International Traffic in Arms Regulations: Temporary Reduction in Certain Registration Fees

 
CONTENT
Federal Register, Volume 85 Issue 88 (Wednesday, May 6, 2020)
[Federal Register Volume 85, Number 88 (Wednesday, May 6, 2020)]
[Rules and Regulations]
[Pages 26847-26848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09748]
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DEPARTMENT OF STATE
22 CFR Part 122
[Public Notice: 11103]
RIN 1400-AF13
International Traffic in Arms Regulations: Temporary Reduction in
Certain Registration Fees
AGENCY: Department of State.
ACTION: Temporary reduction in certain fees.
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SUMMARY: The Department of State is making a temporary change in the
Tier I and Tier II and new registrant payment guidelines on the
Directorate of Defense Trade Controls (DDTC) website at
www.pmddtc.state.gov. These guidelines outline the registration fees
charged to persons who engage in the United States in the business of
manufacturing, exporting, or temporarily importing defense articles,
furnishing defense services, or who engage in brokering activities
pursuant to the International Traffic in Arms Regulations (ITAR). This
temporary change is in the interest of the security and foreign policy
of the United States. Further, it is consistent with the March 13, 2020
declaration by President Trump of a National Emergency Concerning the
Novel Coronavirus Disease (COVID-19) Outbreak and is warranted due to
the extraordinary challenges to U.S. defense trade and the health of
the Defense Industrial Base as a result of the exceptional and undue
hardships and risks to safety caused by the public health emergency
related to COVID-19. This temporary reduction in certain fees is
intended to help mitigate the economic impact of the COVID-19 public
health emergency on U.S. Defense Industrial Base and takes into account
the operational requirements of DDTC that the fees fund.
DATES: The temporary reduction in fees was effective May 1, 2020, and
shall expire on April 30, 2021, unless modified by a subsequent
notification in the Federal Register.
FOR FURTHER INFORMATION CONTACT: Neal Kringel, Office of Defense Trade
Controls Management, U.S. Department of State, telephone (202) 663-
1282, or email [email protected]. ATTN: Temporary Fee
Reduction.
SUPPLEMENTARY INFORMATION: This document serves to inform entities
registered with the Directorate of Defense Trade Controls (DDTC)
pursuant to ITAR Sec. Sec. 122.1(a) and 129.3(a), of a temporary
reduction in registration fees charged to entities in Tier I and Tier
II and new registrants. (For more information on DDTC registrations,
please visit the ``Conduct Business'' page then select the
``Registration'' tab and the ``Payment of Registration'' tab of the
DDTC website). ITAR Sec. 122.1(a) provides that any person who engages
in the United States in the business of manufacturing or exporting or
temporarily importing defense articles, or furnishing defense services,
is required to register with DDTC. ITAR Sec. 129.3(a) further provides
that, with limited exceptions, any regulated person who engages in
brokering activities is required to register with DDTC. ITAR Sec.
122.3 provides that a person who is required to register must do so on
an annual basis by submitting a completed Statement of Registration
(form DS-2032) and payment of a fee following the payment guidelines
available on the DDTC website at www.pmddtc.state.gov.
What is the purpose of this change?
 Given the extraordinary impact of the COVID-19 pandemic on the
national economy and Defense Industrial Base, DDTC is temporarily
reducing registration fees for DDTC registrants in Tier I and Tier II
to $500 for registrations whose original expiration date is between May
31, 2020 and April 30, 2021. Also, DDTC is reducing registration fees
to $500 for new applicants who submit their registration application
between May 1, 2020 and April 30, 2021. All new registrants are in Tier
I in the first year. This will allow new registrants and existing
registrants in Tiers I and II--including the many small to medium sized
enterprises that must register under these tiers--to receive and plan
for a reduced registration fee over the course of the coming year. The
fee structure for Tier III entities remains unchanged at this time
given the higher costs incurred by DDTC in processing the volume of
licenses and other relevant submissions by entities in Tier III. Also,
Tier III already has a provision for a reduced fee if the fee
calculated above is greater than 3 percent of the total value of all
applications. In such cases, the fee will be 3 percent of the total
value of all applications or $2,750, whichever is greater. These
measures were informed by consultations with U.S. industry, in
particular the Defense Trade Advisory Group, as well as with DDTC's
interagency partners in the Departments of Defense and Commerce. This
temporary reduction in fees shall apply only through April 30, 2021, at
which time fees for entities in Tiers I and II will return to the rates
that were in effect on April 1, 2020, unless otherwise extended by a
subsequent notification in the Federal Register.\1\
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 \1\ Proclamation 9994 of March 13, 2020, 85 FR 15337 (Mar. 18,
2020).
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Temporary Fee Reduction
 For reasons stated above, the State Department amends the fee
payment schedule referenced in 22 CFR 122.3 and posted on the DDTC
website as follows:
 ``DDTC is temporarily reducing registration fees for DDTC
registrants in Tier I and Tier II to $500 for registrations whose
original expiration date is between May 31, 2020 and April 30, 2021.
Also, DDTC is reducing registration fees to $500 for new applicants who
submit their registration application between May 1, 2020 and April 30,
2021. All new registrants are in Tier I in the first year. This will
allow new registrants and existing registrants in Tiers I and II, the
majority of which are small and medium-sized enterprises, to receive a
reduced registration fee over the course of the coming year. The fee
structure for Tier III entities remains unchanged at this time. We
anticipate that this temporary reduction in fees for Tier I and Tier II
and new registrants will save regulated industry over $20 million over
the course of the coming year. The temporary reduction in fees is
warranted as a result of the exceptional and undue economic hardship
caused by the public health emergency caused by the COVID-19
pandemic.''
 ``This temporary reduction in fees shall apply only through April
30, 2021, at which time fees for entities in Tiers I and II will return
to the rates that were in effect on April 1, 2020 unless otherwise
extended by a subsequent notice in the Federal Register.''
Regulatory Findings
Administrative Procedure Act
 The Department of State is of the opinion that controlling the
import and export of defense articles and defense services is a
military or foreign affairs function of the United States Government
and rules implementing
[[Page 26848]]
this function are exempt from section[thinsp]553 (Rulemaking) and
section[thinsp]554 (Adjudications) of the Administrative Procedure Act
(APA) pursuant to 5 U.S.C. 553(a)(1).
Regulatory Flexibility Act
 Since the Department is of the opinion that this rulemaking is
exempt from the provisions of 5 U.S.C. 553, there is no requirement for
an analysis under the Regulatory Flexibility Act.
Unfunded Mandates Reform Act of 1995
 This rulemaking does not involve a mandate that will result in the
expenditure by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any year and it
will not significantly or uniquely affect small governments. Therefore,
no actions were deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
Small Business Regulatory Enforcement Fairness Act of 1996
 The Department does not believe this rulemaking is a major rule
under the criteria of 5 U.S.C. 804. Based on the criteria of 5 U.S.C.
804(2), the Department does not believe this rulemaking will have an
annual effect on the economy of $100,000,000 or more. The Department
estimates that this rulemaking will result in the elimination of
approximately $20,000,000 in registration fees that otherwise would
have been collected by the Department.
Executive Orders 12372 and 13132
 This rulemaking does not have sufficient federalism implications to
require consultations or warrant the preparation of a federalism
summary impact statement. The regulations implementing Executive Order
12372 regarding intergovernmental consultation on Federal programs and
activities do not apply to this rulemaking.
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). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rulemaking is a significant but not an economically
significant rule, under the criteria of Executive Order 12866, and is
consistent with the provisions of Executive Order 13563.
Executive Order 12988
 The Department of State has 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 has determined that this rulemaking will
not have tribal implications, will not impose substantial direct
compliance costs on Indian tribal governments, and will not preempt
tribal law. Accordingly, the requirements of Executive Order 13175 do
not apply to this rulemaking.
Paperwork Reduction Act
 This rulemaking does not impose or revise any information
collections subject to 44 U.S.C. Chapter 35.
Executive Order 13771
 This rulemaking is not subject to the requirements of E.O. 13771
since it relates to a military or foreign affairs function of the
United States.
Zachary A. Parker,
Director, Office of Directives Management, U.S. Department of State.
[FR Doc. 2020-09748 Filed 5-5-20; 8:45 am]
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