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U.S. Departments of State and Commerce Each Issue Proposed Rules Removing Certain Firearms and Ammunition from the ITAR

Publications - Client Alert | May 21, 2018

On Monday, May 14, 2018, the United States Departments of State and Commerce each issued proposed rules concerning the removal of certain firearms and ammunition from the International Trafficking in Arms Regulations (the ITAR) and placing such items under the control of the Commerce Control List. The effect of the proposed rules would be to transfer the authority concerning the export of certain items previously under the ITAR to the jurisdiction of the Department of Commerce under the Export Administration Regulations (the EAR). Once the rules are published in the Federal Register, both departments will accept comments during a 45 day comment period.


The Directorate of Defense Trade Controls (DDTC), U.S. Department of State, administers the International Traffic in Arms Regulations. The items subject to the jurisdiction of the ITAR, i.e., “defense articles,” are identified on the ITAR’s U.S. Munitions List (USML). With few exceptions, items not subject to the export control jurisdiction of the ITAR are subject to the jurisdiction of the Export Administration Regulations which includes the Commerce Control List (CCL) administered by the Bureau of Industry and Security (BIS), U.S. Department of Commerce. Both the ITAR and the EAR impose license requirements on exports and re-exports.

The Department of State is engaged in an effort to revise the U.S. Munitions List so that its scope is limited to those defense articles that provide the United States with a critical military or intelligence advantage or, in the case of weapons, are inherently for military end use. The articles now controlled by USML Categories I, II, and III that would be removed from the USML under this proposed rule do not meet this standard, including many items which are widely available in retail outlets in the United States and abroad. The review of the items in these Categories was focused on identifying the types of articles that are now controlled on the USML that are either (i) inherently military and otherwise warrant control on the USML or (ii) if of a type common to non-military firearms applications, possess parameters or characteristics that provide a critical military or intelligence advantage to the United States, and are almost exclusively available from the United States. If an article satisfies one or both of those criteria, the article remains on the USML. If an article does not satisfy either criterion, it has been identified in the new Export Control Classification Numbers included in the proposed rule of the Commerce Department. Thus, the scope of the items proposed to be removed from the ITAR in the proposed State Department rule are essentially commercial items widely available in retail outlets and less sensitive military items.

The Proposed Rules

These proposed rules do not deregulate the items removed from the ITAR and transferred to the jurisdiction of the Department of Commerce’s BIS under the EAR. BIS would require licenses to export, or re-export to any country a firearm or other weapon currently on the USML that would be added to the Commerce Control List by these proposed rules. According to the language contained in the rule, the Departments of Commerce states that “as compared to decontrolling firearms and other items, in publishing this proposed rule, BIS, working with the Departments of Defense and State, is trying to reduce the procedural burdens and costs of export compliance on the U.S. firearms industry while allowing the U.S. Government to enforce export controls for firearms appropriately and to make better use of its export control resources.

The following is a summary of some of the changes which would occur should the rules become final:

  • While controlling such “technology,” the EAR includes criteria that would exclude certain information and software related to “development” and “production,” of items as well operation, installation, and maintenance “technology.” from control. For example, if a gun manufacturer posts a firearm’s operation and maintenance manual on the Internet, making it publicly available to anyone interested in accessing it and without restrictions on further dissemination (i.e., unlimited distribution), the operation and maintenance information included in that published operation and maintenance manual would no longer be “subject to the EAR.” (See EAR §§ 734.3(b) and 734.7(a).)
  • Nonproprietary system descriptions, including for firearms and related items, are another example of information that would not be subject to the EAR. (See 734.3(b)(3)(v).)
  • The following Firearms previously subject to the ITAR, would be removed to various new categories under the CCL:
    • Non-automatic and semi-automatic firearms (other than shotguns) with a caliber of less than or equal to .50 inches (12.7 mm)
    • Non-automatic and non-semi-automatic rifles, carbines, revolvers or pistols with a caliber greater than .50 inches (12.7 mm) but not greater than .72 inches (18.0 mm)
    • Detachable magazines with a capacity of greater than 16 rounds but less than 50 rounds that are “specially designed” for the firearms listed above
    • Receivers (frames) and complete breech mechanisms, including castings, forgings, or stampings thereof, “specially designed” for the firearms listed above
    • Barrels, cylinders, barrel extensions, mounting blocks (trunnions), bolts, bolt carriers, operating rods, gas pistons, trigger housings, triggers, hammers, sears, disconnectors, pistol grips that contain fire control “parts” or “components,” and buttstocks that contain fire control “parts” or “components” (e.g., triggers, hammers, sears, or disconnectors) if “specially designed” for the firearms listed above or for firearms
    • both the shotguns currently on the USML that are to be added to the CCL (barrel length less than 18 inches) and the shotguns and the enumerated “parts” and “components” currently controlled in ECCN 0A984 (barrel length 18 inches or greater)
    • “non-lethal or less-lethal grenades and projectiles and ‘specially designed’ ‘parts’ and ‘components’ of those projectiles”
    • Riflescopes which are “specially designed” for use in firearms that are “subject to the ITAR.”
    • ammunition for small arms, in most cases, firearms of caliber not exceeding 0.50 inches, although some ammunition for firearms of caliber up to 0.72 inches. However, ammunition that has little or no civil use or that is inherently military such as ammunition that is preassembled into links or belts, caseless ammunition, tracer ammunition, ammunition with a depleted uranium projectile or a projectile with a hardened tip or core and ammunition with an explosive projectile would remain in USML Category III
  • Many of the items transferred to the CCL from the USML generally would be eligible for the same license exceptions and subject to the same restrictions on use of license exceptions as similar items under the CCL and BIS states that it intends that those restrictions be no more restrictive than the ITAR license exemption restrictions that currently apply to those items
  • In addition, many applicants exporting or re-exporting items that these proposed rules would transfer from the USML to the CCL would realize cost savings through the elimination of some or all registration fees currently assessed under the ITAR. There are no registration or application processing fees for applications to export items currently listed on the CCL
  • The proposed rule for the Department of Commerce make it explicit that applications for exports and re-exports of certain items transferred to the CCL from the USML would be subject to a policy of denial when there is reason to believe the transaction involves certain parties of concern. In addition, transactions involving criminal organizations, rebel groups, street gangs, or other similar groups or individuals that may be disruptive to regional stability, including within individual countries would be subject to a policy of denial

Perhaps most important to exporters of large volumes of items currently subject to the ITAR, the proposed rule for the Department of State provides that Section 123.15 of the ITAR, “Congressional Certification Pursuant to Section 36(c) of the Arms Export Control Act” is amended by referencing only those items which are not transferred to the CCL. Under the current regulations, exports of these items which exceed $1,000,000 in value are subject to Congressional Notification and Certification, which adds a great deal of time to the issuance of an export license. No companion provision for Congressional Notification or Certification is contained in the proposed rules or in the EAR. 

Practical Effect

If the proposed rules become final, this will be a big change for entities that have become accustomed to working with the ITAR licensing requirements. The licensing regime under the EAR and the Department of Commerce is very different and uses a series of codes known as the Export Control Classification Numbers (ECCN) to classify certain items and determine the level of control and restrictions based on the ECCN. It will take some time for entities to familiarize themselves to the new procedures, but for those of us who have experience in both the ITAR and the EAR, most would agree that the EAR is a very streamlined and efficient system and should result in a great deal of time savings.

Next Steps

Proposed rules are subject to governmental review by a number of agencies prior to being published in the Federal Register. This period can vary from a few week to many months. Once the proposed rules are published in the Federal Register there will be a period of 45 during which public comments are received. At the close of the comment period, the respective agencies must reconcile and address these comments before publishing a final rule in the Federal Register. Both rules request input on whether the implementation of the rules should be 90 or the more traditional 180 days from the date of publication of the final rules. From a practical standpoint, assuming the proposed rules are published by the end of May, comments are due by sometime in July, comments are addressed and a new final rule is published in September, the rules could become final as early as the end of 2018 or sometime in the first quarter of 2019.

The proposed rules can be found here.

Additional Information

Kutak Rock's National Firearms Industry Group advises clients in the firearms industry on all legal matters related to the industry including detailed advice concerning import and export compliance. Please feel free to contact us for further information concerning your import/export needs.

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