The State Department wants to take several categories of defense hardware, including most radar altimeters and smooth-bore canister launchers, off the U.S. Munitions List, the arms-export licensing system's control list. The change aims to reduce regulatory burden on exporters and manufacturers. The proposal, published in the Oct. 1, 2026 Federal Register, is an omnibus rewrite of the International Traffic in Arms Regulations (ITAR) that touches 22 CFR Parts 120, 121 and 123.
The notice appears at 91 FR 62361 as Document 2026-20079 (RIN 1400-AF40, Public Notice 13123). Comments are due Nov. 30, 2026, through regulations.gov docket DOS-2026-0991 or by email citing the RIN. State says the rule would "ensure that the U.S. Munitions List (USML) focuses ITAR controls on the most sensitive technologies, to improve regulatory transparency and clarity, and to reduce regulatory burdens."
Which Items Leave the USML Under the Proposed Rule?
The rule would remove items from the USML. Items not subject to the ITAR generally fall under the Export Administration Regulations (EAR), which the Commerce Department's Bureau of Industry and Security administers. State's stated reason is that the items no longer warrant ITAR treatment. In the Category II discussion, the Department writes: "The Department assesses the items proposed for removal no longer provide a critical military or intelligence advantage."
The proposal makes four main USML changes:
- Category II(a)(4): The paragraph would be narrowed to remove smooth-bore, fixed-barrel canister launchers. Grenade launchers with rifled or removable barrels would stay on the USML.
- Category VIII(h)(10): The paragraph would be removed and reserved, which takes most radar altimeters off the list.
- Category X(a)(7): The paragraph would be adjusted to remove certain goggles, spectacles, visors, vision blocks, canopies, and filters for optical sights or viewers. State separately seeks comment on refining (a)(7) and (d)(3).
- Category XX(c): The paragraph would be split into (c)(1) through (c)(3), as described below.
For companies that build avionics, navigation sensors, and optical components, the altimeter and optics changes matter most. Items that leave the USML would no longer need State licenses, though they would generally fall under EAR controls instead.
Why Is State Splitting the Submersible Parts Paragraph?
Category XX(c) is the most structurally ambitious change. State describes the current paragraph bluntly: "Currently, paragraph (c) describes all specially designed parts, components, accessories, attachments, and associated equipment for military submersible and semi-submersible vehicles, which is one of the broadest control paragraphs on the USML."
Under the proposal, (c) would become three paragraphs. Items specially designed for naval nuclear propulsion plants or facilities in (c)(1) would be newly designated Significant Military Equipment (SME), a tighter tier of control than the rest of the category. Paragraph (c)(2) would describe the remaining systems and equipment, and State says the multiple focused subparagraphs would significantly narrow the scope of controls now implemented through paragraph (c). The remaining catch-all control would move to (c)(3).
What Does the New Section 123.26 Repair Exemption Do?
The rule adds ITAR Sec. 123.26, which would allow the temporary export of foreign defense articles from the United States without a license when the export is solely for certain activities, such as servicing or repair by the original equipment manufacturer (OEM) or its authorized service provider. The exemption covers unclassified foreign defense articles only, and the exporter must meet specified conditions.
Foreign governments and companies that own U.S.-origin defense hardware regularly send it back to the original manufacturer for maintenance, and without an exemption such exports need authorization. An exemption for unclassified items sent to the OEM or its authorized service provider would remove that step for qualifying shipments, which could benefit U.S. repair and sustainment businesses as well as their foreign customers.
Definitions Cleanup in Parts 120 and 121
The rule also revises definitions in Part 120, including Sec. 120.31 through 120.33, and USML-related provisions in Part 121. State proposes removing the reserved Sec. 120.35 and adding a new Sec. 120.35 identifying items excluded from control under the ITAR. State frames the definitional edits as clarity measures, and for some of the definitions it intends no change in scope.
On items that change jurisdiction, the notice says additional guidance, "including the impact of the change on the treatment of items previously exported under an ITAR license," is provided on the Directorate of Defense Trade Controls (DDTC) website. Exporters with existing licenses for affected items should check that guidance once any rule becomes final.
How Does State Justify the Burden Claim?
The Office of Management and Budget deemed the rule a significant regulatory action. State says quantitative analyses cannot be usefully estimated, so it makes a qualitative case. Its conclusion, in the Executive Orders 12866 and 13563 section: "The Department assesses that the benefits of this rulemaking outweigh any costs, that modifying the USML in this manner is the most cost-effective method to achieve the Department's regulatory objectives on this matter, and that doing so will result in a net reduction of the burden on the regulated community."
The absence of a dollar estimate is notable. State's notice says it lacks useful estimates or models for how often affected items would be exported. Commenters with data on license volumes, processing times, or the cost of dual-licensing regimes for affected items can supply figures State says it does not have.
What It Means for Contractors
Contractors and suppliers should sort their exposure into three groups.
Makers of altimeters, launchers, and optical accessories. If your products fall in Category II(a)(4), VIII(h)(10), or X(a)(7), the proposal would take them off the USML, so they would generally be subject to the EAR. That generally means a different licensing analysis, and in many cases less of it, but you will need to reclassify products, update marketing and compliance records, and look at what the EAR requires for your destinations.
Naval and submarine suppliers. The Category XX split cuts both ways. Parts that fall outside the nuclear-propulsion paragraph and the narrowed remaining paragraphs could become easier to export. Anything specially designed for naval nuclear propulsion would be newly designated SME, which brings added obligations. Suppliers should map every part number against the three new paragraphs now rather than wait for a final rule.
Repair and sustainment providers. The Sec. 123.26 exemption could simplify work on foreign customers' equipment, but only when the item is unclassified, the shipment is solely for servicing, repair, or other specified activities, and the exemption's conditions are met.
All of this is a proposal. Nothing changes until State publishes a final rule, and the final text may differ. The comment window closes Nov. 30, 2026. Companies with a stake should file comments with technical specifics, such as performance thresholds, commercial availability, and licensing history, that tie directly to the paragraphs State is rewriting.
