[Federal Register: September 17, 1996 (Volume 61, Number 181)]
[Rules and Regulations]
[Page 48830-48834]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17se96-12]

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DEPARTMENT OF STATE

22 CFR Parts 120, 123, and 128

[Public Notice 2408]


Bureau of Political-Military Affairs; Amendments to the
International Traffic in Arms Regulations

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: This rule amends the International Traffic in Arms Regulations
(ITAR) to correct a typographical error in the definition of
``technical data;'' eliminate the requirement of reporting subsequent
exports of unclassified technical data; and clarify authority and use
the current names of any office, bureau, or titles of officers that
have changed since 1990.

EFFECTIVE DATE: September 17, 1996.

FOR FURTHER INFORMATION CONTACT:
Philips S. Rhoads, Chief, Compliance and Enforcement Branch, Office of
Defense Controls, Bureau of Political-Military Affairs, Department of
State (703 875-6650).

SUPPLEMENTARY INFORMATION: Federal Register Public Notice No. 1179,
dated March 29, 1990, announced that the Office of Munitions Control
had changed its name to the Office of Defense Trade Controls. (55 FR
11714.) Part 128 of the International Traffic in Arms Regulations
(ITAR) is being amended to reflect the current name of the Office of
Defense Trade Controls. Other amendments reflect the name change of the
Bureau of Politico-Military Affairs to its current name, the Bureau of
Political-Military Affairs.Additionally, references to the ``Under
Secretary of State for Security Assistance, Science and Technology''
are being amended to the current title of the ``Under Secretary of
State for Arms Control and International Security Affairs.''
Furthermore, cross references to other sections in the ITAR are being

[[Page 48831]]

amended for accuracy. The delivery address for the Office of Defense
Trade Controls was added to part 128.
    These amendments involve a foreign affairs function of the United
States. They are exempt from review under Executive Order 12866 but
have been reviewed internally by the Department to ensure consistency
with the purposes thereof. They are also not subject to 5 U.S.C. 553
and 554., and do not require analysis under the Regulatory Flexibility
Act or the Unfunded Mandates Reform Act.

List of Subjects

22 CFR Part 120

    Arms and munitions, Exports, Technical assistance.

22 CFR Part 123

    Arms and munitions, Exports, Technical assistance.

22 CFR Part 128

    Arms and munitions, Exports.

    Accordingly, for the reasons set forth in the preamble, 22 CFR
chapter I, subchapter M, is amended as follows:

PART 120--PURPOSE AND DEFINITIONS

    1. The authority citation for part 120 continues to read as
follows:

    Authority: Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22
U.S.C. 2752, 2778, 2797); E.O. 11958, 42 FR 4311, 3 CFR, 1977 Comp.
p. 79; 22 U.S.C. 2658.

    2. Section 120.10(a)(1) is revised to read as follows:

Sec. 120.10  Technical data.

    (a) * * *
    (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.
* * * * *

PART 123--LICENSES FOR THE EXPORT OF DEFENSE ARTICLES

    1. The authority citation for part 123 continues to read as
follows:

    Authority: Secs. 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. 79; 22
U.S.C. 2658.

    2. Section 123.22(d) is revised to read as follows:

Sec. 123.22  Filing of export licenses and Shipper's Export
Declarations with District Directors of Customs.

* * * * *
    (d) A Shipper's Export Declaration is not required for exports of
unclassified technical data. Exporters shall notify the Office of
Defense Trade Controls of the initial export of the data by either
returning the license after self endorsement or by sending a letter to
the Office of Defense Trade Controls. The letter shall provide the
method, date, license number and airway bill number (if applicable) of
the shipment. The letter must be signed by an empowered official of the
company and provided to the Office of Defense Trade Controls within
thirty days of the initial export.
* * * * *

PART 128--ADMINISTRATIVE PROCEDURES

    1. The authority citation for 22 part 128 continues to read as
follows:

    Authority: Secs. 2, 38, 40, 42, and 71, Arms Export Control Act.
90 Stat. 744 (22 U.S.C. 2752, 2778, 2780, 2791, and 2797); E.O.
11958, 42 FR 4311; 22 U.S.C. 2658; E.O. 12291, 46 FR 1981.

    2. Section 128.1 is revised to read as follows:

Sec. 128.1  Exclusion of functions from the Administrative Procedure
Act.

    The Arms Export Control Act authorizes the President to control the
import and export of defense articles and services in furtherance of
world peace and the security and foreign policy of the United States.
It authorizes the Secretary of State to make decisions on whether
license applications or other written requests for approval shall be
granted, or whether exemptions may be used. It also authorizes the
Secretary of State to revoke, suspend or amend licenses or other
written approvals whenever the Secretary deems such action to be
advisable. The administration of the Arms Export Control Act is a
foreign affairs function encompassed within the meaning of the military
and foreign affairs exclusion of the Administrative Procedure Act and
is thereby expressly exempt from various provisions of that Act.
Because the exercising of the foreign affairs function, including the
decisions required to implement the Arms Export Control Act, is highly
discretionary, it is excluded from review under the Administrative
Procedure Act.
    3. Section 128.2 is revised to read as follows:

Sec. 128.2  Administrative Law Judge

    The Administrative Law Judge referred to in this part is an
Administrative Law Judge appointed by the Department of State or of the
Department of Commerce, as provided in 15 CFR 788.2. The Administrative
Law Judge is authorized to exercise the powers and perform the duties
provided for in Secs. 127.7, 127.8, and 128.3 through 128.16 of this
subchapter.
    4. Section 128.3 is revised to read as follows:

Sec. 128.3  Institution of Administrative Proceedings.

    (a) Charging letters. The Director, Office of Defense Trade
Controls, with the concurrence of the Office of the Legal Adviser,
Department of State, may initiate proceedings to impose debarment or
civil penalties in accordance with Sec. 127.7 or Sec. 127.10 of this
subchapter respectively. Administrative proceedings shall be initiated
by means of a charging letter. The charging letter will state the
essential facts constituting the alleged violation and refer to the
regulatory or other provisions involved. It will give notice to the
respondent to answer the charges within 30 days, as provided in
Sec. 128.5(a), and indicate that a failure to answer will be taken as
an admission of the truth of the charges. It will inform the respondent
that he or she is entitled to an oral hearing if a written demand for
one is filed with the answer or within seven (7) days after service of
the answer. The respondent will also be informed that he or she may, if
so desired, be represented by counsel of his or her choosing. Charging
letters may be amended from time to time, upon reasonable notice.
    (b) Service. A charging letter is served upon a respondent:
    (1) If the respondent is a resident of the United States, when it
is mailed postage prepaid in a wrapper addressed to the respondent at
that person's last known address; or when left with the respondent or
the agent or employee of the respondent; or when left at the
respondent's dwelling with some person of suitable age and discretion
then residing herein; or
    (2) If the respondent is a non-resident of the United States, when
served upon the respondent by any of the foregoing means. If such
methods of service are not practicable or appropriate, the charging
letter may be tendered for service on the respondent to an official of
the government of the country wherein the respondent resides, provided
that there is an agreement or understanding between the United States
Government and the government

[[Page 48832]]

of the country wherein the respondent resident permitting this action.
    5. Section 128.4 is revised to read as follows:

Sec. 128.4  Default.

    (a) Failure to answer. If the respondent fails to answer the
charging letter, the respondent may be held in default. The case shall
then be referred to the Administrative Law Judge for consideration in a
manner as the Administrative Law Judge may consider appropriate. Any
order issued shall have the same effect as an order issued following
the disposition of contested charges.
    (b) Petition to set aside defaults. Upon showing good cause, any
respondent against whom a default order has been issued may apply to
set aside the default and vacate the order entered thereon. The
petition shall be submitted to duplicate to the Assistant Secretary for
Political-Military Affairs, U.S. Department of State, 2201 C Street,
NW., Washington, DC 20520. The Director will refer the petition to the
Administrative Law Judge for consideration and a recommendation. The
Administrative law Judge will consider the application and may order a
hearing and require the respondent to submit further evidence in
support of his or her petition. The filing of a petition to set aside a
default does not in any manner affect an order entered upon default and
such order continues in full force and effect unless a further order is
made modifying or terminating it.
    6. In Sec. 128.5 paragraphs (b) and (c) are revised to read as
follows:

Sec. 128.5  Answer and demand for oral hearing.

* * * * *
    (b) Contents of answer. An answer must be responsive to the
charging letter. It must fully set forth the nature of the respondent's
defense or defenses. In the answer, the respondent must admit or deny
specifically each separate allegation of the charging letter, unless
the respondent is without knowledge, in which case the respondent's
answer shall so state and the statement shall operate as denial.
Failure to deny or controvert any particular allegation will be deemed
an admission thereof. The answer may set forth such additional or new
matter as the respondent believes support a defense or claim of
mitigation. Any defense or partial defense not specifically set forth
in an answer shall be deemed waived. Evidence offered thereon by the
respondent at a hearing may be refused except upon good cause being
shown. If the respondent does not demand an oral hearing, he or she
shall transmit, within seven (7) days after the service of his or her
answer, original or photocopies of all correspondence, papers, records,
affidavits, and other documentary or written evidence having any
bearing upon or connection with the matters in issue. If any such
materials are in language other than English, translations into English
shall be submitted at the same time.
    (c) Submission of answer. The answer, written demand for oral
hearing (if any) and supporting evidence required by Sec. 128.5(b)
shall be in duplicate and mailed or delivered to the Office of
Administrative Law Judge, United States Department of Commerce, Room H-
6716. 14th Street and Constitution Avenue, NW., Washington, DC 20230. A
copy shall be simultaneously mailed to the Director, Office of Defense
Trade Controls, SA-6, Room 200, Department of State, Washington, DC
20522-0602, or delivered to the 21st street entrance of the Department
of State, 2201 C Street, NW., Washington, DC addressed to Director,
Office of Defense Trade Controls, SA-6, Room 200, Department of State,
Washington, DC 20522-0602.
    7. Section 128.6 is revised to read as follows:

Sec. 128.6  Discovery.

    (a) Discovery by the respondent. The respondent, through the
Administrative Law Judge, may request from the Office of Defense Trade
Controls any relevant information, not privileged, that may be
necessary or helpful in preparing a defense. The Office of Defense
Trade Controls may provide any relevant information, not privileged,
that may be necessary or helpful in preparing a defense. The Office of
Defense Trade Controls may supply summaries in place or original
documents and may withhold information from discovery if the interests
of national security or foreign policy so require, or if necessary to
comply with any statute, executive order or regulation requiring that
the information may not be disclosed. The respondent may request the
Administrative Law Judge to request any relevant information, books,
records, or other evidence, from any other person or government agency
so long as the request is reasonable in scope and not unduly
burdensome.
    (b) Discovery by the Office of Defense Trade Controls. The Office
of Defense Trade Controls or the Administrative Law Judge may request
from the respondent admissions of facts, answers to interrogatories,
the production of books, records, or other relevant evidence, so long
as the request is relevant and material, reasonable in scope, and not
unduly burdensome.
    (c) Subpoenas. At the request of any party, the Administrative Law
Judge may issue subpoenas, returnable before him, requiring the
attendance of witnesses and the production of books, records, and other
documentary or physical evidence determined by he Administrative Law
Judge to be relevant and material to the proceedings, reasonable in
scope, and not unduly burdensome.
    (d) Enforcement of discovery rights. If the Office of Defense Trade
Controls fails to provide the respondent with information in its
possession which is not otherwise available and which is necessary to
the respondent's defense, the Administrative Law Judge may dismiss the
charges on her or his own motion or on a motion of the respondent. If
the respondent fails to respond with reasonable diligence to the
requests for discovery by the Office of Defense Trade Controls or the
Administrative Law Judge, on her or his own motion or motion of the
Office of Defense Trade Controls, and upon such notice to the
respondent as the Administrative Law Judge may direct, may strike
respondent's answer and declare the respondent in default, or make any
other ruling which the Administrative Law Judge deems necessary and
just under the circumstances. If a third party fails to respond to the
request for information, the Administrative Law Judge shall consider
whether the evidence sought is necessary to a fair hearing, and if it
is so necessary that a fair hearing may not be held without it, the
Administrative Law Judge shall dismiss the charges.
    8. Section 128.7 is revised to read as follows:

Sec. 128.7  Prehearing conference.

    (a)(1) The Administrative Law Judge may, upon his own motion or
upon motion of any party, request the parties or their counsel to a
prehearing conference to consider:
    (i) Simplification of issues;
    (ii) The necessity of desirability of amendments to pleadings;
    (iii) Obtaining stipulations of fact and of documents to avoid
unnecessary proof; or
    (iv) Such other matter as may expedite the disposition of the
proceeding.
    (2) The Administrative Law Judge will prepare a summary of the
action agreed upon or taken at the conference, and will incorporate
therein any written stipulations or agreements made by the parties.

[[Page 48833]]

    (3) The conference proceedings may be recorded magnetically or
taken by a reporter and transcribed, and filed with the Administrative
Law Judge.
    (b) If a conference is impracticable , the Administrative Law Judge
may request the parties to correspond with the person to achieve the
purposes of a conference. The Administrative Law Judge shall prepare a
summary of action taken as in the case of a conference.
    9. Section 128.8 is revised to read as follows:

Sec. 128.8   Hearings.

    (a) A respondent who had not filed a timely written answer is not
entitled to a hearing, and the case may be considered by the
Administrative Law Judge as provided in Sec. 128.4(a). If any answer is
filed, but no oral hearing demanded, the Administrative Law Judge may
proceed to consider the case upon the written pleadings and evidence
available. The Administrative Law Judge may provide for the making of
the record in such manner as the Administrative Law Judge deems
appropriate. If respondent answers and demands an oral hearing, the
Administrative Law Judge, upon due notice, shall set the case for
hearing, unless a respondent has raised in his answer no issues of
material fact to be determined. If respondent fails to appear at a
scheduled hearing, the hearing nevertheless may proceed in respondent's
absence. The respondent's failure to appear will not affect the
validity of the hearing or any proceedings or action thereafter.
    (b) The Administrative Law Judge may administer oaths and
affirmations. Respondent may be represented by counsel. Unless
otherwise agreed by the parties and the Administrative Law Judge the
proceeding will be taken by a reporter or by magnetic recording,
transcribed, and filed with the Administrative Law Judge. Respondent
may examine the transcript and may obtain a copy upon payment of proper
costs.
    10. Section 128.9 is revised to read as follows:

Sec. 128.9   Proceedings before and report of Administrative Law Judge.

    (a) The Administrative Law Judge may conform any part of the
proceedings before him or her to the Federal Rules of Civil Procedure.
The record may be made available in any other administrative or other
proceeding involving the same respondent.
    (b) The Administrative Law Judge, after considering the record,
will prepare a written report. The report will include findings of
fact, findings of law, a finding whether a law or regulation has been
violated, and the Administrative Law Judge's recommendations. It shall
be transmitted to the Assistant Secretary for Political-Military
Affairs, Department of State.
    11. Section 128.10 is revised to read as follows:

Sec. 128.10  Disposition of proceedings.

    Where the evidence is not sufficient to support the charges, the
Director, Office of Defense Trade Controls or the Administrative Law
Judge will dismiss the charges. Where the Administrative Law Judge
finds that a violation has been committed, the Administrative Law
Judge's recommendation shall be advisory only. The Assistant Secretary
for Political-Military Affairs will review the record, consider the
report of the Administrative Law Judge, and make an appropriate
disposition of the case. The Director may issue an order debarring the
respondent from participating in the export of defense articles or
technical data or the furnishing of defense services as provided in
Sec. 127.7 of this subchapter, impose a civil penalty as provided in
Sec. 127.10 of this subchapter or take such action as the
Administrative Law Judge deems appropriate. Any debarment order will be
effective for the period of time specified therein and may contain such
additional terms and conditions as are deemed appropriate. A copy of
the order together with a copy of the Administrative Law Judge's report
will be served upon the respondent.
    12. Section 128.11 is revised to read as follows:

Sec. 128.11  Consent agreements.

    (a) The Office of Defense Trade Controls and the respondent may, by
agreement, submit to the Administrative Law Judge a proposal for the
issuance of a consent order. The Administrative Law Judge will review
the facts of the case and the proposal and may conduct conferences with
the parties and may require the presentation of evidence in the case.
If the Administrative Law Judge does not approve the proposal, the
Administrative Law Judge will notify the parties and the case will
proceed as though no consent proposal had been made. If the proposal is
approved, the Administrative Law Judge will report the facts of the
case along with recommendations to the Assistant Secretary for
Political-Military Affairs. If the Assistant Secretary for Political-
Military Affairs does not approve the proposal, the case will proceed
as though no consent proposal had been made. If the Assistant Secretary
for Political-Military Affairs approves the proposal, an appropriate
order may be issued.
    (b) Cases may also be settled prior to service of a charging
letter. In such an event, a proposed charging letter shall be prepared,
and a consent agreement and order shall be submitted for the approval
and signature of the Assistant Secretary for Political-Military
Affairs, and no action by the Administrative Law Judge shall be
required. Cases which are settled may not be reopened or appealed.
    13. Section 128.12 is revised to read as follows:

Sec. 128.12  Rehearings.

    The Administrative Law Judge may grant a rehearing or reopen a
proceeding at any time for the purpose of hearing any relevant and
material evidence which was not known or obtainable at the time of the
original hearing. A report for rehearing or reopening must contain a
summary of such evidence, and must explain the reasons why it could not
have been presented at the original hearing. The Administrative Law
Judge will inform the parties of any further hearing, and will conduct
such hearing and submit a report and recommendations in the same manner
as provided for the original proceeding (Described in Sec. 128.10).
    14. In Sec. 128.13 paragraphs (a), (c), (e), and (f) are revised to
read as follows:

Sec. 128.13  Appeals.

    (a) Filing of appeals. An appeal must be in writing, and be
addressed to and filed with the Under Secretary of State for Arms
Control and International Security Affairs, Department of State,
Washington, DC 20520. An appeal from a final order denying export
privileges or imposing civil penalties must be filed within 30 days
after receipt of a copy of the order. If the Under Secretary cannot for
any reason act on the appeal, he or she may designate another
Department of State official to receive and act on the appeal.
* * * * *
    (c) Matters considered on appeal. An appeal will be considered upon
the basis of the assembled record. This record consists of (but is not
limited to) the charging letter, the respondent's answer, the
transcript or magnetic recording of the hearing before the
Administrative Law Judge, the report of the Administrative Law Judge,
the order of the Assistant Secretary for Political-Military Affairs,
and any other relevant documents involved in the proceedings before the
Administrative Law Judge. The Under Secretary of State for Arms Control
and International Security

[[Page 48834]]

Affairs may direct a rehearing and reopening before the Administrative
Law Judge if he or she finds that the record is insufficient or that
new evidence is relevant and material to the issues and was not known
and was not available to the respondent at the time of the original
hearings.
* * * * *
    (e) Preparation of appeals.--(1) General requirements. An appeal
shall be in letter form. The appeal and accompanying material should be
filed in duplicate, unless otherwise indicated, and a copy
simultaneously mailed to the Director, Office of Defense Trade
Controls, SA-6, Room 200, Department of State, Washington, DC 20522-
0620 or delivered to the 21st street entrance of the Department of
State, 2201 C Street, NW., Washington, DC addressed to Director, Office
of Defense Trade Controls, SA-6, Room 200, Department of State,
Washington, DC 20522-0602.
    (2) Oral presentation. The Under Secretary of State for Arms
Control and International Security Affairs may grant the appellant an
opportunity for oral argument and will set the time and place for oral
argument and will notify the parties, ordinarily at least 10 days
before the date set.
    (f) Decisions. All appeals will be considered and decided within a
reasonable time after they are filed. An appeal may be granted or
denied in whole or in part, or dismissed at the request of the
appellant. The decision of the Under Secretary of State for Arms
Control and International Security Affairs will be final.
    15. Section 128.14 is revised to read as follows:

Sec. 128.14  Confidentiality of proceedings.

    Proceedings under this part are confidential. The documents
referred to in Sec. 128.17 are not, however, deemed to be confidential.
Reports of the Administrative Law Judge and copies of transcripts or
recordings of hearings will be available to parties and, to the extent
of their own testimony, to witnesses. All records are available to any
U.S. Government agency showing a proper interest therein.
    16. Section 128.15 is revised to read as follows:

Sec. 128.15  Orders containing probationary periods.

    (a) Revocation of probationary periods. A debarment or interim
suspension order may set a probationary period during which the order
may be held in abeyance for all or part of the debarment or suspension
period, subject to the conditions stated therein. The Director, Office
of Defense Trade Controls, may apply without notice to any person to be
affected thereby, to the Administrative Law Judge for an order revoking
probation when it appears that the conditions of the probation have
been breached. The facts in support of the application will be
presented to the Administrative Law Judge, who will report thereon and
make a recommendation to the Assistant Secretary for Political-Military
Affairs. The latter will make a determination whether to revoke
probation and will issue an appropriate order.
    (b) Hearings--(1) Objections upon notice. Any person affected by an
application upon notice to revoke probation, within the time specified
in the notice, may file objections with the Administrative Law Judge.
    (2) Objections to order without notice. Any person adversely
affected by an order revoking probation, without notice may request
that the order be set aside by filing his objections thereto with the
Administrative Law Judge. The request will not stay the effective date
of the order or revocation.
    (3) Requirements for filing objections. Objections filed with the
Administrative Law Judge must be submitted in writing and in duplicate.
A copy must be simultaneously submitted to the Office of Defense Trade
Controls. Denials and admissions, as well as any mitigating
circumstances, which the person affected intends to present must be set
forth in or accompany the letter of objection and must be supported by
evidence. A request for an oral hearing may be made at the time of
filing objections.
    (4) Determination. The application and objections thereto will be
referred to the Administrative Law Judge. An oral hearing if requested,
will be conducted at an early convenient date, unless the objections
filed raise no issues of material fact to be determined. The
Administrative Law Judge will report the facts and make a
recommendation to the Assistant Secretary for Political-Military
Affairs, who will determine whether the application should be granted
or denied and will issue an appropriate order. A copy of the order and
of the Administrative Law Judge's report will be furnished to any
person affected thereby.
    (5) Effect of revocation on other actions. The revocation of a
probationary period will not preclude any other action concerning a
further violation, even where revocation is based on the further
violation.
    17. Section 128.16 is revised to read as follows:

Sec. 128.16  Extension of time.

    The Administrative Law Judge, for good cause shown, may extend the
time within which to prepare and submit an answer to a charging letter
or to perform any other act required by this part.

    Dated: August 27, 1996.
Lynn E. Davis,
Under Secretary for Arms Control and International Security Affairs,
Department of State.
[FR Doc. 96-23659 Filed 9-16-96; 8:45 am]
BILLING CODE 4710-25-M
