Proposed Rule on Broad Revisions to ITAR and its U.S. Munitions List
In response to Executive Order 14268, Reforming Foreign Defense Sales to Improve Speed and Accountability, the U.S. State Department’s Directorate of Defense Trade Controls (DDTC) published a proposed rule under Public Notice 13123 on October 1, 2026 (Proposed Rule). The Proposed Rule would revise several fundamental definitions under the International Traffic in Arms Regulations (ITAR), remove certain defense article components from the ITAR’s U.S. Munitions List (USML), and expand the circumstances under which information and commodities are excluded or released from ITAR export controls.
This Proposed Rule is significant because it is part of a renewed effort by the DDTC to refocus ITAR export controls on those technologies that provide a critical military or intelligence advantage and remove ones that do not.
Key Changes to ITAR Definitions and Exclusions from ITAR Controls
Under the Proposed Rule:
- Controlled ITAR Technical Data. The Proposed Rule would clarify the boundary between controlled ITAR technical data and high-level information, including basic marketing information and general system descriptions that do not disclose (a) how an ITAR defense article performs its functions or (b) the ITAR defense article’s performance requirements or specifications.
- Items Excluded from the USML. The DDTC is proposing a new ITAR Section 120.35 that would exclude an end-item, system, or component from the ITAR’s USML when it has been permanently modified to remove all military characteristics that originally caused it to be controlled under the ITAR.
- “Specially Designed.” The DDTC would expand the circumstances in which a component is released from ITAR control. Among other changes, a component that was not ITAR-controlled during the first year after development would not later become ITAR-controlled merely because it is used, without substantive modification, in another defense article. The Proposed Rule would also identify additional types of ordinary (i.e., commodity) components that would not become ITAR-controlled merely because they were designed for use in an ITAR defense article.
Key Revisions to the USML
Under the Proposed Rule:
- Category II—Guns and Armament. The DDTC would remove smooth-bore, fixed-barrel canister launchers from the USML, while retaining grenade launchers with rifled or removable barrels. The removed launchers would transfer to the Commerce Control List (CCL) and become subject to export controls under the Export Administration Regulations (EAR).
- Category VIII—Aircraft and Related Articles. The DDTC would remove most radar altimeters from the USML. The removed radar altimeters would transfer to the CCL and become subject to export controls under the EAR.
- Category X—Personal Protective Equipment. The DDTC would narrow ITAR controls on protective eyewear and related optical equipment for military personnel by retaining controls only for those items meeting specified higher protection and optical-density thresholds.
- Category XX—Submersible Vessels and Related Articles. The DDTC would substantially narrow the broad catch-all control covering equipment for military submersibles. The revised category would continue to control naval nuclear-propulsion items, certain specifically identified submersible systems and equipment, and their specially designed components.
A New ITAR Temporary-Export License Exemption
The DDTC is proposing a new ITAR Section 123.26 that would permit the temporary export of a foreign defense article located in the U.S. without an ITAR export license when the defense article is sent to its OEM or an authorized service provider solely for servicing, inspection, testing, calibration, repair, overhaul, upgrade, reconditioning, or one-for-one replacement. The exemption could significantly reduce licensing burdens for foreign defense contractors whose U.S.-located products are to be serviced or repaired outside the U.S.
Interim Actions in Anticipation of the Final Rule Issuance
- Revisit Affected ITAR Classifications. Companies should determine whether products, software, technical data, or services currently classified and controlled under the affected USML categories of the ITAR would be removed from the USML altogether or more narrowly controlled on the USML.
- Prepare for EAR Export Controls for Removed Items. Removal from the ITAR’s USML does not make an item uncontrolled because the removed items will be transferred to the CCL and subjected to EAR export controls. Companies should identify the corresponding EAR export control classification on the CCL and determine whether future exports would require an EAR export license or qualify for an EAR License Exception.
- Reassess Technical-Data Export Controls. The Proposed Rule may permit greater use of high-level marketing and system descriptions that do not disclose how a defense article performs its functions or reveal its performance requirements or specifications.
- Review Foreign Repair and Servicing Transactions. Companies should (a) identify those foreign defense articles that could qualify for the proposed ITAR temporary-export license exemption and (b) then establish procedures for satisfying its conditions.
- Expect Further Movement Away from ITAR Export Controls on Established Technologies. The most important point of this article is that this Proposed Rule is part of a broader DDTC policy shift, which reflects a renewed policy effort to reserve ITAR controls for technologies that provide a critical military or intelligence advantage and move lesser technologies to EAR jurisdiction. Additional USML revisions and removals from ITAR control should be expected as DDTC continues its renewed effort on this front.
Estimated Timeline for Rule Finalization
- Current: The DDTC published the Proposed Rule on October 1, 2026. Public comments are due November 30, 2026. Miller Canfield stands ready to assist you with the drafting and submittal of your public comments to the Proposed Rule.
- Next (2027): The DDTC will review the public comments and determine whether to revise the proposed definitions, USML controls, and temporary-export exemption.
- Then (late 2027 to 2028): If DDTC proceeds without issuing a second proposed rule, it could publish a final rule in the Federal Register, together with an effective date and transition guidance for items moving from ITAR to EAR jurisdiction.
Note: The timing estimates given above are illustrative and not a prediction. Finalization of the rule in late 2027 to 2028 would be a reasonable working estimate. Substantial revisions to the rule, the issuance of a second proposed rule, or an extended interagency review could push rule finalization into 2029.
The attorneys of the Miller Canfield Export Controls and Sanctions Practice are available to assist companies in assessing the Proposed Rule and preparing and submitting comments to DDTC.
This alert summarizes a proposed rule and does not constitute legal advice. The regulatory text may change before any final rule is issued.
