July 30, 2024 | PDF Copy
* * * * *
(d)
Defense service. Defense services described in § 120.32(a)(1) are controlled under the relevant paragraph of each USML category that includes defense services “directly related” or “relating” to defense articles as described therein. For defense services described in § 120.32(a)(2) that are not controlled in the defense article-specific defense services paragraphs, see USML Category IX(s)(2) and (3) in § 121.1 of this subchapter.
| [T]he Department proposes to amend § 120.11, which describes the order of review, to include a proposed paragraph (d) specific to defense services and to redesignate current paragraph (d) as paragraph (e). |
(a)
Defense service means:
(1) The furnishing of assistance, including training or consulting, to foreign persons in the development (including, e.g., design), production (including, e.g., engineering and manufacture), assembly, testing, repair, maintenance, modification, disabling, degradation, destruction, operation, processing, use, or demilitarization of a defense article; or
| The proposed amendments to the definition of defense service at § 120.32, and additions to the USML, include several key changes. These changes affect the design and structure of the relevant provisions of the ITAR, which, in turn, affect how the USML describes and controls activities falling under the definition of defense service.
First, a proposed revision would amend § 120.32(a)(1) by revising the list of regulated activities currently found in (a)(1) to include “assistance, including training or consulting, to foreign persons in the development (including, e.g., design), production (including, e.g., engineering and manufacture), assembly, testing, repair, maintenance, modification, disabling, degradation, destruction, operation, processing, use, or demilitarization of a defense article.” This revised list moves several activities currently individually specified in (a)(1) (i.e., design, engineering, and manufacture) into parentheticals following defined terms in which they are included. Those activities were folded into the revised definitions of “production” and “development” at § 120.43 by a recent ITAR rule (87 FR 16396, Mar. 23, 2022).
In addition, the revised list of activities includes two new references, “disabling” and “degradation.” The Department proposes these terms to make explicit that the act of harming a military capability through the disabling or degradation of defense articles via any method remains controlled. In assessing non-traditional methods of disrupting a nation’s military capabilities during its review, the Department noted that, while the current definition of defense service includes such activities, advances in technology that facilitate such activities merit explicit reference. The proposed revision clarifies that cyber services, or any other activities, that disable and degrade defense articles, but fall short of total destruction or demilitarization, are included within the definition of defense service at § 120.32(a)(1).
The Department also proposes a clarifying addition to the introductory text of paragraph (a)(1) in order to better describe the scope of activities controlled by the definition. In describing the assistance covered by the paragraph, the Department proposes to replace the parenthetical “(including training)” with a new clause clarifying that assistance includes training or consulting. In so doing, the Department does not intend to add a new level of control to its existing control of defense services, but rather intends to clarify that it does not treat training to mean only direct instructional activity. The proposed addition would reaffirm that providing the tools or means of furnishing training to a foreign person so that the foreign person may conduct training in lieu of the regulated person is included in the control. Such consulting is not limited to the furnishing of a completed product, but includes assisting in the development of such training.
The exclusion at § 124.2(b), which has been in the ITAR since 1984 (see 49 FR 47682, Dec. 6, 1984), provides that: “[s]ervices performed as a member of the regular military forces of a foreign nation by U.S. persons who have been drafted into such forces are not deemed to be defense services for purposes of § 120.32 of this subchapter.” . . . The Department further notes § 124.2(b) applies to the entirety of § 120.32 . . . |
(2) The furnishing of assistance, including training or consulting, to foreign persons, regardless of whether a defense article is involved, as described in USML Category IX(s)(2) or (3) in § 121.1 of this subchapter.
| Second, the proposed amendments would remove current § 120.32(a)(2) as redundant since the furnishing of technical data to a foreign person is already a controlled event described in §§ 120.50 through 120.52. Further, the proposed amendments would remove current paragraph (a)(3). In their stead, these two provisions are replaced by a proposed new paragraph (a)(2) that directs persons to the USML where descriptions of services to be controlled under ITAR are provided. The Department includes a proposed note to § 120.32 directing the regulated community to the new location.
Specifically, the proposed paragraph (a)(2) directs persons to two new proposed USML entries in Category IX that would control defense services related to intelligence and military assistance. The proposed entries differ from the type of defense services described in paragraph (a)(1), which directly relate to defense articles and already have corresponding entries in each USML category (e.g., Category I(i), Category II(k), etc.).
The two new entries are proposed for a currently reserved paragraph (s) of Category IX, and the category is proposed to be renamed “Military Training Equipment, Intelligence Defense Services, and Military Defense Services” to more accurately describe the controls in the category. The Department proposes to reserve paragraph (s)(1) for use as a future entry and to place the new controls in proposed paragraphs (s)(2) and (3) within that category. For purposes of this preamble, the intelligence assistance controlled by paragraph (s)(2) is referred to as “intelligence assistance” and the military and paramilitary assistance controlled by paragraph (s)(3) are referred to by the singular “military assistance.”
The Department determined that rather than relying solely on the definition of defense service, it would be better to direct users to the USML to conduct their classification analysis since this approach is similar to how users currently conduct defense article classification analysis, and it allows for a more detailed articulation of certain specific activities meriting ITAR control. Moreover, AECA § 38(a)(1) (22 U.S.C. 2778(a)(1)) provides that defense services, like defense articles, are to be designated on the USML. By adding specific entries in addition to the existing USML paragraphs controlling defense services, including those furnished in connection with a defense article, the Department brings additional clarity to the regulations. |
Note to paragraph (a):
For military training previously described in this paragraph, see paragraph (a)(1) and USML Category IX(s)(2) and (3).
(b) [Reserved]
Category IX—Military Training Equipment, Intelligence Defense Services, and Military Defense Services
* * * * *
(e) Technical data (see § 120.33 of this subchapter) and defense services (see § 120.32 of this subchapter):
(1) Directly related to the defense articles enumerated in paragraphs (a) and (b) of this category; or
(2) Directly related to the software and associated databases enumerated in paragraph (b)(4) of this category even if no defense articles are used or transferred.
* * * * *
(s) Defense Services, as follows:
(1) [Reserved]
(2) Assistance, including training or consulting, to a foreign government, unit, or force, or their proxy or agent, that creates, supports, or improves intelligence activities, including through planning, conducting, leading, providing analysis for, participating in, evaluating, or otherwise consulting on such activities, for compensation, except for the following types of assistance:
| Proposed USML Category IX(s)(2) describes furnishing intelligence assistance for a foreign government, unit, or force, or their proxy or agent, and training a foreign government, unit, or force, or their proxy or agent, to furnish such services, while providing specified carve-outs to the controls.
The proposed amendments utilize a method of control sometimes known as “catch and release,” which functions to initially describe a broad range of activities as a “catch,” and then specifies certain limited carve-outs as a “release” from the “catch.”
As applied here, the catch-and-release design establishes that furnishing certain forms of listed assistance to a foreign person is controlled . . . Only assistance that is both “caught” and not “released” by the respective paragraphs is controlled . . .
As to the objective of the proposed additions to the USML, the Department determined revised and clarified controls are warranted and necessary to address the risks to U.S. national security and foreign policy interests posed by U.S. persons furnishing assistance in intelligence activities. In particular, the Department determined that certain intelligence activities that do not involve defense articles provide a critical military or intelligence advantage such that they warrant and require revised controls under the ITAR.
The creation of a separate entry in proposed paragraph (s)(2) separates the control text governing intelligence assistance from the control text describing military assistance. It is intended to provide clearer notice to the regulated community, and in particular to U.S. persons with relevant experience, that the ITAR regulates services related to intelligence activities, regardless of nexus to a defense article.
The text of proposed paragraph (s)(2) for intelligence assistance uses the same descriptors found in proposed paragraph (s)(3) for military assistance, but also includes “providing analysis for” and “participating in.” The phrase “providing analysis for” is included since conducting an intelligence analysis can provide a critical advantage even without involvement in intelligence collection or other intelligence operations.
“Participating in” is included to make clear persons hired and assisting in an intelligence operation on behalf of a designated foreign government, unit, or force, or their proxy or agent, are controlled activities.
Second, including “training or consulting” in the text of proposed paragraph (s)(2) allows the Department to specifically and explicitly describe on the USML the conduct of U.S. persons (or foreign persons in the United States) who furnish any described defense service to enable a foreign government, unit, or force, or their proxy or agent, to conduct intelligence activities themselves. The Department assesses regulating assistance on tactics, techniques, procedures, and other types of training that enables the intelligence activities a foreign government, unit, or force, or their proxy or agent, is consistent with the aims and authority of the ITAR and the AECA. Again, the Department notes this text would regulate assistance to any kind of foreign unit or foreign force, regardless of government affiliation, as well as to their proxies or agents.
The listed assistance activities identified in proposed paragraph (s)(2) are caveated by the inclusion of “for compensation,” thereby limiting the control to those services that are provided commercially or in a professional capacity. Compensation in this context need not be limited to financial compensation, but would require some measurable response from the recipient in exchange for the service. This could include a wide of range compensation for example, from gifts and or lodging, to goods or services, political favors, legislative or legal relief, etc. Activities of the U.S. Government are generally not included within the furnishing of assistance for compensation. This text is included to ensure the ITAR does not control non-critical intelligence assistance provided on a volunteer basis (and not for hire or compensation). Further, it is not intended to control assistance of a type that ordinarily occurs in today’s technically advanced society. For example, the Department does not intend for the activities of hobbyists or casually interested persons forwarding or commenting on open-source, publicly available satellite imagery relevant to the invasion of Ukraine, to be considered the furnishing of a defense service.
While the “for compensation” language is proposed as an objective criterion to provide clarity and to help ensure the ITAR does not unintentionally control non-critical intelligence assistance provided on a volunteer basis (and not for compensation), suggesting a less-concerning quality of assistance, the Department would consider additional alternative controls. Any such alternative would need to provide notice to the public of clear, objective standards to control the kind of intelligence services proposed as Category IX (s)(2), without inadvertently capturing more activities than are necessary.
Therefore, the Department seeks input on the clarity and scope of the “for compensation” criterion. Concurrently, the Department also seeks input as to additional control criteria in paragraph (s)(2) that could provide sufficient notice, as well as objective standards, to control assistance that clearly provides a critical intelligence advantage, but which does not turn on compensation. This could include, as but one example, intelligence assistance that was asked-for or otherwise solicited by a foreign person, directly or indirectly. The Department also welcomes input on the six carve-outs or exclusions as to their clarity, and whether other exclusions could serve to clearly and objectively narrow the scope of the proposed or any additional controls.
Proposed paragraphs (s)(2)(i) through (vi) would carve out six specific sets of activities from the proposed controls on intelligence assistance described in the introductory text to proposed paragraph (s)(2). Three of the carve-outs to intelligence assistance activities, those in proposed paragraphs (s)(2)(i) through (iii), are identical to the three military assistance activities carve-outs from proposed paragraphs (s)(3)(iv)(A) through (C) and are further discussed in the preamble discussion of those paragraphs below. |
(i) Furnishing of medical, translation, financial, insurance, legal, scheduling, or administrative services, or acting as a common carrier;
| The activities carved out by (s)(3)(iv)(A) are similar in nature to the brokering activity carve-outs already found in part 129. |
(ii) Participation as a member of a regular military force of a foreign nation by a U.S. person who has been drafted into such a force (see also § 124.2(b) of this subchapter);
| The activities to be carved out by proposed paragraph (s)(3)(iv)(B) make certain that the activities of U.S. persons drafted into the regular military forces of a foreign nation are not controlled by this section. This language is consistent with the text of the existing language at ITAR § 124.2(b).
Included in the releases for both intelligence assistance (paragraph (s)(2)(ii)) and military assistance (paragraph (s)(3)(iv)(B)) are activities performed by U.S. persons who have been drafted into the regular military forces of a foreign nation. The Department proposes this inclusion in addition to the existing exclusion at § 124.2(b) from the current definition of defense service so that persons reviewing the USML for controlled activities fully understand which activities are controlled. The exclusion at § 124.2(b), which has been in the ITAR since 1984 (see 49 FR 47682, Dec. 6, 1984), provides that: “[s]ervices performed as a member of the regular military forces of a foreign nation by U.S. persons who have been drafted into such forces are not deemed to be defense services for purposes of § 120.32 of this subchapter.” The Department proposes to include similar provisions within the new paragraph (s) in USML Category IX to preclude any possible confusion by the regulated community, including both persons long aware of the existing § 124.2(b) and persons new to the regulations who may be unfamiliar with the current exclusion, as to whether the Department intends to regulate the activities of draftees. The Department further notes § 124.2(b) applies to the entirety of § 120.32, whereas the defense services described in Category IX(s)(2) and (3) and the specific carve-outs to them, are related to proposed § 120.32(a)(2). By including the carve-outs from the proposed USML paragraphs and a “see” parenthetical directing users to § 124.2(b), the Department endeavors to ensure awareness of the exclusion in light of the proposed new control. |
(iii) Training and advice that is entirely composed of general scientific, mathematical, or engineering principles commonly taught in schools, colleges, and universities;
| Finally, proposed paragraph (s)(3)(iv)(C) carves out training and advice entirely composed of general scientific, mathematical, or engineering principles commonly taught in schools, colleges, and universities. |
(iv) Information technology services that support ordinary business activities not specific to a particular business sector;
| The fourth carve-out related to intelligence assistance is set forth in proposed paragraph (s)(2)(iv). Here, the Department proposes to carve out information technology services that are ordinarily provided to allow any business entity to operate internally as a modern business environment, without a sector-specific specialization. These would include, for example, services related to IT infrastructure, composed of the hardware (including switches, routers, and servers) and software (including operating systems and basic network security applications) that enable an organization to run specialized software applications. IT infrastructure is not necessarily collocated with the organization, as it may include cloud infrastructure such as remote data centers, edge computing, and various “as a service” (SaaS) models. |
(v) Any lawfully authorized investigative, protective, or intelligence activity of a law enforcement or intelligence agency of the United States or of a territory, possession, State, or District of the United States, including political subdivisions thereof; or
| The fifth carve-out, proposed in paragraph (s)(2)(v), makes clear that the ITAR does not interfere with an otherwise lawful activity of a U.S. local or federal law enforcement or intelligence agency. This carve-out is similar to one found in 18 U.S.C. 1030(f). |
(vi) Maintenance or repair of a commodity or software.
| The sixth carve-out, proposed in paragraph (s)(2)(vi), focuses the expanded defense service controls in paragraph (s)(2), and intends to avoid imposing a duplicative export licensing requirement for the activities described, since they are already regulated or proposed for regulation under the ITAR or EAR to the destinations of concern. (While the ITAR and EAR generally use similar terminology, there are certain exceptions. For example: where the ITAR speaks of exports, reexports, and retransfers (§§ 120.50 through 120.52), the EAR uses export, reexport, and transfer (in-country) (§§ 734.13, 734.14, and 734.16); the ITAR uses “articles,” and the EAR uses “items,” to describe commodities and software. EAR terms are used here when used in specific relation to those regulations and not the ITAR.)
The Department further notes that, similar to the defense service definition at § 120.32(a)(1), the mere act of exporting, reexporting, or transferring (in-country) a commodity, software, technical data, or EAR technology does not constitute a defense service in the context of (s)(2). For items subject to the EAR, the Department assesses that the repair or maintenance of that commodity or software (when isolated from a defense article) should similarly be subject to the EAR, even when caught in (s)(2), since an EAR authorization could be used to secure a replacement in lieu of performing the repair or maintenance. In contrast, the repair or maintenance of commodities or software subject to the ITAR is already regulated via ITAR § 120.32(a)(1), including when repairing an EAR commodity or software incorporated into a defense article. |
(3) Assistance, including training or consulting, to a foreign government, unit, or force, or their proxy or agent, that creates, supports, or improves the following, other than as specified in paragraph (s)(3)(iv) of this category:
| The proposed USML Category IX(s)(3) describes defense services relating to military assistance that do not necessarily involve defense articles and provides specified carve-outs to the controls. Persons furnishing certain military assistance to foreign persons can cause local and regional instability in a manner equal to or greater than the supply of a tangible article or weapon to a foreign person end-user.
The proposed amendments utilize a method of control sometimes known as “catch and release,” which functions to initially describe a broad range of activities as a “catch,” and then specifies certain limited carve-outs as a “release” from the “catch.”
As applied here, the catch-and-release design establishes that furnishing certain forms of listed assistance to a foreign person is controlled . . . Only assistance that is both “caught” and not “released” by the respective paragraphs is controlled . . .
The proposed inclusion of certain specific forms of military assistance as a defense service within the USML is intended to provide U.S. persons with clear notice that such activities require authorization as, depending on the circumstances, the activities may be counter to U.S. national security or foreign policy interests, the stated aims of AECA § 38(a)(2) (22 U.S.C. 2778(a)(2)), Conventional Arms Transfer Policy objectives, or shared interests with our allies and partners. To ensure that the military assistance controls are consistent with ITAR § 120.3(b) and only control those activities that provide a critical military or intelligence advantage, the proposed controls described in Category IX(s)(3) would regulate a higher level of support than front-line combatant activities. The Department notes, however, that although not intended for control in proposed Category IX(s)(3), such activities may be otherwise regulated by other provisions in the ITAR, or by regulations administered by other agencies of the U.S. Government. In conjunction with the addition of this proposed USML entry, the Department is proposing to remove the existing USML entry for military training at current Category IX(e)(3). In so doing, the Department does not intend to narrow the scope of what is controlled by that existing military training entry, but rather aims to bring additional clarity to that control as part of new text proposed as Category IX(s)(3).
In changing nomenclature from regular or irregular units and forces to the capabilities of a military or paramilitary, the Department aims to provide what it believes are more generally understood terms. “Regular” and “irregular” forces are terms that have been used in the context of international humanitarian law. But illicit actors or unassuming persons may be put on even clearer notice that providing training to create, support, or improve the military or paramilitary capabilities of any kind of unit or force, governmental or not, is a defense service requiring authorization. In this way the focus is on the nature and type of training or advice provided (military or paramilitary capabilities) more than on the recipients, which are now more broadly defined as expressly including proxies or agents of a foreign government, foreign unit, or foreign force. |
(i) The organization or formation of military or paramilitary forces;
| Specifically, proposed paragraph (s)(3)(i) controls persons furnishing assistance that creates, supports, or improves the organization or formation of foreign military or paramilitary forces. This text is included to cover assistance in the development and organization of foreign military services (e.g., armies, navies, air forces, etc.) at any stage. |
(ii) Military or paramilitary operations, by planning, leading, or evaluating such operations; or
| Proposed paragraph (s)(3)(ii) controls persons furnishing assistance that creates, supports, or improves military or paramilitary operations by planning, leading, or evaluating all aspects of such operations, including, e.g., logistical support. In contrast to (s)(3)(i), this text is included to cover assistance being provided in the conduct and analysis of military operations by the foreign military services, whether in war or peace. |
(iii) Military or paramilitary capabilities through advice or training, including formal or informal instruction.
| The Department notes that this rule proposes to remove the text of current § 120.32(a)(3) regarding military training, along with the current corresponding reference to military training in Category IX(e)(3). The Department believes that the essential elements of § 120.32(a)(3) would be better situated and described in proposed Category IX(s)(3)(iii). In addition, removal furthers the Department’s aim to better align the definition of defense service at § 120.32 with the definition of defense article at § 120.31.
The examples of methods of providing military training now contained in that part of § 120.32(a)(3) beginning with “correspondence courses” are non-exhaustive examples of instruction. The Department believes that those example methods and any other methods of training need not be listed and does not retain that text in the proposed paragraph (s)(3)(iii), even though they would still be controlled as either formal or informal instruction, advice, or other forms of training. |
(iv) Assistance in paragraphs (s)(3)(i) through (iii) of this category does not include:
(A) Furnishing of medical, translation, financial, insurance, legal, scheduling, or administrative services, or acting as a common carrier;
| The activities carved out by (s)(3)(iv)(A) are similar in nature to the brokering activity carve-outs already found in part 129. |
(B) Participation as a member of a regular military force of a foreign nation by a U.S. person who has been drafted into such a force (see also § 124.2(b) of this subchapter); or
| The activities to be carved out by proposed paragraph (s)(3)(iv)(B) make certain that the activities of U.S. persons drafted into the regular military forces of a foreign nation are not controlled by this section. This language is consistent with the text of the existing language at ITAR § 124.2(b).
Included in the releases for both intelligence assistance (paragraph (s)(2)(ii)) and military assistance (paragraph (s)(3)(iv)(B)) are activities performed by U.S. persons who have been drafted into the regular military forces of a foreign nation. The Department proposes this inclusion in addition to the existing exclusion at § 124.2(b) from the current definition of defense service so that persons reviewing the USML for controlled activities fully understand which activities are controlled. The exclusion at § 124.2(b), which has been in the ITAR since 1984 (see 49 FR 47682, Dec. 6, 1984), provides that: “[s]ervices performed as a member of the regular military forces of a foreign nation by U.S. persons who have been drafted into such forces are not deemed to be defense services for purposes of § 120.32 of this subchapter.” The Department proposes to include similar provisions within the new paragraph (s) in USML Category IX to preclude any possible confusion by the regulated community, including both persons long aware of the existing § 124.2(b) and persons new to the regulations who may be unfamiliar with the current exclusion, as to whether the Department intends to regulate the activities of draftees. The Department further notes § 124.2(b) applies to the entirety of § 120.32, whereas the defense services described in Category IX(s)(2) and (3) and the specific carve-outs to them, are related to proposed § 120.32(a)(2). By including the carve-outs from the proposed USML paragraphs and a “see” parenthetical directing users to § 124.2(b), the Department endeavors to ensure awareness of the exclusion in light of the proposed new control. |
(C) Training and advice that is entirely composed of general scientific, mathematical, or engineering principles commonly taught in schools, colleges, and universities.
| Finally, proposed paragraph (s)(3)(iv)(C) carves out training and advice entirely composed of general scientific, mathematical, or engineering principles commonly taught in schools, colleges, and universities. |
