[Federal Register Volume 77, Number 118 (Tuesday, June 19, 2012)]
[Proposed Rules]
[Pages 36428-36433]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14471]
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DEPARTMENT OF STATE
22 CFR Part 120
RIN 1400-AD22
[Public Notice 7921]
Amendment to the International Traffic in Arms Regulations:
Definition for ``Specially Designed''
AGENCY: Department of State.
ACTION: Proposed rule.
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SUMMARY: As part of the President's Export Control Reform (ECR)
Initiative, the Directorate of Defense Trade Controls (DDTC) seeks
public comment on the proposed definition of ``specially designed'' to
be adopted in the International Traffic in Arms Regulations (ITAR).
This proposed rule is published concurrently with the Department of
Commerce's proposed revision to the definition of ``specially
designed'' in the Export Administration Regulations (EAR). The
revisions contained in this rule are part of the Department of State's
retrospective plan under E.O. 13563 completed on August 17, 2011. The
Department of State's full plan can be accessed at http://www.state.gov/documents/organization/181028.pdf.
DATES: The Department of State will accept comments on this proposed
rule until August 3, 2012.
ADDRESSES: Interested parties may submit comments within 45 days of the
date of publication by one of the following methods:
Email: DDTCResponseTeam@state.gov with the subject line,
``Specially Designed Definition.''
Internet: At www.regulations.gov, search for this notice
by using this notice's RIN (1400-AD22).
Comments received after that date will be considered if feasible,
but consideration cannot be assured. Those submitting comments should
not include any personally identifying information they do not desire
to be made public or information for which a claim of confidentiality
is asserted because those comments and/or transmittal emails will be
made available for public inspection and copying after the close of the
comment period via the Directorate of Defense Trade Controls Web site
at www.pmddtc.state.gov. Parties who wish to comment anonymously may do
so by submitting their comments via www.regulations.gov, leaving the
fields that would identify the commenter blank and including no
identifying information in the comment itself. Comments submitted via
www.regulations.gov are immediately available for public inspection.
FOR FURTHER INFORMATION CONTACT: Ms. Candace M. J. Goforth, Director,
Office of Defense Trade Controls Policy, U.S. Department of State,
telephone (202) 663-2792, or email DDTCResponseTeam@state.gov. ATTN:
Specially Designed Definition.
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 120-130). The items subject to
the jurisdiction of the ITAR, i.e., ``defense articles,'' are
identified on the ITAR's U.S. Munitions List (USML) (22 CFR 121.1).
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 730-774, which
includes the
[[Page 36429]]
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.
Export Control Reform Update
The Departments of State and Commerce described in their respective
Advanced Notices of Proposed Rulemaking (ANPRM) in December 2010 the
Administration's plan to make the USML and the CCL positive, tiered,
and aligned so that eventually they can be combined into a single
control list (see ``Commerce Control List: Revising Descriptions of
Items and Foreign Availability,'' 75 FR 76664 (December 9, 2010) and
``Revisions to the United States Munitions List,'' 75 FR 76935
(December 10, 2010)). The notices also called for the establishment of
a ``bright line'' between the USML and the CCL to reduce government and
industry uncertainty regarding export jurisdiction by clarifying
whether particular items are subject to the jurisdiction of the ITAR or
the EAR. While these remain the Administration's ultimate Export
Control Reform objectives, their concurrent implementation would be
problematic in the near term. In order to more quickly reach the
national security objectives of greater interoperability with U.S.
allies, enhancing the defense industrial base, and permitting the U.S.
Government to focus its resources on controlling and monitoring the
export and reexport of more significant items to destinations, end-
uses, and end-users of greater concern than NATO allies and other
multi-regime partners, the Administration has decided, as an interim
step, to propose and implement revisions to both the USML and the CCL
that are more positive, but not yet tiered.
Specifically, based in part on a review of the comments received in
response to the December 2010 notices, the Administration has
determined that fundamentally altering the structure of the USML by
tiering and aligning it on a category-by-category basis would
significantly disrupt the export control compliance systems and
procedures of exporters and reexporters. For example, until the entire
USML was revised and became final, some USML categories would follow
the legacy numbering and control structures while the newly revised
categories would follow a completely different numbering structure. In
order to allow for the national security benefits to flow from re-
aligning the jurisdictional status of defense articles that no longer
warrant control on the USML on a category-by-category basis while
minimizing the impact on exporters' internal control and jurisdictional
and classification marking systems, the Administration plans to proceed
with building positive lists now and afterward return to structural
changes.
Definition for ``Specially Designed''
Although one of the goals of the ECR Initiative is to describe USML
controls without using design intent criteria, a few of the controls in
the proposed revision nonetheless use the term ``specially designed.''
It is, therefore, necessary for the Department to define the term. Two
proposed definitions have been published to date.
The Department first provided a draft definition for ``specially
designed'' in the December 2010 ANPRM (75 FR 76935) and noted the term
would be used minimally in the USML, and then only to remain consistent
with the Wassenaar Arrangement or other multilateral regime obligations
or when no other reasonable option exists to describe the control
without using the term. The definition provided at that time is as
follows: ``For the purposes of this Subchapter, the term `specially
designed' means that the end-item, equipment, accessory, attachment,
system, component, or part (see ITAR Sec. 121.8) has properties that
(i) distinguish it for certain predetermined purposes, (ii) are
directly related to the functioning of a defense article, and (iii) are
used exclusively or predominantly in or with a defense article
identified on the USML.''
The Department of Commerce subsequently published on July 15, 2011,
for public comment, (see ``Proposed Revisions to the Export
Administration Regulations (EAR): Control of Items the President
Determines No Longer Warrant Control under the United States Munitions
List (USML),'' 76 FR 41958), the Administration's proposed definition
of ``specially designed'' that would be common to the CCL and the USML.
The public provided more than 40 comments on that proposed definition
on or before the September 13, 2011, submission deadline. The
Departments of State, Commerce, and Defense have reviewed those
comments and related issues. The Department of State's Defense Trade
Advisory Group and the Department of Commerce's Technical Advisory
Committees participated in the review. The revised definition provided
in this proposed rule is, but for a few modifications, identical to the
definition published separately by the Department of Commerce (see
elsewhere in this issue of the Federal Register). The overall goal of
the definition is to differentiate between those articles
``enumerated'' on the USML and those articles not enumerated but
captured in ``catch-all'' paragraphs.
The July 15 rule referenced above identified nine objectives for
the revised ``specially designed'' definition. These objectives have
not changed and the U.S. Government is committed to adopting a
``specially designed'' definition under the ITAR and EAR that would
achieve these nine objectives. The nine objectives are to:
(1) Preclude multiple or overlapping controls of similar items
within and across the two control lists;
(2) Be easily understood and applied by exporters, prosecutors,
juries, and the U.S. Government--e.g., by using objective, knowable,
and clear requirements that do not rely upon a need to investigate and
divine the intentions of the original designer of a part or the
predominant market applications for such items;
(3) Be consistent with definitions used by the international export
control regimes;
(4) Not include any item specifically enumerated on either the USML
or the CCL and, in order to avoid a definitional loop, do not use
``specially designed'' as a control criterion;
(5) Be capable of excluding from control simple or multi-use parts
such as springs, bolts, and rivets, and other types of items the U.S.
Government determines do not warrant significant export controls;
(6) Apply to both descriptions of end items that are ``specially
designed'' to have particular characteristics and to parts and
components that were ``specially designed'' for particular end items;
(7) Apply to materials and software because they are ``specially
designed'' to have a particular characteristic or for a particular type
of end item;
(8) Not increase the current control level to ``600 series''
control or other higher end controls of items (i.e., not moving items
currently subject to a lower control status to a higher level control
status), particularly current EAR99 items, that are now controlled at
lower levels; and
(9) Not, merely as a result of the definition, cause historically
EAR controlled items to become ITAR controlled.
The revised ``specially designed'' definition provided in this
notice
[[Page 36430]]
proposes a simplified two paragraph structure. Paragraph (a) is to
identify what commodities, as a result of development, are ``specially
designed,'' and paragraph (b) is to identify what parts, components,
accessories, and attachments are excluded from ``specially designed.''
Paragraph (a) begins with the phrase, ``Except for commodities
described in (b), a commodity is `specially designed' if, as a result
of development, it [is within the scope of any one of three
subparagraphs discussed below].'' It is the beginning of the ``catch''
in the ``catch and release'' structure of the definition. For U.S.
Munitions List paragraphs containing the term ``specially designed,'' a
defense article is ``caught''--it is ``specially designed''--if any of
the three elements of paragraph (a) apply and none of the elements of
paragraph (b) apply.
Paragraph (a) is limited by the phrase, ``if, as a result of
development.'' The definition would also include a note to paragraph
(b)(3) that contains the following definition of development for
purposes of the proposed ``specially designed'' definition:
```Development' is related to all stages prior to serial production,
such as: design, design research, design analyses, design concepts,
assembly and testing of prototypes, pilot production schemes, design
data, process of transforming design data into a product, configuration
design, integration design, layouts.'' Thus, a defense article is
caught by the threshold requirement of paragraph (a) only if someone is
engaged in any of these ``development'' activities with respect to the
article at issue. Three questions one may ask to determine if a defense
article is within the scope of paragraph (a) are as follows: (1) Does
the commodity, as a result of development, have properties peculiarly
responsible for achieving or exceeding the controlled performance
levels, characteristics, or functions described in the relevant USML
paragraph?; (2) Is the part or component, as a result of development,
necessary for an enumerated defense article to function as designed?;
and (3) Is the accessory or attachment, as a result of development,
used with an enumerated defense article to enhance its usefulness or
effectiveness? If the answer to all three questions is ``no,'' then the
commodity is not ``specially designed'' and further analysis pursuant
to paragraph (b) is not necessary. If the answer to any one of the
questions is ``yes,'' then the exporter or reexporter must determine
whether any one of the five parts of paragraph (b) of the definition
applies. If any one of the five paragraph (b) exclusions apply, then
the commodity is not ``specially designed.'' If none do, then the
commodity is ``specially designed.''
Paragraph (a)(1) would capture a commodity if it, as a result of
``development,'' ``has properties peculiarly responsible for achieving
or exceeding the controlled performance levels, characteristics, or
functions described in the relevant U.S. Munitions List paragraph.''
This criterion is essentially the same as was proposed in the July 15
proposed definition. Based on the comments, the public found this part
of the definition clear. As an example, even if a commodity is capable
of use with a controlled defense article, it is not captured by this
part of paragraph (a) unless someone did something during the
commodity's development so that it would achieve or exceed the
performance levels, characteristics, or functions described in a
referenced USML paragraph.
Paragraph (a)(2) would capture a part or component if it, as a
result of ``development,'' ``is necessary for an enumerated defense
article to function as designed.'' The Department realizes that this
element is similar to paragraph (a)(1), but believes that it needs to
be listed separately because not all descriptions of parts and
components on the USML include performance levels, characteristics, or
functions as a basis for control. Paragraph (a)(2) thus will capture
parts and components that are necessary for another article on the USML
to function ``as designed.'' If an article will function ``as
designed'' without the part or component at issue, then that part or
component is not captured by paragraph (a)(2).
Paragraph (a)(3) would capture an accessory or attachment if it, as
a result of ``development,'' ``is used with an enumerated defense
article to enhance its usefulness or effectiveness.'' This phrase is
from the ITAR's current and the EAR's proposed definitions of
``accessory,'' ``attachment,'' and ``equipment.''
The July 15 proposed ``specially designed'' definition included two
exclusion paragraphs (paragraphs (c) and (d)) that identified what
items would not be ``specially designed.'' Many commenting parties
requested the July 15 definition be simplified and shortened, including
the exclusion paragraphs. The Department has addressed these concerns
by adopting a simplified structure for the exclusion paragraph (b)
included in this proposed rule. Specifically, any part, component,
accessory, or attachment that is described in an exclusion paragraph
under (b)(1), (b)(2), (b)(3), (b)(4), or (b)(5), would not be
controlled by a USML ``catch-all'' paragraph.
These five exclusions under paragraph (b) would play an important
role in this proposed ``specially designed'' definition. Paragraphs
(a)(2) and (a)(3) are broad enough to capture all the defense articles
that would be potentially ``specially designed,'' but in practice would
capture a larger set of parts, components, accessories, and attachments
than is intended. Paragraph (b) would work to release from inclusion
under ``specially designed'' specific and non-specific parts,
components, accessories, and attachments, consistent with existing U.S.
export control and international commitments. The exclusions under
paragraph (b) as proposed in this rule would refine the set of parts,
components, accessories, and attachments that would be subject to the
``catch-all'' controls on the USML. In this way, paragraphs (a) and (b)
are inextricably linked and are intended to work together to identify
the parts, components, accessories, and attachments that need to be
treated as ``specially designed'' for purposes of the ``catch-all''
provisions on the USML.
Paragraph (b) codifies the principle in ITAR Sec. 120.3 that, in
general, a commodity should not be ITAR controlled if has a predominant
civil application or has performance equivalent (defined by form, fit,
and function) to a commodity used for civil applications. If such a
commodity warrants control under the ITAR because it provides the
United States with a critical military or intelligence advantage or for
another reason, then it is or should be enumerated on the USML, as
described in the ``bright line,'' ``positive list'' objectives in the
December 2010 ANPRM (75 FR 76935).
An example of an article that would not be ``specially designed''
as a result of proposed paragraph (b)(4) is one that was or is being
developed to be interchangeable between an aircraft enumerated in USML
Category VIII and also an aircraft controlled by ECCN 9A610.a. Such a
conclusion for a particular article does not necessarily mean that the
article is not subject to export controls. The article may, for
example, be enumerated on the USML and, thus, ITAR controlled. In
addition, if it is not enumerated on the USML, it might fall with the
scope of the controls at ECCN 9A610.x. The jurisdiction of an article
must be determined on a case-by-case basis. Proposed paragraph (b)(4)
merely states that such an article would not be within the scope of a
``catch-all'' paragraph of the USML in light of its
[[Page 36431]]
commonality with non-ITAR controlled articles.
Paragraph (a) would create more objective tests for what defense
articles, as a result of development, would be ``specially designed''
based on the criteria identified in (a)(1), (a)(2), or (a)(3).
Paragraph (b) would create more objective tests for what parts,
components, accessories, and attachments are excluded from ``specially
designed'' under the exclusion criteria identified in (b)(1), (b)(2),
(b)(3), (b)(4) or (b)(5). The objective criteria identified in
paragraph (a) working with the objective exclusion criteria identified
in paragraph (b) would allow this proposed ``specially designed''
definition to achieve the nine stated objectives identified above for
the definition.
Request for Comments
As the U.S. Government works through the proposed revisions to the
USML, some solutions have been adopted that were determined to be the
best of available options. With the thought that multiple perspectives
would be beneficial to the USML revision process, the Department
welcomes the assistance of users of the lists and requests input on the
following:
(1) The key goal of this rulemaking is to establish a definition of
``specially designed'' that provides a ``bright line'' between the
commodities controlled by the USML and the CCL. The public is asked to
provide comment on the clarity and understanding of the proposed
definition.
(2) The key goal of this rulemaking is to establish a definition of
``specially designed'' that is applicable to all USML categories. The
public is asked to provide comments on the use of ``specially
designed'' in proposed rules for USML revision where the comment period
has already closed, as well those proposed rules with open comment
periods.
Regulatory Analysis and Notices
Administrative Procedure Act
The Department of State is of the opinion that controlling the
import and export of defense articles and services is a foreign affairs
function of the United States Government and that rules implementing
this function are exempt from sections 553 (Rulemaking) and 554
(Adjudications) of the Administrative Procedure Act (APA). Although the
Department is of the opinion that this rule is exempt from the
rulemaking provisions of the APA, the Department is publishing 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. As noted above, and also
without prejudice to the Department position that this proposed
rulemaking is not subject to the APA, the Department previously
published a related Advance Notice of Proposed Rulemaking (RIN 1400-
AC78) on December 10, 2010 (75 FR 76935), and accepted comments for 60
days.
Regulatory Flexibility Act
Since the Department is of the opinion that this proposed 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 proposed 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 proposed 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 proposed 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 proposed amendment does not
have sufficient federalism implications to require consultations or
warrant the preparation of a federalism summary impact statement. The
regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this proposed amendment.
Executive Orders 12866 and 13563
Executive Orders 13563 and 12866 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 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).
Executive Order 12988
The Department of State has reviewed the proposed 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.
Executive Order 13175
The Department of State has determined that this rulemaking will
not have tribal implications, will not impose substantial direct
compliance costs on Indian tribal governments, and will not preempt
tribal law. Accordingly, Executive Order 13175 does not apply to this
rulemaking.
Paperwork Reduction Act
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. This proposed rule would affect the following approved
collections: (1) Statement of Registration, DS-2032, OMB No. 1405-0002;
(2) Application/License for Permanent Export of Unclassified Defense
Articles and Related Unclassified Technical Data, DSP-5, OMB No. 1405-
0003; (3) Application/License for Temporary Import of Unclassified
Defense Articles, DSP-61, OMB No. 1405-0013; (4) Nontransfer and Use
Certificate, DSP-83, OMB No. 1405-0021; (5) Application/License for
Permanent/Temporary Export or Temporary Import of Classified Defense
Articles and Classified Technical Data, DSP-85, OMB No. 1405-0022; (6)
Application/License for Temporary Export of Unclassified Defense
Articles, DSP-73, OMB No. 1405-0023; (7) Statement of Political
Contributions, Fees, or Commissions in Connection with the Sale of
Defense Articles or Services,
[[Page 36432]]
OMB No. 1405-0025; (8) Authority to Export Defense Articles and
Services Sold Under the Foreign Military Sales (FMS) Program, DSP-94,
OMB No. 1405-0051; (9) Application for Amendment to License for Export
or Import of Classified or Unclassified Defense Articles and Related
Technical Data, DSP-6, -62, -74, -119, OMB No. 1405-0092; (10) Request
for Approval of Manufacturing License Agreements, Technical Assistance
Agreements, and Other Agreements, DSP-5, OMB No. 1405-0093; (11)
Maintenance of Records by Registrants, OMB No. 1405-0111; (12) Annual
Brokering Report, DS-4142, OMB No. 1405-0141; (13) Brokering Prior
Approval (License), DS-4143, OMB No. 1405-0142; (14) Projected Sale of
Major Weapons in Support of Section 25(a)(1) of the Arms Export Control
Act, DS-4048, OMB No. 1405-0156; (15) Export Declaration of Defense
Technical Data or Services, DS-4071, OMB No. 1405-0157; (16) Request
for Commodity Jurisdiction Determination, DS-4076, OMB No. 1405-0163;
(17) Request to Change End-User, End-Use, and/or Destination of
Hardware, DS-6004, OMB No. 1405-0173; (18) Request for Advisory
Opinion, DS-6001, OMB No. 1405-0174; (19) Voluntary Disclosure, OMB No.
1405-0179; and (20) Technology Security/Clearance Plans, Screening
Records, and Non-Disclosure Agreements Pursuant to 22 CFR 126.18, OMB
No. 1405-0195. The Department of State believes there will be minimal
changes to these collections. The Department of State believes the
combined effect of all rules to be published moving commodities from
the USML to the EAR as part of the Administration's Export Control
Reform would decrease the number of license applications by
approximately 30,000 annually. The Department of State is looking for
comments on the potential reduction in burden.
List of Subjects in 22 CFR Part 120
Arms and munitions, Exports.
Accordingly, for the reasons set forth above, Title 22, Chapter I,
Subchapter M, part 120 is proposed to be amended as follows:
PART 120--PURPOSE AND DEFINITIONS
1. The authority citation for part 120 continues to read as
follows:
Authority: Sections 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 CFR 4075, 3 CFR, 1977 Comp. p. 79; 22 U.S.C.
2658; Pub. L. 105-261, 112 Stat. 1920.
2. Add Sec. 120.41 to read as follows:
Sec. 120.41 Specially designed.
When applying this definition, follow this sequential analysis:
Begin with paragraph (a)(1) of this section and proceed through each
subsequent paragraph. If a commodity would not be controlled as a
result of the application of the standards in paragraph (a) of this
section, then it is not necessary to work through paragraph (b) of this
section. If a commodity would be controlled as a result of paragraph
(a), then it is necessary to work through each of the elements of
paragraph (b). Commodities described in any of paragraphs (b)(1)
through (5) of this section are not ``specially designed'' commodities
controlled on the U.S. Munitions List but may be subject to the
jurisdiction of another U.S. Government regulatory agency (see Sec.
120.5 of this subchapter).
(a) Except for commodities described in (b) of this section, a
commodity is ``specially designed'' if, as a result of development, it:
(1) Has properties peculiarly responsible for achieving or
exceeding the controlled performance levels, characteristics, or
functions described in the relevant U.S. Munitions List paragraph;
(2) Is a part (see Sec. 121.8(d) of this subchapter) or component
(see Sec. 121.8(b) of this subchapter) necessary for an enumerated
defense article to function as designed; or
(3) Is an accessory or attachment (see Sec. 121.8(c) of this
subchapter) used with an enumerated defense article to enhance its
usefulness or effectiveness.
(b) A part, component, accessory, or attachment is not controlled
by a U.S. Munitions List ``catch-all'' paragraph if it:
(1) Is enumerated in a U.S. Munitions List paragraph;
(2) Is a single unassembled part that is of a type commonly used in
multiple types of commodities not enumerated on the U.S. Munitions List
or the Commerce Control List, such as threaded fasteners (e.g., screws,
bolts, nuts, nut plates, studs, inserts), other fasteners (e.g., clips,
rivets, pins), basic hardware (e.g., washers, spacers, insulators,
grommets, bushings, springs), wire, and solder;
(3) Has the same form, fit, and performance capabilities as a part,
component, accessory, or attachment used in or with a commodity that:
(i) Is or was in production (i.e., not in development); and
(ii) Is not enumerated on the U.S. Munitions List;
(4) Was or is being developed with a reasonable expectation of use
in or with defense articles enumerated on the U.S. Munitions List and
commodities not on the U.S. Munitions List; or
(5) Was or is being developed with no reasonable expectation of use
for a particular application.
Note 1: The term ``enumerated'' refers to any article which is
identified on the U.S. Munitions List or the Commerce Control List.
Note 2: The term ``commodity'' refers to any article, material,
or supply, except technology/technical data or software.
Note to paragraph (a)(1): An example of a commodity that, as a
result of development has properties peculiarly responsible for
achieving or exceeding the controlled performance levels, functions,
or characteristics in a U.S. Munitions List category would be a
swimmer delivery vehicle ``specially designed'' to dock with a
submarine to provide submerged transport for swimmers or divers from
submarines.
Note to paragraph (b): A ``catch-all'' paragraph is one that
does not refer to specific types of parts, components, accessories,
or attachments, but rather controls parts, components, accessories,
or attachments if they were ``specially designed'' for an enumerated
item. For the purposes of the U.S. Munitions List, a ``catch-all''
paragraph is delineated by the phrases ``and `specially designed'
parts and components therefor,'' or ``parts, components,
accessories, attachments, and associated equipment `specially
designed' for.''
Note 1 to paragraph (b)(3): For the purposes of this
definition, ``production'' means all production stages, such as
product engineering, manufacture, integration, assembly (mounting),
inspection, testing, and quality assurance. This includes ``serial
production'' where commodities have passed production readiness
testing (i.e., an approved, standardized design ready for large
scale production) and have been or are capable of being produced on
an assembly line using the approved, standardized design.
Note 2 to paragraph (b)(3): For the purposes of this
definition, ``development'' is related to all stages prior to serial
production, such as: Design, design research, design analyses,
design concepts, assembly and testing of prototypes, pilot
production schemes, design data, process of transforming design data
into a product, configuration design, integration design, layouts.
Note 3 to paragraph (b)(3): Commodities in ``production'' that
are subsequently subject to ``development'' activities, such as
those pertaining to quality improvements, cost reductions, or
feature enhancements, remain in ``production.'' However, any new
models or versions of such commodities developed from such efforts
that change the basic performance or capability of the commodity are
in ``development'' until and unless they enter into ``production.''
Note to paragraphs (b)(4) and (b)(5): For a defense article not
to be ``specially designed''
[[Page 36433]]
on the basis of (b)(4) or (b)(5), documents contemporaneous with its
development, in their totality, must establish the elements of
paragraph (b)(4) or (b)(5). Such documents may include concept
design information, marketing plans, declarations in patent
applications, or contracts. Absent such documents, the commodity may
not to be excluded from being ``specially designed'' by either
paragraph (b)(4) or (b)(5).
Note to paragraph (b)(5): If you have knowledge that the
commodity was or is being developed for a particular application,
you may not rely on paragraph (b)(5) to conclude that the commodity
was or is not ``specially designed.''
Dated: June 7, 2012.
Rose E. Gottemoeller,
Acting Under Secretary, Arms Control and International Security,
Department of State.
[FR Doc. 2012-14471 Filed 6-15-12; 11:15 am]
BILLING CODE 4710-25-P