DDTC Publishes ITAR Omnibus Amendments Proposed Rule

The U.S. Department of State's Directorate of Defense Trade Controls (DDTC) published a proposed omnibus rule (Rule) on October 1, 2026.

If finalized, the Rule would reduce the scope of activities requiring authorization under the International Traffic in Arms Regulations (ITAR) by:

• releasing certain items from ITAR control through revisions to Categories II, VIII, X and XX of the U.S. Munitions List (USML), creation of an exclusion for certain demilitarized) items, and addition of two new releases to the definition of "specially designed" (one for components that start out as 600-series but are later reused in a defense article and one analogous to the current "fasteners" release but for knobs, tires, gauges, switches, fuses, brackets, hinges, hoses and passenger seats)
• creating a new exemption for the temporary export of foreign-origin defense articles to the foreign manufacturer or an authorized service provider for servicing, inspection, testing, repair or replacement

The Rule would also clarify the definitions of "development" and "production" and provide that a space launch of a defense article would be excluded from ITAR control only if the item is launched into or beyond orbit.

Public comments are due by November 30, 2026.

Part 120 Definitional Changes That Release Certain Items from USML Control

New Section 120.35: Items Excluded from the USML

The Rule would add Section 120.35 to expressly exclude two sets of items from the USML.

First, new Section 120.35 would exclude certain DEMIL items. The exclusion would be limited to end items, systems and equipment described on the USML under paragraph (a)(1) of the definition of "specially designed" and apply only if all features peculiarly responsible for meeting the control criteria were removed. The preamble to the Rule notes that "removing all components described on the USML (e.g., armor and weapons) may be insufficient if, for example, structural elements or other features" peculiarly responsible for achieving controlled characteristics remain, citing the example of a Category VIII helicopter designed to deliver munitions, which would not be eligible for the exclusion even if de-weaponized and used exclusively for fighting wildfires because "it has an airframe that was designed to meet the requirements for delivering munitions" and "[r]emoving components supporting that function (e.g., hard points, ballistically tolerant systems, weapons, and mission systems) would not remove all the airframe properties that were included in the design to support the vertical stub-wing loads for carrying munitions and the horizontal stub-wing loads to accommodate forces from munitions launches." 91 Fed. Reg. 62361, 62362 (Oct. 1, 2026).

By contrast, the preamble states that the Rule would exclude a vehicle originally designed to launch missiles and controlled under USML Category VII(b) "from which all of its weapons, mission systems, and armor have been removed such that the remaining vehicle chassis and systems are also common to variants of the same vehicle that were not designed as a firing or launch platform." Id. The Rule would expressly state that U.S. Department of Defense (DOD) DEMIL certification does not establish that an item is excluded from the USML. Id. at 62366.

Second, new Section 120.35 would relocate and reword the existing exclusion in Section 120.31(b) from the definition of "defense article" for "basic marketing information on function or purpose or general system descriptions." The new provision would describe the scope of the exclusion as extending to unclassified descriptions of function, purpose or performance characteristics that "do not convey requirements or specifications" or "details on how the functions or purpose are performed." According to the preamble, this change is intended "to better describe the information this paragraph excludes" with "no intended change to the scope of control." Id. at 62362.

Corresponding changes to the definitions of "defense article" and "defense service" would account for the new Section 120.35.

New Releases from "Specially Designed" (Section 120.41)

The Rule would amend the definition of "specially designed" to add two new releases. New release (b)(7) would exclude a part or component that 1) was designed for a defense article with no catchall control and therefore was not described on the USML for at least the first year after development but 2) was later reused in the same or equivalent form in a defense article that is described in a USML paragraph with a catchall control, resulting in post-hoc classification of the component on the USML. Id. The preamble to the Rule gives the example of a component that was originally developed for an electronic support system described in Category XI(a)(4)(i) but not described elsewhere on the USML. Because Category XI does not have an applicable catchall control, that component would be subject to the EAR under ECCN 3A611.x. If, however, "[y]ears later, the unmodified component is reused in an electronic support system specially designed for a naval submarine described in paragraph (a)(1) of USML Category XX," the component would be caught by Category XX(c) because 1) it is used in or with a defense article and 2) none of the releases applies to items developed exclusively for and used only in defense articles. "As a result, the component previously subject to the EAR becomes described on the USML in Category XX(c) … New paragraph § 120.41(b)(7) would ensure such a component is not described in USML Category XX(c) if it has the same or equivalent form" as the original 600-series version. Id. Documentation contemporaneous with development would be required to establish the item's eligibility for this release. Id. at 62367.

New release (b)(8) would be similar to the existing (b)(2) "fastener" release and exclude the following basic parts and components from catchall controls: "a knob, tire, visible spectrum light bulb, light fixture, analog gauge or indicator, audio selector panel, nameplate, magnetic compass, rheostat, manual electrical switch, solenoid, circuit breaker utilizing solely thermal-magnetic overcurrent protection, fuse, glass preform, latch, hinge, bracket, pneumatic hose, or passenger seat." Id.

Category-Specific Changes That Release Certain Items from USML Control

The Rule would make the following category-specific changes to remove certain items from the USML. Companies should determine whether their businesses involve items in the affected USML categories. Affected manufacturers, exporters and brokers should prepare for EAR jurisdiction, identifying the applicable Export Control Classification Number (ECCN) and existing ITAR licenses for the items and evaluating whether new EAR licenses will be required, whether any EAR license exceptions may be available and whether use of USML paragraph (x) could be an option for licensing (for newly EAR-controlled items used in or with defense articles).

• Category II – Guns: Narrowing Grenade Launcher Controls. Category II(a)(4) would cover only grenade launchers with rifled or removable barrels or tubes, removing smooth-bore, fixed-barrel canister launchers.
• Category VIII – Aircraft: Radar Altimeters Removed. Category VIII(h)(10) would be removed and reserved, taking most radar altimeters off the USML.
• Category X – Personal Protective Equipment: Ocular Protection Narrowed. Category X(a)(7) would remove from the USML certain goggles, spectacles, visors, vision blocks, canopies and filters for optical sights or viewers, retaining only those items that provide ocular protection using other than common broadband absorptive dyes or UV inhibitors and that meet specified optical-density thresholds for visible, nuclear-flash, near-infrared or UV lasers.
• Category XX – Submersible Vessels: Restructuring of Paragraph (c). Current Category XX(c) would be replaced by three provisions: (c)(1) for items specially designed for naval nuclear propulsion plants or facilities, which would be newly designated as significant military equipment (SME), with heightened reporting and non-transfer requirements; (c)(2) for specified systems and equipment for Category XX(a) vessels; and (c)(3) for parts and components of (b)(2) or (c)(2) articles. The changes would move many submarine and underwater-vehicle parts, components, accessories, attachments and associated equipment from ITAR control to EAR control.

New License Exemption: Temporary Export for Foreign Article Servicing (Section 123.26)

New Section 123.26 would exempt from licensing the temporary export of an unclassified foreign defense article solely for servicing, inspection, testing, calibration, repair, overhaul, upgrade, reconditioning or one-to-one replacement by the original equipment manufacturer (OEM) or an authorized service provider.

The proposed exemption could significantly reduce the ITAR licensing burden on U.S. purchasers of foreign defense articles and U.S. subsidiaries of foreign defense companies selling their parent companies' products in the U.S. market, as well as the associated burden on the Office of Defense Trade Controls Licensing.

However, items such temporarily exported under the new exemption might still require a Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) permit for reentry into the U.S., under ATF's authority over permanent imports of items described on the U.S. Munitions Import List (USMIL). See 91 Fed. Reg. at 62361 and 62363 ("This exemption from export licensing requirements does not relate to the import requirements that may be imposed by the [USMIL].").

Other Changes

Clarification of the Definitions of "Development" and "Production" (Section 120.43)

The Rule would restructure and reword Section 120.43 to clarify the definitions of "development" and "production."

In addition to restructuring Section 120.43(a)-(b), the Rule would replace the term "serial production" with "full production" and would add a paragraph providing that "[d]evelopment ends once the functional design decisions, integration, validation, and testing activities are complete … and the design is approved for full-rate production, serial production, standardized production, software production release, deployment to production, or other equivalent transfer to full production." It would also refine the existing guidance on postproduction modification to clarify that though items may reenter development when they "are subjected to development activities that would result in changes to their function or performance capability," the following post-production modifications would not return an item to development: "activities that would result only in cosmetic changes, or enhancements or improvements in the sustainability, reliability, or maintainability of the article, including those pertaining to quality improvements, cost reduction, or feature enhancements." 91 Fed. Reg. at 62363 and 62367.

The Rule specifically requests comments on these changes, including whether they sufficiently account for continuous integration and continuous deployment (CI/CD) and custom-build contexts and other life cycle scenarios.

Clarifications to the Definition of "Specially Designed"

• Replacing "Equivalent" with "Equivalent Form" (Section 120.42): The Rule would clarify the definition of "specially designed" by replacing the term "equivalent" with "equivalent form," meaning that a commodity's "form has been modified solely for fit purposes."
• Adding a Note Regarding the Application of the (b)(2) and New (b)(8) Releases: The Rule would add a new Note 3 to paragraph (b) of "specially designed" to codify the unwritten rule that parts and components can only be released under the (b)(2) "fasteners" release if they "only have functions described in" (b)(2). The Note would also limit the items eligible for release under new (b)(8) to those that only have functions described in either (b)(2) or (b)(8). "Thus, a flange nut (i.e., a nut integrated with a washer) would qualify [for (b)(2)], whereas a hose connecting bolt (i.e., a bolt with internal piping for fluid transfer) would not" and "a bracket with integrated fasteners" would be eligible for release under paragraph (b)(8), but not under paragraph (b)(2).

Clarifying the Scope of the Space Launch Exclusion (Section 120.54(a)(1))

The Rule would revise Section 120.54(a)(1) to clarify that launches of defense articles into space are not exports, reexports or transfers only if the defense article is launched "into or beyond orbit" – i.e., suborbital launches of defense articles are exports, reexports or transfers subject to the ITAR.

DDTC's Requests for Comments

DDTC is specifically seeking public comments on 14 questions. Priority topics include:

• Ocular Protection Criteria (Cat X(a)(7)). Whether optical-density thresholds and a possible visible light transmission criterion best distinguish military and civil protection
• Civil Weather Radar Antennas (Cat XI(c)(10)(iv)). Examples and criteria distinguishing civil airborne antennas from military antennas
• Removing "Software" from "Specially Designed." Whether to remove "software" from paragraphs (a)(2), (b), (b)(3) and (b)(5) of the definition of "specially designed," such that "software" (other than software regulated as technical data) would only be subject to the (a)(1) "peculiarly responsible" test and would not be eligible for any releases; with this potential revision, an (a)(1) analysis would remain applicable to software but the (a)(2) and (b) analyses would not (note that this proposed change would affect only USML entries where software is described as specially designed and not where software is described as technical data – which uses the definition at Section 120.33(a)(4))
• Development/Production Definitions. Interaction with DOD Technology Readiness Levels (TRLs), Acquisition Milestones and sufficiency with respect to continuous integration and continuous deployment (CI/CD) and custom-build contexts and other life cycle scenarios
• Section 120.35(b) Clarity. Clarity of the relocated basic-marketing-information exclusion and any unintended scope change
• Remaining Controls. Items in commercial use, with foreign availability or warranting control despite the revisions

Next Steps and Action Items

Comments are due by November 30, 2026. Submit through Regulations.gov (docket DOS-2026-0991) or DDTCPublicComments@state.gov with RIN 1400-AF40 in the subject line. Anonymous comments are permitted; proprietary or export-controlled information should follow the rule's separate supplement procedure.

This is a proposed rule only – no effective date has been set. If finalized, DDTC will provide guidance on existing licenses, technical assistance agreements and manufacturing license agreements affected by classification changes.

If you have any questions about the Rule or other aspects of U.S. international trade regulation, please contact the authors or another member of Holland & Knight's International Trade Group.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.