[Federal Register Volume 73, Number 187 (Thursday, September 25, 2008)]
[Rules and Regulations]
[Pages 55439-55441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22574]
[[Page 55439]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF STATE
22 CFR Parts 122 and 129
[Public Notice 6370]
RIN 1400-AC50
Amendment to the International Traffic in Arms Regulations:
Registration Fee Change
AGENCY: Department of State.
ACTION: Final rule.
-----------------------------------------------------------------------
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.
DATES: Effective Date: This rule is effective September 25, 2008.
FOR FURTHER INFORMATION CONTACT: Patricia Slygh, Directorate of Defense
Trade Controls, Bureau of Political-Military Affairs, Department of
State (202) 663-2830 or FAX (202) 261-8199; e-mail
[email protected], ATTN: Regulatory Change, ITAR Parts 122 and
129.
SUPPLEMENTARY INFORMATION: On July 28, 2008, the Department published a
Notice of Proposed Rulemaking (NPRM) to increase the registration fees,
change the registration renewal period, and make other minor
administrative changes to Parts 122 and 129 of the ITAR. Further
background is provided within the NPRM at 73 FR 43653.
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 three-tier
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 twelve-month 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 twelve-month 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
twelve-month 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 12-month 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
first-tier 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.
Comment Analysis
The Department received comments from twenty-seven (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 self-financing mechanism so
that the DDTC's mission will eventually be at least 75% self-financed.
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 multi-year
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 multi-year registrations have been discontinued
in order to provide DDTC with a revenue stream that reflects its costs.
The Department will contemplate reconsidering multi-year registrations
after the Department has experience with a single-year 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
22 CFR Part 122
Arms and munitions, Exports, Reporting and recordkeeping
requirements.
22 CFR Part 129
Arms and munitions, Exports, Technical assistance.
0
Accordingly, for the reasons set forth above, Title 22, Chapter I,
Subchapter M, parts 122 and 129 are amended as follows:
PART 122--REGISTRATION OF MANUFACTURERS AND EXPORTERS
0
1. The authority citation for part 122 continues to read as follows:
Authority: Secs. 2 and 38, Public Law 90-629, 90 Stat. 744 (22
U.S.C. 2752, 2778); E.O. 11958, 42 FR 4311, 1977 Comp. p. 79, 22
U.S.C. 2651a.
0
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 DS-2032 (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.
* * * * *
0
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 DS-2032, 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 12-month 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 12-month 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 12-month
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
12-month 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 12-month 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 129--REGISTRATION AND LICENSING OF BROKERS
0
4. The authority citation for part 129 continues to read as follows:
Authority: Sec. 38, Pub. L. 104-164, 110 Stat. 1437 (22 U.S.C.
2778).
0
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 DS-2032 (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 DS-2032 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. E8-22574 Filed 9-24-08; 8:45 am]
BILLING CODE 4710-25-P