1. Short title This Act may be cited as the Special Relationship Military Improvement Act of 2023 . 2. Exemption Section 38 of the Arms Export Control Act ( 22 U.S.C. 2778 ) is amended— (1) in subsection (f)(3), by inserting or the United Kingdom after Canada ; and (2) in subsection (j)(1), by striking subparagraph (C) and inserting after subparagraph (B) the following new subparagraphs: (C) Exception for the United Kingdom The requirement to conclude a bilateral agreement in accordance with subparagraph (A) shall not apply with respect to an exemption for the United Kingdom from the licensing requirements of this chapter for the export of defense items. (D) Exception for defense cooperation treaties The requirement to conclude a bilateral agreement in accordance with subparagraph (A) shall not apply with respect to an exemption from the licensing requirements of this chapter for the export of defense items to give effect to the Treaty Between the Government of the United States of America and the Government of Australia Concerning Defense Trade Cooperation, done at Sydney September 5, 2007 (and any implementing arrangement thereto), except that the United States shall exempt from the scope of such treaty— (i) complete rocket systems (including ballistic missile systems, space launch vehicles, and sounding rockets) or complete unmanned aerial vehicle systems (including cruise missile systems, target drones, and reconnaissance drones) capable of delivering at least a 500 kilogram payload to a range of 300 kilometers, and associated production facilities, software, or technology for these systems, as defined in the Missile Technology Control Regime Annex Category I, Item 1; (ii) individual rocket stages, re-entry vehicles and equipment, solid or liquid propellant motors or engines, guidance sets, thrust vector control systems, and associated production facilities, software, and technology, as defined in the Missile Technology Control Regime Annex Category I, Item 2