, as a result
of the feedback received, the Department will review its registration
fee structure more regularly to avoid large-percentage changes to
registration fees.
In addition, the Department continues to have a process for
registrants where they may address registration fee concerns. Tier 2
and Tier 3 registrants whose registration fees are greater than $3,500
may petition DDTC for a pre-set alternate payment schedule. To be
considered for an alternate payment schedule, registrants must provide
some form of proof that their registration fee is greater than 1
percent of their total sales in the given year. Total sales include
domestic and international sales and are not limited to sales of items
described on the USML. Additionally, the Department continues to have
discounts available for Tier 3 renewals. To ensure fairness to those
registrants in Tier 3, if the registrant timely shows that their total
registration fee is greater than 3 percent of the total value of
favorable determinations on license applications or other requests for
authorization during the 12-month period ending 90 days prior to
expiration of the current registration, the registration fee may be
reduced to 3 percent of the value of such authorizations, or $4,000,
whichever is greater. The Department also has discounts for exporters
and temporary importers of low-value authorizations who fall under Tier
3, as described on the DDTC website (<a href="https://www.pmddtc.state.gov">https://www.pmddtc.state.gov</a>;
under Support > Review FAQs > DECCS--Registration > ``Understanding the
Renewal Fee Download File''). Registrants who are wholly exempt from
income taxation pursuant to 26 U.S.C. 501(c)(3) also qualify for the
Tier 1 registration fee of $3,000.
One commenter agreed the proposal is fair for Tier 3 registrants to
pay more than Tier 1 and Tier 2 registrants as they consume more
services from DDTC, while expressing overall concern about the higher
registration fees for all tiers.
Multiple commenters stated that the Tier 1 and Tier 2 inflationary
adjustments are difficult for small businesses, citing negative
economic impacts for their companies and that the registration fee
increase is more than the rate of inflation increase since 2008. The
Department appreciates that any increase in registration fees may cause
difficulties for businesses, particularly small businesses. However,
the Department assessed that after fifteen years of inflation,
increasing technological improvements, and improved services, that an
increase in the amount of registration fees is necessary for the
continued and modernized operations of DDTC. Reflecting considerations
such as those in the comments it expected to receive, DDTC set the Tier
1 and Tier 2 registration fee amounts to reflect an increase fairly
consistent with inflation over the last fifteen years. Several
commenters expressed concern that the Tier 3 proposed registration fee
is significantly above the inflation rate when the additional fee
multiplier for favorable determinations is factored in. The Department
acknowledges this is accurate. The proposed registration fee structure
allows DDTC to fund a large share of the many critical functions it
provides to exporters, importers, brokers, manufacturers, and the
public--such as the DDTC Response Team, Help Desk, commodity
jurisdiction determinations, advisory opinions, guidance on brokering,
and support for registration--all of which offer services for the
approximately 14,500 current DDTC registrants and also for the general
public. The Department has concluded that Tier 3 registrants have
benefited the most from DDTC's improvements, specifically the Defense
Export Control and Compliance System (DECCS) and customer service
improvements, and that they are best positioned to contribute from
their export-derived revenue to continue and improve DDTC's services.
Additionally, Tier 3 registrants have more frequent interactions with
DDTC and thus require more DDTC services. Because these improvements
primarily benefit Tier 3 registrants, it is those registrants that will
be asked to contribute more. Finally, the Department again notes the
availability of discounted registration fees for high-volume, low-value
Tier 3 registrants.
One commenter asked for clarification of how favorable
determinations are classified and defined, and whether the scope of
other requests for authorization encompasses application amendments and
proviso reconsiderations. The commenter also asked the following
questions: Are proviso reconsiderations included in the total? Are
agreement amendments included in the total? The Department acknowledges
this comment and clarifies that a favorable determination is an
approval, an approval with provisos (sometimes also referred to as an
approval with conditions), or written authorization from DDTC to
conduct an activity regulated by the ITAR. An application that is
returned without action or denied is not a type of favorable
determination. That said, amendment requests and requests for proviso
reconsiderations are considered in the registration fee calculation
when they are positively adjudicated.
One commenter inquired how DDTC was able to temporarily reduce its
Tier 1 and Tier 2 registration fees to $500 for 1 year due to the
coronavirus (COVID-19) pandemic, yet the agency needs to increase its
registration fees now. Given the extraordinary impact of COVID-19 on
the national economy and Defense Industrial Base, DDTC temporarily
reduced registration fees for registrants in Tier 1 and Tier 2 to $500
to help mitigate against the uncertain economic impact of the COVID-19
public health emergency. The temporary reduction in registration fees
that occurred four years ago was a special circumstance and is
unrelated to the current proposed registration fee changes.
One commenter suggested that DDTC consider implementing pricing
scales for different types of licenses or consider additional streams
of revenue available outside of registration fees. For example, the
commenter suggested that DSP-6, DSP-74, and DSP-62 may be billed at a
lower rate due to the limited time and resources needed to review and
approve applications. Further, the same commenter also suggested
limited fee structures may be explored for foreign entities that
request DSP-6004 for reexports or retransfers. The Department notes
that under the Arms Export Control Act, DDTC is authorized to charge
for registration fees, not a fee per license.
One commenter noted that as a risk mitigation practice, companies
often apply for a license when the regulatory language or environment
is unclear. DDTC's proposed license fee increases may disincentivize
companies from submitting licenses when the regulatory requirements are
ambiguous. The
[[Page 99083]]
Department notes the ITAR requires a license for the export, temporary
import, or furnishing of defense services. Industry may submit a
request for an Advisory Opinion to get more information on regulatory
language. The ``Advisory Opinions (AO)'' application in DECCS allows
industry users to electronically submit inquiries pursuant to ITAR
Sec. Sec. 120.22(a) (for preliminary authorization determinations) and
(c) (for interpretations of ITAR requirements other than brokering) and
129.9(a) (for guidance whether an activity is a brokering activity) and
(c) (for guidance on other areas of brokering).
One commenter inquired how the new registration fees will increase
the investments in DECCS and technology. The Department provides that
DDTC plans include continuing to update DECCS with user-requested and
other enhancements, specifically as it applies to the DECCS-Licensing
application and its integrations with other external applications
(e.g., USXports, Automated Export System). The DDTC IT Modernization
Team is tracking these enhancements for continued improvements and
meets periodically with the DECCS User Group (DUG) and the Defense
Trade Advisory Group (DTAG) regarding information technology (IT) user
matters and responds to feedback from both. The DDTC IT Modernization
Team will continue to share periodic updates with and solicit feedback
from both the DTAG and the DUG.
One commenter suggested that DDTC take a phased approach to
increasing its registration fees so that registrants may account for
budgeting while mitigating their financial risks. The Department
understands the need for entities to budget for this proposed increase
and is therefore delaying the effective date and implementation of this
new rule until January 2025. DDTC will continue to socialize the new
registration fee structure so that registrants are aware of the new
registration fees ahead of the implementation. All registrants will
continue to receive a letter in DECCS that states their new
registration fee 90 days ahead of their due date. Additionally, DDTC
plans to conduct registration fee analyses every two-years, which
should mitigate the need for a similarly significant increase in the
future. DDTC will continue to solicit public comment to gather
industry's point of view.
The Department received a few comments asking for additional detail
about how the Department determined the new registration fee costs. One
commenter suggested that DDTC should disclose a budget for these
increased estimated funds ``and then justify that spend in how it will
continue to serve and improve industry.'' Based on the Department's
analysis, the proposed increase in registration fees allows DDTC to
adjust for inflation, to continue to make IT and other internal
improvements, and to efficiently address industry's needs, as stated
above. The increased registration fees are necessary to maintain the
high level of service of the statutorily required export control
system. DDTC will continue to engage with industry (via the DTAG, DUG,
and industry events) to provide insights into how the organization
serves the regulated community.
In addition to the comments addressed above, the Department
received several comments outside the scope of this rulemaking. The
Department takes note of these comments but is not entertaining
substantive revisions to other existing text of the ITAR in this
rulemaking.
Regulatory Analysis and Notices
Administrative Procedure Act
The Department has historically determined that rulemakings
implementing the Arms Export Control Act or amending the ITAR involve a
military or foreign affairs function of the United States under 5
U.S.C. 553(a). However, due to Department's interest in seeking public
comment on this rule, the Department solicited comments during a 45-day
comment period, to which it is now responding in this final rule.
Regulatory Flexibility Act
Since this rule is exempt from the notice-and-comment rulemaking
provisions of 5 U.S.C. 553, it does not require analysis under the
Regulatory Flexibility Act.
Unfunded Mandates Reform Act of 1995
This rulemaking does not involve a mandate that will result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any year and it
will not significantly or uniquely affect small governments. Therefore,
no actions were deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
Executive Orders 12372 and 13132
This rulemaking does not have sufficient federalism implications to
require consultations or warrant the preparation of a federalism
summary impact statement. The regulations implementing Executive Order
12372 regarding intergovernmental consultation on Federal programs and
activities do not apply to this rulemaking.
Congressional Review Act
The Department does not believe that this rulemaking is a major
rule, as defined by the Congressional Review Act, 5 U.S.C. 800 et seq.
Executive Orders 12866, 14094, and 13563
Executive Orders 12866 (as amended by Executive Order 14094) and
13563 direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributed
impacts, and equity). Executive Order 13563 emphasizes the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility. This final rule has
not been designated as a significant regulatory action by the Office of
Information and Regulatory Affairs under Executive Order 12866, as
amended.
As noted in the proposed rule, roughly 14,500 registrants in fiscal
year (FY) 2023 contributed registration fees to DDTC's FY 2023
collections amounting to $33.8 million. Based on projections made from
registrant data from recent years, the new registration fee structure,
which presumes roughly the same number of registrants, is expected to
bring in an overall total of roughly $67.2 million per year, which
would be an overall increase of $33.4 million per year. Although this
is a 99 percent projected increase in collections overall from current
registration fees for FY 2025, DDTC's projected operational budget will
be nearly $60 million, and that amount is expected to continue to
increase based on inflation and other increases in expenses. DDTC's $60
million budget includes (but is not limited to) contract labor support,
IT services, personnel salaries, outreach, and travel. Accordingly, the
revised registration fee structure is necessary for DDTC to continue
operating to meet its mission. No action or an insufficient increase
would cause budget deficits or a cut in necessary services. Further to
a qualitative benefit-cost analysis, the registration fee structure
finalized here benefits DDTC by meeting its budget demands in a way
that also reasonably accounts for unknown variables such as changes in
the number of registrants, or potential exemptions that would not
[[Page 99084]]
require specific license applications or approvals and therefore
decreases the expected collections from Tiers 2 and 3. It also allows
for benefits to the regulated community, enabling DDTC to address
unexpected contingencies as it did in 2020, when it temporarily lowered
registration fee amounts as a relief measure during the COVID-19
pandemic.
The largest increase, on a per-registrant basis, falls on Tier 3
registrants. The Department believes this increase is justified for the
reasons discussed previously, including that Tier 3 registrants derive
greater benefits from engaging in regulated activities while also
consuming a disproportionate amount of DDTC support services. As stated
above, the Department continues to have discounts available for Tier 3
renewals. To ensure fairness to those registrants in Tier 3, if they
timely show that their total registration fee is greater than 3 percent
of the total value of favorable determinations on license applications
or other requests for authorization during the 12-month period ending
90 days prior to expiration of the current registration, the
registration fee may be reduced to 3 percent of the total license value
of such authorizations, or $4,000, whichever is greater, as described
on the DDTC website (<a href="https://www.pmddtc.state.gov">https://www.pmddtc.state.gov</a>) under Support >
Review FAQs > DECCS--Registration > ``Understanding the Renewal Fee
Download File.'' Because we project registrants in Tier 3 to account
for over 22,000 of the roughly 26,000 applications expected to be
adjudicated by DDTC, the Department believes that this is a more
equitable distribution of financial costs. Tier 1 and Tier 2
registrants, on the other hand, will see a 33 percent and 45 percent
increase, respectively, not far from the near 40 percent inflation rate
in the over fifteen years since the registration fees were last
adjusted.
As mentioned above, the Department is putting a new consideration
in place for Tier 1 registrants. This was done both in response to
comments received and due to a resulting benefit-cost analysis.
Qualitatively, the Department does not aim to impose unnecessary costs
on registrants, particularly small-business registrants. On the other
hand, quantitatively, the Department does not know how many
registrants, let alone how many Tiers 1 registrants, are small
businesses. Nor does it know their average sales or revenues. The
Department does not collect any of this information. Moreover, North
American Industry Classification System (NAICS) codes do not provide
suitable estimates as there are many industry codes that may have
certain companies become registrants based on their activities, and not
based on any one or several codes. Consequently, estimating the impact
of lower registration fees for such entities on DDTC's necessary
revenues and operating budget is not possible. Despite the quantitative
uncertainty and risk, the qualitative benefits and the chance to assist
some small businesses outweighed the costs to DDTC when the scope of
that assistance could be reasonably targeted. To that end, the $500
registration fee-discount petition process introduced above for Tier 1
registrants whose fees equal 1 percent or more of their total revenue
in a given year is a way that the Department could mitigate against the
burdens that come from the registration fee increase. Tier 1
registrants who receive this discount would end up with a registration
fee increase of $250 more, or 11.1 percent more, than their current
registration fee, which was last adjusted sixteen years ago in
September 2008. The $500 registration fee discount would be 16.67
percent less than the usual Tier 1 registration fee this rule
establishes. Because of the unknown volume and effect of this discount,
the Department will offer the petition process for one year; however,
based on how it affects the budget, the Department will reevaluate
whether it may continue the process in future years. Additionally, a
further-out delayed effective date until January 2025 for the new
registration fee structure was part of the Department's benefit-cost
analysis and was done so as to give more lead time to entities to plan
for new costs.
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, the requirements of Executive Order 13175 do
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.
Signing Authority
The Under Secretary, Arms Control and International Security,
Bonnie D. Jenkins, having reviewed and approved this document, has
delegated the authority to electronically sign this document to Stanley
L. Brown, Acting Assistant Secretary, Bureau of Political-Military
Affairs, for purposes of publication in the Federal Register.
List of Subjects
22 CFR Part 122
Arms and munitions, Exports, Reporting and recordkeeping
requirements.
22 CFR Part 129
Arms and munitions, Brokers, Exports, Technical assistance.
For the reasons discussed in the preamble and under the authority
of 22 U.S.C. 2778, the Department of State amends title 22, chapter I,
subchapter M, parts 122 and 129 of the Code of Federal Regulations as
follows:
PART 122--REGISTRATION OF MANUFACTURERS AND EXPORTERS
0
1. The authority citation for part 122 continues to read as follows:
Authority: Sections 2 and 38, Pub. L. 90-629, 90 Stat. 744 (22
U.S.C. 2752, 2778); 22 U.S.C. 2651a; E.O. 13637, 78 FR 16129.
0
2. Amend Sec. 122.1 by revising the section heading and adding a
heading to paragraph (a) to read as follows:
Sec. 122.1 Registration: requirements, exemptions, and purpose.
(a) Requirement to register. * * *
* * * * *
0
3. Revise Sec. 122.2 to read as follows:
Sec. 122.2 Registration: submission of registration statement,
certification, frequency, renewal, and lapse.
(a) Submission of registration statement. An intended registrant
must submit a Statement of Registration (Department of State form DS-
2032) to the Office of Defense Trade Controls Compliance by following
the electronic filing instructions available on the Directorate of
Defense Trade Controls website at <a href="http://www.pmddtc.state.gov">www.pmddtc.state.gov</a>. The Statement
of Registration may include subsidiaries and affiliates when more than
50 percent of the voting securities are owned by the registrant, or the
subsidiaries and affiliates are otherwise controlled by the registrant
(see Sec. 120.66 of this subchapter). Registrants may not establish
new entities for the purpose of reducing registration fees. The
Statement of Registration must:
(1) Be signed by a U.S. person senior officer (e.g., chief
executive officer,
[[Page 99085]]
president, secretary, partner, member, treasurer, general counsel) who
has been empowered by the intended registrant to sign such documents;
and
(2) Include documentation that demonstrates the registrant is
incorporated or otherwise authorized to do business in the United
States.
(b) Statement of Registration Certification. The Statement of
Registration of the intended registrant shall include a certification
by an authorized senior officer of the following:
(1) Whether the intended registrant or its parent, subsidiary, or
other affiliate listed in the Statement of Registration, or any of its
chief executive officers, presidents, vice presidents, secretaries,
partners, members, other senior officers or officials (e.g.,
comptroller, treasurer, general counsel), or any member of the board of
directors of the intended registrant, or of any parent, subsidiary, or
other affiliate listed in the Statement of Registration:
(i) Has ever been indicted or otherwise charged (e.g., charged by
criminal information in lieu of indictment) for or has been convicted
of violating any U.S. criminal statutes enumerated in Sec. 120.6 of
this subchapter or violating a foreign criminal law on exportation of
defense articles where conviction of such law carries a minimum term of
imprisonment of greater than 1 year; or (ii) Is ineligible to contract
with, or to receive a license or other approval to import defense
articles or defense services from, or to receive an export license or
other approval from, any agency of the U.S. Government; and
(2) Whether the intended registrant is foreign owned or foreign
controlled (see Sec. 120.65 of this subchapter). If the intended
registrant is foreign owned or foreign controlled, the certification
shall include an explanation of such ownership or control, including
the identities of the foreign person or persons who ultimately own or
control the registrant. This requirement applies to a registrant who is
a U.S. person and is owned or controlled by a foreign person. It also
applies to a registrant who is a foreign person and is owned or
controlled by a foreign person from the same country or a foreign
person from another country.
(c) Incomplete registration submission. The Directorate of Defense
Trade Controls will notify the registrant if the Statement of
Registration is incomplete either by notifying the registrant of what
information is required or through the return of the entire
registration package.
(d) Frequency. A person who is required to register and pay a
registration fee must renew the registration and pay a registration fee
on an annual basis after initial registration.
(e) Renewal of registration. A registrant must submit its request
for registration renewal at least 30 days but no earlier than 60 days
prior to the expiration date. Notice of the fee due for the next year's
registration will be sent to the registrant of record at least 60 days
prior to its expiration date.
(f) Lapse in registration. A registrant who fails to renew a
registration and, after an intervening period, seeks to register again
must pay registration fees for any part of such intervening period
during which the registrant engaged in the business of manufacturing or
exporting defense articles or defense services.
0
4. Revise Sec. 122.3 to read as follows:
Sec. 122.3 Registration fees.
(a) Registration fee. A person who is required to register must
submit payment of a fee following the payment guidelines available on
the Directorate of Defense Trade Controls website at
<a href="http://www.pmddtc.state.gov">www.pmddtc.state.gov</a>. The fee to be paid shall be one of the following:
(1) Tier 1. The first tier is a set fee of $3,000 per year. This
applies to new registrants. It also applies to those who are renewing
their registrations and for whom the Department did not issue a
favorable determination on a license application or other request for
authorization during the 12-month period ending 90 days prior to the
expiration of the current registration.
(2) Tier 2. The second tier is a set fee of $4,000 for registrants
renewing their registrations who have submitted license applications or
other requests for authorization and received five or fewer favorable
determinations during the 12-month period ending 90 days prior to the
expiration of their current registration.
(3) Tier 3. The third tier is a calculated fee for registrants who
have submitted license applications or other requests for authorization
and received more than five favorable determinations during the 12-
month period ending 90 days prior to the expiration of their current
registration. For these registrants, the fee calculation is $4,000 plus
$1,100 times the total number of favorable determinations over five.
(b) Website, discounts, and further guidance. Information on
certain discounts for registrants who are wholly exempt from income tax
pursuant to 26 U.S.C. 501(c)(3), and for Tier 3 registrants who are
low-value exporters or temporary importers are available on the
Directorate of Defense Trade Controls website at <a href="http://www.pmddtc.state.gov">www.pmddtc.state.gov</a>
by selecting ``Conduct Business'' on the top heading bar, then
selecting ``Registration'' from the left menu bar, and finally
selecting ``Payment of Registration'' from the subsequent left menu
bar. Other guidance and information relevant to the payment of
registration fees is also available on the website.
PART 129--REGISTRATION AND LICENSING OF BROKERS
0
5. The authority citation for part 129 continues to read as follows:
Authority: Section 38, Pub. L. 104-164, 110 Stat. 1437, (22
U.S.C. 2778); E.O. 13637, 78 FR 16129.
Sec. 129.8 [Amended]
6. Amend Sec. 129.8, in the first sentence of paragraph (b)(1), by
removing the text ``and a fee following the fee guidelines available on
the Directorate of Defense Trade Controls website at
<a href="http://www.pmddtc.state.gov">www.pmddtc.state.gov</a>.'' and adding in its place ``and the Tier 1 fee
specified in Sec. 122.3(a)(1) of this subchapter, regardless of how
many favorable determinations the person received during the 12-month
period ending 90 days prior to the expiration of their current
registration.''
Stanley L. Brown,
Acting Assistant Secretary, Bureau of Political-Military Affairs,
Department of State.
[FR Doc. 2024-29032 Filed 12-6-24; 4:15 pm]
BILLING CODE 4710-25-P
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