Cryptography's Role In Securing The Information Society

                Appendix N   Continued

[N.4 commences p. 636.]
__________________________________________________________________



                   N.4 REGULATIONS
                           
                           
   N.4.1 International Traffic in Arms Regulations
  (22 CFR, Excerpts from Parts 120-123,125, and 126)
                           
                           
                       Part 120
                           
               Purpose and Definitions


Sec. 120.1--General authorities and eligibility.

     (a) Section 38 of the Arms Export Control Act (22 U.S.C.
2778) authorizes the President to control the export and import of
defense articles and defense services. The statutory authority of
the President to promulgate regulations with respect to exports of
defense articles and defense services was delegated to the
Secretary of State by Executive Order 11958, as amended (42 FR
4311). This subchapter implements that authority. By virtue of
delegations of authority by the Secretary of State, these
regulations are primarily administered by the Director of the
Office of Defense Trade Controls, Bureau of Politico-Military
Affairs, Department of State.

     (b) Authorized Officials. All authorities conferred upon the
Director of the Office of Defense Trade Controls by this
subchapter may be exercised at any time by the Under Secretary of
State for Intemational Security Affairs, the Assistant Secretary
of State for Politico-Military Affairs, or the Deputy Assistant
Secretary of State for Politico-Military Affairs responsible for
supervising the Office of Defense Trade Controls unless the Legal
Adviser or the Assistant Legal Adviser for Politico-Military
Affairs of the Department of State determines that any specific
exercise of this authority under this subsection may be
inappropriate.

     (c) Eligibility. Only U.S. persons (as defined in Sec.
120.15) and foreign govemmental entities in the United States may
be granted licenses or other approvals (other than retransfer
approvals sought pursuant to this subchapter). Foreign persons (as
defined in Sec. 120.16) other than governments are not eligible.
U.S. persons who have been convicted of violating the criminal
statutes enumerated in Sec. 120.27, who have been debarred
pursuant to part 127 or 128 of this subchapter, who are the
subject of an indictment involving the criminal statutes
enumerated in Sec. 120.27, who are ineligible to contract with, or
to receive a license or other form of authorization to import
defense articles or defense services from any agency of the U.S.
Government, who are ineligible to receive export licenses (or
other forms of authorization to export) from anv agency of the
U.S. Government, who are subject to Department of State
Suspension/Revocation under Sec. 126.7 (a)(1)-(a)(7) of this
subchapter, or who are ineligible under Sec. 127.6(c) of this
subchapter are generally ineligible. Applications for licenses or
other approvals will be considered only if the applicant has
registered with the Office of Defense Trade Controls pursuant to
part 122 of this subchapter. All [637] applications and requests
for approval must be signed by a U.S. person who has been
empowered by the registrant to sign such documents....


Sec. 120.3--Policy on designating and determining defense articles
and services.

     An article or service may be designated or determined in the
future to be a defense article (see Sec. 120.6) or defense service
(see Sec. 120.9) if it:

     (a) Is specifically designed, developed, configured,
adapted, or modified for a military application, and

(i) Does not have predominant civil applications, and

(ii) Does not have performance equivalent (defined by form, fit
and function) to those of an article or service used for civil
applications; or

     (b) Is specifically designed, developed, configured,
adapted, or modified for a military application, and has
significant military or intelligence applicability such that
control under this subchapter is necessary.

     The intended use of the article or service after its export
(i.e., for a military or civilian purpose) is not relevant in
determining whether the article or service is subject to the
controls of this subchapter. Any item covered by the U.S.
Munitions List must be within the categories of the U.S. Munitions
List. The scope of the U.S. Munitions List shall be changed only
by amendments made pursuant to section 38 of the Arms Export
Control Act (22 U.S.C. 2778).


Sec. 120.4--Commodity jurisdiction.

     (a) The commodity jurisdiction procedure is used with the
U.S. Government if doubt exists as to whether an article or
service is covered by the U.S. Munitions List. It may also be used
for consideration of a redesignation of an article or service
currently covered by the U.S. Munitions List. The Department must
submit a report to Congress at least 30 days before any item is
removed from the U.S. Munitions List. Upon written request, the
Office of Defense Trade Controls shall provide a determination of
whether a particular article or service is covered by the U.S.
Munitions List. The determination, consistent with Secs. 120.2,
120.3, and 120.4, entails consultation among the Departments of
State, Defense, Commerce and other U.S. Government agencies and
industry in appropriate cases.

     (b) Registration with the Office of Defense Trade Controls
as defined in part 122 of this subchapter is not required prior to
submission of a commodity jurisdiction request. If it is
determined that the commodity is a defense article or service
covered by the U.S. Munitions List, registration is required for
exporters, manufacturers, and furnishers of defense articles and
defense services (see part 122 of this subchapter). [638]

(c) Requests shall identify the article or service, and include a
history of the product's design, development and use. Brochures,
specifications and any other documentation related to the article
or service shall be submitted in seven collated sets.

     (d)(1) A determination that an article or service does not
have predominant civil applications shall be made by the
Department of State, in accordance with this subchapter, on a
case-by-case basis, taking into account:

(i) The number, variety and predominance of civil applications;

(ii) The nature, function and capability of the civil
applications; and (iii) The nature, function and capability of the
military applications.

(2) A determination that an article does not have the performance
equivalent, defined by form, fit and function, to those used for
civil applications shall be made by the Department of State, in
accordance with this subchapter, on a case-by-case basis, taking
into account:

(i) The nature, function, and capability of the article;

(ii) Whether the components used in the defense article are
identical to those components ori~inally developed for civil use.

     Note: The form of the item is its defined configuration,
including the geometrically measured configuration, density, and
weight or other visual parameters which uniquely characterize the
item, component or assembly. For software, form denotes language,
language level and media. The fit of the item is its ability to
physically interface or interconnect with or become an integral
part of another item. The function of the item is the action or
actions it is designed to perform.

(3) A determination that an article has significant military or
intelligence applications such that it is necessary to control its
export as a defense article shall be made, in accordance with this
subchapter, on a case-by-case basis, taking into account:

(i) The nature, function, and capability of the article;

(ii) The nature of controls imposed by other nations on such items
(including COCOM and other multilateral controls), and

(iii) That items described on the COCOM Industrial List shall not
be designated defense articles or defense services unless the
failure to control such items on the U.S. Munitions List would
jeopardize significant national security or foreign policy
interests.

     (e) The Office of Defense Trade Controls will provide a
preliminarv response within 10 working days of receipt of a
complete request for commoditv jurisdiction. If after 45 days the
Office of Defense Trade Controls has not provided a final
commodity jurisdiction determination, the applicant may request in
writing to the Director, Center for Defense Trade that this
determination be given expedited processing.

     (f) State, Defense and Commerce will resolve commodity
jurisdiction disputes in accordance with established procedures.
State shall notify Defense and Commerce of the initiation and
conclusion of each case. [639]


     (g) A person may appeal a commodity jurisdiction
determination by submitting a written request for reconsideration
to the Director of the Center for Defense Trade. The Center for
Defense Trade will provide a written response of the Director's
determination within 30 days of receipt of the appeal. If desired,
an appeal of the Director's decision can then be made directly to
the Assistant Secretary for Politico-Militarv Affairs....


Sec. 120.6--Defense article.

     Defense article means any item or technical data designated
in Sec. 121.1 of this subchapter. The policy described in Sec.
120.3 is applicable to designations of additional items. This term
includes technical data recorded or stored in anv physical form,
models, mockups or other items that reveal technical data directly
relating to items designated in Sec. 121.1 of this subchapter. It
does not include basic marketing information on function or
purpose or general system descriptions....


Sec. 120.9--Defense service.

     Defense service means:

     (1) The furnishing of assistance (including training) to
foreign persons, whether in the United States or abroad in the
design, development, engineering, manufacture, production,
assembly, testing, repair, maintenance, modification, operation,
demilitarization, destruction, processing or use of defense
articles; or

     (2) The furnishing to foreign persons of any technical data
controlled under this subchapter (see Sec. 120.10), whether in the
United States or abroad.


Sec. 120.10--Technical data.

     Technical data means, for purposes of this subchapter:

     (1) Information, other than software as defined in Sec.
120.10(d), which is required for the design, development,
production, manufacture, assembly, operation, repair, testing,
maintenance or modification of defense articles. This includes
information in the form of blueprints, drawings, photographs,
plans, instructions and documentation.

     (2) Classified information relating to defense articles and
defense services;

     (3) Information covered by an invention secrecy order;

     (4) Software as defined in Sec. 121.8(f) of this subchapter
directly related to defense articles;

     (5) This definition does not include information concerning
general scientific, mathematical or engineering principles
commonly taught in schools, colleges and universities or
information in the public domain as defined in Sec. 120.11. [640]
It also does not include basic marketing information on function
or purpose or general system descriptions of defense articles.


Sec. 120.11--Public domain.

     Public domain means information which is published and which
is generally accessible or available to the public:

     (1) Through sales at newsstands and bookstores;

     (2) Through subscriptions which are available without
restriction to any individual who desires to obtain or purchase
the published information;

     (3) Through second class mailing privileges granted by the
U.S. Government;

     (4) At libraries open to the public or from which the public
can obtain documents;

     (5) Through patents available at any patent office;

     (6) Through unlimited distribution at a conference, meeting,
seminar, trade show or exhibition, generally accessible to the
public, in the United States;

     (7) Through public release (i.e., unlimited distribution) in
any form (e.g., not necessarily in published form) after approval
by the cognizant U.S. govemment department or agency (see also
Sec. 125.4(b)(13) of this subchapter);

     (8) Through fundamental research in science and engineering
at accredited institutions of higher learning in the U.S. where
the resulting information is ordinarily published and shared
broadly in the scientific community. Fundamental research is
defined to mean basic and applied research in science and
engineering where the resulting information is ordinarily
published and shared broadly within the scientific community, as
distinguished from research the results of which are restricted
for proprietary reasons or specific U.S. Government access and
dissemination controls. University research will not be considered
fundamental research if:

(i) The University or its researchers accept other restrictions on
publication of scientific and technical information resulting from
the project or activity, or

(ii) The research is funded by the U.S. Government and specific
access and dissemination controls protecting information resulting
from the research are applicable....


Sec. 120.14--Person.

     Person means a natural person as well as a corporation,
business association, partnership, society, trust, or any other
entity, organization or group, including governmental entities. If
a provision in this subchapter does not refer exclusively to a
foreign person ( Sec. 120.16) or U.S. person (Sec. 120.15), then
it refers to both. [641]


Sec. 120.15--U.S. person.

     U.S. person means a person (as defined in Sec. 120.14 of
this part) who is a protected individual as defined by 8 U.S.C.
1324b(a)(3). It also means any corporation, business association,
partmership, society, trust or any other entity, organization or
group that is incorporated to do business in the United States. It
also includes any governmental (federal, state or local) entity.
It does not include any foreign person as defined in Sec. 120.16
of this part.


Sec. 120.16--Foreign person.

     Foreign person means any natural person who is not a
protected individual as defined by 8 U.S.C. 1324b(a)(3). It also
means any foreign corporation, business association, partnership,
trust, society or any other entity or group that is not
incorporated or organized to do business in the United States, as
well as international organizations, foreign governments and any
agency or subdivision of foreign governments (e.g., diplomatic
missions).


Sec. 120.17--Export.

     Export means:

     (1) Sending or taking a defense article out of the United
States in any manner, except by mere travel outside of the United
States by a person whose personal knowledge includes technical
data; or

     (2) Transferring registration, control or ownership to a
foreign person of any aircraft, vessel, or satellite covered by
the U.S. Munitions List, whether in the United States or abroad;
or

     (3) Disclosing (including oral or visual disclosure) or
transferring in the United States any defense article to an
embassy, any agency or subdivision of a foreign government (e.g.,
diplomatic missions); or

     (4) Disclosing (including oral or visual disclosure) or
transferring technical data to a foreign person, whether in the
United States or abroad; or

     (5) Performing a defense service on behalf of, or for the
benefit of, a foreign person, whether in the United States or
abroad....


Sec. 120.18--Temporary import.

     Temporary import means bringing into the United States from
a foreign country any defense article that is to be returned to
the country from which it was shipped or taken, or any defense
article that is in transit to another foreign destination. [642]
Temporary import includes withdrawal of a defense article from a
customs bonded warehouse or foreign trade zone for the purpose of
returning it to the country of origin or country from which it was
shipped or for shipment to another foreign destination. Permanent
imports are regulated by the Department of the Treasury (see 27
CFR parts 47,178 and 179).


Sec. 120.19--Reexport or retransfer.

     Reexport or retransfer means the transfer of defense
articles or defense services to an end use, end user or
destination not previously authorized.


Sec. 120.20--License.

     License means a document bearing the word license issued by
the Director, Office of Defense Trade Controls or his authorized
designee which permits the export or temporary import of a
specific defense article or defense service controlled by this
subchapter.


Sec. 120.21--Manufacturing license agreement.

     An agreement (e.g., contract) whereby a U.S. person grants a
foreign person an authorization to manufacture defense articles
abroad and which involves or contemplates:

     (a) The export of technical data (as defined in Sec. 120.10)
or defense articles or the performance of a defense service; or

     (b) The use by the foreign person of technical data or
defense articles previously exported by the U.S. person. (See part
124 of this subchapter.)


Sec. 120.22--Technical assistance agreement.

     An agreement (e.g., contract) for the performance of a
defense service(s) or the disclosure of technical data, as opposed
to an agreement granting a right or license to manufacture defense
articles. Assembly of defense articles is included under this
section, provided production rights or manufacturing know-how are
not conveyed. Should such rights be transferred, Sec. 120.21 is
applicable. (See part 124 of this subchapter.)


Sec. 120.23--Distribution agreement.

     An agreement (e.g., a contract) to establish a warehouse or
distribution [643] point abroad for defense articles exported from
the United States for subsequent distribution to entities in an
approved sales territory (see part 124 of this subchapter)....



                       Part 121
                           
           The United States Munitions List


Sec. 121.1--General. The United States Munitions List.

     (a) The following articles, services and related technical
data are designated as defense articles and defense services
pursuant to sections 38 and 47(7) of the Arms Export Control Act
(22 U.S.C. 2778 and 2794(7)). Changes in designations will be
published in the Federal Register. Information and clarifications
on whether specific items are defense articles and services under
this subchapter may appear periodically in the Defense Trade News
published by the Center for Defense Trade....


Category XIII Auxiliary Military Equipment....

     (b) Information Security Systems and equipment,
cryptographic devices, software, and components specifically
designed or modified therefor, including: 

(1) Cryptographic (including key management) systems, equipment,
assemblies, modules, integrated circuits, components or software
with the capability of maintaining secrecy or confidentiality of
information or information systems, except cryptographic equipment
and software as follows:

(i) Restricted to decryption functions specifically designed to
allow the execution of copy protected software, provided the
decryption functions are not useraccessible.

(ii) Specially designed, developed or modified for use in machines
for banking or money transactions, and restricted to use only in
such transactions. Machines for banking or money transactions
include automatic teller machines, self-service statement
printers, point of sale terminals or equipment for the encryption
of interbanking transactions.

(iii) Employing only analog techniques to provide the
cryptographic processing that ensures information security in the
following applications:

(A) Fixed (defined below) band scrambling not exceeding 8 bands
and in which the transpositions change not more frequently than
once every second;

(B) Fixed (defined below) band scrambling exceeding 8 bands and in
which the transpositions change not more frequently than once
everv ten seconds;

(C) Fixed (defined below) frequency inversion and in which the
transpositions change not more frequently than once every second;

(D) Facsimile equipment;

(E) Restricted audience broadcast equipment; 

(F) Civil television equipment. [644]

     Note: Special Definition. For purposes of this subparagraph,
fixed means that the coding or compression algorithm cannot accept
externally supplied parameters (e.g., cryptographic or key
variables) and cannot be modified by the user.

(iv) Personalized smart cards using cryptography restricted for
use only in equipment or systems exempted from the controls of the
USML.

(v) Limited to access control, such as automatic teller machines,
self-service statement printers or point of sale terminals, which
protects password or personal identification numbers (PIN) or
similar data to prevent unauthorized access to facilities but does
not allow for encryption of files or text, except as directly
related to the password of PIN protection.

(vi) Limited to data authentication which calculates a Message
Authentication Code (MAC) or similar result to ensure no
alteration of text has taken place, or to authenticate users, but
does not allow for encryption of data, text or other media other
than that needed for the authentication.

(vii) Restricted to fixed data compression or coding techniques.

(viii) Limited to receiving for radio broadcast, pay television or
similar restricted audience television of the consumer type,
without digital encryption and where digital decryption is limited
to the video, audio or management functions.

(ix) Software designed or modified to protect against malicious
computer damage (e.g., viruses).

     Note: A procedure has been established to facilitate the
expeditious transfer to the Commodity Control List of mass market
software products with encryption that meet specified criteria
regarding encryption for the privacy of data and the associated
key management. Requests to transfer commodity jurisdiction of
mass market software products designed to meet the specified
criteria may be submitted in accordance with the commodity
jurisdiction provisions of Sec. 120.4. Questions regarding the
specified criteria or the commodity jurisdiction process should be
addressed to the Office of Defense Trade ControIs. All mass market
software products with cryptography that were previously granted
transfers of commodity jurisdiction will remain under Department
of Commerce control. Mass market software governed by this note is
software that is generally available to the public by being sold
from stock at retail selling points, without restriction, by means
of over the counter transactions, mail order transactions, or
telephone call transactions; and designed for installation by the
user without further substantial support by the supplier.

(2) Cryptographic (including key management) systems, equipment,
assemblies, modules, integrated circuits, components or software
which have the capability of generating spreading or hopping codes
for spread spectrum systems or equipment.

(3) Cryptanalytic systems, equipment, assemblies, modules,
integrated circuits, components or software.

(4) Systems, equipment, assemblies, modules, integrated circuits,
components or software providing certified or certifiable
multi-level security or user isolation [645] exceeding class B2 of
the Trusted Computer System Evaluation Criteria (TCSEC) and
software to certify such systems, equipment or software.

(5) Ancillary equipment specifically designed or modified for
paragraphs (b) (1), (2), (3), (4) and (5) of this category; ...


Category XXI Miscellaneous Articles

     (a) Any article not specifically enumerated in the other
categories of the U.S. Munitions List which has substantial
military applicability and which has been specifically designed or
modified for military purposes. The decision on whether any
article may be included in this category shall be made by the
Director of the Office of Defense Trade Controls.

     (b) Technical data (as defined in Sec. 120.21 of this
subchapter) and defense services (as defined in Sec. 120.8 of this
subchapter) directly related to the defense articles enumerated in
paragraphs (a) of this category....



                       Part 122
                           
     Registration of Manufacturers and Exporters


Sec. 122.1--Registration requirements.

     (a) Any person who engages in the United States in the
business of either manufacturing or exporting defense articles or
furnishing defense services is required to register with the
Office of Defense Trade Controls. Manufacturers who do not engage
in exporting must nevertheless register.

     (b) Exemptions. Registration is not required for:

(1) Officers and employees of the United States Government acting
in an official capacity.

(2) Persons whose pertinent business activity is confined to the
production of unclassified technical data only.

(3) Persons all of whose manufacturing and export activities are
licensed under the Atomic Energy Act of 1954, as amended.

(4) Persons who engage only in the fabrication of articles for
experimental or scientific purpose, including research and
development.

     (c) Purpose. Registration is primarily a means to provide
the U.S. Government with necessary information on who is involved
in certain manufacturing and exporting activities. Registration
does not confer any export rights or privileges. It is generally a
precondition to the issuance of any license or other approval
under this subchapter. [646]


Sec. 122.2--Submission of registration statement.

     (a) General. The Department of State Form DSP-9
(Registration Statement) and the transmittal letter required by
paragraph (b) of this section must be submitted by an intended
registrant with a payment by check or money order payable to the
Department of State of one of the fees prescribed in Sec. 122.3(a)
of this subchapter. The Registration Statement and transmittal
letter must be signed by a senior officer who has been empowered
bv the intended registrant to sign such documents. The intended
registrant shall also submit documentation that demonstrates that
it is incorporated or otherwise authorized to do business in the
United States. The Office of Defense Trade Controls will return to
the sender any Registration Statement that is incomplete, or that
is not accompanied by the required letter or payment of the proper
registration fee.

     (b) Transmittal letter. A letter of transmittal, signed by
an authorized senior officer of the intended registrant, shall
accompany each Registration Statement.

(1) The letter shall state whether the intended registrant, chief
executive officer, president, vice-presidents, other senior
officers or officials (e.g. comptroller, treasurer, general
counsel) or any member of the board of directors:

(i) Has ever been indicted for or convicted of violating any of
the U.S. criminal statutes enumerated in Sec. 120.27 of this
subchapter; or

(ii) Is ineligible to contract with, or to receive a license or
other approval to import defense articles or defense services
from, or to receive an export license or other approval from, any
agency of the U.S. Government.

(2) The letter shall also declare whether the intended registrant
is owned or controlled by foreign persons (as defined in Sec.
120.16 of this subchapter). If the intended registrant is owned or
controlled by foreign persons, the letter shall also state whether
the intended registrant is incorporated or otherwise authorized to
engage in business in the United States.

(c) Definition. For purposes of this section, ownership means that
more than 50 percent of the outstanding voting securities of the
firm are owned by one or more foreign persons. Control means that
one or more foreign persons have the authority or ability to
establish or direct the general policies or day-to-day operations
of the firm. Control is presumed to exist where foreign persons
own 25 percent or more of the outstanding voting securities if no
U.S. persons control an equal or larger percentage. The standards
for control specified in 22 CFR 60.2(c) also provide guidance in
determining whether control in fact exists....



                       Part 123
                           
     Licenses for the Export of Defense Articles


Sec. 123.7--Exports to warehouses or distribution points outside
the United States. [647]

     Unless the exemption under Sec. 123.16(b)(1) is used, a
license is required to export defense articles to a warehouse or
distribution point outside the United States for subsequent resale
and will normally be granted only if an agreement has been
approved pursuant to Sec. 124.14 of this subchapter....


Sec. 123.9--Country of ultimate destination and approval of
reexports or retransfers.

     (a) The country designated as the country of ultimate
destination on an application for an export license, or on a
Shipper's Export Declaration where an exemption is claimed under
this subchapter, must be the country of ultimate enduse. The
written approval of the Office of Defense Trade Controls must be
obtained before reselling, transferring, transshipping, or
disposing of a defense article to any end user, end use or
destination other than as stated on the export license, or on the
Shipper's Export Declaration in cases where an exemption is
claimed under this subchapter. Exporters must ascertain the
specific end-user and end-use prior to submitting an application
to the Office of Defense Trade Controls or claiming an exemption
under this subchapter.

     (b) The exporter shall incorporate the following statement
as an integral part of the bill of lading, and the invoice
whenever defense articles on the U.S. Munitions List are to be
exported:

     These commodities are authorized bv the U.S. Government for
export only to country of ultimate destination for use by
end-user. They may not be transferred, transshipped on a
non-continuous voyage, or otherwise be disposed of in any other
country, either in their original form or after being incorporated
into other end-items, without the prior written approval of the
U.S. Department of State."

     (c) A U.S. person or a foreign person requesting approval
for the reexport or retransfer, or change in end-use, of a defense
article shall submit a written request which shall be subject to
all the documentation required for a permanent export license (see
Sec. 123.1) and shall contain the following:

(1) The license number under which the defense article was
previously authorized for export from the United States;

(2) A precise description, quantity and value of the defense
article; 

(3) A description of the new end-use; and

(4) Identification of the new end-user.

     (d) The written approval of the Office of Defense Trade
Controls must be obtained before reselling, transferring,
transshipping on a non-continuous voyage, or disposing of a
defense article in anv country other than the country of ultimate
destination, or anyone other than the authorized end-user, as
stated on the Shipper's Export Declaration in cases where an
exemption is claimed under this subchapter. [648

     (e) Reexports or retransfers of U.S.-origin components
incorporated into a foreign defense article to a government of a
NATO country, or the governments of Australia or Japan, are
authorized without the prior written approval of the Office of
Defense Trade Controls, provided:

(1) The U.S.-origin components were previously authorized for
export from the United States, either by a license or an
exemption;

(2) The U.S.-origin components are not significant military
equipment, the items are not major defense equipment sold under a
contract in the amount of $14,000,000 ($14 million) or more; the
articles are not defense articles or defense services sold under a
contract in the amount of $50,000,000 ($50 million) or more; and
are not identified in part 121 of this subchapter as Missile
Technology Control Regime (MTCR) items; and

(3) The person reexporting the defense article must provide
written notification to the Office of Defense Trade Controls of
the retransfer not later than 30 days following the reexport. The
notification must state the articles being reexported and the
recipient government.

(4) In certain cases, the Director, Office of Defense Trade
Controls, may place retransfer restrictions on a license
prohibiting use of this exemption.


Sec. 123.10--Non transfer and use assurances.

     (a) A nontransfer and use certificate (Form DSP-83) is
required for the export of significant military equipment and
classified articles including classified technical data. A license
will not be issued until a completed Form DSP-83 has been received
by the Office of Defense Trade Controls. This form is to be
executed by the foreign consignee, foreign end-user, and the
applicant. The certificate stipulates that, except as specifically
authorized by prior written approval of the Department of State,
the foreign consignee and foreign end-user will not reexport,
resell or otherwise dispose of the significant military equipment
enumerated in the application outside the country named as the
location of the foreign end-use or to any other person.

     (b) The Office of Defense Trade Controls may also require a
DSP-83 for the export of any other defense articles or defense
services.

     (c) When a DSP-83 is required for an export of any defense
article or defense service to a non-govemmental foreign end-user,
the Office of Defense Trade Controls may require as a condition of
issuing the license that the appropriate authority of the
government of the country of ultimate destination also execute the
certificate.... [649]



                       Part 125
                           
      Licenses for the Export of Technical Data 
           and Classified Defense Articles


Sec. 125.1--Exports subject to this part.

     (a) The controls of this part apply to the export of
technical data and the export of classified defense articles.
Information which is in the public domain (see Sec. 120.11 of this
subchapter and Sec. 125.4(b)(13)) is not subject to the controls
of this subchapter.

     (b) A license for the export of technical data and the
exemptions in Sec. 125.4 may not be used for foreign production
purposes or for technical assistance unless the approval of the
Office of Defense Trade Controls has been obtained. Such approval
is generally provided only pursuant to the procedures specified in
part 124 of this subchapter.

     (c) Technical data authorized for export may not be
reexported, transferred or diverted from the country of ultimate
end-use or from the authorized foreign end-user (as designated in
the license or approval for export) or disclosed to a national of
another country without the prior written approval of the Office
of Defense Trade Controls.

     (d) The controls of this part apply to the exports referred
to in paragraph (a) of this section regardless of whether the
person who intends to export the technical data produces or
manufactures defense articles if the technical data is determined
by the Office of Defense Trade Controls to be subject to the
controls of this subchapter.

     (e) The provisions of this subchapter do not apply to
technical data related to articles in Category VI(e) and Category
XVI. The export of such data is controlled by the Department of
Energy and the Nuclear Regulatory Commission pursuant to the
Atomic Energy Act of 1954, as amended, and the Nuclear
NonProliferation Act of 1978.


Sec. 125.2--Exports of unclassified technical data.

     (a) A license (DSP-5) is required for the export of
unclassified technical data unless the export is exempt from the
licensing requirements of this subchapter. In the case of a plant
visit, details of the proposed discussions must be transmitted to
the Office of Defense Trade Controls for an appraisal of the
technical data. Seven copies of the technical data or the details
of the discussion must be provided.

     (b) Patents. A license issued by the Office of Defense Trade
Controls is required for the export of technical data whenever the
data exceeds that which is [650] used to support a domestic filing
of a patent application or to support a foreign filing of a patent
application whenever no domestic application has been filed.
Requests for the filing of patent applications in a foreign
country, and requests for the filing of amendments, modifications
or supplements to such patents, should follow the regulations of
the U.S. Patent and Trademark Office in accordance with 37 CFR
part 5. The export of technical data to support the filing and
processing of patent applications in foreign countries is subject
to regulations issued by the U.S. Patent and Trademark Office
pursuant to 35 U.S.C. 184.

     (c) Disclosures. Unless otherwise expressly exempted in this
subchapter, a license is required for the oral, visual or
documentary disclosure of technical data by U.S. persons to
foreign persons. A license is required regardless of the manner in
which the technical data is transmitted (e.g., in person, bv
telephone, correspondence, electronic means, etc.). A license is
required for such disclosures by U.S. persons in connection with
visits to foreign diplomatic missions and consular offices....


Sec. 125.4--Exemptions of general applicability.

     (a) The following exemptions apply to exports of
unclassified technical data for which approval is not needed from
the Office of Defense Trade Controls. These exemptions, except for
paragraph (b)(13) of this section, do not apply to exports to
proscribed destinations under Sec. 126.1 of this subchapter or for
persons considered generally ineligible under Sec. 120.1(c) of
this subchapter. The exemptions are also not applicable for
purposes of establishing offshore procurement arrangements. If
Sec. 126.8 of this subchapter requirements are applicable, they
must be met before an exemption under this section may be used.
Transmission of classified information must comply with the
requirements of the Department of Defense Industrial Security
Manual and the exporter must certify to the transmittal authoritv
that the technical data does not exceed the technical limitation
of the authorized export.

     (b) The following exports are exempt from the licensing
requirements of this subchapter.

(1) Technical data, including classified information, to be
disclosed pursuant to an official written request or directive
from the U.S. Department of Defense;

(2) Technical data, including classified information, in
furtherance of a manufacturing license or technical assistance
agreement approved by the Departrnent of State under part 124 of
this subchapter and which meet the requirements of Sec. 124.3 of
this subchapter;

(3) Technical data, including classified information, in
furtherance of a contract between the exporter and an agency of
the U.S. Government, if the contract provides for the export of
the data and such data does not disclose the details of design,
development, production, or manufacture of any defense article;

(4) Copies of technical data, including classified information,
previously authorized for export to the same recipient. Revised
copies of such technical data are [651] also exempt if they
pertain to the identical defense article, and if the revisions are
solely editorial and do not add to the content of technology
previously exported or authorized for export to the same
recipient;

(5) Technical data, including classified information, in the form
of basic operations, maintenance, and training information
relating to a defense article lawfully exported or authorized for
export to the same recipient. Intermediate or depotlevel repair
and maintenance information may be exported only under a license
or agreement approved specifically for that purpose;

(6) Technical data, including classified information, related to
firearms not in excess of caliber .50 and ammunition for such
weapons, except detailed design, development, production or
manufacturing information;

(7) Technical data, including classified information, being
returned to the original source of import;

(8) Technical data directly related to classified information
which has been previously exported or authorized for export in
accordance with this part to the same recipient, and which does
not disclose the details of the design, development, production,
or manufacture of any defense article;

(9) Technical data, including classified information, sent by a
U.S. corporation to a U.S. person employed by that corporation
overseas or to a U.S. Govemment agency. This exemption is subject
to the limitations of Sec. 125.1(b) and may be used only if:

(i) The technical data is to be used overseas solely by U.S.
persons;

(ii) If the U.S. person overseas is an employee of the U.S.
Govemment or is directly employed by the U.S. corporation and not
by a foreign subsidiary; and

(iii) The classified information is sent overseas in accordance
with the requirements of the Department of Defense Industrial
Security Manual.

(10) Disclosures of unclassified technical data in the U.S. by
U.S. institutions of higher leaming to foreign persons who are
their bona fide and full time regular employees. This exemption is
available only if:

(i) The employee's permanent abode throughout the period of
employment is in the United States;

(ii) The employee is not a national of a country to which exports
are prohibited pursuant to Sec. 126.1 of this subchapter; and

(iii) The institution informs the individual in writing that the
technical data may not be transferred to other foreign persons
without the prior written approval of the Office of Defense Trade
Controls;

(11) Technical data, including classified information, for which
the exporter, pursuant to an arrangement with the Department of
Defense, Department of Energy or NASA which requires such exports,
has been granted an exemption in writing from the licensing
provisions of this part by the Office of Defense Trade Controls.
Such an exemption will normally be granted only if the arrangement
directly implements an international agreement to which the United
States is a party and if multiple exports are contemplated. The
Office of Defense Trade Controls, in consultation with the
relevant U.S. Govemment agencies, will determine whether the
interests of the United States Government are best served by
expediting exports under an arrangement through an exemption (see
also paragraph (b)(3) of this section for a related exemption);
[652]

(12) Technical data which is specifically exempt under part 126 of
this subchapter; or

(13) Technical data approved for public release (i.e., unlimited
distribution) by the cognizant U.S. Government department or
agency or Directorate for Freedom of Information and Security
Review. This exemption is applicable to information approved by
the cognizant U.S. Government department or agency for public
release in any form. It does not require that the information be
published in order to qualify for the exemption....


Sec. 125.8--Filing of licenses for exports of unclassified
technical data.

     (a) Licenses for the export of unclassified technical data
must be presented to the appropriate District Director of Customs
or Postmaster at the time of shipment or mailing. The District
Director of Customs or Postmaster will endorse and transmit the
licenses to the Office of Defense Trade Controls in accordance
with the instructions contained on the reverse side of th~ on~

     (b) If a license for the export of unclassified technical
data is used but not endorsed by U.S. Customs or a Postmaster for
whatever reason (e.g., electronic transmission, unavailability of
Customs officer or Postmaster, etc.), the person exporting the
data must self-endorse the license, showing when and how the
export took place. Every license must be returned to the Office of
Defense Trade Controls when the total value authorized has been
shipped or when the date of expiration has been reached, whichever
occurs first....



                       Part 126
                           
           General Policies and Provisions


Sec. 126.1--Prohibited exports and sales to certain countries.

     (a) It is the policy of the United States to denv licenses,
other approvals, exports and imports of defense articles and
defense services, destined for or originating in certain
countries. This policy applies to: Albania, Armenia, Azerbaijan,
Bulgaria, Byelarus, Cambodia, Cuba, Estonia, Georgia, Iran, Iraq,
Libya, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova,
Mongolia, North Korea, Romania, Russia, South Africa, Syria,
Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Vietnam. This
policy also applies to countries with respect to which the United
States maintains an arms embargo (e.g., Burma, China, Liberia,
Somalia, the Sudan, the former Yugoslavia, and Zaire) or for
whenever an export would not otherwise be in furtherance of world
peace and the security and foreign policy of the United States.
Comprehensive arms embargoes are normally the subject of a State
Department notice published in the Federal Register. The
exemptions provided in the regulations in this subchapter, except
Secs. 123.17 and [653] 125.4(b)(13) of this subchapter, do not
apply with respect to articles originating in or for export to any
proscribed countries or areas.

     (b) Shipments. A defense article licensed for export under
this subchapter may not be shipped on a vessel, aircraft or other
means of conveyance which is owned or operated by, or leased to or
from, any of the proscribed countries or

     (c) South Africa. South Africa is subject to an arms embargo
and thus to the policy specified in paragraph (a) of this section.
Exceptions may be made to this policy only if the Assistant
Secretary for Politico-Military Affairs determines that: 

(1) The item is not covered by United Nations Security Council
Resolution 418 of November 4,1977; and

(2) The item is to be exported solely for commercial purposes and
not for use by the armed forces, police, or other security forces
of South Africa or for any other similar purpose.

     (d) Terrorism. Exports to countries which the Secretary of
State has determined to have repeatedly provided support for acts
of international terrorism are contrary to the foreign policy of
the United States and are thus subject to the policy specified in
paragraph (a) of this section and the requirements of section 40
of the Arms Export Control Act (22 U.S.C. 2780) and the Omnibus
Diplomatic Security and Anti-Terrorism Act of 1986 (22 U.S.C.
4801, note). The countries in this category are: Cuba, Iran, Iraq,
Libya, North Korea and Syria. The same countries are identified
pursuant to section 6(j) of the Export Administration Act, as
amended (50U.S.C. App. 2405(j)).

     (e) Proposed sales. No sale or transfer and no proposal to
sell or transfer any defense articles, defense services or
technical data subject to this subchapter may be made to any
country referred to in this section (including the embassies or
consulates of such a country), or to any person acting on its
behalf, whether in the United States or abroad, without first
obtaining a license or written approval of the Office of Defense
Trade Controls. However, in accordance with paragraph (a) of this
section, it is the policy of the Department of State to deny
licenses and approvals in such cases. Any person who knows or has
reason to know of such a proposed or actual sale, or transfer, of
such articles, services or data must immediately inform the Office
of Defense Trade Controls....


Sec. 126.5--Canadian exemptions.

     (a) District Directors of Customs and postmasters shall
permit the export or temporary import without a license of any
unclassified defense article or any unclassified technical data to
Canada for end-use in Canada by Canadian citizens or return to the
United States, or from Canada for end-use in the United States or
[654] return to a Canadian citizen in Canada, with the exception
of the articles or related technical data listed in paragraph (b)
of this section.

     (b) Exceptions. The exemptions of this section do not apply
to the following articles and related technical data....

(7) Technical data for use by a foreign national other than a
Canadian.

(8) Unclassified technical data directly related to a classified
defense article....


Sec. 126.7--Denial, revocation, suspension, or amendment of
licenses and other approvals.

     (a) Policy. Licenses or approvals shall be denied or revoked
whenever required by any statute of the United States (see Secs.
127.6 and 127.10 of this subchapter). Any application for an
export license or other approval under this subchapter may be
disapproved, and any license or other approval or exemption
granted under this subchapter may be revoked, suspended, or
amended without prior notice whenever:

(1) The Department of State deems such action to be in furtherance
of world peace, the national security or the foreign policy of the
United States, or is otherwise advisable; or

(2) The Department of State believes that 22 U.S.C. 2778, any
regulation contained in this subchapter, or the terms of any U.S.
Government export authorization (including the terms of a
manufacturing license or technical assistance agreement, or export
authorization granted pursuant to the Export Administration Act,
as amended) has been violated by any party to the export or other
person having significant interest in the transaction; or ....

     (b) Notification. The Office of Defense Trade Controls will
notify applicants or licensees or other appropriate United States
persons of actions taken pursuant to paragraph (a) of this
section. The reasons for the action will be stated as specifically
as security and foreign policy considerations permit....


Sec. 126.9--Advisory opinions.

     Any person desiring information as to whether the Office of
Defense Trade Controls would be likely to grant a license or other
approval for the export of a particular defense article or defense
service to a particular country may request an advisory opinion
from the Office of Defense Trade Controls. These opinions are not
binding on the Department of State and are revocable. A request
for an advisory opinion must be made in writing and must outline
in detail the equipment, its usage, the security classification
(if any) of the articles or related technical data, and the
country or countries involved. An original and seven copies of the
letter must be provided along with seven copies of suitable
descriptive information concerning the defense article or defense
service....


[End N.4.1]

