Government Contracts Monitor

Department of State Proposes Changes to United States Munitions List Categories VIII and XIX

February 22, 2016

By: Eric Whytsell

The latest outcome of the President’s ongoing Export Control Reform (ECR) effort is the recent Department of State (DoS) proposal to amend the International Traffic in Arms Regulations (ITAR) to revise Categories VIII (aircraft and related articles) and XIX (gas turbine engines and associated equipment) of the U.S. Munitions List (USML) to describe more precisely the articles warranting control on the USML.

On March 2, 2015, DoS published a Notice of Inquiry requesting public comment on USML Categories VIII and XIX, thereby initiating a “review of these categories to ensure that they are clear, do not inadvertently control items in normal commercial use, account for technological developments, and properly implement the national security and foreign policy objectives of the reform effort.” DoS is undertaking a similar review of each of the various USML categories that have been revised in the context of the ECR initiative.

In response to the March 2015 Notice of Inquiry, DoS received 25 comments from the public offering proposals for modifications to the phrasing of regulatory text in USML Category VIII and Category XIX. After the public comments were reviewed and considered by DoS and other agencies, proposed changes consistent with ECR objectives were accepted and made part of the proposed rule. Key proposed changes for each Category are described below.

Revision of Category VIII

The proposed rule (1) revises Paragraph (a) to clarify that the controls for all paragraphs are applicable ‘‘whether manned, unmanned, remotely piloted, or optionally piloted,’’ (2) modifies paragraph (a)(5) concerning unmanned aerial vehicles to clarify that USML control depends on whether the UAVs are “incorporating or specially designed to incorporate a defense article,” and (3) deletes paragraph (a)(6) and places it into reserve, because the relevant control would be subsumed by paragraph (a)(5). The rule also modifies Paragraphs (a)(7) and (a)(8) to clarify the features meriting USML control. Again, these involve whether the aircraft is “incorporating or specially designed to incorporate a defense article.” Paragraphs (a)(11) and (a)(13) are deleted and placed into reserve, and Paragraph (a)(14) is modified to exclude L–100 aircraft manufactured prior to 2013 from the scope of control.

The proposed rule deletes the ‘‘ship-based’’ control parameter from Paragraph (d), and modifies it to clarify the intent and scope of the control. Notes 1 and 3 to paragraph (f) are also modified to incorporate clarifying language.

In Paragraph (h)(1), the references to ‘‘equipment’’ are deleted in order to make clear that all production and test equipment specially designed for USML Category VIII articles presently is subject to the ECR under Export Control Classification Number (ECCN) 9B610. The proposed rule updates the list of subject platforms, and proposes to move specific types of production and test equipment for the specific aircraft identified in (h)(1) to the control of the USML because they are of a nature that inherently reveals technical data directly related to the defense article. However, DoS requests public comment on whether the production and test equipment identified in revised paragraph (h)(30) will per se reveal technical data directly related to a defense article. The Note to paragraph (h)(1) is changed to enhance the clarity of the Note.

The proposed rule revises Paragraph (h)(2) to focus the scope of control on certain rotorcraft gearboxes meeting specific technical parameters, and adds a note to paragraph (h)(2) to clarify certain terminology. It also modifies Paragraph (h)(4)(ii) to clarify the scope of control, and updates Paragraph (h)(5) to add the words ‘‘On-aircraft’’ in order to clarify the scope of control. Paragraph (h)(7) is modified to clarify the scope of control and to include control over specially designed parts and components of the subject flight control systems. In addition, the proposed rule modifies Paragraph (h)(8) to clarify the meaning of ‘‘threat-adaptive autonomous flight control systems.’’ Paragraph (h)(10) is modified to enhance the clarity of the control text, and Paragraph (h)(13) is deleted and placed into reserve. The rule revises Paragraph (h)(18) to control specially designed parts and components of the subject systems. Paragraph (h)(19) is modified to remove reference to ECCN 9A610. The rule also places current paragraphs (h)(23) through (h)(26) into reserve, and adds new controls as paragraphs (h)(27) through (h)(30).

Revision of Category XIX

The proposed rule modifies Paragraph (a) to clarify the scope of controlled engines by adding “developmental engines” and “variable cycle engines.” The rule also revises Paragraph (b) to provide additional technical parameters to clarify the scope of controlled engines. With respect to paragraph (b)(1), DoS seeks public comment on whether any commercial models exceed the capability described in this paragraph – and expressly asks for specific examples of the commercial models at issue. Paragraph (c) is modified to incorporate conforming changes and to make clear that the paragraph applies only to gas turbine engines, while paragraph (d) is modified to update the list of subject engines. The proposed rule modifies the Note to Paragraph (e) to incorporate a conforming change. The rule proposes several changes within paragraph (f), including the modification of Paragraph (f)(1) to incorporate technical corrections and to update the list of subject engines. In addition, new Paragraph (f)(2) introduces additional text to clarify the scope of controlled hot section components. The rule proposes new controls for paragraphs (f)(7) through (f)(16).

The Department of State will accept comments on this proposed rule until March 25, 2016. Interested parties should submit comments via e-mail to: DDTCPublicComments@state.gov with the subject line, "ITAR Amendment—Categories VIII and XIX" or via www.regulations.gov, where this notice can be found by using this rule’s RIN (1400–AD89).

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