§ 123.1 Requirement for export licenses.

(a) Any person who intends to export a defense article must obtain a license from the Office of Munitions Control prior to the export unless the export qualifies for an exemption under the provisions of this subchapter.

(b) As a condition to the issuance of a license or other approval, the Office of Munitions Control may require all pertinent documentary information regarding the proposed transaction.

(c) An application for a license under this part for the permanent export of defense articles sold commercially must be accompanied by a copy of a purchaser order, letter of intent or other appropriate documentation. In cases involving the U.S. Foreign Military Sales program, three copies of the relevant Department of Defense Form 1513 are required, unless the procedures of § 126.4(c) or § 126.6 are followed.

(d) Provisions for the export of classified defense articles and defense services are contained in Part 125 of this subchapter.

[49 FR 47691, Dec. 6, 1984, as amended at 53 FR 11497, Apr. 7, 1988]

§ 123.2 Imports.

No defense article may be imported into the United States unless (a) it was previously exported temporarily under a license issued by the Office of Munitions Control; or (b) it constitutes a temporary import/intransit shipment licensed under § 123.3; or (c) its import is authorized by the Department of the Treasury (see 27 CFR Parts 47, 178 and 179).

§ 123.3 Temporary import (intransit) li

censes.

A temporary import license (DSP61) issued by the Office of Munitions Control is required for the intransit shipment of any unclassified defense article. This requirement applies to any temporary import into the United States of a defense article for overhaul, repair, modification, or other purposes, and the subsequent direct return of the defense article to the country from which it was sent. The Office of Munitions Control may re

quire an appropriate bond. The temporary import license must also be used for other temporary unclassified imports, such as a temporary import of unclassified defense articles intransit to a third country. It may also be used if a defense article is imported into the United States for incorporation into another article and is then to be returned to the country of origin or transshipped to another country. (See § 125.8 for classified imports.)

§ 123.4 Temporary export licenses.

The Office of Munitions Control may issue a license for the temporary export of unclassified defense articles (DSP-73). Such licenses are valid only if (a) the article will be exported for a period of less than twenty-four months and will be returned to the United States and (b) transfer of title will not occur during the period of temporary export. Accordingly, articles exported pursuant to a temporary export license may not be sold or otherwise permanently transferred to a foreign person while they are overseas under a temporary export license. A renewal of the license or other written approval must be obtained from the Office of Munitions Control if the article is to remain outside the United States beyond the period for which the license is valid.

§ 123.5 [Reserved]

§ 123.6 Foreign trade zones and U.S. Customs bonded warehouses.

Foreign trade zones and U.S. Customs bonded warehouses are considered integral parts of the United States for the purpose of this subchapter. An export license is therefore not required for shipment between the United States and a foreign trade zone or a Customs bonded warehouse. However, an export license is required for all shipments of articles on the U.S Munitions List from foreign trade zones and U.S. Customs bonded warehouses to foreign countries, regardless of how the articles reached the zone or warehouse.

§ 123.7 Exports to warehouses or distribution points outside the United States. A license to export defense articles to a warehouse or distribution point outside the United States for subsequent resale will normally be granted only if an agreement has been approved pursuant to § 124.14 of this subchapter.

§ 123.8 Special controls on vessels of war, military aircraft and satellites.

(a) Transferring registration or control to a foreign person of any aircraft, vessel, or satellite on the United States Munitions List is an export for purposes of this subchapter and requires a license or written approval from the Office of Munitions Control. This requirement applies whether the aircraft, vessel, or satellite is physically located in the United States or abroad.

(b) The registration in a foreign country of any aircraft, vessel or satellite on the United States Munitions List which is not registered in the United States but which is located in the United States constitutes an export. A license or written approval from the Office of Munitions Control is therefore required. Such transactions may also require the prior approval of the Maritime Administration, Department of Transportation, or the Federal Aviation Administration, Department of Transportation or other agencies of the U.S. Government.

§ 123.9 Country of ultimate destination.

(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 end-use. The written approval of the Department of State must be obtained before reselling, diverting, transferring, transshipping, or disposing of a defense article in any country other than the country of ultimate destination 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 Munitions Control or claiming an exemption under this subchapter. Enduse must be confirmed and should not be assumed.

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

These commodities are authorized by the U.S. Government for export only to (country of ultimate destination). They may not be resold, diverted, transferred, transshipped, or otherwise be disposed of in any other country, either in their original form or after being incorporated through an intermediate process into other end-items, without the prior written approval of the U.S. Department of State.

§ 123.10 Non-transfer and use assurances and Congressional notification.

(a) An application for a license (Form DSP-5) to export significant military equipment defined in § 120.19 must be accompanied by a nontransfer and use certificate (Form DSP-83) at the time of submission to the Office of Munitions Control. This form is to be executed by the foreign consignee and foreign end-user. 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.

(b) The DSP-83 may be accepted at a time other than that specified in paragraph (a) of this section if there are special reasons for doing so. A statement of such reasons must accompany the application for a license.

(c) The Office of Munitions Control may also require a DSP-83 for the export of any other defense articles or defense services.

(d) When a DSP-83 is required for an export of any defense article or defense service to a non-governmental foreign end-user, the Office of Munitions Control 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. This means that the foreign government undertakes not to authorize the reexport, resale, or other disposition of the defense articles or defense service enumerated in the application without ensuring that the prior written consent of the U.S. Government has been obtained.

(e) All exports of major defense equipment sold under a contract in the amount of $14,000,000 or more or of defense articles and defense services sold under a contract in the amount of $50,000,000 or more may take place only after the Office of Munitions Control notifies the exporter that thirty calendar days have elapsed since receipt by the Congress of the certification required by the Arms Export Control Act. The issuance of a license or other written approval shall serve as notification that this period has elapsed. Persons who intend to export defense articles and services pursuant to the exemption in § 126.5 under the circumstances described in the first sentence of this subsection must notify the Office of Munitions Control by letter of the intended export and provide a DSP-83 signed by the foreign consignee and end-user. Such exports may take place after the Office of Munitions Control notifies the exporter by letter that the thirty day period has elapsed.

[49 FR 47691, Dec. 6, 1984, as amended at 51 FR 47014, Dec. 30, 1986]

§ 123.11

Movements of aircraft and vessels of war outside the United States.

(a) General. A license issued by the Office of Munitions Control is required whenever a privately-owned aircraft or vessel of war on the United States Munitions List makes a voyage outside the United States.

(b) Exemption. An export license is not required when a vessel or aircraft referred to in section (a) departs from the United States and does not enter the territorial waters or airspace of a foreign country if no defense articles are carried as cargo. Such a vessel or aircraft may not enter the territorial waters or airspace of a foreign country before returning to the United States,

or carry as cargo any defense article, without a temporary export license (Form DSP-73) from the Department of State. (See § 123.4).

§ 123.12 Shipments between U.S. possessions.

An export license is not required for the shipment of defense articles between the United States, the Commonwealth of Puerto Rico, and U.S. possessions. A license is required, however, for the export of defense articles from these areas to foreign countries.

§ 123.13 Domestic aircraft shipments via a foreign country.

A license is not required for the shipment by air of a defense article from one location in the United States to another location in the United States via a foreign country. The pilot of the aircraft must, however, file a written statement with the district director of customs at the port of exit in the United States. The original statement must be filed at the time of exit with the district director of customs. A duplicate must be filed at the port of reentry with the district director of customs, who will duly endorse it and transmit it to the district director of customs at the port of exit. The statement will be as follows:

§ 123.14 Import certificate/delivery verification procedure.

The United States and a number of foreign countries have agreed on procedures designed to assure that a commodity imported into their territory will not be diverted, transshipped, or reexported to another destination except in accordance with export control regulations of the importing country. This is known as the Import Certificate/Delivery Verification Procedure (IC/DV) and may be invoked with respect to defense articles.

(a) Exports. The Department of State may require the IC/DV procedure on proposed exports of defense articles to non-government entities in the following countries: Austria, Belgium, Denmark, France, Federal Republic of Germany, Greece, Hong Kong, Italy, Japan, Luxembourg, the Netherlands, Norway, Portugal, Turkey, and the United Kingdom. In such cases, U.S. exporters must submit both an export license application (the completed Form DSP-5) and the original Import Certificate, which must be provided and authenticated by the government of the importing country. This document verifies that the foreign importer complied with the import regulations of the government of the importing country and that the importer declared the intention not to divert, transship or reexport the material described therein without the prior approval of that government. After delivery of the commodities to the foreign consignee, the Department of State may also require U.S. exporters to furnish Delivery Verification documentation from the government of the importing country. This documentation verifies that the delivery was in accordance with the terms of the approved export license. Both the "Import Certificate" and the "Delivery Verification" must be furnished to the U.S. exporter by the foreign importer.

(b) Triangular transactions. When a transaction involves three or more countries which have adopted the IC/ DV procedure, the governments of these countries may stamp a triangular symbol on the Import Certificate. This symbol is usually placed on the

Import Certificate when the applicant for the Import Certificate (the importer) stated either (1) that there is uncertainty whether the items covered by the Import Certificate will be imported into the country issuing the Import Certificate; (2) that he or she knows that the items will not be imported into the country issuing the Import Certificate; or (3) that, if the items are to be imported into the country issuing the Import Certificate, they will subsequently be reexported to another destination. Thus, it is possible that the ultimate consignee and the country of ultimate destination will not coincide with that of the importer. All parties, including the ultimate consignee in the country of ultimate destination, must be shown on the completed Import Certificate.

§ 123.15 [Reserved]

EXEMPTIONS

§ 123.16 Obsolete firearms and models.

(a) District directors of customs may permit the export without a license of nonautomatic firearms covered by Category I(a) of § 121.1 if they were manufactured in or before 1898, as well as replicas of such firearms.

(b) District directors of customs may permit the export without a license of unclassified models or mock-ups of defense articles provided that they are nonoperable and do not reveal any technical data in excess of that which is exempted from the licensing requirements of § 125.4(b). U.S. persons who avail themselves of this exemption must provide a written certification to the district director of customs that these conditions are met. This exemption does not imply that the Office of Munitions Control will approve the export of any defense articles for which models or mocks-ups have been exported pursuant to this exemption.

§ 123.17 Exports of firearms and ammunition for personal use.

(a) District directors of customs may permit U.S. persons to export temporarily from the United States without a license not more than three nonautomatic firearms in Category I(a) of

§ 121.1 and not more than 1,000 cartridges therefor, provided that:

(1) A declaration by the U.S. person and an inspection by a customs officer is made;

(2) The firearms and accompanying ammunition must be with the U.S. person's baggage or effects, whether accompanied or unaccompanied (but not mailed); and

(3) They must be for that person's exclusive use and not for resale or other transfer of ownership. The foregoing exemption is not applicable to a crew-member of a vessel or aircraft unless the crew-member declares the firearms to a customs officer upon each departure from the United States, and declares that it is his or her intention to return the articles on each return to the United States. It is also not applicable to the personnel referred to in § 123.18.

(b) District directors of customs may permit a foreign person to export without a license such firearms in Category I(a) of § 121.1 and ammunition therefor as the foreign person brought into the United States under the provisions of 27 CFR 178.115(d). (The latter provision specifically excludes from the definition of importation the bringing into the United States of firearms and ammunition by certain foreign persons for specified purposes.)

(c) District directors of customs may permit U.S. persons to export without a license ammunition for nonautomatic firearms referred to in paragraph (a) of this section if the quantity does not exceed 1,000 cartridges (or rounds) in any shipment. The ammunition must also be for personal use and not for resale or other transfer of ownership. The foregoing exemption is also not applicable to the personnel referred to in § 123.18.

§ 123.18 Firearms for personal use of members of the U.S. Armed Forces and civilian employees of the U.S. Government.

The following exemptions apply to members of the U.S. Armed Forces and civilian employees of the U.S. Government who are U.S. persons (both referred to herein as "personnel"). The exemptions apply only to