[Federal Register Volume 77, Number 74 (Tuesday, April 17, 2012)]
[Rules and Regulations]
[Pages 22668-22671]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9081]


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DEPARTMENT OF STATE

22 CFR Parts 120 and 123

RIN 1400-AC85
[Public Notice: 7846]


Amendment to the International Traffic in Arms Regulations: 
International Import Certificate BIS-645P/ATF-4522/DSP-53 and 
Administrative Changes

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: The Department of State is amending the International Traffic 
in Arms Regulations (ITAR) to remove reference to the International 
Import Certificate (Form BIS-645P/ATF-4522/DSP-53). This amendment 
ceases the Department's practice of accepting DSP-53 submissions. 
Instead, the DSP-61 is to be used by importers when necessary. The 
Department also is making administrative changes to other sections.

DATES: Effective Date: This rule is effective May 17, 2012.

FOR FURTHER INFORMATION CONTACT: Ms. Candace M. J. Goforth, Acting 
Director, Office of Defense Trade Controls Policy, Department of State, 
telephone (202) 663-2792, email DDTCResponseTeam@state.gov. ATTN: 
International Import Certificate, ITAR Section 123.4.

SUPPLEMENTARY INFORMATION: The Arms Export Control Act authorizes the 
President to control the import and export of defense articles. 
Executive Order 11958, as amended, delegated the authority to regulate 
permanent and temporary exports and temporary imports of defense 
articles to the Secretary of State, and delegated the authority to 
regulate permanent imports of defense articles to the Attorney

[[Page 22669]]

General. The International Import Certificate Form BIS-645P/ATF-4522/
DSP-53 is identified as a form issued by the Department of Commerce's 
Bureau of Industry & Security (BIS); the Department of Justice's Bureau 
of Alcohol, Tobacco, Firearms and Explosives (BATFE); and the 
Department of State's Directorate of Defense Trade Controls (DDTC). It 
is meant to standardize procedures used to facilitate international 
trade.
    DDTC receives a few hundred DSP-53 submissions a year, and 
typically they are submitted by persons claiming the temporary import 
licensing exemption available at Sec.  123.4, but who need 
documentation of U.S. Government approval of the temporary import. The 
Department of State's DSP-61 (Application/License for Temporary Import 
of Unclassified Defense Articles) is the primary means by which the 
Department exercises its authority to control the temporary import of 
defense articles. Therefore, DDTC revises Sec.  123.4 to implement its 
decision to no longer accept submissions of the International Import 
Certificate (DSP-53). For temporary imports of defense articles meeting 
the conditions of the exemption at Sec.  123.4, but for which the 
foreign exporter requires documentation, the U.S. importer will be 
required to obtain a DSP-61. BATFE and BIS will continue to adjudicate 
International Import Certificate submissions for items under their 
jurisdiction. DDTC also revises Sec.  123.3 to specify that a DSP-61 is 
accepted to support the use of a temporary import exemption but not in 
satisfaction of requirements for a permanent import. And Sec.  
120.28(b)(1) is amended to remove reference to the DSP-53.
    Section 120.31 is amended to update the list of NATO countries by 
adding Albania and Croatia. Section 123.1(c)(4) is amended to replace 
reference to an obsolete form (``Department of Defense Form 1513'') 
with reference to the proper documentation (``Letter of Offer and 
Acceptance''). Section 123.4(c)(1) is amended to provide a correct 
reference (Sec.  120.1(c) rather than Sec.  120.1(b)). Section 
123.4(c)(2) is amended to provide updated terminology (``Electronic 
Export Information'' replaces ``Shipper's Export Declaration''). 
Section 123.4(c)(3) is amended to provide updated terminology 
(proscribed ``area'' and ``person,'' in addition to ``proscribed 
country''). And Sec.  123.25(b) is amended by removing the word 
``that'' in the statement before the colon.
    The Department of State's intention to discontinue accepting 
submissions of the DSP-53 was first published as a proposed rule on 
July 14, 2011, soliciting public comment (76 FR 41438). The comment 
period ended August 29, 2011. Three parties filed comments. The 
Department's evaluation of the written comments and recommendations 
follows.
    Three commenting parties noted that many foreign governments view 
the International Import Certificate as a means of providing not only 
certification by the U.S. Government of proposed imports, but also of 
providing end-use assurances in a manner similar to the Department's 
form DSP-83 (Nontransfer and Use Certificate). Similarly, one 
commenting party suggested the Department should provide U.S. exporters 
with an explanatory notice that can be presented to foreign officials 
that request an International Import Certificate subsequent to this 
rulemaking. The intent of the International Import Certificate is not 
to provide end-use assurances; it is intended to provide U.S. 
government acknowledgment of a proposed import. For items under their 
import jurisdiction, BIS and BATFE will continue to adjudicate 
International Import Certificate submissions, and therefore will 
continue to provide applicants documentation regarding U.S. government 
acknowledgment of proposed imports. For items under Department of State 
import jurisdiction, an approved DSP-61 serves as U.S. government 
acknowledgement and approval of a proposed temporary import.
    Three commenting parties expressed concern that the Department's 
proposal to cease issuing International Import Certificates could 
inadvertently disrupt international trade. Two of the commenting 
parties recommended the Department coordinate with the international 
community to ensure alternative means of assurances are acceptable. The 
Department accepts this recommendation and notes that it has previously 
expressed the intent to discontinue the DSP-53 with the international 
community at various international conferences and at the Wassenaar 
Arrangement. In these forums, no concerns were expressed to the 
Department.
    One commenting party stated that the requirement to obtain a DSP-
61, if documentation is required by a foreign exporter, will lead to 
cumbersome and unnecessary licensing reviews. The Department 
acknowledges that in a relatively small number of cases, license review 
will occur when with use of the DSP-53 it would have been avoided. The 
Department notes that the DSP-61 is the appropriate means by which a 
person may obtain documentation of U.S. Government approval for the 
temporary import of defense articles otherwise eligible for the license 
exemption at ITAR Sec.  123.4.
    One commenting party requested guidance on the means by which it 
can fulfill a foreign exporter's requirement for documentation of U.S. 
Government authorization for the permanent import of defense articles 
not listed on the U.S. Munitions Import List (``USMIL,'' a subset of 
the USML). BATFE has jurisdiction over the permanent import of defense 
articles, even when those defense articles are not listed on the USMIL. 
Therefore, an International Import Certificate may be submitted to 
BATFE in such instances.
    One commenting party recommended the removal of reference in the 
final rule to the form DSP-85 (Application/License for Permanent/
Temporary Export or Temporary Import of Classified Defense Articles and 
Related Classified Technical Data), noting Sec.  123.4 applies only to 
unclassified articles and that the ITAR is already clear that temporary 
imports of classified defense articles require use of the DSP-85. The 
Department accepted this recommendation.

Regulatory Analysis and Notices

Administrative Procedure Act

    The Department of State is of the opinion that controlling the 
import and export of defense articles and services is a foreign affairs 
function of the United States Government and that rules implementing 
this function are exempt from Sec.  553 (Rulemaking) and Sec.  554 
(Adjudications) of the Administrative Procedure Act. Although the 
Department is of the opinion that this rule is exempt from the 
rulemaking provisions of the APA, the Department published this rule 
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 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

[[Page 22670]]

or uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Executive Order 13175

    The Department has determined that this rule 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 rule.

Small Business Regulatory Enforcement Fairness Act of 1996

    This amendment has been found not to be a major rule within the 
meaning of the Small Business Regulatory Enforcement Fairness Act of 
1996.

Executive Orders 12372 and 13132

    This amendment 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 amendment does not have 
sufficient federalism implications to require consultations or warrant 
the preparation of a federalism summary impact statement. The 
regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this amendment.

Executive Order 12866

    The Department 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 governing the conduct of 
this function are exempt from the requirements of Executive Order 
12866. However, the Department has reviewed this rule to ensure its 
consistency with the regulatory philosophy and principles set forth in 
the Executive Order.

Executive Order 13563

    The Department of State has considered this rule in light of 
Executive Order 13563, dated January 18, 2011, and affirms that this 
regulation is consistent with the guidance therein.

Executive Order 12988

    The Department of State has reviewed this amendment 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.

Paperwork Reduction Act

    By this rulemaking, the Department of State will discontinue 
accepting one form (DSP-53) for the certification of a proposed 
temporary import of defense articles, and require the submission of 
another form (DSP-61) when there is the requirement for documentation 
of U.S. Government approval of the temporary import of defense articles 
that otherwise would be eligible for an available license exemption. 
Therefore, while in a limited number of instances this rule will result 
in different reporting and recordkeeping requirements, it does not 
impose any new reporting or recordkeeping requirements subject to the 
Paperwork Reduction Act, 44 U.S.C. chapter 35.

List of Subjects in 22 CFR Parts 120 and 123

    Arms and munitions, Exports.

    Accordingly, for the reasons set forth above, Title 22, Chapter I, 
Subchapter M, parts 120 and 123 are amended as follows:

PART 120--PURPOSE AND DEFINITIONS

0
1. The authority citation for part 120 continues to read as follows:

    Authority: Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22 
U.S.C. 2752, 2778, 2797); 22 U.S.C. 2794; E.O. 11958, 42 FR 4311; 
E.O. 13284, 68 FR 4075; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; 
Pub. L. 105-261, 112 Stat. 1920.


0
2. Section 120.28 is amended by revising paragraph (b)(1), 
redesignating paragraph (b)(3) as paragraph (c), and revising newly 
redesignated paragraph (c) as follows:


Sec.  120.28  Listing of forms referred to in this subchapter.

* * * * *
    (b) Department of Commerce, Bureau of Industry and Security:
    (1) International Import Certificate (Form BIS-645P/ATF-4522).
* * * * *
    (c) Department of Defense, Defense Security Cooperation Agency: 
Letter of Offer and Acceptance.

0
3. Section 120.31 is amended by revising it to read as follows:


Sec.  120.31  North Atlantic Treaty Organization.

    North Atlantic Treaty Organization (NATO) is comprised of the 
following member countries: Albania, Belgium, Bulgaria, Canada, 
Croatia, Czech Republic, Denmark, Estonia, France, Germany, Greece, 
Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, The 
Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, 
Spain, Turkey, United Kingdom, and the United States.

PART 123--LICENSES FOR THE EXPORT OF DEFENSE ARTICLES

0
4. 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; E.O. 11958, 42 FR 4311; 3 
CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 2776; Pub. L. 105-
261, 112 Stat. 1920; Sec. 1205(a), Pub. L. 107-228.


0
5. Section 123.1 is amended by revising paragraph (c)(4) to read as 
follows:


Sec.  123.1  Requirement for export or temporary import licenses.

* * * * *
    (c) * * *
    (4) An application for a license under this part for the permanent 
export of defense articles sold commercially must be accompanied by a 
copy of a purchase order, letter of intent, or other appropriate 
documentation. In cases involving the U.S. Foreign Military Sales 
program, three copies of the relevant Letter of Offer and Acceptance 
are required, unless the procedures of Sec.  126.4(c) or Sec.  126.6 of 
this subchapter are followed.
* * * * *
0
6. Section 123.3 is amended by adding paragraph (c), to read as 
follows:


Sec.  123.3  Temporary import licenses.

* * * * *
    (c) A DSP-61 license may be obtained by a U.S. importer in 
satisfaction of Sec.  123.4(c)(4) of this subchapter. If a foreign 
exporter requires documentation for a permanent import, the U.S. 
importer must contact the Department of Justice's Bureau of Alcohol, 
Tobacco, Firearms and Explosives for the appropriate documentation. A 
DSP-61 will not be approved to support permanent import requirements.

0
7. Section 123.4 is amended by revising paragraphs (c)(1) through 
(c)(3), and adding paragraph (c)(4), to read as follows:


Sec.  123.4  Temporary import license exemptions.

* * * * *
    (c) * * *
    (1) The importer must meet the eligibility requirements set forth 
in Sec.  120.1(c) of this subchapter;
    (2) At the time of export, the ultimate consignee named on the 
Electronic

[[Page 22671]]

Export Information (EEI) must be the same as the foreign consignee or 
end-user of record named at the time of import;
    (3) A stated in Sec.  126.1 of this subchapter, the temporary 
import must not be from or on behalf of a proscribed country, area, or 
person listed in that section unless an exception has been granted in 
accordance with Sec.  126.3 of this subchapter; and
    (4) The foreign exporter must not require documentation of U.S. 
Government approval of the temporary import. If the foreign exporter 
requires documentation for a temporary import that qualifies for an 
exemption under this subchapter, the U.S. importer will not be able to 
claim the exemption and is required to obtain a DSP-61 Application/
License for Temporary Import of Unclassified Defense Articles.
* * * * *

0
8. Section 123.25 is amended by revising paragraph (b) to read as 
follows:


Sec.  123.25  Amendments to licenses.

* * * * *
    (b) The following types of amendments to a license will be 
considered: Addition of U.S. freight forwarder or U.S. consignor; 
change due to an obvious typographical error; change in source of 
commodity; and change of foreign intermediate consignee if that party 
is only transporting the equipment and will not process (e.g., 
integrate, modify) the equipment. For changes in U.S. dollar value see 
Sec.  123.23.
* * * * *

    Dated: April 6, 2012.
Rose E. Gottemoeller,
Acting Under Secretary, Arms Control and International Security, 
Department of State.
[FR Doc. 2012-9081 Filed 4-16-12; 8:45 am]
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