View Rule

This rule describes how articles the President determines no longer warrant control under United States Munitions List (USML) Category I-Firearms, Close Assault Weapons and Combat Shotguns; Category II-Guns and Armament; and Category III-Ammunition/Ordnance would be controlled on the Commerce Control List (CCL). This rule will be published simultaneously with a proposed rule by the Department of State that would revise Categories I, II, and III of the USML to describe more precisely the articles warranting continued control on that list. This rule also would reorganize and renumber entries currently on the CCL that control shotguns and certain firearms related items to place all firearms related entries close to each other that list.

Statement of Need:

This final rule is needed to ensure appropriate controls would be in place on firearms and related items determined to no longer warrant control under the United States Munitions List that would be moved to the Commerce Control List (CCL). This final rule describes how articles the President determines no longer warrant control under United States Munitions List (USML) Category I Firearms, Close Assault Weapons and Combat Shotguns; Category II Guns and Armament; and Category III Ammunition/Ordnance, would be controlled on the Commerce Control List (CCL) and by the Export Administration Regulations (EAR). This rule is being published in conjunction with a proposed rule from the Department of State, Directorate of Defense Trade Controls, which would amend the list of articles controlled by USML Category I (Firearms, Close Assault Weapons and Combat Shotguns), Category II (Guns and Armament), and Category III (Ammunition/Ordnance) of the USML to describe more precisely items warranting continued control on that list.

The changes described in this rule and in the State Department’s companion rule on Categories I, II, and III of the USML are based on a review of those categories by the Department of Defense, which worked with the Departments of State and Commerce in preparing the amendments. The review 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 (ECCNs) included in this proposed rule. Thus, the scope of the items described in this proposed rule is essentially commercial items widely available in retail outlets and less sensitive military items.

Summary of the Legal Basis:

This action is taken pursuant to BIS’ authority under the Export Administration Regulations (EAR), which regulate exports and reexports to protect national security, foreign policy, and short supply interests.  BIS maintains the EAR, which includes the Commerce Control List (CCL), which describes commodities, software, and technology that are subject to licensing requirements for specific reasons for control. 

Alternatives:

Take no action in order to maintain the status quo by not revising USML Categories I, II, and III and not making the needed conforming changes under the EAR.  This alternative was mentioned by some of the public commenters in response to the proposed rule published by BIS on May 24, 2018 (83 FR 24166).  BIS will evaluate this (take no action) alternative suggested by some of the commenters, as well as all other comments received on the May 24 proposed rule, when drafting the final rule.  The rationale provided in the May 24 proposed rule already addressed why maintaining the status quo was not warranted, but BIS will further address these comments in the final rule.  BIS will also address the comments that were supportive of the May 24 proposed rule that agreed with the Departments of Commerce and State that the items described in the two rules reflected what items should be retained on the USML and what items should be moved to the CCL.        

Anticipated Costs and Benefits:

This final rule involves four collections currently approved by OMB under these BIS collections and control numbers:  Simplified Network Application Processing System (control number 0694-0088), which includes, among other things, license applications; License Exceptions and Exclusions (control number 0694-0137); Import Certificates and End-User Certificates (control number 0694-0093); Five Year Records Retention Period (control number 0694-0096); and the U.S. Census Bureau collection for the Automated Export System (AES) Program (control number 0607-0152).  This final rule would affect the information collection, under control number 0694-0088, associated with the multi-purpose application for export licenses.  This collection carries a burden estimate of 43.8 minutes for a manual or electronic submission for a burden of 31,833 hours.  BIS believes that the combined effect of all rules to be published adding items removed from the ITAR to the EAR that would increase the number of license applications to be submitted by approximately 30,000 annually, resulting in an increase in burden hours of 21,900 (30,000 transactions at 43.8 minutes each) under this control number.  For those items in USML Categories I, II and III that would move by this rule to the CCL, the State Department estimates that 10,000 applicants annually will move from the USML to the CCL.  BIS estimates that 6,000 of the 10,000 applicants would require licenses under the EAR, resulting in a burden of 4,380 hours under this control number.  Those companies are currently using the State Department’s forms associated with OMB Control No. 1405-0003 for which the burden estimate is 1 hour per submission, which for 10,000 applications results in a burden of 10,000 hours.  Thus, subtracting the BIS burden hours of 4,380 from the State Department burden hours of 10,000, the burden would be reduced by 5,620 hours.  For purposes of E.O. 13771 of January 30, 2017 (82 FR 9339), the Department of State and Department of Commerce final rules are expected to be net deregulatory actions.  The Departments of State and Commerce for purposes of E.O. 13771 have agreed to equally share the cost burden reductions that would result from the publication of these two integral regulatory actions.  The Department of State would receive 50% and the Department of Commerce would receive 50% for purposes of calculating the deregulatory benefit of these two integral regulatory actions.  For purposes of the Department of Commerce, the net deregulatory actions would result in a permanent and recurring cost savings of $1,250,000 per year, and a reduction in burden hours by 2,810 hours.  The reduction in burden hours by 2,810 would result in an additional cost savings of $126,281 to the exporting public.  Therefore, the total dollar cost savings would be $1,376,281 for purposes of E.O. 13771 for the Department of Commerce.

Risks:

This final rule must be published concurrently with the Department of State final rule that would revise USML Categories I, II, and II, to provide for appropriate controls on firearms and related items determined to no longer warrant control under the United States Munitions List (USML) that would be moved to the Commerce Control List (CCL) under the Export Administration Regulations (EAR).  If this rule were not published, entities would not benefit from simpler license application procedures and reduced (or eliminated) registration fees based on the transfer of jurisdiction of the items described in the rule.  Thus, entities would not benefit from reduced administrative costs associated with EAR jurisdiction.