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Federal Register / Vol. 69,
No. 99 / Friday, May 21, 2004 / Rules and
Regulations
The Full ITAR is on line click here.
Category IX—Military Training Equipment and
Training
(a) Training equipment specifically designed,
modified, configured or adapted for military
purposes, including but not limited to weapons
system
trainers, radar
trainers, gunnery training devices,
antisubmarine warfare trainers, target
equipment, armament training units,
pilot-less aircraft
trainers, navigation trainers and human-rated
centrifuges.
(b) Simulation devices for the items covered by
this subchapter.
(c) Tooling and equipment specifically designed
or modified for the production of articles
controlled by this category.
(d) Components, parts, accessories, attachments,
and associated equipment specifically designed,
modified, configured, or adapted for the
articles in
paragraphs (a), (b) and
(c) of this category.
(e) Technical data (as defined in §
120.10 of this subchapter) and defense
services (as defined in §
120.9 of this subchapter)
directly related to the
defense articles enumerated in paragraphs (a)
through (d) of this category.
(f) The following interpretations explain and
amplify terms used in this category and
elsewhere in this subchapter:
(1) The weapons systems trainers in paragraph
(a) of this category include individual crew
stations and system specific trainers;
(2) The articles in this category include any
end item, components, accessory, part, firmware,
software or system that has been designed or
manufactured using
technical data and defense services controlled
by this category;
(3) The defense services and related technical
data in paragraph (f) of this category include
software and associated databases that can be
used to simulate
trainers, battle management, test
scenarios/models, and weapons effects. In any
instance when the military training transferred
to a foreign person does
not use articles controlled by the U.S.
Munitions List, the training may nevertheless be
a defense service that requires
authorization in
accordance with this subchapter. See e.g., §
120.9 and §
124.1 of this subchapter for additional
information on military training.
Sec. 120.1 General authorities and eligibility.
(a)
Section 38 of the Arms Export Control Act (22
U.S.C. 2778) authorizes the President to control
the export and import of defense articles and
defense services. The statutory authority of the
President to promulgate regulations with respect
to exports of defense articles and defense
services was delegated to the Secretary of State
by Executive Order 11958, as amended. This
subchapter implements that authority. By virtue
of delegations of authority by the Secretary of
State, these regulations are primarily
administered by the Deputy Assistant Secretary
for Defense Trade Controls and Managing Director
of Defense Trade Controls, Bureau of
Political-Military Affairs.
(b)(1)
Authorized officials. All authorities conferred
upon the Deputy Assistant Secretary for Defense
Trade Controls or the Managing Director of
Defense Trade Controls by this subchapter may be
exercised at any time by the Under Secretary of
State for Arms Control and International
Security or the Assistant Secretary of State for
Political-Military Affairs unless the Legal
Adviser or the Assistant Legal Adviser for
Political-Military Affairs of the Department of
State determines that any specific exercise of
this authority under this paragraph may be
inappropriate.
(2) In
the Bureau of Political-Military Affairs, there
is a Deputy Assistant Secretary for Defense
Trade Controls (DAS--Defense Trade Controls) and
a Managing Director of Defense Trade Controls
(MD--Defense Trade Controls). The DAS--Defense
Trade Controls and the MD--Defense Trade
Controls are responsible for exercising the
authorities conferred under this subchapter. The
DAS--Defense Trade Controls is responsible for
oversight of the defense trade controls
function. The MD--Defense Trade Controls is
responsible for the Directorate of Defense Trade
Controls, which oversees the subordinate offices
described in paragraph (b)(2)(i) of this
section.
(i) All
references to the Office of Defense Trade
Controls and the Director of the Office of
Defense Trade Controls contained in the
International Traffic in Arms Regulations (ITAR)
shall be deemed to be
references
to:
(A) The
Office of Defense Trade Controls Management and
the Director, Office of Defense Trade Controls
Management, respectively, insofar as such
references relate to management of defense trade
controls operations; to include the exercise of
general authorities in this part 120 and the
design, development, and refinement of
processes, activities, and functional tools for
the export licensing regime and to effect export
compliance/enforcement activities;
(B) The
Office of Defense Trade Controls Licensing and
the Director, Office of Defense Trade Controls
Licensing, respectively, insofar as such
references relate to licensing or other
authorization of defense trade, including
references under parts
123,
124,
125,
126,
129
and
130 of this subchapter, and the commodity
jurisdiction procedure under this part
120;
(C) The
Office of Defense Trade Controls Compliance and
the Director, Office of Defense Trade Controls
Compliance, respectively, insofar as such
references relate to violations of law or
regulation and compliance therewith, including
references contained in parts
127,
128 and
130,
of this subchapter, and including references
under part
122 of this subchapter, and that
portion under part
129 of this subchapter
pertaining to registration;
(D) The
Office of Defense Trade Controls Policy and the
Director, Office of Defense Trade Controls
Policy, respectively, insofar as such references
relate to the general policies of defense trade,
including references under this part
120 and
part
126 of this subchapter.
(ii)
Further amendments to the ITAR will be
promulgated to reflect the specific changes as a
result of this realignment.
(c)
Eligibility. Only U.S. persons (as defined in
Sec. 120.15) and foreign governmental entities
in the United States may be granted licenses or
other approvals (other than retransfer approvals
sought pursuant to this subchapter). Foreign
persons (as defined in Sec.
120.16) other than
governments are not eligible. U.S. persons who
have been convicted of violating the criminal
statutes enumerated in Sec. 120.27, who have
been debarred pursuant to part
127 or
128 of
this subchapter, who are the subject of an
indictment involving the criminal statutes
enumerated in Sec. 120.27, who are ineligible to
contract with, or to receive a license or other
form of authorization to import defense articles
or defense services from any agency of the U.S.
Government, who are ineligible to receive export
licenses (or other forms of authorization to
export) from any agency of the U.S. Government,
who are subject to Department of State
Suspension/Revocation under Sec. 126.7
(a)(1)-(a)(7) of this subchapter, or who are
ineligible under Sec. 127.6(c) of this
subchapter are generally ineligible.
Applications for licenses or other approvals
will be considered only if the applicant has
registered with the Office of Defense Trade
Controls pursuant to part
122 of this
subchapter. All applications and requests for
approval must be signed by a U.S. person who has
been empowered by the registrant to sign such
documents.
(d) The
exemptions provided in this subchapter do not
apply to transactions in which the exporter or
any party to the export (as defined in Sec.
126.7(e) of this subchapter) is generally
ineligible as set forth above in paragraph (c)
of this section, unless an exception has been
granted pursuant to Sec. 126.7(c) of this
subchapter.
[58 FR 39283,
July 22, 1993, as amended at 68 FR 7417, Feb.
14, 2003; 68 FR 51171, Aug. 26, 2003; 68 FR
57352, Oct. 3, 2003]
Sec. 120.3 Policy on designating and determining
defense articles and services.
An
article or service may be designated or
determined in the future to be a defense article
(see Sec.
120.6)
or defense service (see Sec.
120.9) if it:
(a) Is
specifically designed, developed, configured,
adapted, or modified for a military application,
and
(i) Does
not have predominant civil applications, and
(ii) Does
not have performance equivalent (defined by
form, fit and function) to those of an article
or service used for civil applications; or
(b) Is
specifically designed, developed, configured,
adapted, or modified for a military application,
and has significant military or intelligence
applicability such that control under this
subchapter is necessary.
The
intended use of the article or service after its
export (i.e., for a military or civilian
purpose) is not relevant in determining whether
the article or service is subject to the
controls of this subchapter. Any item covered by
the U.S. Munitions List must be within the
categories of the U.S. Munitions List. The scope
of the U.S. Munitions List shall be changed only
by amendments made pursuant to section 38 of the
Arms Export Control Act (22 U.S.C. 2778).
Sec. 120.6
Defense article.
Defense
article means any item or technical data
designated in Sec.
121.1 of this subchapter. The
policy described in Sec. 120.3 is applicable to
designations of additional items. This term
includes technical data recorded or stored in
any physical form, models, mockups or other
items that reveal technical data directly
relating to items designated in Sec.
121.1 of
this subchapter. It does not include basic
marketing information on function or purpose or
general system descriptions.
Note: Section 121.1 Refers to
this page. We are only considering Chapter IX
not the entire USML. Should you require more
information please see Section
121.
Sec. 120.9 Defense service.
(a)
Defense service means:
(1) The
furnishing of assistance (including training) to
foreign persons, whether in the United States or
abroad in the design, development,
engineering,
manufacture, production, assembly, testing,
repair, maintenance, modification, operation,
demilitarization, destruction, processing
or use of
defense articles;
(2) The
furnishing to foreign persons of any technical
data controlled under this subchapter (see Sec.
120.10), whether in the United States or
abroad; or
(3)
Military training of foreign units and forces,
regular and irregular, including formal or
informal instruction of foreign persons in the
United
States or
abroad or by correspondence courses, technical,
educational, or information publications and
media of all kinds, training aid, orientation,
training
exercise, and military advice. (See also Sec.
124.1.)
(b)
[Reserved]
[62 FR
67275, Dec. 24, 1997]
Sec.
120.10 Technical data.
(a)
Technical data means, for purposes of this
subchapter:
(1)
Information, other than software as defined in
Sec.
120.10(4), which is required for the design,
development, production, manufacture, assembly,
operation,
repair, testing, maintenance or modification of
defense articles. This includes information in
the form of blueprints, drawings, photographs,
plans,
instructions and documentation.
(2)
Classified information relating to defense
articles and defense services;
(3)
Information covered by an invention secrecy
order;
(4)
Software as defined in Sec.
121.8(f) of this subchapter directly related
to defense articles;
(5) This
definition does not include information
concerning general scientific, mathematical or
engineering principles commonly taught in
schools,
colleges and
universities or information in the public domain
as defined in Sec.
120.11. It also does not include basic
marketing information on function
or purpose or
general system descriptions of defense articles.
(b)
[Reserved]
[58 FR
39283, July 22, 1993, as amended at 61 FR 48831,
Sept. 17, 1996]
Sec.
120.11 Public domain.
(a)
Public domain means information which is
published and which is generally accessible or
available to the public:
(1)
Through sales at newsstands and bookstores;
(2)
Through subscriptions which are available
without restriction to any individual who
desires to obtain or purchase the published
information;
(3)
Through second class mailing privileges granted
by the U.S. Government;
(4) At
libraries open to the public or from which the
public can obtain documents;
(5)
Through patents available at any patent office;
(6)
Through unlimited distribution at a conference,
meeting, seminar, trade show or exhibition,
generally accessible to the public, in the
United States;
(7)
Through public release (i.e., unlimited
distribution) in any form (e.g., not necessarily
in published form) after approval by the
cognizant U.S. government
department or
agency (see also Sec.
125.4(b)(13) of this subchapter);
(8)
Through fundamental research in science and
engineering at accredited institutions of higher
learning in the U.S. where the resulting
information is
ordinarily
published and shared broadly in the scientific
community. Fundamental research is defined to
mean basic and applied research in science and
engineering
where the resulting information is ordinarily
published and shared broadly within the
scientific community, as distinguished from
research the
results of
which are restricted for proprietary reasons or
specific U.S. Government access and
dissemination controls. University research will
not be
considered
fundamental research if:
(i) The
University or its researchers accept other
restrictions on publication of scientific and
technical information resulting from the project
or activity, or
(ii) The
research is funded by the U.S. Government and
specific access and dissemination controls
protecting information resulting from the
research are applicable.
(b)
[Reserved]
Sec.
120.13 United States.
United
States, when used in the geographical sense,
includes the several states, the Commonwealth of
Puerto Rico, the insular possessions of the
United States, the District of Columbia, the
Commonwealth of the Northern Mariana Islands,
any territory or possession of the United
States, and any territory or possession over
which the United States exercises any powers of
administration, legislation, and jurisdiction.
Sec. 120.14
Person.
Person
means a natural person as well as a corporation,
business association, partnership, society,
trust, or any other entity, organization or
group, including governmental entities. If a
provision in this subchapter does not refer
exclusively to a foreign person (Sec.
120.16) or U.S. person (Sec.
120.15),
then it refers to both.
Sec.
120.15 U.S. person.
U.S.
person means a person (as defined in section
120.14
of this part) who is lawful permanent resident
as defined by 8 U.S.C. 1101(a)(20) or who is a
protected individual as defined by 8 U.S.C.
1324b(a)(3). It also means any corporation,
business association, partnership, society,
trust, or any other entity, organization or
group that is incorporated to do business in the
United States. It also includes any governmental
(federal, state or local) entity. It does not
include any foreign person as defined in section
120.16 of this part.
[59 FR
25811, May 18, 1994]
Sec.
120.16 Foreign person.
Foreign
persons means any natural person who is not a
lawful permanent resident as defined by 8 U.S.C.
1101(a)(20) or who is not a protected individual
as defined by 8 U.S.C. 1324b(a)(3). It also
means any foreign corporation, business
association, partnership, trust, society or any
other entity or group that is not incorporated
or organized to do business in the United
States, as well as international organizations,
foreign governments and any agency or
subdivision of foreign governments (e.g.
diplomatic missions).
[59 FR
25811, May 18, 1994]
Sec. 120.27
U.S. criminal statutes.
(a) For
purposes of this subchapter, the phrase U.S.
criminal statutes means:
(1)
Section 38 of the Arms Export Control Act (22
U.S.C. 2778);
(2)
Section 11 of the Export Administration Act of
1979 (50 U.S.C. app. 2410);
(3)
Sections 793, 794, or 798 of title 18, United
States Code (relating to espionage involving
defense or classified information);
(4)
Section 16 of the Trading with the Enemy Act (50
U.S.C. app. 16);
(5)
Section 206 of the International Emergency
Economic Powers Act (relating to foreign assets
controls; 50 U.S.C. 1705);
(6)
Section 30A of the Securities Exchange Act of
1934 (15 U.S.C. 78dd-1) or section 104 of the
Foreign Corrupt Practices Act (15 U.S.C.
78dd-2);
(7)
Chapter 105 of title 18, United States Code
(relating to sabotage);
(8)
Section 4(b) of the Internal Security Act of
1950 (relating to communication of classified
information; 50 U.S.C. 783(b));
(9)
Sections 57, 92, 101, 104, 222, 224, 225, or 226
of the Atomic Energy Act of 1954 (42 U.S.C.
2077, 2122, 2131, 2134, 2272, 2274, 2275, and
2276);
(10)
Section 601 of the National Security Act of 1947
(relating to intelligence identities protection;
50 U.S.C. 421);
(11)
Section 603(b) or (c) of the Comprehensive
Anti-Apartheid Act of 1986 (22 U.S.C. 5113(b)
and (c)); and
(12)
Section 371 of title 18, United States Code
(when it involves conspiracy to violate any of
the above statutes).
(b)
[Reserved]
Sec. 121.8 End-items, components, accessories, attachments, parts, firmware, software and systems.
(a) An
end-item is an assembled article ready for its
intended use. Only ammunition, fuel or another
energy source is required to place it in an
operating state.
(b) A
component is an item which is useful only when
used in conjunction with an end-item. A major
component includes any assembled element which
forms a
portion of an end-item without which the
end-item is inoperable. (Example: Airframes,
tail sections, transmissions, tank treads,
hulls, etc.) A minor
component
includes any assembled element of a major
component.
(c)
Accessories and attachments are associated
equipment for any component, end-item or system,
and which are not necessary for their operation,
but which
enhance their usefulness or effectiveness.
(Examples: Military riflescopes, special paints,
etc.)
(d) A
part is any single unassembled element of a
major or a minor component, accessory, or
attachment which is not normally subject to
disassembly
without the
destruction or the impairment of design use.
(Examples: Rivets, wire, bolts, etc.)
(e)
Firmware and any related unique support tools
(such as computers, linkers, editors, test case
generators, diagnostic checkers, library of
functions
and system
test diagnostics) specifically designed for
equipment or systems covered under any category
of the U.S. Munitions List are considered as
part
of the
end-item or component. Firmware includes but is
not limited to circuits into which software has
been programmed.
(f)
Software includes but is not limited to the
system functional design, logic flow,
algorithms, application programs, operating
systems and support
software for
design, implementation, test, operation,
diagnosis and repair. A person who intends to
export software only should, unless it is
specifically
enumerated in
Sec. 121.1 (e.g., XIII(b)), apply for a
technical data license pursuant to part
125 of this subchapter.
(g) A
system is a combination of end-items,
components, parts, accessories, attachments,
firmware or software, specifically designed,
modified or
adapted to
operate together to perform a specialized
military function.
TITLE
22--FOREIGN RELATIONS
CHAPTER I--DEPARTMENT OF STATE
PART
122 -- REGISTRATION OF MANUFACTURERS AND
EXPORTERS
Sec.
122.1
Registration requirements.
122.2
Submission of registration statement.
122.3
Registration fees.
122.4
Notification of changes in information
furnished by registrants.
122.5
Maintenance of records by registrants.
Authority: Secs. 2 and 38, Pub. L. 90-629,
90 Stat. 744 (22 U.S.C. 2752, 2778); E.O.
11958, 42 FR 4311, 1977 Comp. p. 79; 22
U.S.C. 2658.
Source: 58 FR 39298, July 22, 1993, unless
otherwise noted.
Sec. 122.1 Registration requirements.
(a)
Any person who engages in the United States
in the business of either manufacturing or
exporting defense articles or furnishing
defense services is required to register
with the Office of Defense Trade Controls.
Manufacturers who do not engage in exporting
must nevertheless register.
(b)
Exemptions. Registration is not required
for:
(1)
Officers and employees of the United States
Government acting in an official capacity.
(2)
Persons whose pertinent business activity is
confined to the production of unclassified
technical data only.
(3)
Persons all of whose manufacturing and
export activities are licensed under the
Atomic Energy Act of 1954, as amended.
(4)
Persons who engage only in the fabrication
of articles for experimental or scientific
purpose, including research and development.
(c)
Purpose. Registration is primarily a means
to provide the U.S. Government with
necessary information on who is involved in
certain manufacturing and exporting
activities. Registration does not confer any
export rights or privileges. It is generally
a precondition to the issuance of any
license or other approval under this
subchapter.
Sec. 122.2 Submission of registration
statement.
(a) General. The Department of State Form
DSP-9 (Registration Statement) and the
transmittal letter required by paragraph (b)
of this section must be submitted by an
intended registrant with a payment by check
or money order payable to the Department of
State of one of the fees prescribed in Sec.
122.3(a) of this subchapter. The
Registration Statement and transmittal
letter must be signed by a senior officer
who has been empowered by the intended
registrant to sign such documents. The
intended registrant shall also submit
documentation that demonstrates that it is
incorporated or otherwise authorized to do
business in the United States. The Office of
Defense Trade Controls will return to the
sender any Registration Statement that is
incomplete, or that is not accompanied by
the required letter or payment of the proper
registration fee.
[CFR
April 2004]
(a)
General.
The Department of State Form DS-2032
(Statement of Registration) and the
transmittal letter required by paragraph (b)
of this section must be submitted by an
intended registrant with a payment (by check
or money order) payable to the Department of
State of one of the fees prescribed in
§122.3(a)
of this subchapter. Checks and money orders
must be in U.S. currency, and checks must be
payable through a U.S. financial
institution. In addition, the Statement of
Registration and transmittal letter must be
signed by a senior officer who has been
empowered by the intended registrant to sign
such documents. The intended registrant
also shall submit documentation that
demonstrates that it is incorporated or
otherwise authorized to do business in the
United States. The Directorate of Defense
Trade Controls will notify the registrant if
the Statement of Registration package is
incomplete.
[69 FR
70888 December 8, 2004]
(b)
Transmittal letter. A letter of transmittal,
signed by an authorized senior officer of
the intended registrant, shall accompany
each Registration Statement.
(1)
The letter shall state whether the intended
registrant, chief executive officer,
president, vice-presidents, other senior
officers or officials (e.g. comptroller,
treasurer, general counsel) or any member of
the board of directors:
(i)
Has ever been indicted for or convicted of
violating any of the U.S. criminal statutes
enumerated in Sec. 120.27 of this
subchapter; or
(ii)
Is ineligible to contract with, or to
receive a license or other approval to
import defense articles or defense services
from, or to receive an export license or
other approval from, any agency of the U.S.
Government.
(2)
The letter shall also declare whether the
intended registrant is owned or controlled
by foreign persons (as defined in Sec.
120.16 of this subchapter). If the intended
registrant is owned or controlled by foreign
persons, the letter shall also state whether
the intended registrant is incorporated or
otherwise authorized to engage in business
in the United States.
(c) Definition. For purposes of this
section, ownership means that more than 50
percent of the outstanding voting securities
of the firm are owned by one or more foreign
persons. Control means that one or more
foreign persons have the authority or
ability to establish or direct the general
policies or day-to-day operations of the
firm. Control is presumed to exist where
foreign persons own 25 percent or more of
the outstanding voting securities if no U.S.
persons control an equal or larger
percentage. The standards for control
specified in 22 CFR 60.2(c) also provide
guidance in determining whether control in
fact exists.
[CFR
April 2004]
(c)
Definition. For purpose of this
section, ownership means that more
than 50 percent of the outstanding voting
securities of the firm are owned by one or
more foreign persons. Control means
that one or more foreign persons have the
authority or ability to establish or direct
the general policies or day-to-day
operations of the firm. Control is presumed
to exist where foreign persons own 25
percent or more of the outstanding voting
securities if no U.S. persons control an
equal or larger percentage.
[69 FR
70888 December 8, 2004]
Sec. 122.3 Registration fees.
(a) A person who is required to register may
do so for a period up to 4 years upon
submission of a completed form DSP-9,
transmittal letter, and payment of a fee as
follows:
1
year--$600
2
years--$1,200
3
years--$1,800
4
years--$2,200
[CFR
April 2004]
(a) A
person who is required to register may do so
for a period up to 2 years upon submission
of a completed Form DS-2032, transmittal
letter, and payment of a fee as follows:
1 year
……………………….. $1,750.00
2 years
………………………. $3,500.00
[69 FR
70888 December 8, 2004]
(b)
Lapse in registration. A registrant who
fails to renew a registration and, after an
intervening period, seeks to register again
must pay registration fees for any part of
such intervening period during which the
registrant engaged in the business of
manufacturing or exporting defense articles
or defense services.
(c) Refund of fee. Fees paid in advance for
future years of a multiple year registration
will be refunded upon request if the
registrant ceases to engage in the
manufacture or export of defense articles
and defense services. A request for a refund
must be submitted to the Office of Defense
Trade Controls prior to the beginning of any
year for which a refund is claimed.
[CFR
April 2004]
[58 FR
39298, July 22, 1993, as amended at 62 FR
27497, May 20, 1997]
Sec. 122.4 Notification of changes in
information furnished by registrants.
(a) A
registrant must, within five days of the
event, notify the Office of Defense Trade
Controls by registered mail if:
(1)
Any of the persons referred to in Sec.
122.2(b) are indicted for or convicted of
violating any of the U.S. criminal statutes
enumerated in Sec. 120.27 of this
subchapter, or become ineligible to contract
with, or to receive a license or other
approval to export or temporarily import
defense articles or defense services from
any agency of the U.S. government; or
(2)
There is a material change in the
information contained in the Registration
Statement, including a change in the senior
officers; the establishment, acquisition or
divestment of a subsidiary or foreign
affiliate; a merger; a change of location;
or the dealing in an additional category of
defense articles or defense services.
(b) A
registrant must notify the Office of Defense
Trade Controls by registered mail at least
60 days in advance of any intended sale or
transfer to a foreign person of ownership or
control of the registrant or any entity
thereof. Such notice does not relieve the
registrant from obtaining the approval
required under this subchapter for the
export of defense articles or defense
services to a foreign person, including the
approval required prior to disclosing
technical data. Such notice provides the
Office of Defense Trade Controls with the
information necessary to determine whether
the authority of section 38(g)(6) of the
Arms Export Control Act regarding licenses
or other approvals for certain sales or
transfers of articles or data should be
invoked (see Sec. Sec. 120.10 and 126.1(e)
of this subchapter).
(c)
The new entity formed when a registrant
merges with another company or acquires, or
is acquired by, another company or a
subsidiary or division of another company
shall advise the Office of Defense Trade
Controls of the following:
(1)
The new firm name and all previous firm
names being disclosed;
(2)
The registration number that will survive
and those that are to be discontinued (if
any);
(3)
The license numbers of all approvals on
which unshipped balances will be shipped
under the surviving registration number,
since any license not the subject of
notification will be considered invalid; and
(4)
Amendments to agreements approved by the
Office of Defense Trade Controls to change
the name of a party to those agreements. The
registrant must, within 60 days of this
notification, provide to the Office of
Defense Trade Controls a signed copy of an
amendment to each agreement signed by the
new U.S. entity, the former U.S. licensor
and the foreign licensee. Any agreements not
so amended will be considered invalid.
(d)
Prior approval by the Office of Defense
Trade Controls is required for any amendment
making a substantive change.
Sec. 122.5 Maintenance of records by
registrants.
(a) A
person who is required to register must
maintain records concerning the manufacture,
acquisition and disposition of defense
articles; the provision of defense services;
and information on political contributions,
fees, or commissions furnished or obtained,
as required by part 130 of this subchapter.
All such records must be maintained for a
period of five years from the expiration of
the license or other approval. The Director,
Office of Defense Trade Controls, may
prescribe a longer or shorter period in
individual cases.
(b)
Records maintained under this section shall
be available at all times for inspection and
copying by the Director, Office of Defense
Trade Controls or a person designated by the
Director (the Director of the Diplomatic
Security Service or a person designated by
the Director of the Diplomatic Security
Service or another designee), or the
Commissioner of the U.S. Customs Service or
a person designated by the Commissioner.
Sec. 123.5 Temporary export licenses.
(a) The
Office of Defense Trade Controls may issue a
license for the temporary export of unclassified
defense articles (DSP-73). Such licenses are
valid only if (1) the article will be exported
for a period of less than 4 years and will be
returned to the United States and (2) transfer
of title will not occur during the period of
temporary export. Accordingly, articles exported
pursuant to a temporary export license may not
be sold or otherwise permanently transferred to
a foreign person while they are overseas under a
temporary export license. A renewal of the
license or other written approval must be
obtained from the Office of Defense Trade
Controls if the article is to remain outside the
United States beyond the period for which the
license is valid.
(b)
Requirements. Defense articles authorized for
temporary export under this section may be
shipped only from a port in the United States
where a District Director of Customs is
available, or from a U.S. Post Office (see 39
CFR part 20), as appropriate. The license for
temporary export must be presented to the
District Director of Customs who, upon
verification, will endorse the exit column on
the reverse side of the license. In some
instances of the temporary export of technical
data (e.g postal shipments), self-endorsement
will be necessary (see Sec. 123.22(d)). The
endorsed license for temporary export is to be
retained by the licensee. In the case of a
military aircraft or vessel exported under its
own power, the endorsed license must be carried
on board such vessel or aircraft as evidence
that it has been duly authorized by the
Department of State to leave the United States
temporarily.
(c) Any
temporary export license for hardware that is
used, regardless of whether the hardware was
exported directly to the foreign destination or
returned directly from the foreign destination,
must be endorsed by the Bureau of Customs and
Border Protection in accordance with the
procedures in Sec. 123.22 of this subchapter.
Sec. 123.15 Congressional notification for licenses.
(a) All
exports of major defense equipment, as defined
in Sec. 120.8 of this subchapter, sold under a
contract in the amount of $14,000,000 or more,
or exports of defense articles and defense
services sold under a contract in the amount of
$50,000,000 or more, may take place only after
the Office of Defense Trade Controls notifies
the exporter through issuance of a license or
other approval that Congress has not enacted a
joint resolution prohibiting the export and:
(1) In
the case of a license for an export to the North
Atlantic Treaty Organization, any member country
of that Organization, or Australia, Japan or New
Zealand, 15 calendar days have elapsed since
receipt by the Congress of the certification
required by 22 U.S.C. 2776(c)(1); or
(2) In
the case of a license for an export to any other
destination, 30 calendar days have elapsed since
receipt by the Congress of the certification
required by 22 U.S.C. 2776(c)(1).
(b)
Persons who intend to export defense articles
and defense services pursuant to any exemption
in this subchapter under the circumstances
described in the first sentence of paragraph (a)
of this section must notify the Office of
Defense Trade Controls by letter of the intended
export and, prior to transmittal to Congress,
provide a signed contract and a DSP-83 signed by
the applicant, the foreign consignee and
end-user.
Sec. 123.16 Exemptions of general applicability.
(a) The
following exemptions apply to exports of
unclassified defense articles for which no
approval is needed from the Office of Defense
Trade Controls. These exemptions do not apply
to: Proscribed destinations under Sec.
126.1 of this subchapter; exports for which
Congressional notification is required (see Sec.
123.15 of this subchapter); MTCR articles;
Significant Military Equipment (SME); and may
not be used by persons who are generally
ineligible as described in Sec.
120.1(c) of this subchapter. All shipments
of defense articles, including those to and from
Canada, require a Shipper's Export Declaration (SED)
or notification letter. If the export of a
defense article is exempt from licensing, the
SED must cite the exemption. Refer to Sec.
123.22 for Shipper's Export Declaration and
letter notification requirements.
(b) The
following exports are exempt from the licensing
requirements of this subchapter.
(1)
District Directors of Customs shall permit the
export without a license of defense hardware
being exported in furtherance of a manufacturing
license agreement, technical assistance
agreement, distribution agreement or an
arrangement for distribution of items identified
in Category XIII(b)(1), approved in accordance
with Part 124, provided that:
(i) The
defense hardware to be exported supports the
activity and is identified by item, quantity and
value in the agreement or arrangement; and
(ii) Any
provisos or limitations placed on the authorized
agreement or arrangement are adhered to; and
(iii) The
exporter certifies on the Shipper's Export
Declaration that the export is exempt from the
licensing requirements of this subchapter. This
is done by writing, ``22 CFR
123.16(b)(1) and the agreement or
arrangement (identify/state number)
applicable''; and
(iv) The
total value of all shipments does not exceed the
value authorized in the agreement or
arrangement.
(v) In
the case of a distribution agreement, export
must be made directly to the approved foreign
distributor.
(2)
District Directors of Customs shall permit the
export of components or spare parts (for
exemptions for firearms and ammunition see Sec.
123.17) without a license when the total value
does not exceed $500 in a single transaction
and:
(i) The
components or spare parts are being exported to
support a defense article previously authorized
for export; and
(ii) The
spare parts or components are not going to a
distributor, but to a previously approved
end-user of the defense articles; and
(iii) The
spare parts or components are not to be used to
enhance the capability of the defense article;
(iv)
exporters shall not split orders so as not to
exceed the dollar value of this exemption;
(v) the
exporter may not make more than 24 shipments per
calendar year to the previously authorized end
user;
(vi) The
exporter must certify on the Shipper's Export
Declaration that the export is exempt from the
licensing requirements of this subchapter. This
is done by writing 22 CFR 123.16(b)(2)
applicable.
(3)
District Directors of Customs shall permit the
export without a license, of packing cases
specially designed to carry defense articles.
(4)
District Directors of Customs shall permit the
export without a license, of unclassified models
or mock-ups of defense articles, provided that
such models or mock-ups are nonoperable and do
not reveal any technical data in excess of that
which is exempted from the licensing
requirements of Sec.
125.4(b) of this subchapter and do not
contain components covered by the U.S. Munitions
List (see Sec. 120.6(b) of this subchapter).
Some models or mockups built to scale or
constructed of original materials can reveal
technical data. U.S. persons who avail
themselves of this exemption must provide a
written certification to the District Director
of Customs that these conditions are met. This
exemption does not imply that the Office of
Defense Trade Controls will approve the export
of any defense articles for which models or
mocks-ups have been exported pursuant to this
exemption.
(5)
District Directors of Customs shall permit the
temporary export without a license of
unclassified defense articles to any public
exhibition, trade show, air show or related
event if that article has previously been
licensed for a public exhibition, trade show,
air show or related event and the license is
still valid. U.S. persons who avail themselves
of this exemption must provide a written
certification to the District Director of
Customs that these conditions are met.
(6) For
exemptions for firearms and ammunition for
personal use refer to Sec. 123.17.
(7) For
exemptions for firearms for personal use of
members of the U.S. Armed Forces and civilian
employees see Sec. 123.18.
(8) For
exports to Canada refer to Sec. 126.5 of this
subchapter.
(9)
District Directors of Customs shall permit the
temporary export without a license by a U.S.
person of any unclassified component, part, tool
or test equipment to a subsidiary, affiliate or
facility owned or controlled by the U.S. person
(see Sec.
122.2(c) of this subchapter) if the
component, part, tool or test equipment is to be
used for manufacture, assembly, testing,
production, or modification provided:
(i) The
U.S. person is registered with the Office of
Defense Trade Controls and complies with all
requirements set forth in part
122 of this subchapter;
(ii) No
defense article exported under this exemption
may be sold or transferred without the
appropriate license or other approval from the
Office of Defense Trade Controls.
(10)
District Directors shall permit, without a
license, the permanent export, and temporary
export and return to the United States, by
accredited U.S. institutions of higher learning
of articles fabricated only for fundamental
research purposes otherwise controlled by
Category XV (a) or (e) in Sec. 121.1 of this
subchapter when all of the following conditions
are met:
(i) The
export is to an accredited institution of higher
learning, a governmental research center or an
established government funded private research
center located within countries of the North
Atlantic Treaty Organization (NATO) or countries
which have been designated in accordance with
section 517 of the Foreign Assistance Act of
1961 as a major non-NATO ally (and as defined
further in section 644(q) of that Act) for
purposes of that Act and the Arms Export Control
Act, or countries that are members of the
European Space Agency or the European Union and
involves exclusively nationals of such
countries;
(ii) All
of the information about the article(s),
including its design, and all of the resulting
information obtained through fundamental
research involving the article will be published
and shared broadly within the scientific
community, and is not restricted for proprietary
reasons or specific U.S. government access and
dissemination controls or other restrictions
accepted by the institution or its researchers
on publication of scientific and technical
information resulting from the project or
activity (See Sec. 120.11 of this subchapter);
and
(iii) If
the article(s) is for permanent export, the
platform or system in which the article(s) may
be incorporated must be a satellite covered by
Sec.
125.4(d)(1)(iii) of this subchapter and be
exclusively concerned with fundamental research
and only be launched into space from countries
and by nationals of countries identified in this
section.
Sec. 123.22 Filing, retention, and return of export licenses and filing of export information.
(a) Any
export, as defined in this subchapter, of a
defense article controlled by this subchapter,
to include defense articles transiting the
United States, requires the electronic reporting
of export information. The reporting of the
export information shall be to the Bureau of
Customs and Border Protection using the
Automated Export System (AES) or directly to the
Directorate of Defense Trade Controls (DDTC).
Any license or other approval authorizing the
permanent export of hardware must be filed at a
U.S. Port before any export. Licenses or other
approvals for the permanent export of technical
data and defense services shall be retained by
the applicant who will send the export
information directly to DDTC. Temporary export
or temporary import licenses for such items need
not be filed with the Bureau of Customs and
Border Protection, but must be presented to the
Bureau of Customs and Border Protection for
decrementing of the shipment prior to departure
and at the time of entry. The Bureau of Customs
and Border Protection will only decrement a
shipment after the export information has been
filed correctly using the AES. Before the export
of any hardware using an exemption in this
subchapter, the DDTC registered
applicant/exporter, or an agent acting on the
filer's behalf, must electronically provide
export information using the AES (see paragraph
(b) of this section). In addition to
electronically providing the export information
to the Bureau of Customs and Border Protection
before export, all the mandatory documentation
must be presented to the port authorities (e.g.,
attachments, certifications, proof of AES
filing; such as the External Transaction Number
(XTN) or Internal Transaction Number (ITN)).
Export authorizations shall be filed, retained,
decremented or returned to DDTC as follows:
(1)
Filing of licenses and documentation for the
permanent export of hardware. For any permanent
export of hardware using a license (e.g., DSP-5,
DSP-94) or an exemption in this subchapter, the
exporter must, prior to an AES filing, deposit
the license and provide any required
documentation for the license or the exemption
with the Bureau of Customs and Border
Protection, unless otherwise directed in this
subchapter (e.g., Sec.
125.9). If necessary, an export may be made
through a port other than the one designated on
the license if the exporter complies with the
procedures established by the Bureau of Customs
and Border Protection.
(2)
Presentation and retention by the applicant of
temporary licenses and related documentation for
the export of unclassified defense articles.
Licenses for the temporary export or temporary
import of unclassified defense articles need not
be filed with the Bureau of Customs and Border
Protection, but must be retained by the
applicant and presented to the Bureau of Customs
and Border Protection at the time of temporary
import and temporary export. When a defense
article is temporarily exported from the United
States and moved from one destination authorized
on a license to another destination authorized
on the same or another temporary license, the
applicant, or an agent acting on the applicant's
behalf, must ensure that the Bureau of Customs
and Border Protection decrements both temporary
licenses to show the exit and entry of the
hardware.
(b)
Filing and reporting of export information--(1)
Filing of export information with the Bureau of
Customs and Border Protection. Before exporting
any hardware controlled by this subchapter,
using a license or exemption, the DDTC
registered applicant/exporter, or an agent
acting on the filer's behalf, must
electronically file the export information with
the Bureau of Customs and Border Protection
using the Automated Export System (AES) in
accordance with the following timelines:
(i) Air
or truck shipments. The export information must
be electronically filed at least 8 hours prior
to departure.
(ii) Sea
or rail Shipments. The export information must
be electronically filed at least 24 hours prior
to departure.
(2)
Emergency shipments of hardware that cannot meet
the pre-departure filing requirements. Bureau of
Customs and Boarder Protection may permit an
emergency export of hardware by truck (e.g.,
departures to Mexico or Canada) or air, by a
U.S. registered person, when the exporter is
unable to comply with the SED filing timeline in
paragraph (b)(1)(i) of this section. The
applicant, or an agent acting on the applicant's
behalf, in addition to providing the export
information electronically using the AES, must
provide documentation required by the Bureau of
Customs and Border Protection and this
subchapter. The documentation provided to the
Bureau of Customs and Border Protection at the
port of exit must include the External
Transaction Number (XTN) or Internal Transaction
Number (ITN) for the shipment and a copy of a
notification to DDTC stating that the shipment
is urgent and why. The original of the
notification must be immediately provided to
DDTC. The AES filing of the export information
when the export is by air must be at least two
hours prior to any departure from the United
States; and, when a truck shipment, at the time
when the exporter provides the articles to the
carrier or at least one hour prior to departure
from the United States, when the permanent
export of the hardware has been authorized for
export:
(i) In
accordance with Sec.
126.4 of this subchapter, or
(ii) On a
valid license (i.e., DSP-5, DSP-94) and the
ultimate recipient and ultimate end user
identified on the license is a foreign
government.
(3)
Reporting of export information on technical
data and defense service. When an export is
being made using a DDTC authorization (e.g.,
technical data license, agreement or a technical
data exemption provided in this subchapter), the
DDTC registered exporter will retain the license
or other approval and provide the export
information electronically to DDTC as follows:
(i)
Technical data license. Prior to the permanent
export of technical data licensed using a Form
DSP-5, the applicant shall electronically
provide export information using the system for
direct electronic reporting to DDTC of export
information and self validate the original of
the license. When the initial export of all the
technical data authorized on the license has
been made, the license must be returned to DDTC.
Exports of copies of the licensed technical data
should be made in accordance with existing
exemptions in this subchapter. Should an
exemption not apply, the applicant may request a
new license.
(ii)
Manufacturing license and technical assistance
agreements. Prior to the initial export of any
technical data and defense services authorized
in an agreement the U.S. agreement holder must
electronically inform DDTC that exports have
begun. In accordance with this subchapter, all
subsequent exports of technical data and
services are not required to be filed
electronically with DDTC except when the export
is done using a U.S. Port. Records of all
subsequent exports of technical data shall be
maintained by the exporter in accordance with
this subchapter and shall be made immediately
available to DDTC upon request. Exports of
technical data in furtherance of an agreement
using a U.S. Port shall be made in accordance
with Sec. 125.4 of this subchapter and made in
accordance with the procedures in paragraph
(b)(3)(iii) of this section.
(iii)
Technical data and defense service exemptions.
In any instance when technical data is exported
using an exemption in this subchapter (e.g.,
Sec. Sec.
125.4(b)(2),
125.4(b)(4), 126.5 [126.5 refers to Canadian
Exemptions] ) from a U.S. port, the exporter is
not required to report using AES, but must,
effective January 18, 2004, provide the export
data electronically to DDTC. A copy of the
electronic notification to DDTC must accompany
the technical data shipment and be made
available to the Bureau of Customs and Border
Protection upon request.
Note to
paragraph (b)(3)(iii): Future changes to the
electronic reporting procedure will be amended
by publication of a rule in the Federal
Register. Exporters are reminded to continue
maintaining records of all export transactions,
including exemption shipments, in accordance
with this subchapter.
(c)
Return of licenses. All licenses issued by the
Directorate of Defense Trade Controls (DDTC)
must be returned to the DDTC in accordance with
the following:
(1)
License filed with the Bureau of Customs and
Border Protection. The Bureau of Customs and
Border Protection must return to the DDTC any
license when the total value or quantity
authorized has been shipped or when the date of
expiration is reached, whichever occurs first.
(2)
Licenses not filed with the Bureau of Customs
and Border Protection. Any license that is not
filed with the Bureau of Customs and Border
Protection (e.g., oral or visual technical data
releases or temporary import and export licenses
retained in accordance with paragraph (a)(2) of
this section), must be returned by the applicant
to the DDTC no later than 60 days after the
license has been expended (e.g., total value or
quantity authorized has been shipped) or the
date of expiration, whichever occurs first.
Sec. 124.1 Manufacturing license agreements and
technical assistance agreements.
(a) The
approval of the Office of Defense Trade Controls
must be obtained before the defense services
described in Sec.
120.9(a) of this subchapter
may be
furnished. In order to obtain such approval, the
U.S. person must submit a proposed agreement to
the Office of Defense Trade Controls. Such
agreements
are generally characterized as either
Manufacturing license agreements, technical
assistance agreements, distribution agreements
or off-shore
procurement
agreements, and may not enter into force without
the prior written approval of the Office of
Defense Trade Controls. Once approved, the
defense
services described in the agreements may
generally be provided without further licensing
in accordance with Sec. Sec.
124.3 and
125.4(b)(2)
of this
subchapter. The requirements of this section
apply whether or not technical data is to be
disclosed or used in the performance of the
defense
services
described in Sec.
120.9(a) of this subchapter (e.g., all the
information relied upon by the U.S. person in
performing the defense service is in the
public domain
or is otherwise exempt from the licensing
requirements of this subchapter pursuant to Sec.
125.4 of this subchapter). This requirement
also applies
to the training of any foreign military forces,
regular and irregular, in the use of defense
articles. Technical assistance agreements must
be
submitted in
such cases. In exceptional cases, The Office of
Defense Trade Controls, upon written request,
will consider approving the provision of
defense
services described in Sec.
120.9(a) of this subchapter by granting a
license under part
125 of this subchapter. Also, see Sec.
126.8 of this
subchapter
for the requirements for prior approval of
proposals relating to significant military
equipment.
(b)
Classified Articles. Copies of approved
agreements involving the release of classified
defense articles will be forwarded by the Office
of Defense
Trade
Controls to the Defense Investigative Service of
the Department of Defense.
(c)
Amendments. Changes to the scope of approved
agreements, including modifications, upgrades,
or extensions must be submitted for approval.
The
amendments
may not enter into force until approved by the
Office of Defense Trade Controls.
(d) Minor
Amendments. Amendments which only alter delivery
or performance schedules, or other minor
administrative amendments which do not affect
in any manner
the duration of the agreement or the clauses or
information which must be included in such
agreements because of the requirements of this
part, do not
have to be submitted for approval. One copy of
all such minor amendments must be submitted to
the Office of Defense Trade Controls within
thirty days
after they are concluded.
Sec. 124.3 Exports of technical data in
furtherance of an agreement.
(a)
Unclassified technical data. The Bureau of
Customs and Border Protection or U.S. Postal
authorities shall permit the export without a
license of
unclassified
technical data if the export is in furtherance
of a manufacturing license or technical
assistance agreement which has been approved in
writing
by the
Directorate of Defense Trade Controls (DDTC) and
the technical data does not exceed the scope or
limitations of the relevant agreement. The
approval of
the DDTC must be obtained for the export of any
unclassified technical data that may exceed the
terms of the agreement.
(b)
Classified technical data. The export of
classified information in furtherance of an
approved manufacturing license or technical
assistance agreement
which
provides for the transmittal of classified
information does not require further approval
from the Office of Defense Trade Controls when:
(1) The
United States party certifies to the Department
of Defense transmittal authority that the
classified information does not exceed the
technical or
product
limitations in the agreement; and
(2) The
U.S. party complies with the requirements of the
Department of Defense Industrial Security Manual
concerning the transmission of classified
information
and any other requirements of cognizant U.S.
departments or agencies.
[58 FR
39305, July 22, 1993, as amended at 68 FR 61102,
Oct. 27, 2003]
Sec. 124.13 Procurement by United States
persons in foreign countries (offshore
procurement).
Notwithstanding the other provisions in part
124 of this subchapter, the Office of
Defense Trade Controls may authorize by means of
a license (DSP-5)
the export of
unclassified technical data to foreign persons
for offshore procurement of defense articles,
provided that:
(a) The
contract or purchase order for offshore
procurement limits delivery of the defense
articles to be produced only to the person in
the United States
or to an
agency of the U.S. Government; and
(b) The
technical data of U.S.-origin to be used in the
foreign manufacture of defense articles does not
exceed that required for bid purposes on a
build-to-print
basis
(build-to-print means producing an end-item
(i.e., system, subsystem or component) from
technical drawings and specifications (which
contain no process or
know-how
information) without the need for additional
technical assistance). Release of supporting
documentation (e.g., acceptance criteria, object
code software
for
numerically controlled machines) is permissible.
Build-to-print does not include the release of
any information which discloses design
methodology, engineering
analysis,
detailed process information or manufacturing
know-how); and
(c) The
contract or purchase order between the person in
the United States and the foreign person:
(1)
Limits the use of the technical data to the
manufacture of the defense articles required by
the contract or purchase order only; and
(2)
Prohibits the disclosure of the data to any
other person except subcontractors within the
same country; and
(3)
Prohibits the acquisition of any rights in the
data by any foreign person; and
(4)
Provides that any subcontracts between foreign
persons in the approved country for manufacture
of equipment for delivery pursuant to the
contract or
purchase
order contain all the limitations of this
paragraph (c); and
(5)
Requires the foreign person, including
subcontractors, to destroy or return to the
person in the United States all of the technical
data exported pursuant
to the
contract or purchase order upon fulfillment of
their terms; and
(6)
Requires delivery of the defense articles
manufactured abroad only to the person in the
United States or to an agency of the U.S.
Government; and
(d) The
person in the United States provides the Office
of Defense Trade Controls with a copy of each
contract, purchase order or subcontract for
offshore
procurement
at the time it is accepted. Each such contract,
purchase order or subcontract must clearly
identify the article to be produced and must
identify the
license
number or exemption under which the technical
data was exported; and
(e)
Licenses issued pursuant to this section must be
renewed upon their expiration if offshore
procurement is to be extended beyond the period
of validity of
the original
approved license. In all instances a license for
offshore procurement must state as the purpose
``Offshore procurement in accordance with the
conditions
established in the ITAR, including Sec.
124.13. No other use will be made of the
technical data.'' If the technical data involved
in an offshore
procurement
arrangement is otherwise exempt from the
licensing requirements of this subchapter (e.g.
Sec.
126.4), the
DSP-5
referred to in the first sentence
of this
section is not required. However, the exporter
must comply with the other requirements of this
section and provide a written certification to
the Office of
Defense Trade
Controls annually of the offshore procurement
activity and cite the exemption under which the
technical data was exported. The exemptions
under
Sec.
125.4 of this subchapter may not be used to
establish offshore procurement arrangements.
[58 FR
39305, July 22, 1993, as amended at 64 FR 17534,
Apr. 12, 1999]
TITLE
22--FOREIGN RELATIONS
CHAPTER I--DEPARTMENT OF STATE
PART 125 -- LICENSES FOR THE EXPORT OF
TECHNICAL DATA AND CLASSIFIED DEFENSE
ARTICLES
Sec.
125.1
Exports subject to this part.
125.2
Exports of unclassified technical data.
125.3
Exports of classified technical data and
classified defense articles.
125.4
Exemptions of general applicability.
125.5
Exemptions for plant visits.
125.6
Certification requirements for exemptions.
125.7
Procedures for the export of classified
technical data and other classified defense
articles.
125.8
[Reserved]
125.9
Filing of licenses and other authorizations
for exports of classified technical data and
classified defense articles.
Authority: Sections 2 and 38, Pub. L.
90-629, 90 Stat. 744 (22
U.S.C.
2752, 2778); E.O. 11958, 42 FR 4311, 3 CFR,
1977 Comp. p.79; 22
U.S.C.
2658.
Source: 58 FR 39310, July 22, 1993, unless
otherwise noted.
Sec. 125.1 Exports subject to this part.
(a)
The controls of this part apply to the
export of technical data and the export of
classified defense articles. Information
which is in the public domain
(see Sec.
120.11 of this subchapter and Sec.
125.4(b)(13)) is not subject to the
controls of this subchapter.
(b) A
license for the export of technical data and
the exemptions in Sec.
125.4 may not be used for foreign
production purposes or for technical
assistance
unless
the approval of the Office of Defense Trade
Controls has been obtained. Such approval is
generally provided only pursuant to the
procedures specified
in part
124 of this subchapter.
(c)
Technical data authorized for export may not
be reexported, transferred or diverted from
the country of ultimate end-use or from the
authorized foreign
end-user
(as designated in the license or approval
for export) or disclosed to a national of
another country without the prior written
approval of the Office of
Defense
Trade Controls.
(d)
The controls of this part apply to the
exports referred to in paragraph (a) of this
section regardless of whether the person who
intends to export the
technical
data produces or manufactures defense
articles if the technical data is determined
by the Office of Defense Trade Controls to
be subject to the
controls
of this subchapter.
(e)
The provisions of this subchapter do not
apply to technical data related to articles
in Category VI(e) and Category XVI. The
export of such data is
controlled by the Department of Energy and
the Nuclear Regulatory Commission pursuant
to the Atomic Energy Act of 1954, as
amended, and the Nuclear
Non-Proliferation Act of 1978.
Sec. 125.2 Exports of unclassified
technical data.
(a) A
license (DSP-5)
is required for the export of unclassified
technical data unless the export is exempt
from the licensing requirements of this
subchapter.
In the
case of a plant visit, details of the
proposed discussions must be transmitted to
the Office of Defense Trade Controls for an
appraisal of the technical
data.
Seven copies of the technical data or the
details of the discussion must be provided.
(b)
Patents. A license issued by the Office of
Defense Trade Controls is required for the
export of technical data whenever the data
exceeds that which is
used to
support a domestic filing of a patent
application or to support a foreign filing
of a patent application whenever no domestic
application has been
filed.
Requests for the filing of patent
applications in a foreign country, and
requests for the filing of amendments,
modifications or supplements to such
patents,
should follow the regulations of the U.S.
Patent and Trademark Office in accordance
with 37 CFR part 5. The export of technical
data to support
the
filing and processing of patent applications
in foreign countries is subject to
regulations issued by the U.S. Patent and
Trademark Office pursuant to
35 U.S.C.
184.
(c)
Disclosures. Unless otherwise expressly
exempted in this subchapter, a license is
required for the oral, visual or documentary
disclosure of technical
data by
U.S. persons to foreign persons. A license
is required regardless of the manner in
which the technical data is transmitted
(e.g., in person, by
telephone, correspondence, electronic means,
etc.). A license is required for such
disclosures by U.S. persons in connection
with visits to foreign diplomatic
missions
and consular offices.
Sec. 125.3 Exports of classified technical
data and classified defense articles.
(a) A
request for authority to export defense
articles, including technical data,
classified by a foreign government or
pursuant to Executive Order 12356,
successor
orders, or other legal authority must be
submitted to the Office of Defense Trade
Controls for approval. The application must
contain full details
of the
proposed transaction. It should also list
the facility security clearance code of all
U.S. parties on the license and include the
Defense Investigative
Service
cognizant security office of the party
responsible for packaging the commodity for
shipment. A nontransfer and use certificate
(Form DSP-83)
executed
by the applicant, foreign consignee,
end-user and an authorized representative of
the foreign government involved will be
required.
(b)
Classified technical data which is approved
by the Office of Defense Trade Controls
either for export or reexport after a
temporary import will be
transferred or disclosed only in accordance
with the requirements in the Department of
Defense Industrial Security Manual. Any
other requirements imposed
by
cognizant U.S. departments and agencies must
also be satisfied.
(c)
The approval of the Office of Defense Trade
Controls must be obtained for the export of
technical data by a U.S. person to a foreign
person in the U.S.
or in a
foreign country unless the proposed export
is exempt under the provisions of this
subchapter.
(d)
All communications relating to a patent
application covered by an invention secrecy
order are to be addressed to the U.S. Patent
and Trademark
Office
(see 37 CFR 5.11).
Sec. 125.4 Exemptions of general
applicability.
(a)
The following exemptions apply to exports of
technical data for which approval is not
needed from the Office of Defense Trade
Controls. These exemptions,
except
for paragraph (b)(13) of this section, do
not apply to exports to proscribed
destinations under Sec.
126.1 of this subchapter or for persons
considered
generally
ineligible under Sec.
120.1(c) of this subchapter. The
exemptions are also not applicable for
purposes of establishing offshore
procurement
arrangements or producing defense articles
offshore (see Sec.
124.13), except as authorized under Sec.
125.4 (c). If Sec.
126.8 of this subchapter
requirements are applicable, they must be
met before an exemption under this section
may be used. Transmission of classified
information must comply
with the
requirements of the National Industrial
Security Program Operating Manual and the
exporter must certify to the transmittal
authority that the
technical
data does not exceed the technical
limitation of the authorized export.
(b)
The following exports are exempt from the
licensing requirements of this subchapter.
(1)
Technical data, including classified
information, to be disclosed pursuant to an
official written request or directive from
the U.S. Department of Defense;
(2)
Technical data, including classified
information, in furtherance of a
manufacturing license or technical
assistance agreement approved by the
Department
of State
under part
124 of this subchapter and which meet
the requirements of Sec.
124.3 of this subchapter;
(3)
Technical data, including classified
information, in furtherance of a contract
between the exporter and an agency of the
U.S. Government, if the contract
provides
for the export of the data and such data
does not disclose the details of design,
development, production, or manufacture of
any defense article;
(4)
Copies of technical data, including
classified information, previously
authorized for export to the same recipient.
Revised copies of such technical data
are also
exempt if they pertain to the identical
defense article, and if the revisions are
solely editorial and do not add to the
content of technology previously
exported
or authorized for export to the same
recipient;
(5)
Technical data, including classified
information, in the form of basic
operations, maintenance, and training
information relating to a defense article
lawfully
exported or authorized for export to the
same recipient. Intermediate or depot-level
repair and maintenance information may be
exported only
under a
license or agreement approved specifically
for that purpose;
(6)
Technical data, including classified
information, related to firearms not in
excess of caliber .50 and ammunition for
such weapons, except detailed
design,
development, production or manufacturing
information;
(7)
Technical data, including classified
information, being returned to the original
source of import;
(8)
Technical data directly related to
classified information which has been
previously exported or authorized for export
in accordance with this part to
the same
recipient, and which does not disclose the
details of the design, development,
production, or manufacture of any defense
article;
(9)
Technical data, including classified
information, sent by a U.S. corporation to a
U.S. person employed by that corporation
overseas or to a U.S.
Government agency. This exemption is subject
to the limitations of Sec.
125.1(b) and may be used only if:
(i)
The technical data is to be used overseas
solely by U.S. persons;
(ii)
If the U.S. person overseas is an employee
of the U.S. Government or is directly
employed by the U.S. corporation and not by
a foreign subsidiary; and
(iii)
The classified information is sent overseas
in accordance with the requirements of the
Department of Defense Industrial Security
Manual.
(10)
Disclosures of unclassified technical data
in the U.S. by U.S. institutions of higher
learning to foreign persons who are their
bona fide and full time
regular
employees. This exemption is available only
if:
(i)
The employee's permanent abode throughout
the period of employment is in the United
States;
(ii)
The employee is not a national of a country
to which exports are prohibited pursuant to
Sec.
126.1 of this subchapter; and
(iii)
The institution informs the individual in
writing that the technical data may not be
transferred to other foreign persons without
the prior written
approval
of the Office of Defense Trade Controls;
(11)
Technical data, including classified
information, for which the exporter,
pursuant to an arrangement with the
Department of Defense, Department
of Energy
or NASA which requires such exports, has
been granted an exemption in writing from
the licensing provisions of this part by the
Office of Defense
Trade
Controls. Such an exemption will normally be
granted only if the arrangement directly
implements an international agreement to
which the United
States is
a party and if multiple exports are
contemplated. The Office of Defense Trade
Controls, in consultation with the relevant
U.S. Government
agencies,
will determine whether the interests of the
United States Government are best served by
expediting exports under an arrangement
through
an
exemption (see also paragraph (b)(3) of this
section for a related exemption);
(12)
Technical data which is specifically exempt
under part
126 of this subchapter; or
(13)
Technical data approved for public release
(i.e., unlimited distribution) by the
cognizant U.S. Government department or
agency or Directorate
for
Freedom of Information and Security Review.
This exemption is applicable to information
approved by the cognizant U.S. Government
department
or agency
for public release in any form. It does not
require that the information be published in
order to qualify for the exemption.
(c)
Defense services and related unclassified
technical data are exempt from the licensing
requirements of this subchapter, to
nationals of NATO
countries, Australia, Japan, and Sweden, for
the purposes of responding to a written
request from the Department of Defense for a
quote or bid proposal.
Such
exports must be pursuant to an official
written request or directive from an
authorized official of the U.S. Department
of Defense. The defense
services
and technical data are limited to paragraphs
(c)(1), (c)(2), and (c)(3) of this section
and must not include paragraphs (c)(4),
(c)(5), and (c)(6)
of this
section which follow:
(1)
Build-to-Print. ``Build-to-Print'' means
that a foreign consignee can produce a
defense article from engineering drawings
without any technical
assistance from a U.S. exporter. This
transaction is based strictly on a
``hands-off'' approach since the foreign
consignee is understood to have the
inherent
capability to produce the defense article
and only lacks the necessary drawings.
Supporting documentation such as acceptance
criteria, and
specifications, may be released on an
as-required basis (i.e. ``must have'') such
that the foreign consignee would not be able
to produce an acceptable
defense
article without this additional supporting
documentation. Documentation which is not
absolutely necessary to permit manufacture
of an acceptable
defense
article (i.e. ``nice to have'') is not
considered within the boundaries of a
``Build-to-Print'' data package;
(2)
Build/Design-to-Specification.
``Build/Design-to-Specification'' means that
a foreign consignee can design and produce a
defense article from
requirement specifications without any
technical assistance from the U.S. exporter.
This transaction is based strictly on a
``hands-off'' approach since the
foreign
consignee is understood to have the inherent
capability to both design and produce the
defense article and only lacks the necessary
requirement
information;
(3)
Basic Research. ``Basic Research'' means a
systemic study directed toward greater
knowledge or understanding of the
fundamental aspects of
phenomena
and observable facts without specific
applications towards processes or products
in mind. It does not include ``Applied
Research'' (i.e. a
systemic
study to gain knowledge or understanding
necessary to determine the means by which a
recognized and specific need may be met. It
is a
systematic application of knowledge toward
the production of useful materials, devices,
and systems or methods, including design,
development, and
improvement of prototypes and new processes
to meet specific requirements.);
(4)
Design Methodology, such as: The underlying
engineering methods and design philosophy
utilized (i.e., the ``why'' or information
that explains the
rationale
for particular design decision, engineering
feature, or performance requirement);
engineering experience (e.g., lessons
learned); and the rationale
and
associated databases (e.g., design
allowables, factors of safety, component
life predictions, failure analysis criteria)
that establish the operational
requirements (e.g., performance, mechanical,
electrical, electronic, reliability and
maintainability) of a defense article.
(Final analytical results and the initial
conditions and parameters may be provided.)
(5)
Engineering Analysis, such as: Analytical
methods and tools used to design or evaluate
a defense article's performance against the
operational
requirements. Analytical methods and tools
include the development and/or use of
mockups, computer models and simulations,
and test facilities. (Final
analytical results and the initial
conditions and parameters may be provided.)
(6)
Manufacturing Know-how, such as: information
that provides detailed manufacturing
processes and techniques needed to translate
a detailed
design
into a qualified, finished defense article.
(Information may be provided in a
build-to-print package that is necessary in
order to produce an acceptable
defense
article.)
(d)(1) Defense services for the items
identified in Sec.
123.16(b)(10) of this subchapter
exported by accredited U.S. institutions of
higher learning are
exempt
from the licensing requirements of this
subchapter when the export is:
(i)
To countries identified in Sec.
123.16(b)(10)(i) of this subchapter and
exclusively to nationals of such countries
when engaged in international
fundamental research conducted under the
aegis of an accredited U.S. institution of
higher learning; and
(ii)
In direct support of fundamental research as
defined in Sec.
120.11(8) of this subchapter being
conducted either at accredited U.S.
institutions of higher
learning
or an accredited institution of higher
learning, a governmental research center or
an established government funded private
research center
located
within the countries identified in Sec.
123.16(b)(10)(i) of this subchapter; and
(iii)
Limited to discussions on assembly of any
article described in Sec.
123.16(b)(10) of this subchapter and or
integrating any such article into a
scientific,
research,
or experimental satellite.
(2)
The exemption in paragraph (d)(1) of this
section, while allowing accredited U.S.
institutions of higher learning to
participate in technical meetings with
foreign
nationals from countries specified in Sec.
123.16(b)(10)(i) of this subchapter for
the purpose of conducting space scientific
fundamental research
either in
the United States or in these countries when
working with information that meets the
requirements of Sec.
120.11 of this subchapter in activities
that
would generally be controlled as a defense
service in accordance with Sec. 124.1(a) of
this subchapter, does not cover:
(i)
Any level of defense service or information
involving launch activities including the
integration of the satellite or spacecraft
to the launch vehicle;
(ii)
Articles and information listed in the
Missile Technology Control Regime (MTCR)
Annex or classified as significant military
equipment; or
(iii)
The transfer of or access to technical data,
information, or software that is otherwise
controlled by this subchapter.
[58 FR
39310, July 22, 1993, as amended at 65 FR
45284, July 21, 2000; 66 FR 35900, July 10,
2001; 67 FR 15101, Mar. 29, 2002]
Sec. 125.5 Exemptions for plant visits.
(a) A
license is not required for the oral and
visual disclosure of unclassified technical
data during the course of a classified plant
visit by a foreign person,
provided
(1) the classified visit has itself been
authorized pursuant to a license issued by
the Office of Defense Trade Controls; or (2)
the classified visit was
approved
in connection with an actual or potential
government-to-government program or project
by a U.S. Government agency having
classification
jurisdiction over the classified defense
article or classified technical data
involved under Executive Order 12356 or
other applicable Executive Order; and (3)
the
unclassified information to be released is
directly related to the classified defense
article or technical data for which approval
was obtained and does not
disclose
the details of the design, development,
production or manufacture of any other
defense articles. In the case of visits
involving classified information,
the
requirements of the Defense Industrial
Security Manual (Department of Defense
Manual 5220.22M) must be met.
(b)
The approval of the Office of Defense Trade
Controls is not required for the disclosure
of oral and visual classified information to
a foreign person during
the
course of a plant visit approved by the
appropriate U.S. Government agency if (1)
the requirements of the Defense Industrial
Security Manual have been
met, (2)
the classified information is directly
related to that which was approved by the
U.S. Government agency, (3) it does not
exceed that for which approval
was
obtained, and (4) it does not disclose the
details of the design, development,
production or manufacture of any defense
articles.
(c) A
license is not required for the disclosure
to a foreign person of unclassified
technical data during the course of a plant
visit (either classified or unclassified)
approved
by the Office of Defense Trade Controls or a
cognizant U.S. Government agency provided
the technical data does not contain
information in excess of
that
approved for disclosure. This exemption does
not apply to technical data which could be
used for design, development, production or
manufacture of a
defense
article.
Sec. 125.6 Certification requirements for
exemptions.
(a)
To claim an exemption for the export of
technical data under the provisions of this
subchapter (e.g., Sec. Sec.
125.4 and
125.5), the exporter must
certify
that the proposed export is covered by a
relevant section of this subchapter, to
include the paragraph and applicable
subparagraph. Certifications
consist
of clearly marking the package or letter
containing the technical data ``22 CFR
[insert ITAR exemption] applicable.'' This
certification must be made
in
written form and retained in the exporter's
files for a period of 5 years (see Sec.
123.22 of this subchapter).
(b)
For exports that are oral, visual, or
electronic the exporter must also complete a
written certification as indicated in
paragraph (a) of this section and
retain it
for a period of 5 years.
[68 FR
61102, Oct. 27, 2003]
Sec. 125.7 Procedures for the export of
classified technical data and other
classified defense articles.
(a)
All applications for the export or temporary
import of classified technical data or other
classified defense articles must be
submitted to the Office of
Defense
Trade Controls on Form DSP-85.
(b)
An application for the export of classified
technical data or other classified defense
articles must be accompanied by seven copies
of the data and a
completed
Form DSP-83 (see Sec. 123.10 of this
subchapter). Only one copy of the data or
descriptive literature must be provided if a
renewal of the license
is
requested. All classified materials
accompanying an application must be
transmitted to the Office of Defense Trade
Controls in accordance with the
requirements of the Defense Industrial
Security Manual (Department of Defense
Manual Number 5220.22-M).
Sec. 125.9 Filing of licenses and other
authorizations for exports of classified
technical data and classified defense
articles.
Licenses and other authorizations for the
export of classified technical data or
classified defense articles will be
forwarded by the Office of Defense Trade
Controls
to the Defense Investigative Service of the
Department of Defense in accordance with the
provisions of the Department of Defense
Industrial
Security
Manual. The Office of Defense Trade Controls
will forward a copy of the license to the
applicant for the applicant's information.
The Defense
Investigative Service will return the
endorsed license to the Office of Defense
Trade Controls upon completion of the
authorized export or expiration of the
license,
whichever occurs first.
Sec. 126.1 Prohibited exports and sales to certain countries.
(a)
General. It is the policy of the United States
to deny licenses and other approvals for exports
and imports of defense articles and defense
services,
destined for
or originating in certain countries. This policy
applies to Belarus, Cuba, Iran, Libya, North
Korea, Syria and Vietnam. This policy also
applies to
countries
with respect to which the United States
maintains an arms embargo (e.g., Burma, China,
Haiti, Liberia, Somalia, and Sudan) or whenever
an
export would
not otherwise be in furtherance of world peace
and the security and foreign policy of the
United States. Information regarding certain
other
embargoes
appears elsewhere in this section. Comprehensive
arms embargoes are normally the subject of a
State Department notice published in the
Federal
Register. The exemptions provided in the
regulations in this subchapter, except Sec.
123.17 (section 123.17 refer to firearms) of
this subchapter, do not apply with respect to
articles
originating
in or for export to any proscribed countries,
areas, or persons in this Sec.
126.1.
(b)
Shipments. A defense article licensed for export
under this subchapter may not be shipped on a
vessel, aircraft or other means of conveyance
which is
owned or
operated by, or leased to or from, any of the
proscribed countries or areas.
(c)
Exports and sales prohibited by United Nations
Security Council embargoes. Whenever the United
Nations Security Council mandates an arms
embargo,
all
transactions which are prohibited by the embargo
and which involve U.S. persons anywhere, or any
person in the United States, and defense
articles and
services of a
type enumerated on the United States Munitions
List (22 CFR part 121), irrespective of origin,
are prohibited under the ITAR for the duration
of
the embargo,
unless the Department of State publishes a
notice in the Federal Register specifying
different measures. This would include, but is
not limited to,
transactions
involving trade by U.S. persons who are located
inside or outside of the United States in
defense articles and services of U.S. or foreign
origin
which are
located inside or outside of the United States.
(d)
Terrorism. Exports to countries which the
Secretary of State has determined to have
repeatedly provided support for acts of
international terrorism are
contrary to
the foreign policy of the United States and are
thus subject to the policy specified in
paragraph (a) of this section and the
requirements of section
40 of the
Arms Export Control Act (22 U.S.C. 2780) and the
Omnibus Diplomatic Security and Anti-Terrorism
Act of 1986 (22 U.S.C. 4801, note). The
countries in
this category
are: Cuba, Iran, Libya, North Korea, Sudan and
Syria.
(e)
Proposed sales. No sale or transfer and no
proposal to sell or transfer any defense
articles, defense services or technical data
subject to this subchapter
may be made
to any country referred to in this section
(including the embassies or consulates of such a
country), or to any person acting on its behalf,
whether
in the United
States or abroad, without first obtaining a
license or written approval of the Office of
Defense Trade Controls. However, in accordance
with paragraph
(a) of this
section, it is the policy of the Department of
State to deny licenses and approvals in such
cases. Any person who knows or has reason to
know of such a
proposed or
actual sale, or transfer, of such articles,
services or data must immediately inform the
Office of Defense Trade Controls.
(f)
Iraq. It is the policy of the United States to
deny licenses, other approvals, exports and
imports of defense articles and defense
services, destined for or
originating in Iraq except for any nonlethal
military equipment or lethal military equipment
for use in support of a reconstituted (or
interim) Iraqi military or
police
force required by the Coalition Provisional
Authority in accordance with section 1504 of
Public Law 108-11, Emergency Wartime
Supplemental
Appropriations Act, 2003.
[CFR April 2004]
(f) Iraq. It is the policy of the United States to deny licenses, other approvals, exports and imports of defense articles, destined for or originating in Iraq except,
if determined to be in the national interest of the United States and subject to the notification requirements of section 1504 of Public Law 108-11, exports may
be authorized of nonlethal military equipment and, in the case of lethal military equipment, only that which is designated by the Secretary of State (or designee)
for use by a reconstituted (or interim) Iraqi military or police force, and of small arms designated by the Secretary of State (or designee) for use for private security
purposes.
[69 FR 18810, April 9, 2004]
(g)
Afghanistan. It is the policy of the United
States to deny licenses, other approvals,
exports and imports of defense articles and
defense services, destined
for or
originating in Afghanistan except for the
Government of Afghanistan (currently the Afghan
Interim Authority) and the International
Security Assistance Force,
which will be
reviewed on a case-by-case basis. In addition,
lists of persons subject to a broad prohibition,
including an arms embargo, due to their
affiliation
with the
Taliban, Usama bin Laden, Al-Qaida or those
associated with them will continue to be
published from time to time.
(h)
Rwanda. It is the policy of the United States to
deny licenses, other approvals, exports and
imports of defense articles and defense
services, destined
for or
originating in Rwanda except for the Government
of Rwanda, which will be reviewed on a
case-by-case basis. UN Security Council
Resolution 1011 (1995)
lifted the
embargo only with respect to the Government of
Rwanda.
(i)
Democratic Republic of the Congo. It is the
policy of the United States to deny licenses,
other approvals, exports or imports of defense
articles and defense
services
destined for or originating in the Democratic
Republic of the Congo except for non-lethal
equipment and training (lethal and non-lethal)
to the United
Nations
Organization Mission in the Democratic Republic
of the Congo (MONUC), and the transitional
National Unity Government of the Democratic
Republic of the
Congo, and
the integrated Congolese national army and
police forces, and humanitarian or protective
use, and related assistance and training as
notified in
advance to
the UN. An arms embargo exists with respect to
all foreign and Congolese armed groups and
militias operating in the territory of North and
South
Kivu and of
Ituri, and to groups not party to the Global and
All-inclusive Agreement, in the Democratic
Republic of the Congo.
[58 FR 39312,
July 22, 1993, as amended at 59 FR 15625, Apr.
4, 1994; 59 FR 42158, Aug. 17, 1994; 61 FR 6113,
Feb. 16, 1996; 61 FR 36625, July 12, 1996;
61 FR 41499,
Aug. 9, 1996; 62 FR 37133, July 11, 1997; 67 FR
1075, Jan. 9, 2002; 67 FR 15101, Mar. 29, 2002;
67 FR 44352, July 2, 2002; 68 FR 44614, July 30,
2003;
68 FR 65634,
Nov. 21, 2003; 69 FR 7350, Feb. 17, 2004]
Sec. 126.4 Shipments by or for United States
Government agencies.
(a) A license is not
required for the temporary import, or temporary
export, of any defense article, including
technical data or the performance of a defense
service, by or for any agency of the U.S.
Government (1) for official use by such an
agency, or (2) for carrying out any foreign
assistance, cooperative project or sales program
authorized by law and subject to control by the
President by other means. This exemption applies
only when all aspects of a transaction (export,
carriage, and delivery abroad) are effected by a
United States Government agency or when the
export is covered by a United States Government
Bill of Lading. This exemption, however, does
not apply when a U.S. Government agency acts as
a transmittal agent on behalf of a private
individual or firm, either as a convenience or
in satisfaction of security requirements. The
approval of the Office of Defense Trade Controls
must be obtained before defense articles
previously exported pursuant to this exemption
are permanently transferred (e.g., property
disposal of surplus defense articles overseas)
unless (i) the transfer is pursuant to a grant,
sale, lease, loan or cooperative project under
the Arms Export Control Act or a sale, lease or
loan under the Foreign Assistance Act of 1961,
as amended, or (ii) the defense articles have
been rendered useless for military purposes
beyond the possibility of restoration.
Note: Special
definition. For purposes of this section,
defense articles exported abroad for
incorporation into a foreign launch vehicle or
for use on a foreign launch vehicle or satellite
that is to be launched from a foreign country
shall be considered a permanent export.
(b) This section does
not authorize any department or agency of the
U.S. Government to make any export which is
otherwise prohibited by virtue of other
administrative provisions or by any statute.
(c) A license is not
required for the temporary import, or temporary
or permanent export, of any classified or
unclassified defense articles, including
technical data or the performance of a defense
service, for end-use by a U.S. Government Agency
in a foreign country under the following
circumstances:
(1) The export or
temporary import is pursuant to a contract with,
or written direction by, an agency of the U.S.
Government; and
(2) The end-user in the
foreign country is a U.S. Government agency or
facility, and the defense articles or technical
data will not be transferred to any foreign
person; and
(3) The urgency of the
U.S. Government requirement is such that the
appropriate export license or U.S. Government
Bill of Lading could not have been obtained in a
timely manner.
(d) A Shipper's Export
Declaration (SED), required under Sec.
123.22(c) of this subchapter, and a written
statement by the exporter certifying that these
requirements have been met must be presented at
the time of export to the appropriate District
Director of Customs or Department of Defense
transmittal authority. A copy of the SED and the
written certification statement shall be
provided to the Office of Defense Trade Controls
immediately following the export.
Sec. 126.8 Proposals to foreign persons relating to significant military equipment.
(a)
Certain proposals to foreign persons for the
sale or manufacture abroad of significant
military equipment require either the prior
approval of, or prior
notification
to, the Office of Defense Trade Controls.
(1) Sale
of significant military equipment: Prior
approval requirement. The approval of the Office
of Defense Trade Controls is required before a
U.S. person
may make a
proposal or presentation designed to constitute
a basis for a decision on the part of any
foreign person to purchase significant military
equipment
on the U.S.
Munitions List whenever all the following
conditions are met:
(i) The
value of the significant military equipment to
be sold is $14,000,000 or more; and
(ii) The
equipment is intended for use by the armed
forces of any foreign country other than a
member of the North Atlantic Treaty
Organization, Australia,
New Zealand,
or Japan; and
(iii) The
sale would involve the export from the United
States of any defense article or the furnishing
abroad of any defense service including
technical data; and
(iv) The
identical significant military equipment has not
been previously licensed for permanent export or
approved for sale under the Foreign Military
Sales
Program of
the Department of Defense, to any foreign
country.
(2) Sale
of significant military equipment: Prior
notification requirement. The Office Defense
Trade Controls must be notified in writing at
least thirty days in
advance of
any proposal or presentation concerning the sale
of significant military equipment whenever the
conditions specified in paragraphs (a)(1) (i)
through (iii)
of this
section are met and the identical equipment has
been previously licensed for permanent export or
approved for sale under the FMS Program to any
foreign
country.
(3)
Manufacture abroad of significant military
equipment: Prior approval requirement. The
approval of the Office of Defense Trade Controls
is required before a
U.S. person
may make a proposal or presentation designed to
constitute a basis for a decision on the part of
any foreign person to enter into any
manufacturing
license
agreement or technical assistance agreement for
the production or assembly of significant
military equipment, regardless of dollar value,
in any foreign
country,
whenever:
(i) The
equipment is intended for use by the armed
forces of any foreign country; and
(ii) The
agreement would involve the export from the
United States of any defense article or the
furnishing abroad of any defense service
including technical data.
(b)
Definition of proposal or presentation. The
terms proposal or presentation (designed to
constitute a basis for a decision to purchase
and to enter into any
agreement)
mean the communication of information in
sufficient detail that the person communicating
that information knows or should know that it
would permit
an intended
purchaser to decide either to acquire the
particular equipment in question or to enter
into the manufacturing license agreement or
technical assistance
agreement.
For example, a presentation which describes the
equipment's performance characteristics, price,
and probable availability for delivery would
require
prior
notification or approval, as appropriate, where
the conditions specified in paragraph (a) of
this section are met. By contrast, the
following would not require
prior
notification or approval: Advertising or other
reporting in a publication of general
circulation; preliminary discussions to
ascertain market potential; or merely
calling
attention to the fact that a company
manufactures a particular item of significant
military equipment.
(c)
Satisfaction of requirements. (1) The
requirement of this section for prior approval
is met by any of the following:
(i) A
written statement from the Office of Defense
Trade Controls approving the proposed sale or
agreement or approving the making of a proposal
or presentation.
(ii) A
license issued under Sec.
125.2 or Sec.
125.3 of this subchapter for the export of
technical data relating to the proposed sale or
agreement to the
country
concerned.
(iii) A
temporary export license issued under Sec.
123.5 of this subchapter relating to the
proposed sale or agreement for a demonstration
to the armed
forces of the
country of export.
(iv) With
respect to manufacturing license agreements or
technical assistance agreements, the application
for export licenses pursuant to the two
preceding
subparagraphs
must state that they are related to possible
agreements of this kind.
(2) The
requirement of this section for prior
notification is met by informing the Office of
Defense Trade Controls by letter at least 30
days before making the
proposal or
presentation. The letter must comply with the
procedures set forth in paragraph (d) of this
section and must identify the relevant license,
approval,
or FMS case
by which the identical equipment had previously
been authorized for permanent export or sale.
The Office of Defense Trade Controls will
provide
written
acknowledgement of such prior notification to
confirm compliance with this requirement and the
commencement of the 30-day notification period.
(d)
Procedures. Unless a license has been obtained
pursuant to Sec.
126.8(c)(1) (ii) or (iii), a request for
prior approval to make a proposal or
presentation
with respect
to significant military equipment, or a 30-day
prior notification regarding the sale of such
equipment, must be made by letter to the Office
of Defense
Trade
Controls. The letter must outline in detail the
intended transaction, including usage of the
equipment involved and the country (or
countries) involved.
Seven copies
of the letter should be provided as well as
seven copies of suitable descriptive information
concerning the equipment.
(e)
Statement to accompany licensing requests. (1)
Every application for an export license or other
approval to implement a sale or agreement which
meets
the criteria
specified in paragraph (a) of this section must
be accompanied by a statement from the applicant
which either:
(i)
Refers to a specific notification made or
approval previously granted with respect to the
transaction; or
(ii)
Certifies that no proposal or presentation
requiring prior notification or approval has
been made.
(2) The
Department of State may require a similar
statement from the Foreign Military Sales
contractor concerned in any case where the
United States
Government
receives a request for a letter of offer for a
sale which meets the criteria specified in
paragraph (a) of this section.
(f)
Penalties. In addition to other remedies and
penalties prescribed by law or this subchapter,
a failure to satisfy the prior approval or prior
notification
requirements
of this section may be considered to be a reason
for disapproval of a license, agreement or sale
under the FMS program.
(g)
License for technical data. Nothing in this
section constitutes or is to be construed as an
exemption from the licensing requirement for the
export of
technical
data that is embodied in any proposal or
presentation made to any foreign persons.
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