ITAR USML Review Proposed Rule: What to Do Now

The Department of State published a proposed rule on October 1, 2026, titled "International Traffic in Arms Regulations (ITAR): Review of the U.S. Munitions List and Related Definitions and License Exemption" (Federal Register document 2026-20079). My advice is the same one I give with any proposed ITAR rule: don't change your classifications today, but start preparing today. A proposed rule binds no one. A final rule can bind everyone who manufactures, exports, or brokers defense articles, and the ones who prepared during the comment period are the ones who handle it calmly.

This article is a preparation guide, not a section-by-section summary of the rule. The Department describes three moves: remove certain items from the USML, update definitions and standardize regulatory text, and add a new exemption to the ITAR licensing requirements. For the detail, go to the notice itself.

What Did the State Department Propose on October 1, 2026?

The notice (see its summary section) describes a proposal to amend the ITAR with two aims:

1. Ensure the U.S. Munitions List focuses ITAR controls on the most sensitive technologies.
2. Improve regulatory transparency and clarity, and reduce regulatory burden.

The proposal pursues those aims through three changes: removing certain items from the USML, updating definitions and standardizing regulatory text, and adding a new exemption to the licensing requirements.

This article does not list the specific USML categories affected, the exact definitions being revised, or the terms of the new exemption. Those are in the rule text, so read the amendatory instructions, not just the preamble, because the instructions are what will become law if the rule is finalized.

Why does a proposed rule matter before it is final?

The Administrative Procedure Act process gives the public a window to comment, and the Department has to consider those comments before finalizing. The comment deadline is in the DATES section of the notice. Confirm it there and calendar it now, since it is the most actionable date in this process. If a provision would sweep in your products, or leave you in a worse position than today, the comment period is the only point at which you can change the outcome.

There is also a statutory step worth knowing about. Under Section 38(f) of the Arms Export Control Act (22 U.S.C. 2778(f)), the executive branch must notify Congress before removing an item from the USML, and the statute sets a waiting period after that congressional notification. A final rule that removes items may therefore not take effect immediately, so rely on the effective date in the Federal Register.

How Does the USML Work Today?

The USML is codified at 22 CFR 121.1 and is organized into 21 categories, each covering a class of defense articles, technical data, and defense services. Under the Export Control Reform effort begun in 2013, many categories were revised toward a "positive list" approach, meaning the entries describe controlled items by objective parameters, not by broad catch-all language. Items removed from the USML in those revisions generally became subject to the Export Administration Regulations.

For a company, the practical result is that a USML entry decides which agency holds jurisdiction, which license process applies, and whether foreign-person employees trigger a deemed export. If you want the category-by-category overview, our USML categories guide walks through them.

What Could Removal From the USML Mean for My Products?

If an item comes off the USML, the ITAR stops controlling it. That does not mean it becomes uncontrolled. In earlier rounds of reform, removed items generally landed under EAR jurisdiction with their own Export Control Classification Numbers and their own license requirements. Watch for whether this rule is paired with a companion Commerce rule. If the two agencies publish together, you can plan the jurisdictional move in one pass. If they don't, there may be a gap you need to understand before you ship anything.

The Department's three announced changes, and what to do about each now, are below. The "What to do now" column is our practical suggestion, not a statement from the notice.

Is a USML removal always good news?

Not automatically. Removal can reduce the license burden, but it can also move you into a different regime with different obligations. A company that has built its whole program around ITAR registration under 22 CFR part 122 may find some of its products now sit under the EAR while others remain on the USML. Running two regimes at once is harder than running one, and our ITAR vs. EAR comparison lays out where they diverge on licensing, technical data, and enforcement.

What Definitions Are at Stake?

The Department says it intends to update definitions and standardize regulatory text. The ITAR definitions most often load-bearing for classification live in part 120. Several are worth re-reading now so you can see quickly if the proposal touches them:

• Specially designed (22 CFR 120.41), which is central to whether parts, components, accessories, and attachments are caught by a USML catch-all or released from it.
• Technical data (22 CFR 120.33) and defense service (22 CFR 120.32), which drive what your engineers can share and with whom.
• Activities that are not exports (22 CFR 120.54), which governs certain encrypted data and similar situations.
• Public domain (22 CFR 120.34), which affects what information you can release without authorization.

We are not saying the proposal changes any of these. These are the definitions where a small wording change would produce the largest downstream effect, so they are the first places to look in the redline.

What Does a New ITAR License Exemption Look Like in Practice?

Existing ITAR exemptions are spread across several parts of the regulation. Examples include the shipment-related exemptions in 22 CFR 123.16, the general exemptions in part 126 (such as 126.4 for certain U.S. government transactions and 126.18 for dual and third-country national employees of foreign end-users), and the technical data exemptions in part 125. Every one of them comes with conditions, and many carry notification, certification, or recordkeeping requirements.

The lesson from existing exemptions is that using one correctly depends on following every condition. An exemption is not a general permission. A shipment made under an exemption that doesn't actually apply is an unauthorized export, and unauthorized exports are the kind of violation addressed by the enforcement provisions in 22 CFR part 127. The worst way to use a new exemption is to read the headline and skip the conditions.

When the final text arrives, ask three questions before adopting it into any workflow:

1. Who is eligible: registrants only, certain destinations only, certain end users only?
2. What must be documented, and who signs?
3. Does the exemption cover technical data and defense services, or only hardware?

If you handle exports for a small shop, the small business ITAR guide covers why exemptions are often where smaller companies trip, because they don't have a dedicated person watching the conditions.

How Should I Prepare While the Rule Is Still Proposed?

Here is the sequence we recommend, in order of how much it pays off.

Step 1: Pull the notice and read the actual amendments

Download the proposed rule from the Federal Register and read the regulatory text at the end, not just the summary. Make a list of every USML paragraph and definition that is mentioned, and compare it against your own classification records.

Step 2: Check your classification records

If you cannot show, for each product, how you reached your USML category or EAR classification, fix that first. A jurisdiction and classification record should name the paragraph of 121.1 you relied on, the analysis under the order of review, and who approved it. Companies that have this on file can map changes in an afternoon. Companies that don't spend weeks reconstructing it. Earlier USML revisions bore this out; our impact analysis of USML revisions for defense manufacturers covers how they affected manufacturers, though it predates this proposal.

Step 3: Identify products and technical data that could be affected

Using the proposed text, mark which of your items would plausibly come off the USML. Mark them as "potentially affected," not as "reclassified." Nothing has changed legally yet, and shipping decisions made as if the rule were already final are a common way to create a violation.

Step 4: Decide whether to comment

If the proposal is ambiguous in a way that affects you, say so in a comment, with specific paragraph references and concrete examples of your products or processes. A comment that says "please clarify paragraph (b)(2) because our component X could be read either way" is far more useful to the Department than a general statement of support or opposition.

Step 5: Plan for a transition

Once a final rule is published, the effective date and any transition provisions will tell you how long you have. Assume you will need to update your classification matrix, your technology control plan, your training content, your screening and licensing procedures, and your agreements. A technology control plan that names USML categories will need to be revisited whenever those categories change.

What Should I Not Do?

Don't start shipping items on the assumption that they will be off the USML. Until a final rule takes effect, the current 22 CFR 121.1 governs, and an export of a defense article without a required license or exemption is a violation regardless of what the Department has proposed. Don't deregister under 22 CFR part 122 until you have confirmed that none of your products or services remain ITAR-controlled, because registration is also required for manufacturers and exporters of defense articles, and for those furnishing defense services. Don't discard records either: 22 CFR 122.5 sets a five-year recordkeeping period (check the section for when it begins to run), and a change in the rules does not erase obligations tied to past transactions. Our recordkeeping guide covers what to keep and for how long.

Where I Land on This Proposal

A rule that aims to focus the USML on the most sensitive technologies is reasonable on its face. The real work for a compliance team lives in the definitions, the conditions on an exemption, and the transition from one regime to another. Spend this comment period reading, mapping, and asking questions.

If you want a second set of eyes on how the proposal intersects with your product line, you can reach us through the contact page. We are happy to look at it with you.

Last updated: 2026-10-05

Frequently Asked Questions

Is the October 2026 ITAR USML rule final?

No. Federal Register document 2026-20079, published October 1, 2026, is a proposed rule. The current text of 22 CFR 121.1 and the ITAR definitions remain in force until a final rule is published and takes effect. The comment deadline is listed on the Federal Register page for the notice.

What does the State Department propose to change in the ITAR?

The Department proposes to remove certain items from the U.S. Munitions List, update definitions and standardize regulatory text, and add a new exemption to the ITAR licensing requirements. The stated aims are to focus controls on the most sensitive technologies, improve clarity and transparency, and reduce regulatory burden.

If an item is removed from the USML, is it still export controlled?

Often yes. In earlier USML reform rounds, items removed from the ITAR were generally moved to the Commerce Control List under the EAR, where they carry their own classification and license requirements. Check whether a companion Commerce rule accompanies any final State Department rule.

Should I stop treating my products as ITAR-controlled now?

No. Until a final rule is effective, the current USML in 22 CFR 121.1 governs. Shipping on the assumption that an item will be removed can result in an unauthorized export, which is subject to penalties under 22 CFR 127.10.

Does Congress have a role in USML removals?

Yes. Under Section 38(f) of the Arms Export Control Act (22 U.S.C. 2778(f)), the executive branch must notify Congress before removing an item from the USML, followed by a 30-day waiting period.