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RIN ID: RIN 1400-AC50
DOCUMENT ID: [Public Notice 6370]
SUBJECT CATEGORY: Amendment to the International Traffic in Arms Regulations: Registration Fee Change
DOCUMENT SUMMARY: The Department of State is amending the text of the International Traffic in Arms Regulations (ITAR) to increase the registration fees, change the registration renewal period, and make other minor administrative changes.
SUMMARY: Registration Fee Change,
This rule increases the fee charged to those persons required to register with the Directorate of Defense Trade Controls (DDTC) in accordance with Section 38 of the Arms Export Control Act (AECA) (22 U.S.C. 2778). ITAR registration fees are set forth at 22 CFR 122.3 and were last adjusted in 2004.
To align registration fees with the cost of licensing, compliance and other related activities, the Department is adopting a threetier registration fee schedule. The first tier will be a set fee of $2,250 per year for registrants who are renewing a registration, required to register by law, and for whom DDTC has not reviewed, adjudicated or issued a response to any applications during the twelvemonth period ending 90 days prior to the expiration of their current registration. This tier includes those registering with the Department for the first time.
The second tier is for registrants for whom DDTC has reviewed, adjudicated or issued a response to between one and ten applications during the twelvemonth period ending 90 days prior to the expiration of their current registration. For this tier, registrants will pay a set fee of $2,750 per year.
The third tier is for registrants for whom DDTC has reviewed, adjudicated or issued a response to more than ten applications during the twelve month period ending 90 days prior to the expiration of their current registration. For this tier, registrants will pay a fee of $2,750 plus an additional fee that is based on the number of applications for which DDTC has reviewed, adjudicated or issued a response during the twelve months ending 90 days prior to the expiration of their current registration. The additional fee will be determined by multiplying $250 times the number of applications for which DDTC has reviewed, adjudicated or issued a response during the twelvemonth period ending 90 days prior to the expiration of the current registration.
Fees for registrants whose total registration fee is greater than 3% of the total value of applications for which DDTC has reviewed, adjudicated or issued a response during the 12month period ending 90 days prior to expiration of the current registration will be reduced to 3% of such total application value or $2,750, whichever is greater. Fees for registrants, including universities, who are exempt from income taxation pursuant to 26 U.S.C. 501(c)(3) may be reduced to the firsttier registration fee provided proof of such status (i.e., IRS certification) is submitted with their registration package.
In addition, 22 CFR 129.4(a) and 22 CFR 129.4(b) are revised to reflect the new registration fee schedule.
The Department received comments from twentyseven (27) individuals and companies. Seventeen (17) commenting parties voiced their opposition either to DDTC raising registration fees or to the collection of registration fees at all. Registration fees are collected and utilized in accordance with the AECA. The President has directed the Department of State to implement a series of improvements to its export licensing system to make it more timely, predictable, and transparent. To support that effort, the President has required that the U.S. Department of State initiate a selffinancing mechanism so that the DDTC's mission will eventually be at least 75% selffinanced. Six (6) commenting parties offered actions that could be taken by DDTC to reduce its licensing workload. These comments were not considered at this time as they are outside the scope of this rule. However, the Department remains committed to continuing to reform the export control process. As DDTC continues to reform the export control process, the budgetary requirements will be reviewed on a regular basis, which may result in a revision to the registration fee schedule.
Ten (10) commenting parties suggested alternate funding schedules for registration fees. Nine of these alternates were not adopted as they would not have generated the funds required by DDTC or appeared to be unfair to small businesses that, while required to register with DDTC, utilize only limited Department resources. The tenth proposal recommended several flat tiers based on licensing activity. While this proposal would provide the necessary funds for DDTC, imposing a minimal administrative burden upon the Department, it was not adopted primarily since the incremental cost of submitting one more license under this proposal could be significant as the total cost is recomputed in light of the higher fee at the next tier.
Six (6) commenting parties raised concerns that the proposed fee schedule would be an administrative burden on the Department as well as on industry. Four (4) comments regarding reinstitution of multiyear registrations were received. DDTC has attempted to adopt a fee schedule that will result in minimal burden to applicants, recognizing that any change to the current one fee for all registrants will impose some additional burden. The multiyear registrations have been discontinued in order to provide DDTC with a revenue stream that reflects its costs. The Department will contemplate reconsidering multiyear registrations after the Department has experience with a singleyear fee structure.
Two (2) commenting parties recommended reconsideration of 22 CFR 122.2(a) and 22 CFR 129.4(a) regarding Department policy for returning incomplete registration packages. Discretion will continue to be used when determining if it is necessary to return an incomplete registration package; only those registration packages materially incomplete will be returned.
Four (4) commenting parties recommended that license amendments not
be counted when determining the registration fee. Since license
amendments have a material impact on the authorized activity and
require DDTC to review, adjudicate and respond to the applicant, they
will be counted. Activities under 22 CFR parts 123 through 126 not
requiring the Department to respond to the applicant will not be counted as part of the registration fee; examples include
[[Page 55440]]
annual submission of sales reports, prior notifications, provision of
documents required by proviso, and submission of purchase orders to
support offshore procurement. Other activities outside of 22 CFR parts
123 through 126 that require DDTC to respond to the applicant will not
be counted in determining registration fees; examples of these actions
include commodity jurisdictions and disclosures. Eight (8) commenting
parties recommended that those license applications ``returned without
action'' not be counted when determining the level of licensing
activity. DDTC has adopted this recommendation and 22 CFR 122.3(a)(7)
has been revised accordingly. Additionally, the Department will not
consider denied licenses when determining registration fees. Regulatory Analysis and Notices
Administrative Procedure Act: This amendment involves a foreign
affairs function of the United States and, therefore, is not subject to
the procedures contained in 5 U.S.C. 553 and 554. However, as noted in
the Supplementary Information, notice of the rule was provided and comments were solicited and received on this amendment.
Regulatory Flexibility Act: Because this rule is exempt from
notice and comment rulemaking under 5 U.S.C. 553, it is exempt from the
regulatory flexibility analysis requirements set forth in sections 603
and 604 of the Regulatory Flexibility Act (5 U.S.C. 603 and 604).
Unfunded Mandates Reform Act of 1995: This amendment does not
involve a mandate that will result in the expenditure by State, local,
and tribal governments, in the aggregate, or by the private sector, of
$100 million or more in any year and it will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
Small Business Regulatory Enforcement Fairness Act of 1996: This
amendment is not a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.
Executive Orders 12372 and 13132: This amendment will not have
substantial 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. Executive Order 12372, regarding intergovernmental
consultation on Federal programs and activities, does not apply to this amendment.
Executive Order 12866: This amendment is exempt from the review
under Executive Order 12866, but has been reviewed internally by the
Department of State to ensure consistency with the purposes thereof.
Executive Order 12988: The Department of State has reviewed the
proposed regulations in light of sections 3(a) and 3(b)(2) of Executive
Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.
Paperwork Reduction Act: This rule does not impose any new
reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.
List of Subjects
Arms and munitions, Exports, Reporting and recordkeeping requirements.
Arms and munitions, Exports, Technical assistance.
Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, parts 122 and 129 are amended as follows:
PART 122REGISTRATION OF MANUFACTURERS AND EXPORTERS
1. The authority citation for part 122 continues to read as follows:
Authority: Secs. 2 and 38, Public Law 90629, 90 Stat. 744 (22
U.S.C. 2752, 2778); E.O. 11958, 42 FR 4311, 1977 Comp. p. 79, 22 U.S.C. 2651a.
2. Section 122.2 is amended by revising paragraph (a) to read as follows:
Sec. 122.2 Submission of registration statement.
(a) General. The Department of State Form DS2032 (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 drawn against the registrant's account, payable to the
Department of State of the fee prescribed in Sec. 122.3(a) of this
subchapter. Checks must be in U.S. currency, and 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
(e.g., Chief Executive Officer, President, Secretary, Partner, Member,
Treasurer, General Counsel) 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 is incomplete either by notifying the
registrant of what information is required or through the return of the
entire registration package. Registrants may not establish new entities for the purpose of reducing registration fees.
* * * * *
3. Section 122.3 is amended by revising paragraph (a) to read as follows:
Sec. 122.3 Registration fees.
(a) A person who is required to register must do so on an annual
basis upon submission of a completed Form DS2032, transmittal letter, and payment of a fee as follows:
(1) Tier 1: A set fee of $2,250 per year is required for new
registrants or registrants for whom the Directorate of Defense Trade
Controls has not reviewed, adjudicated or issued a response to any
applications during a 12month period ending 90 days prior to expiration of the current registration.
(2) Tier 2: A set fee of $2,750 per year is required for
registrants for whom the Directorate of Defense Trade Controls has
reviewed, adjudicated or issued a response to between one and ten
applications during a 12month period ending 90 days prior to expiration of the current registration.
(3) Tier 3: The third tier is for registrants for whom the
Directorate of Defense Trade Controls has reviewed, adjudicated or
issued a response to more than ten applications during a 12month
period ending 90 days prior to expiration of the current registration.
For this tier, registrants will pay a fee of $2,750 plus an additional
fee based on the number of applications for which the Directorate of
Defense Trade Controls has reviewed, adjudicated or issued a response.
The additional fee will be determined by multiplying $250 times the
number of applications over ten for whom the Directorate of Defense
Trade Controls has reviewed, adjudicated or issued a response during a
12month period ending 90 days prior to expiration of the current registration.
(4) For registrants, including universities, exempt from income [[Page 55441]]
taxation pursuant to 26 U.S.C. 501(c)(3), their fee may be reduced to
the Tier 1 registration fee provided a copy of their certification
letter from the Internal Revenue Service is submitted with their
registration package. To be eligible, the registrant and all of its
subsidiaries/affiliates must be exempt from income taxation pursuant to 26 U.S.C. 501(c)(3).
(5) The fee for registrants whose total registration fee is greater
than 3% of the total value of applications for whom the Directorate of
Defense Trade Controls has reviewed, adjudicated or issued a response
during the 12month period ending 90 days prior to expiration of the
current registration will be reduced to 3% of such total application value or $2,750, which ever is greater.
(6) For those renewing a registration, notice of the fee due for
the next year's registration will be sent to the registrant of record at least 60 days prior to its expiration date.
(7) For purposes of this subsection, ``applications'' refers to the
actions enumerated within parts 123 through 126 of this subchapter that
require the Directorate of Defense Trade Controls to review, adjudicate
and issue responses. Only those applications that the Department has
taken final action on and provided response to will be counted in
determining the annual registration fee. Those applications that are
``returned without action'' or ``denied'' will not be counted. * * * * *
PART 129REGISTRATION AND LICENSING OF BROKERS
4. The authority citation for part 129 continues to read as follows:
Authority: Sec. 38, Pub. L. 104164, 110 Stat. 1437 (22 U.S.C. 2778).
5. Section 129.4 is amended by revising paragraph (a) to read as follows:
Sec. 129.4 Registration statement and fees.
(a) General. The Department of State Form DS2032 (Statement of
Registration) and the transmittal letter meeting the requirements of
Sec. 122.2(b) of this subchapter must be submitted by an intended
registrant with a payment by check, payable to the Department of State,
of the fees prescribed in Section 122.3(a) of this subchapter. Foreign
brokers must submit a check in U.S. dollars payable through a U.S.
financial institution that includes the registrant's legal name and
address on the check. The Statement of Registration and transmittal
letter must be signed by a senior officer (e.g., Chief Executive
Officer, President, Secretary, Partner, Member, Treasurer, General
Counsel) 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 requirement to submit a Department
of State Form DS2032 and to submit documentation demonstrating
incorporation or authorization to do business in the United States does
not exclude foreign persons from the requirement to register. Foreign
persons who are required to register shall provide information that is
substantially similar in content as that which a U.S. person would
provide under this provision (e.g., foreign business license or similar
authorization to do business). The Directorate of Defense Trade
Controls will notify the registrant if the Statement of Registration is
incomplete either by notifying the registrant of what information is
required or through the return of the entire registration package with
payment. Registrants may not establish new entities for the purpose of reducing registration fees.
* * * * *
Dated: September 19, 2008.
John C. Rood,
Acting Under Secretary for Arms Control and International Security, Department of State.
[FR Doc. E822574 Filed 92408; 8:45 am]
BILLING CODE 471025P
FOR FURTHER INFORMATION CONTACT Patricia Slygh, Directorate of Defense
Trade Controls, Bureau of PoliticalMilitary Affairs, Department of State (202) 6632830 or FAX (202) 2618199; email
DDTCResponseTeam@state.gov, ATTN: Regulatory Change, ITAR Parts 122 and
129.
14 CFR Part 39 40 CFR Part 52 14 CFR Part 71 33 CFR Part 165 50 CFR Part 679 47 CFR Part 73 26 CFR Part 1 40 CFR Part 180 33 CFR Part 117 50 CFR Part 17 44 CFR Part 67 50 CFR Part 648 14 CFR Part 97 40 CFR Part 63 33 CFR Part 100 50 CFR Part 622 50 CFR Part 660 26 CFR Part 301 44 CFR Part 65 39 CFR Part 111 40 CFR Part 300 6 CFR Part 5 40 CFR Part 271 47 CFR Part 64 40 CFR Parts 52 and 81 50 CFR Part 665 10 CFR Part 50 44 CFR Part 64 49 CFR Part 571 39 CFR Part 3020