not apply with respect to exports to or originating in any of such proscribed countries or areas.

(b) Shipments. A defense article licensed for export under this subchapter may not be shipped on a vessel, aircraft or other means of conveyance which is owned or operated by, or leased to or from, any of the proscribed countries or areas.

(c) South Africa. South Africa is subject to an arms embargo and thus to the policy specified in paragraph (a) of this section. In accordance with section 317 of the Comprehensive AntiApartheid Act of 1986 (Pub. L. 99440), exceptions may be made to this policy only if the Assistant Secretary for Politico-Military Affairs determines that:

(1) The item is not covered by United Nations Security Council Resolution 418 of November 4, 1977; and

(2) The item is to be exported solely for commercial purposes and not for use by the armed forces, police, or other security forces of South Africa or for any other similar purpose. Such exceptions are subject to the prior congressional notification requirements specified in section 318 of that Act.

(d) Terrorism. Exports to countries that have repeatedly provided support for acts of international terrorism are contrary to the foreign policy of the United States and are thus subject to the policy specified in paragraph (a) of this section and the requirements of section 40 of the Arms Export Control Act (22 U.S.C. 2780). The countries in this category are Cuba, Iran, Libya, Syria, South Yemen (P.D.R.Y.) and North Korea. These are the same countries identified pursuant to section 6(j) of the Export Administration Act, as amended.

(e) Chile. The Government of Chile is subject to a statutory arms embargo. No export license or other approval may be granted under this subchapter to or for the Government of Chile unless the President makes the certifications required pursuant to section 726 of the International Security Development Cooperation Act of 1981, as amended. The prohibition does not apply to the export of cartridge actuated devices, propellant actuated de

vices, and technical manuals for aircraft of the F-5E/F or A/T-37 type which were sold to the Chilean Air Force by the United States before January 1, 1976, so long as the items are provided only for the purpose of enhancing the safety of the aircraft crew.

(f) Proposed Sales. No sale or transfer and no proposal to sell or transfer any defense articles, defense services or technical data subject to this subchapter may be made to any country referred to in this section (including the embassies or consulates of such a country), or to any person acting on its behalf, whether in the United States or abroad, without first obtaining a license or other written approval from the Office of Munitions Control. (See § 120.10(f) of this subchapter), in accordance with paragraph (a) of this section, it is the policy of the Department of State to deny licenses and approvals in such cases. Any person who knows or has reason to know of such a proposed or actual sale, or transfer, of such articles, services or data must inform the Office of Munitions Control.

[49 FR 47702, Dec. 6, 1984, as amended at 51 FR 47015, Dec. 30, 1986; 53 FR 11498, Apr. 7, 1988]

§ 126.2 Temporary suspension or modification of this subchapter.

The Director, Office of Munitions Control, may order the temporary suspension or modification of any or all of the regulations of this subchapter in the interest of the security and foreign policy of the United States.

§ 126.3 Exceptions.

In a case of exceptional or undue hardship, or when it is otherwise in the interest of the United States Government, the Director, Office of Munitions Control may make an exception to the provisions of this subchapter. [49 FR 47702, Dec. 6, 1984, as amended at 53 FR 11499, Apr. 7, 1988]

§ 126.4 Shipments by or for United States Government agencies.

(a) A license is not required for the export of any defense article or technical data by or for any agency of the

U.S. Government (1) for official use by such an agency, or (2) for carrying out any foreign assistance, cooperative or sales program authorized by law and subject to control by the President by other means. This exemption applies only when all aspects of a transaction (export, carriage, and delivery abroad) are effected by a United States Government agency, or when the export is covered by a United States Government Bill of Lading. This exemption, however, does not apply when a U.S. Government agency acts as a transmittal agent on behalf of a private individual or firm, either as a convenience or in satisfaction of security requirements. The approval of the Office of Munitions Control must be obtained before defense articles exported pursuant to this exemption are permanently transferred to a foreign person (e.g., property disposal of surplus defense articles overseas) unless (i) the transfer is pursuant to a sale, lease, or loan under the Arms Export Control Act or the Foreign Assistance Act of 1961, as amended, or (ii) the defense articles have been rendered useless for military purposes beyond the possibility of restoration.

(b) This section does not authorize any department or agency of the U.S. Government to make any export which is otherwise prohibited by virtue of other administrative provisions or by any statute.

(c) A license is not required for the export of any defense article or technical data for end-use by a U.S. Government Agency under the following circumstances:

(1) The export is pursuant to a contract with, or written direction by, an agency of the U.S. Government; and

(2) The end-user is a U.S. Government agency or facility, and the defense articles or technical data will not be transferred to any foreign person; and

(3) The urgency of the U.S. Government requirement is such that the appropriate export license or U.S. Government Bill of Lading could not have been obtained in a timely manner. A written statement certifying that these requirements have been met will be presented at the time of export to the appropriate district director of

customs or Department of Defense transmittal authority, and shall be provided to the Office of Munitions Control.

§ 126.5 Canadian exemptions.

(a) General. District directors of customs and postmasters may permit the export without a license of any unclassified defense article or any unclassified technical data to Canada for enduse in Canada or return to the United States, with the exception of the articles or technical data listed in paragraph (b) of this section.

(b) Exceptions. The exemptions of this section do not apply to the following articles and technical data:

(1) Fully automatic firearms in Category I(a) which are not for end-use by the Federal Government, or a Provincial or Municipal Government of Canada;

(2) Nuclear weapons strategic delivery systems and all components, parts, accessories, attachments specifically designed for such systems and associated equipment;

(3) Nuclear weapon design and test equipment listed in Category XVI;

(4) Naval nuclear propulsion equipment listed in Category VI(e);

(5) Aircraft listed in Category VIII(a);

(6) Submersible and oceanographic vessels and related articles listed in Category XX (a) through (d).

(c) Related requirements. The foregoing exemption from obtaining an export license does not exempt an exporter from complying with the requirements set forth in § 123.10(e) or from filing the shipper's export declaration required by § 123.25.

(d) Part 124 agreements. The requirements of Part 124 of this subchapter must be complied with in the situations contemplated in that part. For example, the exemptions of this section may not be used for the manufacture in Canada of defense articles, except under the provisions of § 124.13.

[49 FR 47702 Dec. 6, 1984; 50 FR 12787, Apr. 1, 1985]

§ 126.6 Foreign military aircraft and naval vessels, and the Foreign Military Sales program.

(a) General. A license is not required for the export of any defense article if: (1) The article was sold, leased, or loaned by the Department of Defense to a foreign country or international organization pursuant to the Arms Export Control Act or the Foreign Assistance Act of 1961, as amended, and (2) The article was delivered to representatives of such a country or organization in the United States; and

(3) The article is to be exported from the United States on a military aircraft or naval vessel of that government or organization.

(b) Foreign military aircraft and naval vessels. A license is not required for the entry into the United States of military aircraft of any foreign state if no overhaul, repair, or modification of the aircraft is to be performed. Department of State approval for overflight (pursuant to the 49 U.S.C. 1508) and naval visits must, however, be obtained.

(c) Procedures for the Foreign Military Sales program—(1) General. District directors of customs are authorized to permit the export of unclassified defense articles, defense services, and technical data without a license if they were sold by the U.S. Department of Defense to foreign governments or international organizations under the Foreign Military Sales (FMS) program of the Arms Export Control Act. This procedure may be used only if a proposed export is:

(i) Pursuant to an executed U.S. Department of Defense Letter of Offer and Acceptance (DD Form 1513); and

(ii) Accompanied by a properly executed DSP-94; and

(iii) Made by the relevant foreign diplomatic mission of the purchasing country or its authorized freight forwarder, provided that the freight forwarder is registered with the Office of Munitions Control pursuant to Part 122 of this subchapter.

(2) Filing of documents. (i) The original copy of completed Form DSP94, together with one copy of the corresponding authenticated DD Form 1513 and a shipper's export declaration, must be filed with the District di

rector of customs at the port of exit prior to actual shipment. An executed DD Form 1513 is one which has been signed by (A) an authorized Department of Defense representative and countersigned by the Comptroller, Defense Security Assistance Agency (DSAA), and (B) by an authorized representative of the foreign government.

(ii) SED. The shipper's export declaration must be annotated as follows:

This shipment is being exported under the authority of Department of State Form DSP-94. It covers FMS Case (case identification), expiration date-. 22 CFR 126.6 applicable.

(iii) Notification to the Office of Munitions Control. Copy number two of the completed Form DSP-94 should be removed by the exporter and sent immediately, together with a copy of the applicable authenticated DD Form 1513 and the Shipper's export declaration, to the Office of Munitions Control. Form DSP-94 shall be valid for two years from the date on which it is executed.

[49 FR 47702, Dec. 6, 1984; 50 FR 12787, Apr. 1, 1985]

§ 126.7 Denial, revocation, suspension, or amendment of licenses and other approvals.

(a) Policy. Licenses or approvals shall be denied or revoked whenever required by any statute of the United States (see § 127.6 and § 127.10 of this subchapter). Any application for an export license or other approval under this subchapter may be disapproved, and any license or other approval or exemption granted under this subchapter may be revoked, suspended, or amended without prior notice whenever:

(1) The Department of State deems such action to be in furtherance of world peace, the national security or the foreign policy of the United States, or is otherwise advisable; or

(2) The Department of State believes that 22 U.S.C. 2778, any regulation contained in this subchapter, or the terms of any U.S. government export authorization (including the terms of a manufacturing license or technical assistance agreement, or

export authorization granted pursuant to the Export Administration Act, as amended) has been violated by any party to the export or other person having significant interest in the transaction; or

(3) An applicant is the subject of an indictment for a violation of any of the U.S. criminal statutes enumerated in § 120.24 of this subchapter; or

(4) An applicant or any party to the export or the agreement has been convicted of violating any of the U.S. criminal statutes enumerated in § 120.24 of this subchapter; or

(5) An applicant is ineligible to contract with, or to receive a license or other authorization to import defense articles or defense services from, any agency of the U.S. Government; or

(6) An applicant, any party to the export or agreement, or any person who has a significant interest in the transaction has been debarred, suspended, or otherwise is ineligible to receive an export license or other authorization from any agency of the U.S. government (e.g., pursuant to debarment by the Department of Commerce under 15 CFR Part 388 or by the Department of State under Part 127 or 128 of this subchapter); or

(7) An applicant has failed to include any of the information or documentation expressly required to support a license application or other request for approval under this subchapter or as required in the instructions in the applicable Department of State form.

(b) Notification. The Office of Munitions Control will notify applicants or licensees or other appropriate United States persons of actions taken pursuant to paragraph (a) of this section. The reasons for the action will be stated as specifically as security and foreign policy considerations permit.

(c) Reconsideration. If a written request for reconsideration of an adverse decision is made within 30 days after a person has been informed of the decision, the U.S. person will be accorded an opportunity to present additional information. The case will then be reviewed by the Office of Munitions Control.

(d) Reconsideration of certain applications. Applications for licenses or other requests for approval denied for

repeated failure to provide information or documentation expressly required will normally not be reconsidered during the thirty day period following denial. They will be reconsidered after this period only after a final decision is made on whether the applicant will be subject to an administrative penalty imposed pursuant to this subchapter. Any request for reconsideration shall be accompanied by a letter explaining the steps that have been taken to correct the failure and to ensure compliance with the requirements of this subchapter.

(e) Special definition. For purposes of this section, the term "party to the export" means:

(1) The chief executive officer, president, vice-presidents, other senior officers and officials (e.g., comptroller, treasurer, general counsel) and any member of the board of directors of the applicant;

(2) The freight forwarders or designated exporting agent of the applicant; and

(3) Any consignee or end-user of any item to be exported.

[49 FR 47702, Dec. 6, 1984, as amended at 53 FR 11498, Apr. 7, 1988]

§ 126.8 Proposals to foreign persons relating to significant military equipment. (a) General. Certain proposals to foreign persons for the sale or manufacture abroad of significant military equipment require either the prior approval of, or prior notification to, the Office of Munitions Control.

(1) Sale of significant military equipment: Prior approval requirement. The approval of the Office of Munitions Control is required before a U.S. person may make a proposal or presentation designed to constitute a basis for a decision on the part of any foreign person to purchase significant military equipment on the United States Munitions List whenever all the following conditions are met:

North Atlantic Treaty Organization, Australia, New Zealand, or Japan; and (iii) The sale would involve the export from the United States of any defense article or the furnishing abroad of any defense service including technical data; and

(iv) The identical significant military equipment has not been previously licensed for permanent export or approved for sale under the Foreign Military Sales Program of the Department of Defense, to any foreign country.

(2) Sale of significant military equipment: prior notification requirement. The Office of Munitions Control must be notified in writing at least thirty days in advance of any proposal or presentation concerning the sale of significant military equipment whenever the conditions specified in paragraphs (a)(1) (i) through (iii) of this section are met and the identical equipment has been previously licensed for permanent export or approved for sale under the FMS Program to any foreign country.

(3) Manufacture abroad of significant military equipment. The approval of the Office of Munitions Control is required before a U.S. person may make a proposal or presentation designed to constitute a basis for a decision on the part of any foreign person to enter into any manufacturing license agreement or technical assistance agreement for the production or assembly of significant military equipment, regardless of dollar value, in any foreign country, whenever:

(i) The equipment is intended for use by the armed forces of any foreign country; and

(ii) The agreement would involve the export from the United States of any defense article or the furnishing abroad of any defense service including technical data.

(b) Definition or "Proposal or Presentation". The terms "proposal or presentation designed to constitute a basis for a decision . . . to purchase" or to "enter into any . . . agreement” mean the communication of information in sufficient detail that the person communicating that information knows or should know that it would permit an intended purchaser to decide either to acquire the particu

lar equipment in question or to enter into the manufacturing license agreement or technical assistance agreement. For example, a presentation which describes the equipment's performance characteristics, price, and probable availability for delivery would require prior notification or approval, as appropriate, where the conditions specified in paragraph (a) of this section are met. By contrast, the following would not require prior notification or approval: Advertising or other reporting in a publication of general circulation; preliminary discussions to ascertain market potential; or merely calling attention to the fact that a company manufactures a particular item of significant military equipment.

(c) Satisfaction of requirements. (1) The requirement of this section for prior approval is met by any of the following:

(i) A written statement from the Office of Munitions Control approving the proposed sale or agreement or approving the making of a proposal or presentation.

(ii) A license issued under § 125.2 or § 125.3 for the export of technical data relating to the proposed sale or agreement to the country concerned.

(iii) A temporary export license issued under § 123.27 relating to the proposed sale or agreement for a demonstration to the armed forces of the country of export.

(iv) With respect to manufacturing license agreements or technical assistance agreements, the application for export licenses pursuant to the two preceding subparagraphs must state that they are related to possible agreements of this kind.

(2) The requirement of this section for prior notification is met by informing the Office of Munitions Control by letter at least 30 days before making the proposal or presentation. The letter must comply with the procedures set forth in paragraph (d) of this section and must identify the relevant license, approval, or FMS case by which the identical equipment had previously been authorized for permanent export or sale. The Office of Munitions Control will provide written acknowedgement of such prior notifi