22 C.F.R. § 126.8 Proposals to foreign persons relating to significant military equipment.
Title 22 - Foreign Relations
(a) Proposals. 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 Directorate of Defense Trade Controls. (1) Sale of significant military equipment: The prior approval of the Directorate of Defense Trade Controls 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 U.S. Munitions List whenever all the following conditions are met: (i) The value of the significant military equipment to be sold is $14,000,000 or more; and (ii) The equipment is intended for use by the armed forces of any foreign country other than a member of the 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: The Directorate of Defense Trade Controls 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 prior approval of the Directorate of Defense Trade Controls 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 of proposal or presentation. The terms proposal or presentation (designed to constitute a basis for a decision to purchase and 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 particular 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 Directorate of Defense Trade Controls 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 of this subchapter for the export of technical data relating to the proposed sale or agreement to the country concerned. (iii) A temporary export license issued under §123.5 of this subchapter 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 Directorate of Defense Trade Controls 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 Directorate of Defense Trade Controls will provide written acknowledgement of such prior notification to confirm compliance with this requirement and the commencement of the 30-day notification period. (d) Procedures. Unless a license has been obtained pursuant to §126.8(c)(1)(ii) or (iii), a request for prior approval to make a proposal or presentation with respect to significant military equipment, or a 30-day prior notification regarding the sale of such equipment, must be made by letter to the Directorate of Defense Trade Controls. The letter must outline in detail the intended transaction, including usage of the equipment involved and the country (or countries) involved. Seven copies of the letter should be provided as well as seven copies of suitable descriptive information concerning the equipment. (e) Statement to accompany licensing requests. (1) Every application for an export license or other approval to implement a sale or agreement which meets the criteria specified in paragraph (a) of this section must be accompanied by a statement from the applicant which either: (i) Refers to a specific notification made or approval previously granted with respect to the transaction; or (ii) Certifies that no proposal or presentation requiring prior notification or approval has been made. (2) The Department of State may require a similar statement from the Foreign Military Sales contractor concerned in any case where the United States Government receives a request for a letter of offer for a sale which meets the criteria specified in paragraph (a) of this section. (f) Penalties. In addition to other remedies and penalties prescribed by law or this subchapter, a failure to satisfy the prior approval or prior notification requirements of this section may be considered to be a reason for disapproval of a license, agreement or sale under the FMS program. (g) License for technical data. Nothing in this section constitutes or is to be construed as an exemption from the licensing requirement for the export of technical data that is embodied in any proposal or presentation made to any foreign persons. [58 FR 39312, July 22, 1993, as amended at 71 FR 20547, Apr. 21, 2006]
Title 22: Foreign Relations
PART 126—GENERAL POLICIES AND PROVISIONS
§ 126.8 Proposals to foreign persons relating to significant military equipment.
