International Traffic in Arms Regulations: U.S. Munitions List Categories I, II, and III

Published date23 January 2020
Citation85 FR 3819
Record Number2020-00574
SectionRules and Regulations
CourtState Department
Federal Register, Volume 85 Issue 15 (Thursday, January 23, 2020)
[Federal Register Volume 85, Number 15 (Thursday, January 23, 2020)]
                [Rules and Regulations]
                [Pages 3819-3833]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-00574]
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                DEPARTMENT OF STATE
                22 CFR Parts 121, 123, 124, 126, and 129
                [Public Notice: 10603]
                RIN 1400-AE30
                International Traffic in Arms Regulations: U.S. Munitions List
                Categories I, II, and III
                AGENCY: Department of State.
                ACTION: Final rule.
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                SUMMARY: The Department of State (the Department) amends the
                International Traffic in Arms Regulations (ITAR) to revise Categories
                I--firearms, close assault weapons and combat shotguns, II--guns and
                armament, and III--ammunition/ordnance of the U.S. Munitions List
                (USML) to describe more precisely the articles that provide a critical
                military or intelligence advantage or, in the case of weapons, perform
                an inherently military function and thus warrant export and temporary
                import control on the USML. These revisions complete the initial review
                of the USML that the Department began in 2011. Items not subject to the
                ITAR or to the exclusive licensing jurisdiction of any other set of
                regulations are subject to the Export Administration Regulations.
                DATES: This final rule is effective March 9, 2020.
                FOR FURTHER INFORMATION CONTACT: Sarah Heidema, Office of Defense Trade
                Controls Policy, Department of State, telephone (202) 663-2809; email
                [email protected]. ATTN: Regulatory Change, USML Categories
                I, II, and III.
                SUPPLEMENTARY INFORMATION: The Directorate of Defense Trade Controls
                (DDTC), U.S. Department of State, administers the International Traffic
                in Arms Regulations (ITAR) (22 CFR parts 120 through 130). On May 24,
                2018, DDTC published a proposed rule, 83 FR 24198, for public comment
                regarding proposed revisions to Categories I, II, and III of the ITAR's
                U.S. Munitions List (USML) (22 CFR 121.1). After review of received
                comments and with the revisions to the proposed rule further described
                below, DDTC now publishes this final rule to amend the ITAR.
                 The articles and related technical data subject to the jurisdiction
                of the ITAR, i.e., ``defense articles,'' are identified on the USML.
                With few exceptions, items not subject to the export control
                jurisdiction of the ITAR are subject to the jurisdiction of the Export
                Administration Regulations (EAR, 15 CFR parts 730 through 774, which
                includes the Commerce Control List (CCL) in Supplement No. 1 to part
                774), administered by the Bureau of Industry and Security (BIS), U.S.
                Department of Commerce. Both the ITAR and the EAR impose license
                requirements on exports and reexports. Items not subject to the ITAR or
                to the exclusive licensing jurisdiction of any other set of regulations
                are subject to the EAR. The Department of Commerce is publishing a
                companion rule in this edition of the Federal Register.
                 Pursuant to section 38(a)(1) of the Arms Export Control Act (AECA),
                all defense articles controlled for export or import are part of the
                USML under the AECA. All references to the USML in this rule, however,
                are to the list of AECA defense articles that are controlled for
                purposes of export or temporary import pursuant to the ITAR, and not to
                the list of AECA defense articles on the United States Munitions Import
                List (USMIL) that are controlled by the Bureau of Alcohol, Tobacco,
                Firearms and Explosives (ATF) for purposes of permanent import under
                its regulations at 27 CFR part 447. References to the USMIL are to the
                list of AECA defense articles controlled by ATF for purposes of
                permanent import.
                 Section 38(b)(1)(A)(ii) of the AECA, requires, with limited
                exceptions, registration of persons who engage in the business of
                brokering activities with respect to the manufacture, export, import,
                or transfer of any defense article or defense service designated by the
                President as such under section 38(a)(1) and licensing for such
                activities. Through Executive Order 13637, the President delegated the
                responsibility for registration and licensing of brokering activities
                to the Department of State with respect to defense articles or defense
                services controlled either for purposes of export by the Department of
                State or for purposes of permanent import by ATF. Section 129.1 of the
                ITAR states this requirement. As such, all defense articles described
                in the USMIL or the USML are subject to the brokering controls
                administered by the U.S. Department of State in part 129 of the ITAR.
                The transfer of jurisdiction from the ITAR's USML to the EAR's
                [[Page 3820]]
                CCL for purposes of export controls does not affect the list of defense
                articles controlled on the USMIL under the AECA for purposes of
                permanent import or brokering controls for any brokering activity,
                including facilitation in their manufacture, export, permanent import,
                transfer, reexport, or retransfer. This rule adds two new paragraphs,
                (b)(2)(vii) and (viii), to Sec. 129.2 to update the enumerated list of
                actions that are not brokering. This change is a conforming change and
                is needed to address the transfer from the USML to the CCL of USMIL
                defense articles that remain subject to the brokering controls, and to
                ensure that the U.S. government does not impose a double licensing
                requirement on the export, reexport, or retransfer of such items
                subject to the EAR or continue to require registration with the
                Department solely based on activities related to the manufacture of
                these items.
                 The Department of State is engaged in an effort, described more
                fully below, to revise the USML so that its scope is limited to those
                defense articles that provide the United States with a critical
                military or intelligence advantage or, in the case of weapons, have an
                inherently military function. The Department has undertaken these
                revisions pursuant to the President's delegated discretionary statutory
                authority in section 38(a)(1) of the AECA to control the import and
                export of defense articles and defense services in furtherance of world
                peace and the security and foreign policy of the United States and to
                designate those items which constitute the USML. The Department
                determined that the articles in USML Categories I, II, and III that are
                removed from the USML under this final rule do not meet this standard,
                including many articles that are widely available in retail outlets in
                the United States and abroad (such as many firearms previously
                described in Category I, paragraph (a), including, for example, a .22
                caliber rifle).
                 The descriptions below describe the status of the subject
                categories of the USML and CCL as of the effective date of this rule
                and the companion rule published by the Department of Commerce in this
                Federal Register issue. Any reference in the preamble to this final
                rule to transfer from the USML to the CCL reflects the combined effects
                of removal of the defense article from the controls of the ITAR by
                virtue of the removal of an item (i.e., enumerated control text) from
                the USML by this rule and the corresponding adoption of the former
                defense article as an item subject to the EAR by action of the
                companion rule. Comments regarding the overall rule are addressed
                immediately below, while comments specific to a Category or amended
                section of the ITAR are addressed in the relevant discussion of
                revisions to Categories I, II, or III, or in the discussion under the
                title of ``Conforming ITAR Changes.''
                Comments of General Applicability
                 The Department believes that a restatement of the overall
                principles behind the multi-year review of the USML and the efforts to
                better harmonize the ITAR and the EAR and the larger U.S. government's
                export control system is applicable to many of the comments received
                and to the reasoning behind this rule. Therefore, before addressing
                individual comments, the Department reiterates that it, along with its
                interagency partners, is engaged in a years-long effort to revise the
                USML to limit its scope to those items that provide the United States
                with a critical military or intelligence advantage or, in the case of
                weapons, perform an inherently military function. Review of the USML is
                statutorily required by section 38(f) of the AECA, and the Department
                conducts this review in accordance with, and in full recognition of,
                the President's authority, conferred in section 38(a) of the Act, to
                control the import and export of defense articles and defense services
                in furtherance of world peace and the security and foreign policy of
                the United States, and to designate those items that constitute the
                USML. In connection with this effort, the Department has published 26
                final, or interim final, rules revising eighteen of the twenty-one USML
                categories, removing less sensitive items from the USML. While a wide
                range of interagency stakeholders review and clear the Federal Register
                notices that revise the USML, the Department works particularly closely
                with the Departments of Defense and Commerce to solicit their views on
                the appropriate composition of the USML. As required by Executive Order
                13637, the Department obtains the concurrence of the Secretary of
                Defense for designations, including changes in designations, of items
                or categories of items that are defense articles and defense services
                enumerated on the USML. The engagement with the Department of Commerce
                is further intended to ensure that the jurisdictional posture of a
                given item is clear, and that the application of ITAR or EAR controls
                to that item can be discerned and understood by the public.
                 The Department underscores that this rule constitutes an important
                part of a nine-year program of revisions that has streamlined the USML.
                From the beginning, the Department has repeatedly stated its goals for
                that program (see e.g., 76 FR 68694 (Nov. 7, 2011), 76 FR 76097 (Dec.
                6, 2011), 80 FR 11313 (Mar. 2, 2015), 82 FR 4226 (Jan. 13, 2017)).
                First, that it is seeking to better focus its resources on protecting
                those articles and technologies that provide the United States with a
                critical military or intelligence advantage. As applied to this rule,
                for example, firearms and firearms technology that are otherwise
                readily available do not provide such an advantage, whereas an M134
                Minigun or the next generation squad automatic rifle continues to
                warrant USML control even if there is some limited civil availability
                for either. Second, to resolve jurisdictional confusion between the
                ITAR and EAR among the regulated community through revision to ``bright
                line'' positive lists. Third, to provide clarity to the regulated
                community thereby making it easier for exporters to comply with the
                regulations and enable them to compete more successfully in the global
                marketplace. Finally, to develop a regulatory system that supports
                enhanced interoperability between the United States and its allies and
                partners and thereby better supports our ability to address shared
                security challenges.
                 With respect to revisions of Categories I-III, the review was
                focused on identifying the defense articles that are now controlled on
                the USML that are either (i) inherently military and otherwise warrant
                control on the USML or (ii) if of a type common to non-military
                firearms applications, possess parameters or characteristics that
                provide a critical military or intelligence advantage to the United
                States. If a defense article satisfies one or both of those criteria,
                it remained on the USML. For example, while the U.S. military supplies
                some of its service members with sidearms for military use, a sidearm
                also has many uses outside of the military, such that its function is
                not inherently military and therefore it does not warrant control on
                the USML. Alternatively, squad automatic weapons do not generally have
                such non-military uses and remain controlled on the USML in this final
                rule. Any single non-military use, however, does not negate such a
                weapon's inherently military function. In summary, the Department
                analyzes the patterns, both current and anticipated, of use and
                availability of the defense articles and the utility they provide to
                the U.S. military or intelligence community to inform the ultimate
                determination as to whether control is merited on the USML.
                 The Department recognizes the sensitivities and foreign policy
                implications associated with the sale
                [[Page 3821]]
                and export of small arms, light weapons, and associated equipment and
                ammunition as expressed in the President's National Security Policy
                Memorandum Regarding U.S. Conventional Arms Transfer Policy of April
                19, 2018 (Conventional Arms Transfer Policy). Those sensitivities and
                foreign policy implications will continue to be addressed through the
                licensing and enforcement requirements of the Department of Commerce.
                All export license applications for the items transitioning to Commerce
                jurisdiction are subject to review by the interagency, specifically the
                Departments of State, Defense, and Energy, as appropriate. The
                Department will continue to advance its foreign policy mission by
                reviewing all license applications submitted to the Department of
                Commerce for the export of firearms and related technology.
                 Multiple commenters took issue with the proposed transfer from the
                USML to the CCL of weapons that the Department determined, in
                conjunction with its interagency partners, are not inherently for
                military end-use, citing the fact that military and law enforcement
                personnel regularly use them. As previously noted, the fact that a
                military uses a specific piece of hardware is not a dispositive factor
                when determining whether it has an inherently military function. Given
                that the majority of the items referenced in these comments that will
                transfer to the CCL through this rule are widely available in retail
                outlets in the United States and abroad, and widely utilized by the
                general public in the United States, it is reasonable for the
                Department to determine that they do not serve an inherently military
                function, absent specific characteristics that provide military users
                with significantly enhanced utility, such as automatic weapons, sound
                suppressors, and high capacity magazines.
                 Several commenters disputed that the U.S. market should be the
                basis for assessing the commercial availability of firearms, as this is
                not the market to which the proposed rule would be directed. The
                Department recognizes that there are variations in commercial
                availability of firearms not only between nations, but also within the
                domestic market itself; however, this variation in availability does
                not overcome the Department's assessment that the subject firearms do
                not provide a critical military or intelligence advantage such that
                they warrant control under the ITAR. In addition, all exports of
                firearms are subject to the laws of the importing country, and the U.S.
                government does not issue licenses for exporters to ship firearms to
                countries where the end-use is illegal.
                 Several commenters predicted that the rule will make it easier for
                foreign manufacturers to obtain U.S.-origin components and proprietary
                technology, thereby causing U.S. firearms manufacturers to lose global
                market share. The Department refers the commenters to the above-stated
                objectives of this review effort, which include making it easier for
                exporters to comply with export control regulations and enabling them
                to compete more successfully in the global marketplace. The Department
                further notes that this rule is expected to provide certain key
                advantages that will substantially benefit domestic manufacturers by:
                (1) Amending the regulatory burden on the U.S. commercial firearms and
                ammunition industry; (2) clarifying the regulatory requirements for
                independent gunsmiths; and (3) enabling foreign manufacturers to source
                from small- and medium-sized U.S. companies more easily.
                 Several commenters predicted that this rule will diminish the
                United States' ability to set global normative standards for arms
                transfers and non-proliferation. The Department strongly disagrees and
                remains fully committed to the goals outlined in the AECA. In
                particular, the Department takes seriously its responsibility to
                implement the AECA's declaration that: ``It shall be the policy of the
                United States to exert leadership in the world community to bring about
                arrangements for reducing the international trade in implements of war
                and to lessen the danger of outbreak of regional conflict and the
                burdens of armaments'' (22 U.S.C. 2751). The Department will continue
                to meet this responsibility, in part, by reviewing export license
                applications for items subject to the EAR that were formerly controlled
                by the ITAR, including those on the Wassenaar Arrangement on Export
                Controls for Conventional Arms and Dual-Use Goods and Technologies
                (Wassenaar Arrangement) control lists. The Department will continue to
                take into account the considerations of Section 3 of the Conventional
                Arms Transfer Policy, such as the national security and foreign policy
                interests of the United States, when making arms transfer decisions,
                both for firearms that remain subject to the ITAR and firearms that are
                subject to the EAR.
                 Other commenters suggested that this rule contravenes international
                commitments the United States has made through mechanisms such as the
                Wassenaar Arrangement. The transfer of the concerned items to the CCL
                does not contravene U.S. international commitments, as the U.S.
                government will continue to apply a high level of control to these
                items and require U.S. government authorization for all exports of
                firearms and major components.
                 Multiple commenters raised concerns about the role and function of
                the Department of Commerce regarding the items that are transferred
                from the USML to the CCL. Some commenters expressed concerns that the
                Department of Commerce has neither the appropriate resources nor the
                appropriate expertise or mission to process associated applications for
                export. Other commenters asserted that because the Department of
                Commerce, unlike the Department of State, does not charge registration
                or licensing fees, the transfer to the CCL constitutes an unnecessary
                burden on taxpayers. As stated previously, the Department is engaged in
                an effort to revise the USML so that its scope is limited to those
                defense articles that warrant the U.S. government's highest level of
                export control because those defense articles offer a critical military
                or intelligence advantage or, in the case of weapons, have an
                inherently military function. The revisions implemented by the
                Department are necessary in order to focus our resources on such
                defense articles. This effort in general, and this rule in particular,
                were developed in close consultation with other departments and
                agencies, including the Department of Commerce. While the Department of
                Commerce is best suited to address the specific details of the
                implementation of its regulations and its allocation of appropriated
                resources, the Department is confident that the framework for control
                of firearms, and parts and components thereof, across the EAR and the
                ITAR is sufficient to address the concerns of the U.S government and
                does not diminish or damage the national security or foreign policy
                interests of the United States. The Department does not share the
                concerns expressed about the Department of Commerce's expertise or
                mission, and the Department further notes that the Department of
                Commerce has been licensing shotguns and shotgun ammunition, as well as
                various firearms-related articles such as sighting devices and a range
                of other similar articles and technologies, for decades. Additionally,
                the Department of Commerce has investigated and disrupted numerous
                diversion rings related to EAR-controlled items and will apply its
                years of export control enforcement expertise to the items this rule
                transfers to its jurisdiction.
                 Multiple commenters expressed a general concern that the transfer
                to the
                [[Page 3822]]
                CCL increases the risk of overseas trafficking, proliferation, or
                diversion. Multiple commenters also raised concerns about the
                Department of Commerce's end-use monitoring (EUM) capabilities and the
                impact this rule has on the Department of State's EUM programs. This
                rule does not deregulate the export of firearms. All firearms and major
                components being transferred to the CCL will continue to require export
                authorization from the Department of Commerce. Further, the Department
                of Commerce has both a robust EUM program and a law enforcement
                division sufficiently capable of monitoring foreign recipients'
                compliance with their obligations regarding the transfer, use, and
                protection of items on the CCL. Additionally, the Federal Bureau of
                Investigation and the Department of Homeland Security will continue to
                investigate and enforce criminal violations of the export control laws
                as appropriate. This rule also will not impact the Department's ability
                to execute the Blue Lantern EUM program required by section 40A of the
                AECA, 22 U.S.C. 2785. Finally, this rule will not affect existing
                federal or state public safety laws that address domestic criminal
                conduct.
                 Several commenters expressed concern that the Department of
                Commerce will not have access to the same databases and background
                information that the Department of State uses to evaluate license
                applications. Similarly, some commenters expressed concern that as a
                result of this rule some exporters will no longer be subject to U.S.
                government registration requirements, thereby depriving regulators of
                an important source of information and decreasing transparency and
                reporting regarding firearms exports. The Department considered these
                concerns and determined that the interagency license review process
                maintains appropriate oversight of the articles at issue. The
                Department of Commerce's export licensing requirements and process are
                calibrated both to the sensitivity of the article and the proposed
                destination. Additionally, all requests for export licenses for
                firearms remain subject to interagency review, including by the
                Department of State.
                 Several commenters suggested that the Department create a
                registration exemption or reduce registration fees for small volume
                non-exporting firearms manufacturers. Multiple commenters similarly
                suggested modifying ITAR Sec. 122.1 to include a minimum size
                requirement for registration. Modification of the requirements of part
                122 is outside the scope of this rulemaking; however, the Department
                highlights that the Department of Commerce does not have a registration
                requirement for manufacturers and exporters of the items under its
                jurisdiction. Therefore, gunsmiths that do not manufacture, export, or
                broker articles that remain subject to the ITAR after this rule's
                effective date will no longer need to determine if they are required to
                register under the ITAR. They may, however, still be required to comply
                with ATF licensing requirements. Any additional changes to the ITAR
                related to the registration requirement would be addressed in a
                separate rulemaking.
                 On the issue of registration, one commenter noted that as a result
                of this rule some U.S. manufacturers may no longer have to register
                with the Department of State and be subject to the requirements in ITAR
                Sec. 122.4(b) for advance notification of intended sales or transfers
                to foreign persons of ownership or control of the registrant. The
                commenter asserted that without the advance notification requirement
                foreign entities could potentially influence the sales and marketing
                activities of U.S. manufacturers in a manner that would be detrimental
                to U.S. national security. The Department notes in response that its
                regulatory authorities are limited to export-related activities for
                defense articles and services, and highlights that other federal
                regulatory regimes, such as the Committee on Foreign Investment in the
                United States, have the ability to address potential foreign ownership
                or control issues that may impact national security.
                 Multiple commenters expressed concerns that this rule would reduce
                congressional oversight of arms transfers since the Department of
                Commerce does not have to notify Congress of firearms sales in excess
                of $1 million as the Department of State does. The Department
                acknowledges those concerns and notes that those firearms that the U.S.
                government deemed through the interagency review process to warrant
                continued control under the ITAR as defense articles will remain
                subject to congressional notification requirements in conformity with
                section 36 of the AECA and Executive Order 13637.
                 A number of commenters suggested the proposed rule, if made final,
                may have a negative impact on human rights in foreign countries. As
                stated previously, the Department of Commerce will continue its
                longstanding end-use monitoring efforts, including vetting of potential
                end-users, to help prevent human rights abuses. Similarly, as part of
                the aforementioned continuing interagency review of export licenses for
                firearms, the Departments of Defense and State will review export
                license applications on a case-by-case basis for national security and
                foreign policy reasons, including the prevention of human rights
                abuses.
                 One commenter expressed concern that foreign law enforcement
                personnel in particular are at risk of having the transferred CCL items
                used against them. These concerns are mitigated by the fact that, as
                stated previously: (1) These articles remain subject to the Department
                of Commerce's EUM programs that vet potential end-users of concern, and
                (2) license applications for CCL items will be approved only if their
                end-use is permitted under the laws of the importing country.
                 Multiple commenters expressed concerns that, as a result of the
                revision of the USML to remove items from Category I, the rule will
                also remove from the USML the technical data directly related to these
                items, thereby lifting a purported block on the domestic dissemination
                of computer-aided design (CAD) files for the three-dimensional (3-D)
                printing or CAD-enabled production of firearms. Commenters suggested
                that use of these files in the United States could lead to a potential
                increase in the number of unserialized firearms in circulation, or the
                manufacture or distribution of a non-metal firearm otherwise prohibited
                under federal law. Some commenters also expressed concerns that foreign
                dissemination of such files could provide adversaries with a military
                or intelligence advantage.
                 The Department considered the concerns of the commenting parties.
                While the Department concluded that these concerns do not warrant
                modification to the controls on the USML, the Department of Commerce,
                as described below, determined that certain modifications to its
                companion rule are warranted to address similar concerns expressed by
                commenters to its proposed rule.
                 As an initial matter, the Department reiterates that the scope of
                this rulemaking is limited to the Department's delegated authority
                under the AECA. Neither the AECA nor ITAR expressly provide the
                Department with authority to regulate the distribution of technical
                data in the United States to U.S. persons. This applies to all
                technical data subject to the ITAR, regardless of whether it is for the
                manufacture of ITAR-controlled firearms or any other defense article.
                Furthermore, the Department notes that the AECA does not provide the
                [[Page 3823]]
                Department with the authority to (1) prohibit the domestic manufacture
                or possession of firearms, whether produced from CAD files with a 3-D
                printer or otherwise, or (2) regulate the domestic distribution among
                U.S. persons of any defense article, including firearms. Domestic
                activities that do not involve release to foreign persons are generally
                left to other federal agencies--and the states--to regulate. The
                manufacture, import, sale, shipment, delivery, transfer, receipt, or
                possession of firearms that are undetectable as provided in federal law
                is a federal crime, punishable by fine and/or up to five years in
                prison. 18 U.S.C. 924(f). Among other statutes, the Undetectable
                Firearms Act of 1988 prohibits the manufacture, possession, sale,
                import, shipment, delivery, receipt, or transfer of undetectable
                firearms. See 18 U.S.C. 922(p).
                 When determining whether nonautomatic and semi-automatic firearms
                to .50 caliber (12.7mm) inclusive should be removed from the USML, and
                the technical data directly related thereto, the Department evaluated
                whether the hardware and its directly related technical data would
                confer a critical military or intelligence advantage or whether they
                are inherently military based on their function. The Department made a
                determination that neither the hardware nor its directly related
                technical data met these criteria. In response to the specific comments
                related to the potential uses for CAD files that can be used to 3-D
                print firearms, the Department confirms that it did consider the
                potential uses for these CAD files in its review. The Department
                determined, in consultation with the Department of Defense and other
                interagency partners, that these CAD files do not confer a critical
                military or intelligence advantage and are not inherently military
                based on their function. This determination took into account the
                effect that a transfer to the CCL would have on the national security
                and foreign policy interests of the United States, consistent with the
                AECA and ITAR, to include the degree to which it would limit the
                ability of a foreign person to obtain CAD files, publish them on the
                internet, and subsequently manufacture CCL-controlled firearms,
                including those that are unserialized or manufactured from a non-
                metallic material.
                 Although the Department determined that such hardware and its
                directly related technical data do not confer a critical military or
                intelligence advantage or perform an inherently military function for
                purposes of maintaining inclusion on the USML, the Department agrees
                with the Department of Commerce that maintaining controls over such
                exports under the EAR remains in the national security and foreign
                policy interests of the United States. The Department of Commerce has
                recognized in its companion rule that concerns raised over the
                possibility of widespread and unchecked availability of 3-D printing
                technology and software, the lack of government visibility into
                production and use, and the potential damage to U.S. counter-
                proliferation efforts warrant making certain technology and software
                capable of producing firearms subject to the EAR when posted on the
                internet, as described in the Department of Commerce's companion rule.
                The Department agrees that EAR controls on technology and software for
                firearms previously controlled in USML Category I(a)--and for all other
                items this rule removes from the USML--sufficiently address the U.S.
                national security and foreign policy interests relevant to export
                controls. In sum, while Commerce controls over such items and
                technology and software are appropriate, continued inclusion of them on
                the USML is not.
                 This rule is consistent with broader USML to CCL review efforts.
                During the multi-year process of reviewing and revising the USML, the
                Department has exercised its discretion, authorized by delegation in
                section 38(a)(1) of the AECA, to determine which national security and
                foreign policy interests warrant consideration within the context of
                export controls. Under its current standard, the Department assesses
                the national security and foreign policy interests against factors,
                such as those discussed above and in other Federal Register notices, in
                assessing whether items merit inclusion on the USML; this analysis has
                resulted in a number of items previously included in other USML
                categories being transferred to the EAR (see, e.g., 78 FR 22740 (Apr.
                16, 2013), 81 FR 70340 (Oct. 12, 2016)). Through this rule, the
                Department is now applying this standard to Categories I, II, and III
                of the USML. As previously noted, the AECA requires periodic review of
                the USML, and the Department will continue to evaluate technological
                advancements, including those related to 3-D printing, to inform future
                revisions to the USML.
                 One commenter predicted that the rule's effect of removing
                licensing requirements for temporary imports of the items removed from
                the USML would create another channel for criminal elements to obtain
                weapons in the United States. The Department did not receive any
                further information to support the assertion that the hypothetical
                diversion of temporary imports of firearms from foreign countries would
                appreciably bolster criminal access to such items. The Department
                additionally notes that other departments and agencies possess
                enforcement capabilities relevant to criminal acquisition of firearms
                within the United States.
                 One commenter recommended coordinating proposed changes with ATF so
                that the corresponding changes are made to the U.S. Munitions Import
                List (USMIL) at the same time, which would prevent businesses from
                having to consult both the USML and USMIL when deciding whether a
                transaction involves brokering. The USML and the USMIL are separate
                lists of AECA defense articles with both shared as well as different
                AECA objectives, and as such warrant the retention as separate lists
                for AECA defense article and control purposes.
                Effective Date
                 The Department has determined that the appropriate effective date
                for this final rule is March 9, 2020. The Department notes that the
                Department has previously articulated a policy of providing a 180-day
                transition period between the publication of the final rule for each
                revised USML category and the effective date of the transition to the
                CCL for items that will undergo a change in export jurisdiction. See 78
                FR 22,740, 22,747 (Apr. 16, 2013). In addition, some commenters
                suggested that the final rule should have a delayed effective date or a
                split effective date for companies of a particular size. However, in
                consultation with interagency partners, the Department has determined
                that, based on the nature of the items at issue, a 180-day transition
                period or a delayed or a split effective date for certain companies is
                not necessary.
                Revision of Category I
                 This final rule renames Category I as ``USML Category I--Firearms
                and Related Articles'' (formerly ``Category I--Firearms, Close Assault
                Weapons and Combat Shotguns'') and amends the category to control only
                defense articles that are inherently military or that are not otherwise
                widely available for commercial sale. In particular, the amended
                category does not include non-automatic and semi-automatic firearms to
                .50 caliber (12.7mm) inclusive, formerly controlled under paragraph
                (a), and all of the parts, components, accessories, and attachments for
                those
                [[Page 3824]]
                articles. Such items are subject to the new controls in Export Control
                Classification Numbers 0A501, 0A502, 0A503, 0A504, 0A505, 0B501, 0B505,
                0D501, 0D505, 0E501, 0E502, 0E504, and 0E505, which also includes the
                items moved from Category II described below. Such controls in Category
                0 of the CCL are being published in the companion rule by the
                Department of Commerce.
                 Paragraph (a) of amended USML Category I covers firearms that fire
                caseless ammunition. Paragraph (b) continues to cover fully automatic
                firearms, which are firearms that shoot more than one bullet by a
                single function of the trigger, to .50 caliber (12.7mm) inclusive.
                Paragraph (c) covers firearms specially designed to integrate fire
                control, automatic tracking, or automatic firing systems, and all
                weapons previously described in paragraph (c) that remain on the USML
                are now covered by paragraphs (a), (b) or (c) of this category or by
                Category II. Specially designed parts and components for the defense
                articles that remain in paragraph (c) are moved to Category I paragraph
                (h) of this final rule. This change from the proposed rule is necessary
                to allow for the designation of the end-item defense articles in
                paragraph (c) as Significant Military Equipment (SME) whereas the
                specially designed parts and components therefor are not. Paragraph (d)
                covers fully automatic shotguns. Paragraph (e) continues to cover
                silencers, mufflers, and sound suppressors. However, for the same
                reason as paragraph (c) above, specially designed parts and components
                for those defense articles in paragraph (e) are moved to paragraph (h)
                so as not to be designated SME. Flash suppressors are removed from
                paragraph (e) and are transferred to the CCL. The text of paragraph (f)
                is removed and the subsection is reserved, thereby removing as a
                controlled item ``[r]iflescopes manufactured to military
                specifications.'' However, any firearms sighting device (including
                riflescopes) that fits within the controls in USML Category XII (see
                e.g., XII(c)(2) regarding night vison or infrared capabilities) remains
                subject to the ITAR under that category. Other riflescopes are
                transferred to the CCL. Paragraph (g) continues to cover barrels,
                receivers (frames), bolts, bolt carriers, slides, or sears, specially
                designed for the firearms that remain in Category I. Paragraph (h)
                covers high capacity (greater than 50 rounds) magazines, and parts and
                components to convert a semi-automatic firearm into a fully automatic
                firearm, and accessories or attachments specially designed to
                automatically stabilize aim (other than gun rests) or for automatic
                targeting. In a change from the proposed rule, this final rule
                paragraph (h) includes a new paragraph (h)(3) to control parts and
                components specially designed for defense articles in (c) and (e) as
                described above. This addition necessitated the renumbering of proposed
                paragraph (h)(3) to (h)(4) in this final rule. Paragraph (i) covers the
                technical data and defense services directly related to all of the
                defense articles in the category as well as classified technical data
                directly related to items controlled in ECCNs 0A501, 0B501, 0D501, and
                0E501 and defense services using the classified technical data. This is
                a change from the proposed rule, in which defense articles in paragraph
                (c) were inadvertently omitted from the technical data paragraph.
                 This rule adds a new (x) paragraph to USML Category I, allowing
                ITAR licensing for all commodities, software, and technology subject to
                the EAR, provided those commodities, software, and technology are to be
                used in or with defense articles controlled in USML Category I and are
                described in the purchase documentation submitted with the license
                application.
                 The text of the note to Category I is removed and replaced with a
                note containing a slightly revised interpretation of the term
                ``firearm,'' (formerly included at (j)(1)) and to add interpretations
                of the terms ``fully automatic'' and ``caseless ammunition.''
                 Several commenters requested clarification regarding the proposed
                Note 1 to USML Category I. The Department determined that the control
                text of the category sufficiently describes the defense articles to be
                controlled, and, as a result, the final rule removes the proposed Note
                1 to Category I in order to avoid possible confusion.
                 One commenter recommended changes to the text of paragraph (b) in
                an effort to avoid potential overlap with other paragraphs in the
                category. The Department believes these changes are unnecessary because
                the control text adequately differentiates the controlled defense
                articles to allow for self-determination. If an exporter or
                manufacturer requires a definitive determination of category, they may
                submit a commodity jurisdiction request to DDTC.
                 Several commenters expressed concern about the designation of
                certain parts and components in USML Category I as SME. The Department
                recognizes these concerns, and, in response, the final rule revises the
                proposed rule by moving the specially designed parts and components for
                paragraphs (c) and (e) to (h) where they are not designated as SME.
                 Multiple commenters suggested that the rule should remove firearm
                sound suppressors (silencers) from paragraph (e) and transfer them to
                the CCL. The Department recognizes that sound suppressors (silencers)
                are sold commercially in some jurisdictions, often for use at ranges or
                for hunting in certain environments, although their availability in
                retail markets varies significantly within the United States as well as
                foreign countries. However, sound suppressors (silencers) provide the
                capability to muffle the sound of weapons fire, which can degrade the
                ability of an adversary to localize the source of the incoming rounds
                and return fire or raise an alarm. The Department has determined, in
                coordination with the interagency, that silencers continue to warrant
                control on the USML.
                 One commenter requested clarification regarding paragraph (g) and
                the barrels, receivers (frames), bolts, bolt carriers, slides, or sears
                that are common to semi-automatic and automatic firearms on the
                civilian market. The commenter noted that the lack of clarity arises
                from the difference between the control text in USML Category I(g) and
                Note 1 to Category I in the proposed rule. The commenter also requested
                clarification about which specially designed articles are controlled
                under this paragraph. The commenter's concerns can be resolved by
                applying the definition of ``specially designed'' in ITAR Sec.
                120.41(b)(3), as any article that is common to a non-automatic or
                semiautomatic firearm that is on the CCL (i.e., not on the USML) is not
                specially designed and thus is not subject to the ITAR (but is subject
                to the EAR).
                 One commenter suggested amending the Canadian exemptions located in
                ITAR Sec. 126.5 to allow exports of receivers and breech mechanisms
                under paragraph (g). The Department is not revising Supplement No. 1 to
                ITAR Sec. 126 or the provisions of the Canadian exemptions through
                this rulemaking. However, the Department is currently undertaking a
                review of Supplement No. 1 to ITAR Part 126 and any changes will be the
                subject of a separate rulemaking.
                 Multiple commenters suggested that paragraph (h)(1) under this rule
                should exclude high-capacity magazines, i.e., drums or magazines for
                firearms with a capacity of greater than 50 rounds. The Department
                recognizes that civilians can purchase magazines and drums with a
                [[Page 3825]]
                capacity of greater than 50 rounds; however, these high-capacity
                magazines provide an inherently military function and warrant continued
                control on the USML due to their utility in enabling effective use of
                automatic weapons and combat tactics.
                 One commenter requested clarification regarding paragraph (h)(3) in
                order to differentiate the terms ``automatic targeting'' and
                ``automatic tracking'' or ``automatic firing.'' However, the comment
                did not identify any specific confusion. The Department believes that
                the control text appropriately describes the capabilities that warrant
                control, so the final rule does not make any changes to this provision.
                 One commenter noted that the technical data and defense service
                control in paragraph (i) did not apply to USML Category I(c) and
                suggested that the Department include paragraph (c) in the list of
                paragraphs to which the technical data and defense service controls
                applies. This was an oversight and final rule paragraph (i) is revised
                to exclude the paragraph identifiers in the proposed rule. Excluding
                the paragraph identifiers clarifies that technical data and defense
                services for all USML Category I articles are controlled.
                Revision of Category II
                 This final rule revises USML Category II, covering guns and
                armament, establishing a bright line between the USML and the CCL for
                the control of these articles.
                 Most significantly, amended paragraph (j), controlling parts and
                components, is revised to enumerate the items controlled therein. In a
                change from the proposed rule explained below, proposed paragraph
                (j)(10) is revised to clarify that the control applies only to recoil
                systems specially designed to mitigate the shock associated with the
                firing process of guns integrated into air platforms. When reviewing
                proposed paragraph (j) for this final rule, the Department noted that
                proposed paragraphs (10) and (13) described related defense articles,
                as did proposed paragraphs (j)(9) and (j)(11). In order to keep related
                articles in consecutive paragraphs within the category, the Department
                reorganized the paragraphs such that the control text of paragraph (10)
                of the proposed rule is found at paragraph (14) of the final rule and
                the control text of paragraphs (9) and (11) of the proposed rule are
                found at paragraphs (10) and (9) of the final rule, respectively. In
                addition, a new paragraph (12) is added to (j) to clarify that systems
                and equipment for the defense articles in the category for programming
                ammunition are controlled on the USML. Where necessary, paragraphs are
                renumbered to accommodate movement of proposed paragraphs (j)(10) and
                (9) and the addition of new paragraph (12). The Note to proposed
                paragraph (j)(9) is also revised from the proposed rule to include
                reference to mounts for surface vessels and special naval equipment
                controlled in Category VI.
                 Amended paragraph (a) enumerates the items controlled in that
                paragraph. The item formerly covered in paragraph (c) (i.e., apparatus
                and devices for launching or delivering ordnance) is removed, and
                defense articles still warranting control on the ITAR are described in
                new paragraph (a)(4). A new paragraph (a)(5) is added for developmental
                guns and armaments funded by the Department of Defense and the
                specially designed parts and components of those items. The item
                formerly controlled in paragraph (f), (i.e., engines specifically
                designed or modified for the self-propelled guns and howitzers
                controlled in paragraph (a)), is removed from the USML and placed on
                the CCL in ECCN 0A606 pursuant to the companion rule. Tooling and
                equipment specifically designed or modified for the production of items
                controlled in USML Category II, formerly in paragraph (g), is also
                removed from the USML and transferred to the CCL in ECCN 0B602 through
                the Commerce rule. Test and evaluation equipment and test models,
                formerly in paragraph (h), is removed from the USML and transferred to
                the CCL in ECCN 0B602 through the Commerce rule. Certain autoloading
                systems formerly controlled in paragraph (i) are moved to paragraphs
                (j)(9) and components therefor to (j)(10) (paragraph (j)(11) of the
                proposed rule). In a change from the proposed rule explained below,
                final paragraph (j)(11) now contains a specific reference to
                ``ammunition feeder systems.''
                 This rule adds a new (x) paragraph to USML Category II, allowing
                ITAR licensing for all commodities, software, and technology subject to
                the EAR, provided those commodities, software, and technology are to be
                used in or with defense articles controlled in USML Category II and are
                described in the purchase documentation submitted with the application.
                 One commenter recommended defining the term ``gun'' as it is used
                in both the category title and in paragraph (a)(1). The control text in
                the proposed rule appropriately described the capabilities that warrant
                control, and so the final rule does not make any changes in this
                regard.
                 One commenter pointed out that U.S law classifies firearms as
                antique if they were made on or before 1898 and took issue with the
                usage of the year 1890 in Note 1 to paragraph (a). The Gun Control Act
                of 1968 does define antique firearms for domestic purposes, in part, as
                any firearm manufactured in or before 1898. See 18 U.S.C.
                921(a)(16)(A). However, as this rule is regarding the export of
                firearms, it uses the year 1890 in order for the United States to
                remain consistent with its international export control commitments
                under the Wassenaar Arrangement, which uses 1890 as the cutoff year to
                identify many firearms and armaments that are not on the control list.
                 One commenter requested clarification regarding what is considered
                to be part of the firing mechanisms listed in paragraph (j)(4) and
                inquired whether the rule controls electronic firing mechanisms. The
                language in the rule appropriately describes the capabilities that
                warrant control and confirms that the control does include electronic
                firing mechanisms.
                 One commenter requested a note be added to proposed paragraph
                (j)(9) (final paragraph (j)(10)) to clarify what constitutes an
                independently powered ammunition handling system and platform interface
                components. The control text appropriately describes the capabilities
                of concern that warrant control and confirms that an independently-
                powered ammunition handling system need not be external to the gun or
                platform for the control to apply.
                 One commenter expressed concern that proposed paragraphs (j)(9) and
                (j)(11) (final paragraphs (j)(10) and (j)(9), respectively) may capture
                the same parts and components and recommended deleting proposed
                paragraph (j)(11) if the paragraphs are redundant. These paragraphs are
                distinct, as proposed (j)(9) identifies certain components for the end-
                item ammunition handling system that are controlled and proposed
                (j)(11) controls the end-item independent ammunition handling system
                itself. Because these paragraphs are not redundant, the final rule
                retains both of them. The Department revised proposed paragraph (j)(11)
                (final paragraph (j)(9)) to clarify its scope in response to this
                comment.
                 Proposed paragraph (j)(10) (final paragraph (j)(14)) is revised in
                this final rule with language limiting recoil systems to those
                specially designed to mitigate the shock associated with the firing
                process of guns integrated into air platforms. This revision was made
                in response to a commenter who
                [[Page 3826]]
                highlighted that the language in the proposed rule would have
                controlled recoil systems solely due to end-use platform and not due to
                the performance capability.
                 One commenter suggested that the Department reconcile proposed
                paragraphs (j)(10) and (j)(13) (final paragraphs (j)(14) and (j)(13),
                respectively) to prevent an overlap in the control text. Proposed
                (j)(10) and (j)(13) are adequately differentiated to allow for self-
                determination. If an exporter or manufacturer requires a definitive
                determination of category, they may submit a commodity jurisdiction
                request to DDTC.
                 One commenter submitted a question about whether specific
                ammunition containers that are independent of a cannon system would be
                controlled under the proposed paragraph (j)(12) (final paragraph
                (j)(11)). Although absent a commodity jurisdiction request the
                Department cannot make a definitive determination, it is unlikely that
                the ammunition container is controlled because proposed paragraph
                (j)(12) requires that the ammunition container be specially designed
                for the gun or armament, not for the ammunition. The control text
                appropriately describes the capabilities that warrant control, and so
                the final rule does not make any changes to this provision.
                 One commenter also recommended adding clarifying language to
                proposed paragraph (j)(12) (final paragraph (j)(11)) regarding whether
                ``conveyor elements'' are intended to relate to large caliber
                ammunition or medium caliber ammunition. As the control is not limited,
                it applies to all such systems. To clarify the scope of the control,
                the Department adds ``ammunition feeder systems'' to the text of final
                paragraph (j)(11).
                Revision of Category III
                 This final rule renames Category III as ``USML Category III--
                Ammunition and Ordnance'' (formerly ``Category III--Ammunition/
                Ordnance'') and revises its content to establish a bright line between
                the USML and the CCL for the control of these articles and to be
                consistent with the changes to Category I.
                 Most significantly, paragraphs (a) and (d) are revised to remove
                broad catch-alls and enumerate the articles controlled therein. For
                example, paragraph (a), which controls ammunition for articles in USML
                Categories I and II, is amended to specifically list the ammunition
                that it controls. In a change from the proposed rule, paragraph (a)(7)
                regarding ammunition for automatic and superposed (or stacked) guns and
                firearms is revised to clarify the control text. A new paragraph
                (a)(10) is added for developmental ammunition funded by the Department
                of Defense and the parts and components specially designed for such
                developmental ammunition. In a change from the proposed rule, the SME
                designator is moved from paragraph (a) in its entirety to only those
                paragraphs of III(a) warranting control as SME and the SME designation
                is removed from paragraph (a)(10), to be consistent with the controls
                on developmental defense articles funded by the Department of Defense
                in other categories of the USML. Ammunition formerly controlled in
                paragraph (a) that is not now specifically enumerated in paragraph (a)
                or captured by paragraph (a)(10) is transferred to the CCL pursuant to
                the companion rule. Likewise, revised paragraph (d), which controls
                parts and components, enumerates the items it controls; those parts and
                components previously captured via the catch-all and not now enumerated
                are transferred to the CCL.
                 Additionally, paragraph (c) is removed and placed into reserve. The
                production equipment and tooling formerly controlled in that paragraph
                is now controlled by the CCL pursuant to the companion rule.
                 In a change from the proposed rule, the references to steel tipped
                ammunition, and hardened core or solid projectiles made of tungsten,
                steel, or beryllium copper alloys are moved from (d)(1) to paragraph
                (d)(6) for additional clarity.
                 This rule adds a new (x) paragraph to USML Category III, allowing
                ITAR licensing for all commodities, software, and technology subject to
                the EAR, provided those commodities, software, and technology are to be
                used in or with defense articles controlled in USML Category III and
                are described in the purchase documentation submitted with the
                application.
                 In addition, in this final rule, DDTC revised the format of the
                notes to Category III from the proposed rule in order to make them
                consistent with concluding notes to other categories (see, e.g., notes
                to Category VII). In place of three notes within one heading of ``Notes
                to Category III'' as in the proposed rule, this final rule identifies
                each clearly as Note 1, Note 2, and Note 3.
                 One commenter highlighted that the placement of the asterisk beside
                paragraph (a) in the proposed rule created inconsistencies with other
                USML category provisions concerning developmental defense articles
                funded by the Department of Defense (DoD). The Department agrees, and
                the final rule revises the category in order to clarify that DoD-funded
                developmental ammunition is not SME. In particular, the final rule adds
                a specific SME identifier to each relevant subcategory and removes one
                from paragraph (a)(10).
                 One commenter suggested removing paragraph (a)(2) on the grounds
                that the underlying commodity does not fundamentally change when it is
                incorporated into an ammunition link. The control appropriately
                identifies the object that warrants control (linked or belted
                ammunition) which are used primarily for automatic weapons.
                Consequently, the final rule makes no changes to the text of paragraph
                (a)(2).
                 One commenter suggested revising proposed paragraph (a)(4) to
                remove the language ``manufactured with smokeless powder'' on the
                grounds that the rule could be interpreted to mean caseless ammunition
                manufactured with anything besides smokeless powder, which is
                controlled on the CCL. The Department disagrees because the control
                text accurately describes the defense article to be controlled.
                Caseless ammunition that is not manufactured with smokeless powder is
                not controlled by the subcategory. The Department controls ammunition
                in paragraph (a)(4) because smokeless powder has higher energy than
                other propellants and is more readily adapted to a sustained fire.
                 One commenter suggested removing the articles under paragraphs
                (a)(5) and (a)(8) and transferring them to the CCL. The Department
                disagrees, as lightweight and railgun ammunition offer a significant
                military advantage because lightweight ammunition significantly
                improves battlefield activities and railguns are a uniquely military
                capability in which the United States enjoys a critical advantage, in
                part due to our projectiles, and therefore warrant control on the USML.
                 One commenter recommended revising paragraph (a)(6) to address the
                potential redundancy with (a)(1) and to clarify whether the ammunition
                control parameters in the paragraph are based on the pyrotechnic
                material, the tracer materials, or the specification that it must be
                able to be seen by night vision optical systems. While it is possible
                that there may be some overlap between these controls for specific
                articles, each control correctly identifies a capability that warrants
                control on the USML. To clarify the control text, the Department
                replaces the word ``and'' in paragraph (a)(6) of the proposed rule with
                ``or'' in this final rule to identify that these are separate articles.
                If an exporter or
                [[Page 3827]]
                manufacturer requires a definitive determination of category, they may
                submit a commodity jurisdiction determination request to DDTC.
                 One commenter highlighted that paragraph (a)(7) in the proposed
                rule could be interpreted to cover all ammunition for fully automatic
                firearms, which could take ammunition currently controlled by the
                Department of Commerce and change it into SME if for use in a fully
                automatic firearm. The Department notes this concern and has revised
                the control to limit the scope of the control to ammunition that is not
                used with semi or non-automatic firearms (i.e., firearms not on the
                USML).
                 One commenter suggested changing the description of ``primers'' in
                paragraph (d)(10) to ``cap type primers'' on the grounds that the
                provision as written is overly broad. The Department disagrees, as the
                final rule appropriately reflects the primers that warrant control on
                the USML. The final rule does not make any changes to this provision.
                 One commenter assessed that certain production equipment previously
                controlled on the USML would not be captured by the revised USML
                Category III or by the corresponding Department of Commerce rule. The
                Department of Commerce's companion rule to this final rule expands the
                relevant ECCNs 0B505.a as a control for all production equipment
                specially designed for USML Category III, and 0B501.e, for all
                production equipment specially designed for USML Category I.
                 One commenter expressed concern that paragraph (d)(1) appears to
                overlap with the control text in paragraphs (a)(1) and (6) and (d)(2)
                and (6). While it is possible that there may be some overlap between
                these controls for specific articles, each correctly identifies a
                capability that warrants control on the USML. To add additional
                clarity, the Department is removing the reference to steel tipped and
                core or solid projectiles made from tungsten, steel, or beryllium
                copper alloys, and addressing those fully in (d)(6). If an exporter or
                manufacturer requires a definitive determination of category, they may
                submit a commodity jurisdiction determination request to DDTC.
                 One commenter suggested deleting the word ``tracer'' from paragraph
                (d)(2) on the grounds that that would make the provision consistent
                with (d)(1). Because certain tracer shotgun shells are non-pyrotechnic
                and warrant control on the USML, no change is made in this final rule.
                 One commenter suggested deleting ``specially designed parts and
                components'' from paragraph (d)(4) on the basis that the language adds
                duplicative controls on parts that are also subject to the controlled
                parts in paragraphs (d)(7) and (d)(11). The Department believes that
                the paragraphs are not duplicative and the language appropriately
                describes the capabilities that warrant control, so the final rule does
                not make any changes to this provision.
                 One commenter recommended adding language to paragraph (d)(6) in
                the proposed rule to clarify whether the paragraph is intended to
                capture all armor piercing rounds. The Department did not adopt this
                recommendation, as the control text adopted in this rule provides
                objective criteria that more effectively identifies the ammunition
                types that warrant control on the USML.
                 Multiple commenters recommend revising paragraph (d)(7). One
                commenter suggested adding ``specially designed for items controlled in
                USML Category II'' to ensure that articles common to those used with
                non-USML items are not described. The Department agrees and made this
                change.
                 One commenter suggested modifying the wording in paragraph (d)(11)
                to capture all artillery and ammunition fuses and to delete ``specially
                designed parts therefor'' to align with bomb fusing wording in Category
                IV(h)(25). The control correctly identifies a capability warranting
                control on the USML; fuses and arming and safing devices for Category
                III articles cover a wider range of sensitive devices that provide the
                United States with a critical military advantage, separate and apart
                from the control in Category IV(h)(25), for fuses specific to that
                category, so the Department is not implementing any change to paragraph
                (d)(11).
                 One commenter noted that paragraph (e) controls technical data and
                defense services directly related to the defense articles controlled in
                paragraphs (a), (b), and (d) and that technical data and defense
                services in these areas would not be controlled on the USML as they are
                already in the public domain. Information that is in the public domain
                (see ITAR Sec. 120.11), is not controlled; however, defense services
                remain controlled, as would any controlled technical data.
                Conforming ITAR Changes
                 Additionally, this final rule makes conforming changes to several
                sections of the ITAR that referred to the control of articles formerly
                in USML Category I(a). These sections are amended because they all
                refer to firearms that are now controlled on the CCL. The firearms
                exemptions formerly at Sec. 123.17(a) through (e) are removed and the
                subsections reserved as a consequence of the removal from the USML of
                non-automatic and semi-automatic firearms and their transfer to the
                CCL. Section 123.17 is renamed ``Exemption for personal protective
                gear'' (formerly ``Exports of firearms, ammunition, and personal
                protective gear'') to accurately reflect the articles permitted for
                export without a license by that section. Sections 123.16(b)(2) and (6)
                are amended to make conforming changes to reflect the removal of the
                Sec. 123.17 firearms exemptions, as is the policy guidance on Zimbabwe
                found at Sec. 126.1(s). The text of Sec. 123.18 is removed, as it
                described exemptions for firearms that are now controlled for export by
                the Department of Commerce, and the section placed into reserve. The
                text of Sec. 123.16(b)(7) referencing the removed Sec. 123.18
                exemption is also removed and the subsection placed in reserve. In
                addition, Sec. 124.14(c)(9) is amended to remove the example of
                ``sporting firearms for commercial resale.''
                 Section 129.1(b) of the ITAR is amended to clarify that the
                regulations on brokering activities in part 129 apply to those defense
                articles and defense services designated as such on the USML and those
                items described on the USMIL (27 CFR 447.21). Section 129.4 of the ITAR
                is also amended to clarify brokering requirements for items on the
                USMIL that are subject to the brokering requirements of the AECA. The
                articles that are transferred to the CCL for export control purposes,
                yet are on the USMIL for permanent import control purposes, remain
                subject to the brokering requirements of part 129 with respect to all
                brokering activities, including facilitation in their manufacture
                abroad, permanent import, transfer, reexport, or retransfer. In a
                change from the proposed rule, this final rule revises slightly the
                proposed language of Sec. 129.2(b)(2)(vii), renumbers it as (viii),
                and adds a new paragraph (b)(2)(vii) to that section, in order to
                definitively exclude from the definition of brokering activities
                certain domestic activities related to the manufacture of EAR
                controlled items and their export. The revisions to Sec. 129.4 also
                clarify that foreign defense articles that are on the USMIL require
                brokering authorizations.
                 One commenter asserted that this rule's revisions to Sec. 123.15
                will unnecessarily expand congressional notification requirements to
                parts, components, and accessories under Categories I(e) and I(g). The
                commenter recommended that Sec. 123.15 be revised to limit the
                notification requirements to ``USML Category I paragraphs (a) through
                (d).'' Contrary to the
                [[Page 3828]]
                commenter's assertion, this rule does not extend congressional
                notification requirements to parts, components, and accessories.
                Department practice is, and has been, to notify Congress of the
                proposed exports of all Category I(e) and (g) articles that meet the
                threshold value requirement of $1,000,000.
                 One commenter expressed concern that the proposed rule's removal
                and placement of ITAR Sec. 123.16(b)(7) in reserve could potentially
                affect the exemption at ITAR Sec. 123.18 regarding firearms for
                personal use by civilian and active duty members of the U.S. Armed
                Forces. The Department notes in response that amendatory instruction
                number 5 of the proposed rule directed the removal and reserving of
                paragraph (b)(7) of Sec. 123.16. In order to eliminate any confusion
                regarding this action, the final rule includes exemplary text showing
                the subsection as reserved.
                 Several commenters suggested raising the value of the low value
                shipment exemption in ITAR Sec. 123.17(a) from $100 to $500 because
                although the rule's changes increase the eligible amount, they then
                reduce it by shifting the definition of value from wholesale to selling
                price. The Department appreciates this suggestion, but notes in
                response that amendatory instruction 6 of the proposed and final rules
                directs the removal of ITAR Sec. 123.17(a).
                 One commenter noted that the current language in ITAR Sec.
                125.4(b)(6) refers to ``. . . firearms not in excess of caliber .50 and
                ammunition for such weapons . . .'' and suggested a review to ensure
                consistency with language in other areas of the ITAR. The Department
                appreciates the commenter's suggestion and directs the commenter's
                attention to the Note to Category I of the final rule, paragraph (1),
                which uses a similar description to the one in ITAR Sec. 125.4(b)(6)
                and which has been present since the 2003 CFR. The Department believes
                the regulated community clearly understands caliber demarcation and
                declines to make changes at this time. The Department notes the
                commenter's concern for future consideration.
                 Multiple commenters expressed concerns that this rule would remove
                license requirements for brokers, or potentially relinquish enforcement
                authority over brokers. The Department asserts that this rule makes no
                changes to the statutory requirements for the registration and
                licensing of brokers, which remain the same under section
                38(b)(1)(A)(ii) of the AECA (see 28 U.S.C. 2778) and are implemented
                through ITAR part 129, which will continue to apply to all firearms
                listed on the USMIL in addition to those on the USML. Regarding
                enforcement, the Department retains its civil enforcement capacity for
                violations of the ITAR, including all articles subject to the brokering
                regulations, and the Department of Commerce retains its civil
                enforcement authority over items subject to its jurisdiction.
                Additionally, the Department of Justice retains the ability under
                separate authorities to prosecute persons criminally for violations
                involving firearms on the CCL or for brokering violations under the
                AECA.
                 One commenter expressed concern that this rule will create a double
                licensing requirement because the scope of ``brokering activities''
                requiring registration, fee payments, and licensing under ITAR part 129
                includes many types of activities that occur before the Department of
                Commerce will issue a license. The Department does not intend to impose
                a double licensing requirement for individuals undertaking activities
                on behalf of another to facilitate a transaction that will require
                licensing by the Department of Commerce. Therefore, the Department is
                revising the proposed Sec. 129.2(b)(2)(vii) and adding a new
                (b)(2)(viii) to clarify that activities to facilitate the domestic
                manufacture or export of items subject to the EAR are not brokering
                under the ITAR and do not require authorization or registration.
                 One commenter requested clarification regarding whether ``brokering
                activities'' as defined in Sec. 129.2(b)(2) apply to activities to
                facilitate the manufacture, export, permanent import, transfer,
                reexport, or retransfer of items designated on the USMIL. The
                Department directs the commenter to the preambles of the proposed rule
                and this final rule, which state the regulations in part 129 apply to
                both USML and USMIL defense articles and defense services.
                 One commenter requested clarification regarding whether the
                proposed rule's revision to Sec. 129.2(b)(2)(vii) would apply not only
                to items currently controlled in USML Categories I, II, and III, or to
                all items on the USMIL that are currently subject to the EAR (i.e., to
                include 600 series items previously transferred to the EAR). The
                commenter also recommended specifying whether the paragraph (b)(2)(vii)
                exclusion would apply to activities related to exports, reexports, or
                transfers of an items subject to the EAR that does not require use of
                an EAR license or license exception (i.e., No License Required (NLR)).
                The commenter assessed that the language at (b)(2)(vii) appears to
                provide a broad carve-out to the brokering activities definition. The
                commenter also requested clarification regarding whether the language
                was intended to convey that any ITAR or EAR approval for the items in
                question is sufficient to meet this criteria and that the approvals do
                not have to list the specific consignees or end-users for the future
                export, reexport, or transfer. The Department confirms that new
                provisions in Sec. 129.2(b)(2)(vii) and (viii) apply to all items
                subject to the EAR, not just those that transitioned from USML
                Categories I, II or III, to the extent that other items subject to the
                EAR are also included on the USMIL. These provisions also clarify the
                use of the NLR designation and revise the scope of the exclusion from
                brokering activities to include those activities that are controlled by
                the Department of Commerce.
                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 military or
                foreign affairs function of the United States government and that rules
                implementing this function are exempt from sections 553 (rulemaking)
                and 554 (adjudications) of the Administrative Procedure Act (APA).
                Although the Department is of the opinion that this final rule is
                exempt from the rulemaking provisions of the APA, the Department
                published this rule as a proposed rule (83 FR 24198) with a 45-day
                provision for public comment and without prejudice to its determination
                that controlling the import and export of defense services is a foreign
                affairs function.
                Regulatory Flexibility Act
                 Since the Department is of the opinion that this final rule is
                exempt from the rulemaking provisions of 5 U.S.C. 553, it does not
                require analysis under the Regulatory Flexibility Act.
                Unfunded Mandates Reform Act of 1995
                 This amendment does not involve a mandate that will result in the
                expenditure by State, local, and tribal governments, in the aggregate,
                or by the private sector, of $100 million or more in any year and it
                will not significantly or uniquely affect small governments. Therefore,
                no actions were deemed necessary under the provisions of the Unfunded
                Mandates Reform Act of 1995.
                Small Business Regulatory Enforcement Fairness Act of 1996
                 This rulemaking has been found not to be a major rule within the
                meaning
                [[Page 3829]]
                of the Small Business Regulatory Enforcement Fairness Act of 1996.
                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 rulemaking does not have
                sufficient federalism implications to require consultations or warrant
                the preparation of a federalism summary impact statement. The
                regulations implementing Executive Order 12372 regarding
                intergovernmental consultation on Federal programs and activities do
                not apply to this rulemaking.
                Executive Orders 12866 and 13563
                 Executive Orders 12866 and 13563 direct agencies to assess 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). The
                Department believes that the benefits of this rulemaking largely
                outweigh any costs, in that many items currently controlled on the
                more-restrictive USML are being moved to the CCL.
                 Executive Order 13563 emphasizes the importance of considering both
                benefits and costs, both qualitative and quantitative, of harmonizing
                rules, and of promoting flexibility. This rule has been designated a
                ``significant regulatory action,'' although not economically
                significant, under section 3(f) of Executive Order 12866. Accordingly,
                the rule has been reviewed by the Office of Management and Budget
                (OMB).
                 The Department believes the effect of this rule will decrease the
                number of license applications submitted to the Department under OMB
                Control No. 1405-0003 by approximately 10,000 annually, for which the
                average burden estimates are one hour per form, which results in a
                burden reduction of 10,000 hours per year.
                 The Department of Commerce estimates that 4,000 of the 10,000
                licenses that were required by the Department are eligible for license
                exceptions or otherwise not require a separate license under the EAR.
                The Department of Commerce estimates that 6,000 transactions require an
                individual validated license. The Department of Commerce collects the
                information necessary to process license applications under OMB Control
                No. 0694-0088. The Department of Commerce estimates that each manual or
                electronic response to that information collection takes approximately
                43.8 minutes. The Department of Commerce estimates that the 6,000
                licenses constitute a burden of 4,380 hours for this collection.
                 The Department estimates a reduction in burden of 10,000 hours due
                to the transition of these items to the Department of Commerce. The
                Department of Commerce estimates that the burden of submitting license
                applications for these items to the Department of Commerce is 4,380
                burden hours. Therefore, the net burden is reduced by 5,620 hours. The
                Department estimates that the burden hour cost for completing a license
                application is $44.94 per hour. Therefore, the estimated net reduction
                of 5,620 burden hours per year is estimated to result in annual burden
                hour cost reduction of $252,562.80.
                 In addition to the reduction in burden hours, there are direct cost
                savings to the State Department that result from the 10,000 license
                applications no longer required under the ITAR for items transferred to
                the EAR. Pursuant to the AECA, ITAR, and associated delegations of
                authority, every person who engages in the business of brokering
                activities, manufacturing, exporting, or temporarily importing any
                defense articles or defense services must register with the Department
                of State and pay a registration fee. The Department of State adopted
                the current fee schedule to align the registration fees with the cost
                of licensing, compliance and other related activities. The Department
                of Commerce will incur additional costs to administer these controls
                and process license applications. However, the Department of Commerce
                does not charge a registration fee to exporters under the EAR and we
                are unable to estimate the increase in costs to the Department of
                Commerce to process the new license applications. Therefore, we are
                unable to provide an estimate of the net change in resource costs to
                the government from moving these items from the ITAR to the EAR. It is
                the case, however, that the movement of these items from the ITAR will
                result in a direct transfer of $2,500,000 per year from the government
                to the exporting public, less the increased cost to taxpayers, because
                they will no longer pay fees to the State Department and there is no
                fee charged by the Department of Commerce to apply for a license.
                Estimated Cost Savings
                 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 Executive Order 13771 (82 FR 9339,
                February 3, 2017). Although the Department is of the opinion that this
                final rule is exempt from E.O. 13771 and without prejudice to its
                determination that controlling the import and export of defense
                services is a foreign affairs function, this rule is an E.O. 13771
                deregulatory action. The Department has conducted this analysis in
                close consultation with the Department of Commerce.
                 The total cost savings will be $1,376,281 in present (2017)
                dollars. To allow for cost comparisons under E.O. 13771, the value of
                these costs savings in 2016 dollars is $1,353,574. Assuming a 7%
                discount rate, the present value of these cost savings in perpetuity is
                $19,336,771. Since the costs savings of this rule are expected to be
                permanent and recurring, the annualized value of these cost savings is
                also $1,353,574 in 2016 dollars.
                Executive Order 12988
                 The Department of State reviewed this rulemaking in light of
                sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate
                ambiguity, minimize litigation, establish clear legal standards, and
                reduce burden.
                Executive Order 13175
                 The Department of State 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
                 Notwithstanding any other provision of law, no person is required
                to respond to, nor is subject to a penalty for failure to comply with,
                a collection of information, subject to the requirements of the
                Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless
                that collection of information displays a currently valid OMB control
                number.
                 The Department of State believes there will be a reduction in
                burden for the following forms: OMB Control No. 1405-0003, Application/
                License for Permanent Export of Unclassified Defense Articles and
                Related Unclassified Technical Data; OMB control number 1405-0092,
                Application for Amendment of a DSP-5 License;
                [[Page 3830]]
                OMB control number 1405-0013, Application/License for Temporary Import
                of Unclassified Defense Articles; OMB control number 1405-0092,
                Application for Amendment to a DSP-61 License ; OMB control number
                1405-0023, Application/License for Temporary Export of Unclassified
                Defense Articles; OMB control number 1405-0092, Application for
                Amendment to a DSP-73 License ; OMB control number 1405-0022,
                Application/License for Permanent/Temporary Export or Temporary Import
                of Classified Defense Articles and Related Classified Technical Data;
                OMB control number 1405-0174, Request for Advisory Opinion; and OMB
                control number 1405-0173, Request To Change End User, End Use and/or
                Destination of Hardware. This form is an application that, when
                completed and approved by Department of State, constitutes the official
                record and authorization for the commercial export of unclassified U.S.
                Munitions List articles and technical data, pursuant to the AECA and
                ITAR. For an analysis of the reduction in burden for OMB Control No.
                1405-0003, see the above Section for E.O. 12866.
                 The proposed version of this rule referenced only the first of
                these forms. However, subsequent its release, the Department of State
                submitted the remaining eight forms for public notice via Federal
                Register Public Notice 10646 on February 12, 2019. As such, this final
                rule is being amended to reflect all nine forms associated with the
                changes reflected in this rule.
                List of Subjects in 22 CFR Parts 121, 123, 124, 126, and 129
                 Arms and munitions, Exports.
                 Accordingly, for the reasons set forth above, title 22, chapter I,
                subchapter M, parts 121, 123, 124, 126, and 129 are amended as follows:
                PART 121--THE UNITED STATES MUNITIONS LIST
                0
                1. The authority citation for part 121 continues to read as follows:
                 Authority: Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22
                U.S.C. 2752, 2778, 2797); 22 U.S.C. 2651a; Pub. L. 105-261, 112
                Stat. 1920; Section 1261, Pub. L. 112-239; E.O. 13637, 78 FR 16129.
                0
                2. Section 121.1 is amended by revising U.S. Munitions List Categories
                I, II, and III to read as follows:
                Sec. 121.1 The United States Munitions List.
                * * * * *
                Category I--Firearms and Related Articles
                 *(a) Firearms using caseless ammunition.
                 *(b) Fully automatic firearms to .50 caliber (12.7 mm) inclusive.
                 *(c) Firearms specially designed to integrate fire control,
                automatic tracking, or automatic firing (e.g., Precision Guided
                Firearms).
                 Note 1 to paragraph (c): Integration does not include only
                attaching to the firearm or rail.
                 *(d) Fully automatic shotguns regardless of gauge.
                 *(e) Silencers, mufflers, and sound suppressors.
                 (f) [Reserved]
                 (g) Barrels, receivers (frames), bolts, bolt carriers, slides, or
                sears specially designed for the articles in paragraphs (a), (b), and
                (d) of this category.
                 (h) Parts, components, accessories, and attachments, as follows:
                 (1) Drum and other magazines for firearms to .50 caliber (12.7 mm)
                inclusive with a capacity greater than 50 rounds, regardless of
                jurisdiction of the firearm, and specially designed parts and
                components therefor;
                 (2) Parts and components specially designed for conversion of a
                semi-automatic firearm to a fully automatic firearm;
                 (3) Parts and components specially designed for defense articles
                described in paragraphs (c) and (e) of this category; or
                 (4) Accessories or attachments specially designed to automatically
                stabilize aim (other than gun rests) or for automatic targeting, and
                specially designed parts and components therefor.
                 (i) Technical data (see Sec. 120.10 of this subchapter) and
                defense services (see Sec. 120.9 of this subchapter) directly related
                to the defense articles described in this category and classified
                technical data directly related to items controlled in ECCNs 0A501,
                0B501, 0D501, and 0E501 and defense services using the classified
                technical data. (See Sec. 125.4 of this subchapter for exemptions.)
                 (j)-(w) [Reserved]
                 (x) Commodities, software, and technology subject to the EAR (see
                Sec. 120.42 of this subchapter) used in or with defense articles.
                 Note to paragraph (x): Use of this paragraph is limited to license
                applications for defense articles where the purchase documentation
                includes commodities, software, or technology subject to the EAR (see
                Sec. 123.1(b) of this subchapter).
                 Note 1 to Category I: The following interpretations explain and
                amplify the terms used in this category:
                 (1) A firearm is a weapon not over .50 caliber (12.7 mm) which is
                designed to expel a projectile by the deflagration of propellant;
                 (2) A fully automatic firearm or shotgun is any firearm or shotgun
                that shoots, is designed to shoot, or can readily be restored to shoot,
                automatically more than one shot, without manual reloading, by a single
                function of the trigger; and
                 (3) Caseless ammunition is firearm ammunition without a cartridge
                case that holds the primer, propellant, and projectile together as a
                unit.
                Category II--Guns and Armament
                 (a) Guns and armament greater than .50 caliber (12.7 mm), as
                follows:
                 *(1) Guns, howitzers, artillery, and cannons;
                 *(2) Mortars;
                 *(3) Recoilless rifles;
                 *(4) Grenade launchers; or
                 (5) Developmental guns and armament greater than .50 caliber (12.7
                mm) funded by the Department of Defense and specially designed parts
                and components therefor.
                 Note 1 to paragraph (a)(5): This paragraph does not control guns
                and armament greater than .50 caliber (12.7 mm):
                 (a) in production;
                 (b) determined to be subject to the EAR via a commodity
                jurisdiction determination (see Sec. 120.4 of this subchapter); or
                 (c) identified in the relevant Department of Defense contract or
                other funding authorization as being developed for both civil and
                military applications.
                 Note 2 to paragraph (a)(5): Note 1 to pargraph (a)(5) does not
                apply to defense articles enumerated on the U.S. Munitions List,
                whether in production or development.
                 Note 3 to paragraph (a)(5): This provision is applicable to those
                contracts or other funding authorizations that are dated January 23,
                2021, or later.
                 Note 1 to paragraph (a): This paragraph does not include: Non-
                automatic and non-semi-automatic rifles, carbines, and pistols between
                .50 (12.7 mm) and .72 caliber (18.288 mm) that are controlled on the
                CCL under ECCN 0A501; shotguns controlled on the CCL under ECCN 0A502;
                black powder guns and armaments manufactured between 1890 and 1919
                controlled on the CCL under ECCN 0A602; or black powder guns and
                armaments manufactured earlier than 1890.
                 Note 2 to paragraph (a): Guns and armament when integrated into
                their
                [[Page 3831]]
                carrier (e.g., surface vessels, ground vehicles, or aircraft) are
                controlled in the category associated with the carrier. Self-propelled
                guns and armament are controlled in USML Category VII. Towed guns and
                armament and stand-alone guns and armament are controlled under this
                category.
                 (b) Flamethrowers with an effective range greater than or equal to
                20 meters.
                 (c) [Reserved]
                 *(d) Kinetic energy weapon systems specially designed for
                destruction or rendering mission-abort of a target.
                 Note 1 to paragraph (d): Kinetic energy weapons systems include but
                are not limited to launch systems and subsystems capable of
                accelerating masses larger than 0.1g to velocities in excess of 1.6 km/
                s, in single or rapid fire modes, using methods such as:
                Electromagnetic, electrothermal, plasma, light gas, or chemical. This
                does not include launch systems and subsystems used for research and
                testing facilities subject to the EAR, which are controlled on the CCL
                under ECCN 2B232.
                 (e) Signature reduction devices specially designed for the guns and
                armament controlled in paragraphs (a), (b), and (d) of this category
                (e.g., muzzle flash suppression devices).
                 (f)-(i) [Reserved]
                 (j) Parts, components, accessories, and attachments, as follows:
                 (1) Gun barrels, rails, tubes, and receivers specially designed for
                the weapons controlled in paragraphs (a) and (d) of this category;
                 (2) Sights specially designed to orient indirect fire weapons;
                 (3) Breech blocks for the weapons controlled in paragraphs (a) and
                (d) of this category;
                 (4) Firing mechanisms for the weapons controlled in paragraphs (a)
                and (d) of this category and specially designed parts and components
                therefor;
                 (5) Systems for firing superposed or stacked ammunition and
                specially designed parts and components therefor;
                 (6) Servo-electronic and hydraulic elevation adjustment mechanisms;
                 (7) Muzzle brakes;
                 (8) Bore evacuators;
                 (9) Independent ammunition handling systems for the guns and
                armament controlled in paragraphs (a), (b), and (d) of this category;
                 (10) Components for independently powered ammunition handling
                systems and platform interface, as follows:
                 (i) Mounts;
                 (ii) Carriages;
                 (iii) Gun pallets;
                 (iv) Hydro-pneumatic equilibration cylinders; or
                 (v) Hydro-pneumatic systems capable of scavenging recoil energy to
                power howitzer functions;
                 Note 1 to paragraph (j)(10): For weapons mounts specially designed
                for surface vessels and special naval equipment, see Category VI. For
                weapons mounts specially designed for ground vehicles, see Category
                VII.
                 (11) Ammunition containers/drums, ammunition chutes, ammunition
                conveyor elements, ammunition feeder systems, and ammunition container/
                drum entrance and exit units, specially designed for the guns and
                armament controlled in paragraphs (a), (b), and (d) of this category;
                 (12) Systems and equipment for the guns and armament controlled in
                paragraphs (a) and (d) of this category for use in programming
                ammunition, and specially designed parts and components therefor;
                 (13) Aircraft/gun interface units to support gun systems with a
                designed rate of fire greater than 100 rounds per minute and specially
                designed parts and components therefor;
                 (14) Recoil systems specially designed to mitigate the shock
                associated with the firing process of guns integrated into air
                platforms and specially designed parts and components therefor;
                 (15) Prime power generation, energy storage, thermal management,
                conditioning, switching, and fuel-handling equipment, and the
                electrical interfaces between the gun power supply and other turret
                electric drive components specially designed for kinetic weapons
                controlled in paragraph (d) of this category;
                 (16) Kinetic energy weapon target acquisition, tracking fire
                control, and damage assessment systems and specially designed parts and
                components therefor; or
                 *(17) Any part, component, accessory, attachment, equipment, or
                system that:
                 (i) Is classified;
                 (ii) Contains classified software; or
                 (iii) Is being developed using classified information.
                 Note 1 to paragraph (j)(17): ``Classified'' means classified
                pursuant to Executive Order 13526, or predecessor order, and a security
                classification guide developed pursuant thereto or equivalent, or to
                the corresponding classification rules of another government or
                intergovernmental organization.
                 (k) Technical data (see Sec. 120.10 of this subchapter) and
                defense services (see Sec. 120.9 of this subchapter) directly related
                to the defense articles described in paragraphs (a), (b), (d), (e), and
                (j) of this category and classified technical data directly related to
                items controlled in ECCNs 0A602, 0B602, 0D602, and 0E602 and defense
                services using the classified technical data. (See Sec. 125.4 of this
                subchapter for exemptions.)
                 (l)-(w) [Reserved]
                 (x) Commodities, software, and technology subject to the EAR (see
                Sec. 120.42 of this subchapter) used in or with defense articles.
                 Note to paragraph (x): Use of this paragraph is limited to license
                applications for defense articles where the purchase documentation
                includes commodities, software, or technology subject to the EAR (see
                Sec. 123.1(b) of this subchapter).
                Category III--Ammunition and Ordnance
                 (a) Ammunition, as follows:
                 *(1) Ammunition that incorporates a projectile controlled in
                paragraph (d)(1) or (3) of this category;
                 *(2) Ammunition preassembled into links or belts;
                 *(3) Shotgun ammunition that incorporates a projectile controlled
                in paragraph (d)(2) of this category;
                 *(4) Caseless ammunition manufactured with smokeless powder;
                 Note 1 to paragraph (a)(4): Caseless ammunition is ammunition
                without a cartridge case that holds the primer, propellant, and
                projectile together as a unit.
                 *(5) Ammunition, except shotgun ammunition, based on non-metallic
                cases, or non-metallic cases that have only a metallic base, which
                result in a total cartridge mass 80% or less than the mass of a brass-
                or steel-cased cartridge that provides comparable ballistic
                performance;
                 *(6) Ammunition employing pyrotechnic material in the projectile
                base or any ammunition employing a projectile that incorporates tracer
                materials of any type having peak radiance above 710 nm and designed to
                be observed primarily with night vision optical systems;
                 *(7) Ammunition for fully automatic firearms that fire superposed
                or stacked projectiles or for guns that fire superposed or stacked
                projectiles;
                 *(8) Electromagnetic armament projectiles or billets for weapons
                with a design muzzle energy exceeding 5 MJ;
                 *(9) Ammunition, not specified above, for the guns and armaments
                controlled in Category II; or
                 (10) Developmental ammunition funded by the Department of Defense
                and specially designed parts and components therefor.
                 Note 1 to paragraph (a)(10): This paragraph does not control
                ammunition:
                 (a) in production;
                 (b) determined to be subject to the EAR via a commodity
                jurisdiction
                [[Page 3832]]
                determination (see Sec. 120.4 of this subchapter); or
                 (c) identified in the relevant Department of Defense contract or
                other funding authorization as being developed for both civil and
                military applications.
                 Note 2 to paragraph (a)(10): Note 1 does not apply to defense
                articles enumerated on the U.S. Munitions List, whether in production
                or development.
                 Note 3 to paragraph (a)(10): This provision is applicable to those
                contracts or other funding authorizations that are dated January 23,
                2021, or later.
                 (b) Ammunition/ordnance handling equipment specially designed for
                the articles controlled in this category, as follows:
                 (1) Belting, linking, and de-linking equipment; or
                 (2) Fuze setting devices.
                 (c) [Reserved]
                 (d) Parts and components for the articles in this category, as
                follows:
                 (1) Projectiles that use pyrotechnic tracer materials that
                incorporate any material having peak radiance above 710 nm or are
                incendiary or explosive;
                 (2) Shotgun projectiles that are flechettes, incendiary, tracer, or
                explosive;
                 Note 1 to paragraph (d)(2): This paragraph does not include
                explosive projectiles specially designed to produce noise for scaring
                birds or other pests (e.g., bird bombs, whistlers, crackers).
                 (3) Projectiles of any caliber produced from depleted uranium;
                 (4) Projectiles not specified above, guided or unguided, for the
                items controlled in USML Category II, and specially designed parts and
                components therefor (e.g., fuzes, rotating bands, cases, liners, fins,
                boosters);
                 (5) Canisters or sub-munitions (e.g., bomblets or minelets), and
                specially designed parts and components therefor, for the guns or
                armament controlled in USML Category II;
                 (6) Projectiles that employ tips (e.g., M855A1 Enhanced Performance
                Round (EPR)) or cores regardless of caliber, produced from one or a
                combination of the following: Tungsten, steel, or beryllium copper
                alloy;
                 (7) Cartridge cases, powder bags, or combustible cases specially
                designed for the items controlled in USML Category II;
                 (8) Non-metallic cases, including cases that have only a metallic
                base, for the ammunition controlled in paragraph (a)(5) of this
                category;
                 (9) Cartridge links and belts for fully automatic firearms and guns
                controlled in USML Categories I or II;
                 (10) Primers other than Boxer, Berdan, or shotshell types;
                 Note 1 to paragraph (d)(10): This paragraph does not control caps
                or primers of any type in use prior to 1890.
                 (11) Safing, arming, and fuzing components (to include target
                detection and proximity sensing devices) for the ammunition in this
                category and specially designed parts therefor;
                 (12) Guidance and control components for the ammunition in this
                category and specially designed parts therefor;
                 (13) Terminal seeker assemblies for the ammunition in this category
                and specially designed parts and components therefor;
                 (14) Illuminating flares or target practice projectiles for the
                ammunition controlled in paragraph (a)(9) of this category; or
                 *(15) Any part, component, accessory, attachment, equipment, or
                system that:
                 (i) Is classified;
                 (ii) Contains classified software; or
                 (iii) Is being developed using classified information.
                 Note 1 to paragraph (d)(15): ``Classified'' means classified
                pursuant to Executive Order 13526, or predecessor order, and a security
                classification guide developed pursuant thereto or equivalent, or to
                the corresponding classification rules of another government or
                intergovernmental organization.
                 (e) Technical data (see Sec. 120.10 of this subchapter) and
                defense services (see Sec. 120.9 of this subchapter) directly related
                to the defense articles enumerated in paragraphs (a), (b), and (d) of
                this category and classified technical data directly related to items
                controlled in ECCNs 0A505, 0B505, 0D505, and 0E505 and defense services
                using the classified technical data. (See Sec. 125.4 of this
                subchapter for exemptions.)
                 (f)-(w) [Reserved]
                 (x) Commodities, software, and technology subject to the EAR (see
                Sec. 120.42 of this subchapter) used in or with defense articles.
                 Note to paragraph (x): Use of this paragraph is limited to license
                applications for defense articles where the purchase documentation
                includes commodities, software, or technology subject to the EAR (see
                Sec. 123.1(b) of this subchapter).
                 Note 1 to Category III: This category does not control ammunition
                crimped without a projectile (blank star) and dummy ammunition with a
                pierced powder chamber.
                 Note 2 to Category III: This category does not control cartridge
                and shell casings that, prior to export, have been rendered useless
                beyond the possibility of restoration for use as a cartridge or shell
                casing by means of heating, flame treatment, mangling, crushing,
                cutting, or popping.
                 Note 3 to Category III: Grenades containing non-lethal or less
                lethal projectiles are under the jurisdiction of the Department of
                Commerce.
                * * * * *
                PART 123--LICENSES FOR THE EXPORT OF DEFENSE ARTICLES
                0
                3. The authority citation for part 123 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. 2753; 22 U.S.C. 2651a; 22 U.S.C.
                2776; Pub. L. 105-261, 112 Stat. 1920; Sec 1205(a), Pub. L. 107-228;
                Sec. 520, Pub. L. 112-55; Section 1261, Pub. L. 112-239; E.O. 13637,
                78 FR 16129.
                0
                4. Section 123.15 is amended by revising paragraph (a)(3) to read as
                follows:
                Sec. 123.15 Congressional certification pursuant to Section 36(c) of
                the Arms Export Control Act.
                 (a) * * *
                 (3) A license for export of defense articles controlled under
                Category I paragraphs (a) through (g) of the United States Munitions
                List, Sec. 121.1 of this subchapter, in an amount of $1,000,000 or
                more.
                * * * * *
                0
                5. Section 123.16 is amended by revising paragraphs (b)(2) introductory
                text and (b)(6) and removing and reserving paragraph (b)(7) to read as
                follows:
                Sec. 123.16 Exemptions of general applicability.
                * * * * *
                 (b) * * *
                 (2) Port Directors of U.S. Customs and Border Protection shall
                permit the export of parts or components without a license when the
                total value does not exceed $500 in a single transaction and:
                * * * * *
                 (6) For exemptions for personal protective gear, refer to Sec.
                123.17.
                 (7) [Reserved]
                * * * * *
                0
                6. Section 123.17 is amended by revising the section heading, removing
                and reserving paragraphs (a) through (e), and revising paragraph (j) to
                read as follows:
                Sec. 123.17 Exemption for personal protective gear.
                * * * * *
                 (j) If the articles temporarily exported pursuant to paragraphs (f)
                through (i) of
                [[Page 3833]]
                this section are not returned to the United States, a detailed report
                must be submitted to the Office of Defense Trade Controls Compliance in
                accordance with the requirements of Sec. 127.12(c)(2) of this
                subchapter.
                * * * * *
                Sec. 123.18 [Removed and Reserved]
                0
                7. Section 123.18 is removed and reserved.
                PART 124--AGREEMENTS, OFF-SHORE PROCUREMENT, AND OTHER DEFENSE
                SERVICES
                0
                8. The authority citation for part 124 continues to read as follows:
                 Authority: Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22
                U.S.C. 2752, 2778, 2797); 22 U.S.C. 2651a; 22 U.S.C. 2776; Section
                1514, Pub. L. 105-261; Pub. L. 111-266; Section 1261, Pub. L. 112-
                239; E.O. 13637, 78 FR 16129.
                0
                9. Section 124.14 is amended by revising paragraph (c)(9) to read as
                follows:
                Sec. 124.14 Exports to warehouses or distribution points outside the
                United States.
                * * * * *
                 (c) * * *
                 (9) Unless the articles covered by the agreement are in fact
                intended to be distributed to private persons or entities (e.g.,
                cryptographic devices and software for financial and business
                applications), the following clause must be included in all warehousing
                and distribution agreements: ``Sales or other transfers of the licensed
                article shall be limited to governments of the countries in the
                distribution territory and to private entities seeking to procure the
                licensed article pursuant to a contract with a government within the
                distribution territory, unless the prior written approval of the U.S.
                Department of State is obtained.''
                * * * * *
                PART 126--GENERAL POLICIES AND PROVISIONS
                0
                10. The authority citation for part 126 continues to read as follows:
                 Authority: Secs. 2, 38, 40, 42 and 71, Pub. L. 90-629, 90 Stat.
                744 (22 U.S.C. 2752, 2778, 2780, 2791 and 2797); 22 U.S.C. 2651a; 22
                U.S.C. 287c; E.O. 12918, 59 FR 28205; 3 CFR, 1994 Comp., p. 899;
                Sec. 1225, Pub. L. 108-375; Sec. 7089, Pub. L. 111-117; Pub. L. 111-
                266; Section 7045, Pub. L. 112-74; Section 7046, Pub. L. 112-74;
                E.O. 13637, 78 FR 16129.
                0
                11. Section 126.1 is amended by revising paragraph (s) to read as
                follows:
                Sec. 126.1 Prohibited exports, imports, and sales to or from certain
                countries.
                * * * * *
                 (s) Zimbabwe. It is the policy of the United States to deny
                licenses or other approvals for exports or imports of defense articles
                and defense services destined for or originating in Zimbabwe, except
                that a license or other approval may be issued, on a case-by-case
                basis, for the temporary export of firearms and ammunition for personal
                use by individuals (not for resale or retransfer, including to the
                Government of Zimbabwe).
                * * * * *
                PART 129--REGISTRATION AND LICENSING OF BROKERS
                0
                12. 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.
                0
                13. Section 129.1 is amended by revising paragraph (b) to read as
                follows:
                Sec. 129.1 Purpose.
                * * * * *
                 (b) All brokering activities identified in this subchapter apply
                equally to those defense articles and defense services designated in
                Sec. 121.1 of this subchapter and those items designated in 27 CFR
                447.21 (U.S. Munitions Import List).
                0
                14. Section 129.2 is amended by:
                0
                a. In paragraph (b)(2)(v), removing the word ``or'' at the end of the
                paragraph;
                0
                b. Removing the ``.'' at the end of paragraph (b)(2)(vi) and adding
                ``;'' in its place; and
                0
                c. Adding paragraphs (b)(2)(vii) and (viii).
                 The addition reads as follows:
                Sec. 129.2 Definitions.
                * * * * *
                 (b) * * *
                 (2) * * *
                 (vii) Activities by persons to facilitate the manufacture in the
                United States or export of an item subject to the EAR; or
                 (viii) Activities by persons to facilitate the reexport, or
                transfer of an item subject to the EAR that has been approved pursuant
                to a license, license exception, or no license required authorization
                under the EAR or a license or other approval under this subchapter.
                * * * * *
                0
                15. Section 129.4 is amended by revising paragraphs (a)(1) and
                (a)(2)(i) to read as follows:
                Sec. 129.4 Requirement for approval.
                 (a) * * *
                 (1) Any foreign defense article or defense service enumerated in
                part 121 of this subchapter (see Sec. 120.44 of this subchapter, and
                Sec. 129.5 for exemptions) and those foreign origin items on the U.S.
                Munitions Import List (see 27 CFR 447.21); or
                 (2) * * *
                 (i) Firearms and other weapons of a nature described by Category
                I(a) through (d), Category II(a) and (d), and Category III(a) of Sec.
                121.1 of this subchapter or Category I(a) through (c), Category II(a),
                and Category III(a) of the U.S. Munitions Import List (see 27 CFR
                447.21);
                * * * * *
                0
                16. Section 129.6 is amended by revising paragraph (b)(3)(i) to read as
                follows:
                Sec. 129.6 Procedures for obtaining approval.
                * * * * *
                 (b) * * *
                 (3) * * *
                 (i) The U.S. Munitions List (see Sec. 121.1 of this subchapter) or
                U.S. Munitions Import List (see 27 CFR 447.21) category and sub-
                category for each article;
                * * * * *
                Michael R. Pompeo,
                Secretary of State.
                [FR Doc. 2020-00574 Filed 1-17-20; 11:15 am]
                BILLING CODE 4710-25-P
                

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