A bill to provide certain exceptions from requirements for bilateral agreements with Australia and the United Kingdom for exemptions from the International Traffic in Arms Regulations.

Summary: Defense Trade Cooperation Act of 2003 - Amends the Arms Export Control Act (the Act) to make the requirement of a bilateral agreement prior to the transfer of defense articles or services from the United States to a foreign country inapplicable to a bilateral agreement between the United States and the Government of: (1) Australia, with respect to transfers or changes in end use within Australia of defense items that will remain subject to the licensing requirements of the Act after such agreement enters into force; or (2) the United Kingdom, for an exemption from such licensing requirements. Requires the President, at least 30 days before authorizing such an exemption, to certify to the congressional foreign and international relations committees that such an agreement: (1) is in the national interest of the United States; (2) does not adversely affect the ability of the International Traffic in Arms Regulations to provide controls for licensed exports of U.S. defense items; and (3) will not adversely affect the duties or requirements of the Secretary of State under the Act. Directs the President to submit to such committees a text of the regulations that authorize such a licensing exemption.

Requires a report from the President to such committees on licensing requirement exemption issues raised during consultations with respect to the terms of any bilateral agreements with such countries.

Directs the Secretary of State to notify such committees within 90 days after receiving credible information regarding the unauthorized end-use or diversion of U.S. exports made pursuant to any agreement with a country to gain exemption from such licensing requirements.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Defense Trade Cooperation Act of 
2003''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Close defense cooperation between the United States and 
        each of the United Kingdom and Australia requires 
        interoperability among the armed forces.
            (2) The need for interoperability must be balanced with the 
        need for the appropriate and effective regulation of trade in 
        defense articles and defense services.
            (3) The Arms Export Control Act (22 U.S.C. 2751 et seq.) 
        represents a delegation to the executive branch of the 
        constitutional power of Congress to regulate commerce with 
        foreign nations.
            (4) Agreements to gain exemption from the International 
        Traffic in Arms Regulations must be submitted to Congress for 
        review.

SEC. 3. DEFINITIONS.

    In this Act--
            (1) the term ``appropriate congressional committees'' means 
        the Committee on International Relations of the House of 
        Representatives and the Committee on Foreign Relations of the 
        Senate;
            (2) the term ``defense articles'' has the meaning given the 
        term in section 47 of the Arms Export Control Act (22 U.S.C. 
        2794);
            (3) the term ``defense services'' has the meaning given the 
        term in section 47 of the Arms Export Control Act (22 U.S.C. 
        2794); and
            (4) the term ``International Traffic in Arms Regulations'' 
        means the regulations maintained under sections 120 through 130 
        of title 22, Code of Federal Regulations, or any successor 
        regulations.

SEC. 4. EXCEPTIONS TO BILATERAL AGREEMENT REQUIREMENTS FOR AUSTRALIA 
              AND THE UNITED KINGDOM.

    (a) Exceptions.--Subsection (j) of section 38 of the Arms Export 
Control Act (22 U.S.C. 2778) is amended--
            (1) by redesignating paragraph (4) as paragraph (5); and
            (2) by inserting after paragraph (3) the following new 
        paragraph (4):
            ``(4) Exceptions from bilateral agreement requirements.--
                    ``(A) Australia.--Subject to the provisions of the 
                Defense Trade Cooperation Act of 2003, the requirements 
                for a bilateral agreement described in paragraph (2)(A) 
                shall not apply to such a bilateral agreement between 
                the United States Government and the Government of 
                Australia with respect to transfers or changes in end 
                use within Australia of defense items that will remain 
                subject to the licensing requirements of this Act after 
                such agreement enters into force.
                    ``(B) United kingdom.--Subject to the provisions of 
                the Defense Trade Cooperation Act of 2003, the 
                requirements for a bilateral agreement described in 
                paragraphs (1)(A)(ii), (2)(A)(i), and (2)(A)(ii) shall 
                not apply to such a bilateral agreement between the 
                United States Government and the Government of the 
                United Kingdom for an exemption from the licensing 
                requirements of this Act.''.
    (b) Conforming Amendment.--Paragraph (2) of such subsection is 
amended in the matter preceding subparagraph (A) by striking ``A 
bilateral agreement'' and inserting ``Except as provided in paragraph 
(4), a bilateral agreement''.

SEC. 5. CERTIFICATIONS FOR THE UNITED KINGDOM AND AUSTRALIA.

    Not later than 30 days before authorizing an exemption from the 
licensing requirements of the International Traffic in Arms Regulations 
in accordance with any bilateral agreement entered into with the United 
Kingdom or Australia under section 38(j) of the Arms Export Control Act 
(22 U.S.C. 2778(j)), as amended by section 4 of this Act, the President 
shall certify to the appropriate congressional committees that such 
agreement--
            (1) is in the national interest of the United States and 
        will not in any way affect the goals and policy of the United 
        States as outlined in section 1 of the Arms Export Control Act 
        (22 U.S.C. 2751);
            (2) does not adversely affect the ability of the 
        International Traffic in Arms Regulations to provide consistent 
        and adequate controls for licensed exports of United States 
        defense items; and
            (3) will not adversely affect the duties or requirements of 
        the Secretary of State under the Arms Export Control Act.

SEC. 6. NOTIFICATION OF REGULATIONS PERMITTING BILATERAL LICENSING 
              EXEMPTIONS.

    Not later than 30 days before authorizing an exemption from the 
licensing requirements of the International Traffic in Arms Regulations 
in accordance with any bilateral agreement entered into with the United 
Kingdom or Australia under section 38(j) of the Arms Export Control Act 
(22 U.S.C. 2778(j)), as amended by section 4 of this Act, the President 
shall submit to the appropriate congressional committees the text of 
the regulations that authorize such a licensing exemption.

SEC. 7. REPORT ON ISSUES RAISED IN CONSULTATIONS PURSUANT TO BILATERAL 
              AGREEMENTS WITH AUSTRALIA AND THE UNITED KINGDOM.

    Not later than one year after the date of the enactment of this Act 
and annually thereafter for each of the following 5 years, the 
President shall submit to the appropriate congressional committees a 
report on issues raised during the previous year in consultations 
conducted under the terms of any bilateral agreement with Australia, or 
under the terms of any bilateral agreement with the United Kingdom, for 
exemption from the licensing requirements of the Arms Export Control 
Act (22 U.S.C. 2751 et seq.). Each report shall contain detailed 
information--
            (1) on any notifications or consultations between the 
        United States and the United Kingdom under the terms of any 
        agreement with the United Kingdom, or between the United States 
        and Australia under the terms of any agreement with Australia, 
        concerning the modification, deletion, or addition of defense 
        items on the United States Munitions List, the United Kingdom 
        Military List, or the Australian Defense and Strategic Goods 
        List;
            (2) listing all United Kingdom or Australia persons and 
        entities that have been designated as qualified persons 
        eligible to receive United States origin defense items exempt 
        from the licensing requirements of the Arms Export Control Act 
        under the terms of such agreements, and listing any 
        modification, deletion, or addition to such lists, pursuant to 
        the requirements of any agreement with the United Kingdom or 
        any agreement with Australia;
            (3) on consultations or steps taken pursuant to any 
        agreement with the United Kingdom or any agreement with 
        Australia concerning cooperation and consultation with either 
        government on the effectiveness of the defense trade control 
        systems of such government;
            (4) on provisions and procedures undertaken pursuant to--
                    (A) any agreement with the United Kingdom with 
                respect to the handling of United States origin defense 
                items exempt from the licensing requirements of the 
                Arms Export Control Act by persons and entities 
                qualified to receive such items in the United Kingdom; 
                and
                    (B) any agreement with Australia with respect to 
                the handling of United States origin defense items 
                exempt from the licensing requirements of the Arms 
                Export Control Act by persons and entities qualified to 
                receive such items in Australia;
            (5) on any new understandings, including the text of such 
        understandings, between the United States and the United 
        Kingdom concerning retransfer of United States origin defense 
        items made pursuant to any agreement with the United Kingdom to 
        gain exemption from the licensing requirements of the Arms 
        Export Control Act;
            (6) on consultations with the Government of the United 
        Kingdom or the Government of Australia concerning the legal 
        enforcement of any such agreements;
            (7) on United States origin defense items with respect to 
        which the United States has provided an exception under the 
        Memorandum of Understanding between the United States and the 
        United Kingdom and any agreement between the United States and 
        Australia from the requirement for United States Government re-
        export consent that was not provided for under United States 
        laws and regulations in effect on the date of the enactment of 
        this Act; and
            (8) on any significant concerns that have arisen between 
        the Government of Australia or the Government of the United 
        Kingdom and the United States Government concerning any aspect 
        of any bilateral agreement between such country and the United 
        States to gain exemption from the licensing requirements of the 
        Arms Export Control Act.

SEC. 8. SPECIAL REPORTS ON UNAUTHORIZED END-USE OR DIVERSION.

    The Secretary of State shall notify the appropriate congressional 
committees, in a manner consistent with ongoing efforts to investigate 
and bring civil or criminal charges regarding such matters, not later 
than 90 days after receiving any credible information regarding the 
unauthorized end-use or diversion of United States exports made 
pursuant to any agreement with a country to gain exemption from the 
licensing requirements of the Arms Export Control Act. Such 
notification may be made in classified or unclassified form and shall 
include--
            (1) a description of the good or service;
            (2) the United States origin of the good or service;
            (3) the authorized recipient of the good or service;
            (4) a detailed description of the unauthorized end-use or 
        diversion of the good or service, including any knowledge by 
        the United States exporter of such unauthorized end-use or 
        diversion;
            (5) any enforcement action taken by the Government of the 
        United States; and
            (6) any enforcement action taken by the government of the 
        recipient nation.