[Federal Register Volume 89, Number 145 (Monday, July 29, 2024)]
[Proposed Rules]
[Pages 60980-60985]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16501]
[[Page 60979]]
Vol. 89
Monday,
No. 145
July 29, 2024
Part II
Department of State
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Department of Commerce
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Bureau of Industry and Security
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15 CFR Parts 730, 732, 734, et al.
22 CFR Parts 120 and 121
International Traffic in Arms Regulations: Revisions to Definition and
Controls Related to Defense Services; End-Use and End-User Based Export
Controls, Including U.S. Persons Activities Controls: Military and
Intelligence End Uses and End Users; and Export Administration
Regulations: Crime Controls and Expansion/Update of U.S. Persons
Controls; Proposed Rules
Federal Register / Vol. 89 , No. 145 / Monday, July 29, 2024 /
Proposed Rules
[[Page 60980]]
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DEPARTMENT OF STATE
22 CFR Parts 120 and 121
[Public Notice: 12259]
RIN 1400-AF29
International Traffic in Arms Regulations: Revisions to
Definition and Controls Related to Defense Services
AGENCY: Department of State.
ACTION: Proposed rule.
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SUMMARY: The Department of State proposes to revise the definition of
defense service and the scope of related controls in the International
Traffic in Arms Regulations and seeks comment on the proposed revision.
DATES: The Department of State will accept comments on this proposed
rule through September 27, 2024.
ADDRESSES: Interested parties may submit comments by one of the
following methods:
Email: [email protected] with the subject line:
``Regulatory Change: Defense Service Definition''.
Internet: At www.regulations.gov, search for this notice,
by docket number DOS-2024-0023.
Comments received after that date may be considered if feasible,
but consideration cannot be assured. Those submitting comments should
not include any personally identifying information they do not desire
to be made public or information for which a claim of confidentiality
is asserted, because any such claim will be deemed waived and comments
and/or transmittal emails may be made publicly available. Parties who
wish to comment anonymously may do so by submitting their comments via
www.regulations.gov, leaving the fields that would identify the
commenter blank and including no identifying information in the comment
itself. In addition to comments directly responsive to this proposed
rule, the Department of State specifically requests comments regarding
the scope of this rule and the complementary proposed rule from the
Bureau of Industry and Security, Department of Commerce published today
in the Federal Register (RIN 0694-AJ43), with specific attention to any
actual or perceived overlap or ambiguity regarding proposed controls as
a result of the two agencies' regulations. A summary of this proposed
rule may be found at https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Sarah Heidema, Director, Office of
Defense Trade Controls Policy, Department of State, telephone (202)
663-1282; email [email protected]. ATTN: Revisions to
Definition and Controls Related to Defense Services.
SUPPLEMENTARY INFORMATION: The Directorate of Defense Trade Controls
(DDTC), U.S. Department of State, administers the International Traffic
in Arms Regulations (ITAR) (22 CFR parts 120-130). The regulations,
codified as subchapter M of chapter I, title 22 of the Code of Federal
Regulations (``the subchapter'') implement certain authorities of the
Arms Export Control Act (AECA) (22 U.S.C. 2751 et seq.) delegated to
the Secretary of State pursuant to Executive Order 13637. In accordance
with 5 U.S.C. 553(b)(4), a summary of this rule may be found at
www.regulations.gov.
The Department of State (``Department'') undertook a review led by
DDTC of the definition of defense service in the ITAR at Sec. 120.32.
This review focused on identifying activities of U.S. persons that (1)
provide a critical military or intelligence advantage such that they
warrant control under the ITAR and are activities that are not
currently subject to the ITAR; or (2) are controlled under the ITAR,
but the current control language would benefit from additional clarity.
Following the review, the Department proposes a revised definition of
defense service to better describe existing controls and the scope of
activities it proposes to regulate through the revised definition and
also proposes certain additions to the United States Munitions List
(USML) at ITAR Sec. 121.1.
While this review was underway, in December 2022, the Bureau of
Industry and Security, Department of Commerce (BIS) received expanded
statutory authority to control certain activities of U.S. persons
pursuant to an amendment to section 4812 of the Export Control Reform
Act of 2018 (ECRA), 50 U.S.C. 4801-4852, made as part of the National
Defense Authorization Act for Fiscal Year 2023 (Pub. L. 117-263) (NDAA
for FY 2023).
Originally authorizing the control of ``activities of [U.S.]
persons, wherever located, relating to specific . . . foreign military
intelligence services,'' that provision in 50 U.S.C. 4812(a)(2) was
amended and broadened in December 2022 to control ``. . . foreign
military, security, and intelligence services.'' As a result, and in
coordination with other federal departments and agencies and offices,
the Departments of State and Commerce are each issuing separate but
complementary proposed rules in this edition of the Federal Register:
this Department of State proposed rule to amend the definition of
defense service and the USML, and a separate Commerce proposed rule to
implement its new ECRA authority by amending the U.S. person controls
set forth in the Export Administration Regulations, 15 CFR parts 730-
774, and making related changes to the EAR's Part 744: Control Policy:
End-User and End-Use Based. Additionally, BIS's rule clarifies the
scope of BIS's jurisdiction over certain U.S. person activities. By
publishing both rules simultaneously and seeking public comment on the
proposed changes, DDTC and BIS hope to ensure awareness as to the
distinct areas of coverage of U.S. person activities under their
respective legal and regulatory authorities.
Background
In considering what to designate as a defense article or defense
service on the USML, the State Department primarily focuses on those
articles or services that provide a critical military or intelligence
advantage such that they warrant control under the ITAR (see Sec.
120.3(b)).
During its recent review of defense services, DDTC identified
certain (1) military, (2) cyber, and (3) intelligence services,
furnished to foreign persons that are not currently controlled or which
are controlled but for which the applicable control language could
benefit from additional clarity. The Department now proposes a new
definition of defense service, coupled with a detailed articulation of
currently and newly controlled services on the USML, along with
language that would provide the basis for the regulation of certain
proposed new services as defense services. In doing so, the Department
intends to provide greater clarity regarding the activities currently
controlled and to specifically describe those activities that are
proposed for control by this rulemaking. Included in this proposal is
specific language regarding the furnishing of intelligence-related
assistance that is not directly related to a defense article to certain
types of foreign persons (i.e., a foreign unit, force, or government)
or their proxies or agents. The Department assessed that these
activities warrant and require control equivalent to those of
intelligence-related defense articles since such assistance (including
training or consulting) similarly furnishes a critical military or
intelligence advantage to the foreign person. Review of such activity
by the Department for consistency with U.S. foreign policy and national
security interests is necessary prior to any furnishing of such
services.
[[Page 60981]]
Further, the inclusion of the activities in this proposed rule is
reflective of the stated aims of AECA Sec. 38(a)(2) (22 U.S.C.
2778(a)(2)) and principles in the United States Conventional Arms
Transfer Policy.
Proposed Design and Structure of Amendments
The proposed amendments to the definition of defense service at
Sec. 120.32, and additions to the USML, include several key changes.
These changes affect the design and structure of the relevant
provisions of the ITAR, which, in turn, affect how the USML describes
and controls activities falling under the definition of defense
service.
First, a proposed revision would amend Sec. 120.32(a)(1) by
revising the list of regulated activities currently found in (a)(1) to
include ``assistance, including training or consulting, to foreign
persons in the development (including, e.g., design), production
(including, e.g., engineering and manufacture), assembly, testing,
repair, maintenance, modification, disabling, degradation, destruction,
operation, processing, use, or demilitarization of a defense article.''
This revised list moves several activities currently individually
specified in (a)(1) (i.e., design, engineering, and manufacture) into
parentheticals following defined terms in which they are included.
Those activities were folded into the revised definitions of
``production'' and ``development'' at Sec. 120.43 by a recent ITAR
rule (87 FR 16396, Mar. 23, 2022).
In addition, the revised list of activities includes two new
references, ``disabling'' and ``degradation.'' The Department proposes
these terms to make explicit that the act of harming a military
capability through the disabling or degradation of defense articles via
any method remains controlled. In assessing non-traditional methods of
disrupting a nation's military capabilities during its review, the
Department noted that, while the current definition of defense service
includes such activities, advances in technology that facilitate such
activities merit explicit reference. The proposed revision clarifies
that cyber services, or any other activities, that disable and degrade
defense articles, but fall short of total destruction or
demilitarization, are included within the definition of defense service
at Sec. 120.32(a)(1).
The Department also proposes a clarifying addition to the
introductory text of paragraph (a)(1) in order to better describe the
scope of activities controlled by the definition. In describing the
assistance covered by the paragraph, the Department proposes to replace
the parenthetical ``(including training)'' with a new clause clarifying
that assistance includes training or consulting. In so doing, the
Department does not intend to add a new level of control to its
existing control of defense services, but rather intends to clarify
that it does not treat training to mean only direct instructional
activity. The proposed addition would reaffirm that providing the tools
or means of furnishing training to a foreign person so that the foreign
person may conduct training in lieu of the regulated person is included
in the control. Such consulting is not limited to the furnishing of a
completed product, but includes assisting in the development of such
training.
Second, the proposed amendments would remove current Sec.
120.32(a)(2) as redundant since the furnishing of technical data to a
foreign person is already a controlled event described in Sec. Sec.
120.50 through 120.52. Further, the proposed amendments would remove
current paragraph (a)(3). In their stead, these two provisions are
replaced by a proposed new paragraph (a)(2) that directs persons to the
USML where descriptions of services to be controlled under ITAR are
provided. The Department includes a proposed note to Sec. 120.32
directing the regulated community to the new location.
Specifically, the proposed paragraph (a)(2) directs persons to two
new proposed USML entries in Category IX that would control defense
services related to intelligence and military assistance. The proposed
entries differ from the type of defense services described in paragraph
(a)(1), which directly relate to defense articles and already have
corresponding entries in each USML category (e.g., Category I(i),
Category II(k), etc.).
The two new entries are proposed for a currently reserved paragraph
(s) of Category IX, and the category is proposed to be renamed
``Military Training Equipment, Intelligence Defense Services, and
Military Defense Services'' to more accurately describe the controls in
the category. The Department proposes to reserve paragraph (s)(1) for
use as a future entry and to place the new controls in proposed
paragraphs (s)(2) and (3) within that category. For purposes of this
preamble, the intelligence assistance controlled by paragraph (s)(2) is
referred to as ``intelligence assistance'' and the military and
paramilitary assistance controlled by paragraph (s)(3) are referred to
by the singular ``military assistance.''
The introductory text of proposed new USML Category IX(s)(2)
describes defense services relating to intelligence assistance that do
not necessarily involve defense articles. Following the introductory
control text of proposed USML Category IX(s)(2), subsequent paragraphs
would provide specified carve-outs to the general description of
activities described in paragraph (s)(2). Similar carve-out provisions
are also proposed to the military assistance control in USML Category
IX(s)(3). The Department determined that rather than relying solely on
the definition of defense service, it would be better to direct users
to the USML to conduct their classification analysis since this
approach is similar to how users currently conduct defense article
classification analysis, and it allows for a more detailed articulation
of certain specific activities meriting ITAR control. Moreover, AECA
Sec. 38(a)(1) (22 U.S.C. 2778(a)(1)) provides that defense services,
like defense articles, are to be designated on the USML. By adding
specific entries in addition to the existing USML paragraphs
controlling defense services, including those furnished in connection
with a defense article, the Department brings additional clarity to the
regulations. Further to that effort, the Department proposes to amend
Sec. 120.11, which describes the order of review, to include a
proposed paragraph (d) specific to defense services and to redesignate
current paragraph (d) as paragraph (e).
As to the objective of the proposed additions to the USML, the
Department determined revised and clarified controls are warranted and
necessary to address the risks to U.S. national security and foreign
policy interests posed by U.S. persons furnishing assistance in
intelligence activities. In particular, the Department determined that
certain intelligence activities that do not involve defense articles
provide a critical military or intelligence advantage such that they
warrant and require revised controls under the ITAR.
The proposed USML Category IX(s)(3) describes defense services
relating to military assistance that do not necessarily involve defense
articles and provides specified carve-outs to the controls. Persons
furnishing certain military assistance to foreign persons can cause
local and regional instability in a manner equal to or greater than the
supply of a tangible article or weapon to a foreign person end-user.
The proposed inclusion of certain specific forms of military assistance
as a defense service within the USML is intended to provide U.S.
persons with clear notice that such activities require authorization
as, depending on the circumstances, the activities may be counter to
U.S.
[[Page 60982]]
national security or foreign policy interests, the stated aims of AECA
Sec. 38(a)(2) (22 U.S.C. 2778(a)(2)), Conventional Arms Transfer
Policy objectives, or shared interests with our allies and partners. To
ensure that the military assistance controls are consistent with ITAR
Sec. 120.3(b) and only control those activities that provide a
critical military or intelligence advantage, the proposed controls
described in Category IX(s)(3) would regulate a higher level of support
than front-line combatant activities. The Department notes, however,
that although not intended for control in proposed Category IX(s)(3),
such activities may be otherwise regulated by other provisions in the
ITAR, or by regulations administered by other agencies of the U.S.
Government. In conjunction with the addition of this proposed USML
entry, the Department is proposing to remove the existing USML entry
for military training at current Category IX(e)(3). In so doing, the
Department does not intend to narrow the scope of what is controlled by
that existing military training entry, but rather aims to bring
additional clarity to that control as part of new text proposed as
Category IX(s)(3).
The proposed amendments utilize a method of control sometimes known
as ``catch and release,'' which functions to initially describe a broad
range of activities as a ``catch,'' and then specifies certain limited
carve-outs as a ``release'' from the ``catch.'' As applied here, the
catch-and-release design establishes that furnishing certain forms of
listed assistance to a foreign person is controlled. Specifically,
proposed USML Category IX, paragraphs (s)(2) and (s)(3)(i) through
(iii) catch certain activities while paragraphs (s)(2)(i) through (vii)
and (s)(3)(iv)(A) through (C) release, or carve out, specific
activities that were initially caught. Only assistance that is both
``caught'' and not ``released'' by the respective paragraphs is
controlled under paragraphs (s)(2) or (s)(3)(i) through (iii). Included
in the releases for both intelligence assistance (paragraph (s)(2)(ii))
and military assistance (paragraph (s)(3)(iv)(B)) are activities
performed by U.S. persons who have been drafted into the regular
military forces of a foreign nation. The Department proposes this
inclusion in addition to the existing exclusion at Sec. 124.2(b) from
the current definition of defense service so that persons reviewing the
USML for controlled activities fully understand which activities are
controlled. The exclusion at Sec. 124.2(b), which has been in the ITAR
since 1984 (see 49 FR 47682, Dec. 6, 1984), provides that: ``[s]ervices
performed as a member of the regular military forces of a foreign
nation by U.S. persons who have been drafted into such forces are not
deemed to be defense services for purposes of Sec. 120.32 of this
subchapter.'' The Department proposes to include similar provisions
within the new paragraph (s) in USML Category IX to preclude any
possible confusion by the regulated community, including both persons
long aware of the existing Sec. 124.2(b) and persons new to the
regulations who may be unfamiliar with the current exclusion, as to
whether the Department intends to regulate the activities of draftees.
The Department further notes Sec. 124.2(b) applies to the entirety of
Sec. 120.32, whereas the defense services described in Category
IX(s)(2) and (3) and the specific carve-outs to them, are related to
proposed Sec. 120.32(a)(2). By including the carve-outs from the
proposed USML paragraphs and a ``see'' parenthetical directing users to
Sec. 124.2(b), the Department endeavors to ensure awareness of the
exclusion in light of the proposed new control.
Proposed USML Amendments
Proposed USML Category IX(s)(3) describes defense services relating
to military assistance and provides specified carve-outs. Specifically,
proposed paragraph (s)(3)(i) controls persons furnishing assistance
that creates, supports, or improves the organization or formation of
foreign military or paramilitary forces. This text is included to cover
assistance in the development and organization of foreign military
services (e.g., armies, navies, air forces, etc.) at any stage.
Proposed paragraph (s)(3)(ii) controls persons furnishing assistance
that creates, supports, or improves military or paramilitary operations
by planning, leading, or evaluating all aspects of such operations,
including, e.g., logistical support. In contrast to (s)(3)(i), this
text is included to cover assistance being provided in the conduct and
analysis of military operations by the foreign military services,
whether in war or peace. The Department notes that this rule proposes
to remove the text of current Sec. 120.32(a)(3) regarding military
training, along with the current corresponding reference to military
training in Category IX(e)(3). The Department believes that the
essential elements of Sec. 120.32(a)(3) would be better situated and
described in proposed Category IX(s)(3)(iii). In addition, removal
furthers the Department's aim to better align the definition of defense
service at Sec. 120.32 with the definition of defense article at Sec.
120.31. In changing nomenclature from regular or irregular units and
forces to the capabilities of a military or paramilitary, the
Department aims to provide what it believes are more generally
understood terms. ``Regular'' and ``irregular'' forces are terms that
have been used in the context of international humanitarian law. But
illicit actors or unassuming persons may be put on even clearer notice
that providing training to create, support, or improve the military or
paramilitary capabilities of any kind of unit or force, governmental or
not, is a defense service requiring authorization. In this way the
focus is on the nature and type of training or advice provided
(military or paramilitary capabilities) more than on the recipients,
which are now more broadly defined as expressly including proxies or
agents of a foreign government, foreign unit, or foreign force. The
examples of methods of providing military training now contained in
that part of Sec. 120.32(a)(3) beginning with ``correspondence
courses'' are non-exhaustive examples of instruction. The Department
believes that those example methods and any other methods of training
need not be listed and does not retain that text in the proposed
paragraph (s)(3)(iii), even though they would still be controlled as
either formal or informal instruction, advice, or other forms of
training.
Proposed USML Category IX(s)(2) describes furnishing intelligence
assistance for a foreign government, unit, or force, or their proxy or
agent, and training a foreign government, unit, or force, or their
proxy or agent, to furnish such services, while providing specified
carve-outs to the controls. The creation of a separate entry in
proposed paragraph (s)(2) separates the control text governing
intelligence assistance from the control text describing military
assistance. It is intended to provide clearer notice to the regulated
community, and in particular to U.S. persons with relevant experience,
that the ITAR regulates services related to intelligence activities,
regardless of nexus to a defense article. The text of proposed
paragraph (s)(2) for intelligence assistance uses the same descriptors
found in proposed paragraph (s)(3) for military assistance, but also
includes ``providing analysis for'' and ``participating in.'' The
phrase ``providing analysis for'' is included since conducting an
intelligence analysis can provide a critical advantage even without
involvement in intelligence collection or other intelligence
operations. ``Participating
[[Page 60983]]
in'' is included to make clear persons hired and assisting in an
intelligence operation on behalf of a designated foreign government,
unit, or force, or their proxy or agent, are controlled activities.
Second, including ``training or consulting'' in the text of
proposed paragraph (s)(2) allows the Department to specifically and
explicitly describe on the USML the conduct of U.S. persons (or foreign
persons in the United States) who furnish any described defense service
to enable a foreign government, unit, or force, or their proxy or
agent, to conduct intelligence activities themselves. The Department
assesses regulating assistance on tactics, techniques, procedures, and
other types of training that enables the intelligence activities a
foreign government, unit, or force, or their proxy or agent, is
consistent with the aims and authority of the ITAR and the AECA. Again,
the Department notes this text would regulate assistance to any kind of
foreign unit or foreign force, regardless of government affiliation, as
well as to their proxies or agents.
The listed assistance activities identified in proposed paragraph
(s)(2) are caveated by the inclusion of ``for compensation,'' thereby
limiting the control to those services that are provided commercially
or in a professional capacity. Compensation in this context need not be
limited to financial compensation, but would require some measurable
response from the recipient in exchange for the service. This could
include a wide of range compensation for example, from gifts and or
lodging, to goods or services, political favors, legislative or legal
relief, etc. Activities of the U.S. Government are generally not
included within the furnishing of assistance for compensation. This
text is included to ensure the ITAR does not control non-critical
intelligence assistance provided on a volunteer basis (and not for hire
or compensation). Further, it is not intended to control assistance of
a type that ordinarily occurs in today's technically advanced society.
For example, the Department does not intend for the activities of
hobbyists or casually interested persons forwarding or commenting on
open-source, publicly available satellite imagery relevant to the
invasion of Ukraine, to be considered the furnishing of a defense
service.
While the ``for compensation'' language is proposed as an objective
criterion to provide clarity and to help ensure the ITAR does not
unintentionally control non-critical intelligence assistance provided
on a volunteer basis (and not for compensation), suggesting a less-
concerning quality of assistance, the Department would consider
additional alternative controls. Any such alternative would need to
provide notice to the public of clear, objective standards to control
the kind of intelligence services proposed as Category IX (s)(2),
without inadvertently capturing more activities than are necessary.
Therefore, the Department seeks input on the clarity and scope of
the ``for compensation'' criterion. Concurrently, the Department also
seeks input as to additional control criteria in paragraph (s)(2) that
could provide sufficient notice, as well as objective standards, to
control assistance that clearly provides a critical intelligence
advantage, but which does not turn on compensation. This could include,
as but one example, intelligence assistance that was asked-for or
otherwise solicited by a foreign person, directly or indirectly. The
Department also welcomes input on the six carve-outs or exclusions as
to their clarity, and whether other exclusions could serve to clearly
and objectively narrow the scope of the proposed or any additional
controls.
Carve-Outs to Intelligence Assistance
Proposed paragraphs (s)(2)(i) through (vi) would carve out six
specific sets of activities from the proposed controls on intelligence
assistance described in the introductory text to proposed paragraph
(s)(2). Three of the carve-outs to intelligence assistance activities,
those in proposed paragraphs (s)(2)(i) through (iii), are identical to
the three military assistance activities carve-outs from proposed
paragraphs (s)(3)(iv)(A) through (C) and are further discussed in the
preamble discussion of those paragraphs below.
The fourth carve-out related to intelligence assistance is set
forth in proposed paragraph (s)(2)(iv). Here, the Department proposes
to carve out information technology services that are ordinarily
provided to allow any business entity to operate internally as a modern
business environment, without a sector-specific specialization. These
would include, for example, services related to IT infrastructure,
composed of the hardware (including switches, routers, and servers) and
software (including operating systems and basic network security
applications) that enable an organization to run specialized software
applications. IT infrastructure is not necessarily collocated with the
organization, as it may include cloud infrastructure such as remote
data centers, edge computing, and various ``as a service'' (SaaS)
models.
The fifth carve-out, proposed in paragraph (s)(2)(v), makes clear
that the ITAR does not interfere with an otherwise lawful activity of a
U.S. local or federal law enforcement or intelligence agency. This
carve-out is similar to one found in 18 U.S.C. 1030(f).
The sixth carve-out, proposed in paragraph (s)(2)(vi), focuses the
expanded defense service controls in paragraph (s)(2), and intends to
avoid imposing a duplicative export licensing requirement for the
activities described, since they are already regulated or proposed for
regulation under the ITAR or EAR to the destinations of concern.\1\ The
Department further notes that, similar to the defense service
definition at Sec. 120.32(a)(1), the mere act of exporting,
reexporting, or transferring (in-country) a commodity, software,
technical data, or EAR technology does not constitute a defense service
in the context of (s)(2). For items subject to the EAR, the Department
assesses that the repair or maintenance of that commodity or software
(when isolated from a defense article) should similarly be subject to
the EAR, even when caught in (s)(2), since an EAR authorization could
be used to secure a replacement in lieu of performing the repair or
maintenance. In contrast, the repair or maintenance of commodities or
software subject to the ITAR is already regulated via ITAR Sec.
120.32(a)(1), including when repairing an EAR commodity or software
incorporated into a defense article.
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\1\ While the ITAR and EAR generally use similar terminology,
there are certain exceptions. For example: where the ITAR speaks of
exports, reexports, and retransfers (Sec. Sec. 120.50 through
120.52), the EAR uses export, reexport, and transfer (in-country)
(Sec. Sec. 734.13, 734.14, and 734.16); the ITAR uses ``articles,''
and the EAR uses ``items,'' to describe commodities and software.
EAR terms are used here when used in specific relation to those
regulations and not the ITAR.
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Carve-Outs to Military Assistance
With respect to proposed controls over military assistance in
proposed paragraphs (s)(3)(i) through (iii), proposed paragraph
(s)(3)(iv) provides three specific carve-outs. The activities carved
out by (s)(3)(iv)(A) are similar in nature to the brokering activity
carve-outs already found in part 129. The activities to be carved out
by proposed paragraph (s)(3)(iv)(B) make certain that the activities of
U.S. persons drafted into the regular military forces of a foreign
nation are not controlled by this section. This language is consistent
with the text of the existing language at ITAR Sec. 124.2(b). Finally,
proposed paragraph
[[Page 60984]]
(s)(3)(iv)(C) carves out training and advice entirely composed of
general scientific, mathematical, or engineering principles commonly
taught in schools, colleges, and universities.
Regulatory Analysis and Notices
Administrative Procedure Act
This rulemaking involves a military or foreign affairs function of
the United States under 5 U.S.C. 553(a). Nevertheless, and without
prejudice to this determination, the Department has elected to seek
public comment on this proposed rule.
Regulatory Flexibility Act
Since this rule is exempt from the notice-and-comment provisions of
5 U.S.C. 553(b), it does not require analysis under the Regulatory
Flexibility Act.
Unfunded Mandates Reform Act of 1995
This rulemaking does not involve a mandate that will result in the
expenditure by state, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any year and it
will not significantly or uniquely affect small governments. Therefore,
no actions are deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
Executive Orders 12372 and 13132
This rulemaking will not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with Executive
Order 13132, it is determined that this amendment does not have
sufficient federalism implications to require consultations or warrant
the preparation of a federalism summary impact statement. The
regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this rulemaking.
Executive Orders 12866, 13563, and 14094
Executive Order 12866, as amended by Executive Orders 13563 and
14094, directs agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributed
impacts, and equity). Although this rule may impose additional
regulatory requirements or obligations, the Department believes that
costs associated with this rule will be minimal because, to its
knowledge, the types of new activities proposed to be regulated are
usually undertaken in conjunction with other services involving a
defense article that already require a license or other approval. Thus,
the Department assesses the incremental cost of compliance to be
minimal for most exporters. Moreover, based on confidential submissions
to DDTC, the Department believes that when such activities are
undertaken, typically only a limited number of entities would aim to
provide such services and seek licenses or other approvals for them.
Therefore, the Department expects a low number of license applications
from only a small number of entities would result if these controls
were to be promulgated in a final rule. Should commenters believe they
may be subject to new controls on activities they already provide or
plan to provide, the Department welcomes that specific feedback to
better understand the costs and benefits of the proposed controls. The
proposed rule may also provide other benefits in its clarification of
several activities that are currently controlled and consequently may
reduce regulatory uncertainty. This too is based on confidential
submissions to DDTC via commodity jurisdiction requests, advisory
opinions, and voluntary disclosures. The proposed rule is also expected
to strengthen the foreign policy and national security of the United
States as the rule would clarify both the currently regulated and newly
identified activities that provide a critical military or intelligence
advantage, providing notice to the regulated community of the
Department's oversight of these services. Additionally, when
authorization is sought for these services, the information provided on
the purpose and kind of such services, including which foreign persons
who would receive the services, may assist the Department in better
assessing the effects of these activities on the complex considerations
of our foreign affairs. This rule has been designated a ``significant
regulatory action'' by the Office and Information and Regulatory
Affairs under Executive Order 12866.
Executive Order 12988
The Department of State reviewed this rulemaking in light of
Executive Order 12988 to eliminate ambiguity, minimize litigation,
establish clear legal standards, and reduce burden.
Executive Order 13175
The Department determined that this rulemaking will not have tribal
implications, will not impose substantial direct compliance costs on
Indian tribal governments, and will not preempt tribal law.
Accordingly, the requirements of Executive Order 13175 do not apply to
this rulemaking.
Paperwork Reduction Act
This rule does not impose or revise any information collections
subject to 44 U.S.C. chapter 35.
List of Subjects in 22 CFR Parts 120 and 121
Arms and munitions, Classified information, Exports.
Accordingly, for the reasons set forth above and under the
authority of 22 U.S.C. 2778, the Department of State proposes to amend
title 22, chapter I, subchapter M, parts 120 and 121 as follows:
PART 120--PURPOSE AND DEFINITIONS
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1. The authority citation for part 120 continues to read as follows:
Authority: 22 U.S.C. 2651a, 2752, 2753, 2776, 2778, 2779,
2779a, 2785, 2794, 2797; E.O. 13637, 78 FR 16129, 3 CFR, 2013 Comp.,
p. 223.
0
2. Amend Sec. 120.11 by redesignating paragraph (d) as paragraph (e)
and add new paragraph (d) to read:
Sec. 120.11 Order of review.
* * * * *
(d) Defense service. Defense services described in Sec.
120.32(a)(1) are controlled under the relevant paragraph of each USML
category that includes defense services ``directly related'' or
``relating'' to defense articles as described therein. For defense
services described in Sec. 120.32(a)(2) that are not controlled in the
defense article-specific defense services paragraphs, see USML Category
IX(s)(2) and (3) in Sec. 121.1 of this subchapter.
0
3. Section 120.32 is revised to read as follows:
Sec. 120.32 Defense service.
(a) Defense service means:
(1) The furnishing of assistance, including training or consulting,
to foreign persons in the development (including, e.g., design),
production (including, e.g., engineering and manufacture), assembly,
testing, repair, maintenance, modification, disabling, degradation,
destruction, operation, processing, use, or demilitarization of a
defense article; or
[[Page 60985]]
(2) The furnishing of assistance, including training or consulting,
to foreign persons, regardless of whether a defense article is
involved, as described in USML Category IX(s)(2) or (3) in Sec. 121.1
of this subchapter.
Note to paragraph (a): For military training previously
described in this paragraph, see paragraph (a)(1) and USML Category
IX(s)(2) and (3).
(b) [Reserved]
PART 121--THE UNITED STATES MUNITIONS LIST
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4. The authority citation for part 121 continues to read as follows:
Authority: 22 U.S.C. 2752, 2778, 2797; 22 U.S.C. 2651a; Sec.
1514, Pub. L. 105-261, 112 Stat. 2175; E.O. 13637, 78 FR 16129, 3
CFR, 2013 Comp., p. 223.
0
5. Amend Sec. 121.1, by revising the heading to Category IX, revising
paragraph (e), and adding new paragraph (s) to read as follows:
Sec. 121.1 The United States Munitions List.
* * * * *
Category IX--Military Training Equipment, Intelligence Defense
Services, and Military Defense Services
* * * * *
(e) Technical data (see Sec. 120.33 of this subchapter) and
defense services (see Sec. 120.32 of this subchapter):
(1) Directly related to the defense articles enumerated in
paragraphs (a) and (b) of this category; or
(2) Directly related to the software and associated databases
enumerated in paragraph (b)(4) of this category even if no defense
articles are used or transferred.
* * * * *
(s) Defense Services, as follows:
(1) [Reserved]
(2) Assistance, including training or consulting, to a foreign
government, unit, or force, or their proxy or agent, that creates,
supports, or improves intelligence activities, including through
planning, conducting, leading, providing analysis for, participating
in, evaluating, or otherwise consulting on such activities, for
compensation, except for the following types of assistance:
(i) Furnishing of medical, translation, financial, insurance,
legal, scheduling, or administrative services, or acting as a common
carrier;
(ii) Participation as a member of a regular military force of a
foreign nation by a U.S. person who has been drafted into such a force
(see also Sec. 124.2(b) of this subchapter);
(iii) Training and advice that is entirely composed of general
scientific, mathematical, or engineering principles commonly taught in
schools, colleges, and universities;
(iv) Information technology services that support ordinary business
activities not specific to a particular business sector;
(v) Any lawfully authorized investigative, protective, or
intelligence activity of a law enforcement or intelligence agency of
the United States or of a territory, possession, State, or District of
the United States, including political subdivisions thereof; or
(vi) Maintenance or repair of a commodity or software.
(3) Assistance, including training or consulting, to a foreign
government, unit, or force, or their proxy or agent, that creates,
supports, or improves the following, other than as specified in
paragraph (s)(3)(iv) of this category:
(i) The organization or formation of military or paramilitary
forces; (ii) Military or paramilitary operations, by planning, leading,
or evaluating such operations; or
(iii) Military or paramilitary capabilities through advice or
training, including formal or informal instruction.
(iv) Assistance in paragraphs (s)(3)(i) through (iii) of this
category does not include: (A) Furnishing of medical, translation,
financial, insurance, legal, scheduling, or administrative services, or
acting as a common carrier;
(B) Participation as a member of a regular military force of a
foreign nation by a U.S. person who has been drafted into such a force
(see also Sec. 124.2(b) of this subchapter); or
(C) Training and advice that is entirely composed of general
scientific, mathematical, or engineering principles commonly taught in
schools, colleges, and universities.
The Under Secretary, Arms Control and International Security,
Bonnie D. Jenkins, having reviewed and approved this document, has
delegated the authority to electronically sign this document to Zachary
A. Parker, Director, Office of Directives Management, for purposes of
publication in the Federal Register.
Zachary A. Parker,
Director, Office of Directives Management, Department of State.
[FR Doc. 2024-16501 Filed 7-25-24; 8:45 am]
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