Proposed ITAR rule rewrites core definitions and the launch carve-out

Summary: The State Department has proposed changes to the International Traffic in Arms Regulations (ITAR) that would remove a handful of items from the U.S. Munitions List (USML), narrow several catch-all controls, rewrite definitions that apply across the whole list, reword the provision that says a launch is not an export, and add a license exemption for sending foreign-made defense articles back to their makers for repair. It does not amend USML Category IV (launch vehicles) or Category XV (spacecraft), and it arrives while a separate 2024 proposal on those two categories is still pending.

What was filed

Federal Register document 2026-20079 (RIN 1400-AF40) is a proposed rule from the State Department's Directorate of Defense Trade Controls (DDTC) amending 22 CFR parts 120, 121 and 123. It was filed for public inspection on September 30, 2026 and is scheduled for publication on October 1, 2026. It is a proposal: nothing in it is in force.

The Department cites the Arms Export Control Act's requirement to review the USML periodically and Executive Order 14268, which directs it to focus ITAR protections "on our most sensitive and sophisticated technologies." Its test for keeping an item on the list is whether the item provides "a critical military or intelligence advantage." The Department says the rulemaking is exempt from the Administrative Procedure Act's notice-and-comment requirements as a military or foreign affairs function, but it is seeking comment anyway, and the Office of Management and Budget has designated it a significant regulatory action.

Comments are due 60 days after publication, which is November 30, 2026 if the rule publishes on October 1 as scheduled. Submit them at regulations.gov under docket DOS-2026-0991 (the docket may not appear until publication), or by email to DDTCPublicComments@state.gov with "RIN 1400-AF40" in the subject line.

What the rule would change

USML entries (part 121)

• Category VIII(h)(10) would be removed and reserved. The preamble says this "would remove most radar altimeters from the USML." This entry is in the aircraft category; the rocket and missile altimeter entry in Category IV is untouched.
• The rule also changes a few entries with no space application.

Items removed from the USML would become subject to the Commerce Department's Export Administration Regulations (EAR). The proposal does not say which Export Control Classification Numbers they would fall under, and no Commerce companion rule was filed with it.

Definitions (part 120), which apply to every category

• New § 120.35 would list exclusions from the USML. Paragraph (a) covers end-items, systems and equipment described only under § 120.41(a)(1) that are later modified by removing "all properties peculiarly responsible" for meeting the control; a Defense Department "DEMIL" certification alone "does not mean that item is no longer described on the USML." Paragraph (b) restates the marketing-information carve-out now in § 120.31(b).
• § 120.41, "specially designed," would drop "and fit" from (b)(3), reserve (b)(6), and add two new releases, (b)(7) and (b)(8), described below.
• § 120.43, development and production, would say development includes "low-rate initial production," and that development ends when 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." Cosmetic changes and reliability, maintainability, quality or cost improvements would not restart development; changes to "function or performance capability" would.
• § 120.54(a)(1) today reads "Launching a spacecraft, launch vehicle, payload, or other item into space." It would become "Launching a spacecraft, launch vehicle, payload, or other article into or beyond orbit."

New exemption (part 123)

• § 123.26: no license would be needed for the temporary export of "an unclassified foreign defense article" when the export is solely for "servicing, inspecting, testing, calibrating, repairing, overhauling, upgrading, reconditioning, or one-to-one replacement of a defective item by the original equipment manufacturer (OEM) or its authorized service provider."

What it means for space

Points marked Analysis are our reading, not the Department's.

The launch carve-out

The Department says the new wording is for clarity and "consistent with the scope of the current language," because "the term 'into space' is not defined." It adds that launches into space "that do not reach orbit and return directly to the United States" are already not exports, under the separate provision for moving defense articles within the United States (§ 120.54(a)(4)).

Analysis: On the Department's account, orbital launches and suborbital flights that come back down in the United States are unaffected. Read literally, today's "into space" could cover any flight that reaches space; the new wording would close that reading for flights that do not reach orbit. The rule does not say whether a suborbital flight that ends outside the United States is an export. Several cases it leaves open, and one it never covered, matter to launch companies:

• a suborbital or near-orbital test flight that ends with a splashdown in international waters;
• a launch that fails before reaching orbit, and spent lower stages that never reach orbit themselves;
• a vehicle or capsule that lands abroad after reaching orbit (the carve-out covers launching, not landing);
• a U.S. person handing control of an ITAR-controlled satellite to a foreign person once it is in orbit, which is a separate export under § 120.50(a)(3) and is not covered by the launch carve-out at all.

The proposal does not define "orbit," and it changes "other item" to "other article" without explanation. These questions matter only where the thing flown is an ITAR defense article, but that is common: Category IV(a)(5) covers rockets and space launch vehicles not described in (a)(1) to (a)(4), so, absent a commodity jurisdiction determination, a suborbital rocket is likely ITAR even when the craft it carries is controlled under the EAR.

Parts and catch-all controls

A "catch-all" control covers unlisted parts only if they are specially designed for a listed item. Both Category IV and Category XV are mostly lists of named items, with "specially designed parts and components therefor" attached to selected entries: seven in Category XV(e) (among them star trackers, atomic clocks and entry heat shields) and about eleven in Category IV(h). Category XV also has a note, with no counterpart in Category IV, that sends parts specially designed for spacecraft but not listed in XV(e) to the EAR, where ECCN 9A515.x generally picks them up. (Unlisted Category IV parts also fall under the EAR, generally through ECCN 9A604.x, rather than through a note.)

The two new releases:

• § 120.41(b)(7) would release an item that "was not described in § 121.1 ... within the first year after leaving development" and is later used, in the same or equivalent form, in a defense article covered by a catch-all control.
• § 120.41(b)(8) would release a list of basic items from every USML catch-all, including knobs, tires, visible spectrum light bulbs, light fixtures, analog gauges or indicators, audio selector panels, nameplates, magnetic compasses, rheostats, manual electrical switches, solenoids, circuit breakers using only thermal-magnetic overcurrent protection, fuses, glass preforms, latches, hinges, brackets, pneumatic hoses and passenger seats. A proposed note limits this to items with only those basic functions and says USML-controlled coatings and materials stay controlled when applied to them.

Analysis: These releases are likely to matter more to launch vehicle and missile supply chains, which carry more catch-alls, than to satellite makers. Many (b)(8) items are already EAR items for spacecraft under ECCN 9A515.y. But (b)(7) can help satellite suppliers too: a part developed for a Category XV spacecraft, sent to the EAR by the Category XV note, can become ITAR today if it is later reused unmodified in an entry with a catch-all, such as a launch vehicle separation mechanism or a controlled attitude control system. Claims under (b)(7) would need documents from the time of development, as (b)(4) and (b)(5) claims already do, even though the reuse that triggers (b)(7) happens later; that is worth a comment. The Department says (b)(8) has no counterpart in the EAR definition, so a released item could still fall under an EAR catch-all: a change of jurisdiction, with license requirements that could range from similar to minimal depending on where Commerce classifies it.

Development, production and one-off builds

One existing release, § 120.41(b)(3), frees a part that has the same function, performance and the same or equivalent form as a part used in or with a product that was in production and is not listed on the USML. Whether that product "was in production after leaving development" therefore matters, and the proposal redefines those phases.

Analysis: Spacecraft and their subsystems are often built once or in small numbers. The proposal speaks to that: when multiple quantities are not planned, "such as custom builds, the equivalent is the production run for intended delivery or deployment for intended use," and "runs to validate the manufacturing process" are not production. In its questions, the Department says the end of development for ITAR purposes "is more aligned with entrance into Full Rate Production or equivalent production at scale" than with the Defense Department's Milestone C. Current rules already treat everything before serial production as development, and the Department says its (b)(3) edit is not meant to change scope, but the new wording could change classification answers, in either direction, for hardware moving from prototype to flight units. The boundary between a "feature enhancement" (no restart) and a change to "function or performance capability" (restart) is also open for comment.

Capability sheets and conference talks

New § 120.35(b) would exclude unclassified descriptions of what a commodity or software does "that do not convey details on how the functions or purpose are performed," and descriptions of performance capabilities "that do not convey requirements or specifications." The Department says this involves "no change in scope," yet its question 6 asks for "any perceived change in scope." Analysis: Companies and universities that publish datasheets or conference material listing specifications, such as pointing accuracy or specific impulse, should read the "requirements or specifications" wording closely.

Software

The Department is considering, but not proposing, removing "software" from parts of the "specially designed" analysis. It says the idea would affect only USML entries where software is described as specially designed, not software controlled as technical data. Analysis: Categories IV and XV largely reach software as technical data, so the direct effect on the space categories would likely be limited.

The repair exemption

Analysis: A company in the United States could send a foreign-made ITAR component back to its maker, or the maker's authorized service provider, for repair without a license. Today that generally needs a license unless an existing exemption applies, such as the Canadian exemption (§ 126.5(b)), the AUKUS exemption (§ 126.7), or the U.S.-UK and U.S.-Australia treaty exemptions, each within its own limits. The general rules for every exemption would still apply (§ 120.15): registration, no ineligible parties, no exports to or from countries proscribed under § 126.1, and records, which § 122.5 requires be kept for five years; exports would also be filed under § 123.22. Points for comment:

• the text sets no return deadline;
• unlike the § 123.16 exemptions, it does not exclude Significant Military Equipment or items on the Missile Technology Control Regime Annex, which include some spacecraft parts such as certain star trackers;
• it allows "upgrading," which the temporary-import repair exemption in § 123.4(a)(1) does not;
• it covers the article only, not technical data or services needed to diagnose or specify the repair;
• § 122.5(a) still refers to "§ 123.26" as the recordkeeping section for exemptions, a cross-reference that would point at the new repair exemption if the number is reused;
• the preamble notes that import requirements under the U.S. Munitions Import List, administered by the Bureau of Alcohol, Tobacco, Firearms and Explosives, are not affected, which matters for the return trip.

How we got here

• 2013 to 2017. State's first Export Control Reform rule took effect October 15, 2013 (78 FR 22740). Category XV was rewritten effective November 10, 2014 (79 FR 27180), when certain commercial communications and remote sensing satellites moved to the EAR as the Commerce Department created ECCNs 9A515, 9B515, 9D515 and 9E515 (79 FR 27418). Category XV was revised again in 2017 (82 FR 2889).
• 2019. State, working with the National Space Council, requested comments on Categories IV and XV (84 FR 8486).
• 2022. A reorganization consolidated the part 120 definitions (87 FR 16396, effective September 6, 2022).
• 2024. On October 23, State proposed revisions to Categories IV and XV and four space-related exemptions in a new § 126.8, covering official space agency programs, space activities, space tourism and research, and defense articles built into EAR spacecraft (89 FR 84482; RIN 1400-AE73). Commerce published three space rulemakings the same day.
• 2025. Executive Order 14268 was signed on April 9. DDTC's "Targeted Revisions" rules (90 FR 5594 and 90 FR 41778) revised Category IV(c) but not Category XV.
• 2026. An interim final rule on civil aircraft with aircraft survivability equipment, published August 28 (91 FR 55457), adds provisions to § 120.54 that take effect October 13, 2026.

The October 2024 space proposal has not been finalized: the current Category XV text is unchanged from January 2024 and § 126.8 is still reserved, and the new rule does not mention it. State's Fall 2025 regulatory agenda, the most recent we could confirm, lists that proposal at the final rule stage with an interim final rule targeted for September 2026 (the Spring 2025 agenda had targeted August 2025), so a rule on the space categories may be close and could take effect without another comment period.

Open questions

• Which EAR classifications? The rule does not name them, and there is no Commerce companion rule.
• Diverging definitions. The EAR's "specially designed" definition (15 CFR 772.1) still says "and fit" in (b)(3), and the rule does not say whether Commerce will follow.
• Timing of removals. Under 22 U.S.C. 2778(f)(1), items cannot be removed from the USML until 30 days after notice to the House and Senate foreign affairs committees.
• Existing licenses. The rule says guidance on how classification changes affect existing licenses and agreements is "provided on DDTC's website."

What to do

• Comment by the deadline (November 30, 2026 if publication is on October 1; confirm against the published rule). Keep export-controlled or proprietary details out of public comments; the rule describes a separate process for proprietary supplements.
  • Space companies with evidence: the rule's request for comments poses 14 numbered questions. Questions 8 to 10 ask about items that would remain on the USML and are in normal commercial use, expected to have civil uses within five years, or widely available abroad. Question 7 asks whether items closely related to these revisions should be added, so comments can tighten controls as well as loosen them.
• Launch and suborbital operators: map planned flight profiles, including test flights ending at sea and landings abroad, against the proposed wording.
• Suppliers: list catch-all parts that match (b)(8) or were first used in another program, and keep development and production records that could support a (b)(7) claim.

This article is general information, not legal advice. Talk to export control counsel before acting on a proposed rule.

Sources

• Proposed rule 2026-20079 (public inspection)
• Public inspection page
• eCFR, 22 CFR 121.1 (USML)
• eCFR, 22 CFR part 120 (definitions, § 120.15, § 120.54)
• eCFR, 22 CFR parts 122, 123 and 126
• eCFR, 15 CFR 772.1 (EAR definitions)
• 22 U.S.C. 2778
• Executive Order 14268, 90 FR 15631
• 78 FR 22740 (2013)
• 79 FR 27180 (2014, Category XV)
• 79 FR 27418 (2014, EAR 9x515)
• 82 FR 2889 (2017, Category XV)
• 84 FR 8486 (2019)
• 87 FR 16396 (2022)
• 89 FR 84482 (2024, Categories IV and XV proposal)
• Commerce space rules of October 23, 2024: revisions to space-related export controls (89 FR 84770), removal of license requirements for certain spacecraft (89 FR 84766), proposed rule (89 FR 84784)
• Unified Agenda, RIN 1400-AE73: Fall 2025, Spring 2025
• 15 CFR part 774, supplement 1 (ECCNs 9A515 and 9A604)
• 90 FR 5594 (January 2025)
• 90 FR 41778 (August 2025)
• 91 FR 55457 (August 2026)