IIB

106TH CONGRESS

1ST SESSION H. R. 973

IN THE SENATE OF THE UNITED STATES

JUNE 16, 1999

Received; read twice and referred to the Committee on Foreign Relations

AN ACT

To modify authorities with respect to the provision of security assistance under the Foreign Assistance Act of 1961

and the Arms Export Control Act, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Security Assistance

3 Act of 1999’’.

4 SEC. 2. TABLE OF CONTENTS.

5 The table of contents of this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I—TRANSFERS OF EXCESS DEFENSE ARTICLES

Sec. 101. Excess defense articles for central European countries.

Sec. 102. Excess defense articles for certain independent States of the former

Soviet Union.

TITLE II—FOREIGN MILITARY SALES AUTHORITIES

Sec. 201. Termination of foreign military financed training.

Sec. 202. Sales of excess Coast Guard property.

Sec. 203. Competitive pricing for sales of defense articles.

Sec. 204. Reporting of offset agreements.

Sec. 205. Notification of upgrades to direct commercial sales.

Sec. 206. Expanded prohibition on incentive payments.

Sec. 207. Administrative fees for leasing of defense articles.

TITLE III—STOCKPILING OF DEFENSE ARTICLES FOR FOREIGN

COUNTRIES

Sec. 301. Additions to United States war reserve stockpiles for allies.

Sec. 302. Transfer of certain obsolete or surplus defense articles in the war reserves stockpile for allies.

TITLE IV—INTERNATIONAL ARMS SALES CODE OF CONDUCT ACT

OF 1999

Sec. 401. Short title.

Sec. 402. Findings.

Sec. 403. International arms sales code of conduct.

TITLE V—AUTHORITY TO EXEMPT INDIA AND PAKISTAN FROM

CERTAIN SANCTIONS

Sec. 501. Waiver authority.

Sec. 502. Consultation.

Sec. 503. Reporting requirement.

Sec. 504. Appropriate congressional committees defined.

TITLE VI—TRANSFER OF NAVAL VESSELS TO CERTAIN FOREIGN

COUNTRIES

Sec. 601. Authority to transfer naval vessels.

Sec. 602. Inapplicability of aggregate annual limitation on value of transferred

excess defense articles.
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Sec. 603. Costs of transfers.

Sec. 604. Expiration of authority.

Sec. 605. Repair and refurbishment of vessels in United States shipyards.

Sec. 606. Sense of the Congress relating to transfer of naval vessels and aircraft to the Government of the Philippines.

TITLE VII—MISCELLANEOUS PROVISIONS

Sec. 701. Annual military assistance reports.

Sec. 702. Publication of arms sales certifications.

Sec. 703. Notification requirements for commercial export of significant military equipment on United States Munitions List.

Sec. 704. Enforcement of Arms Export Control Act.

Sec. 705. Violations relating to material support to terrorists.

Sec. 706. Authority to consent to third party transfer of ex-U.S.S. Bowman

County to USS LST Ship Memorial, Inc.

Sec. 707. Exceptions relating to prohibitions on assistance to countries involved

in transfer or use of nuclear explosive devices.

Sec. 708. Continuation of the export control regulations under IEEPA.

1 TITLE I—TRANSFERS OF EXCESS

2 DEFENSE ARTICLES

3 SEC. 101. EXCESS DEFENSE ARTICLES FOR CENTRAL EURO4 PEAN COUNTRIES.

5 Section 105 of Public Law 104–164 (110 Stat. 1427)

6 is amended by striking ‘‘1996 and 1997’’ and inserting

7 ‘‘2000 and 2001’’.

8 SEC. 102. EXCESS DEFENSE ARTICLES FOR CERTAIN INDE9 PENDENT STATES OF THE FORMER SOVIET

10 UNION.

11 (a) USES FOR WHICH FUNDS ARE AVAILABLE.—

12 Notwithstanding section 516(e) of the Foreign Assistance

13 Act of 1961 (22 U.S.C. 2321j(e)), during each of the fiscal

14 years 2000 and 2001, funds available to the Department

15 of Defense may be expended for crating, packing, han16 dling, and transportation of excess defense articles trans17 ferred under the authority of section 516 of that Act to
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1 Georgia, Kazakhstan, Kyrgyzstan, Moldova,

2 Turkmenistan, Ukraine, and Uzbekistan.

3 (b) CONTENT OF CONGRESSIONAL NOTIFICATION.—

4 Each notification required to be submitted under section

5 516(f) of the Foreign Assistance Act of 1961 (22 U.S.C.

6 2321j(f)) with respect to a proposed transfer of a defense

7 article described in subsection (a) shall include an esti8 mate of the amount of funds to be expended under sub9 section (a) with respect to that transfer.

10 TITLE II—FOREIGN MILITARY

11 SALES AUTHORITIES

12 SEC. 201. TERMINATION OF FOREIGN MILITARY FINANCED

13 TRAINING.

14 Section 617 of the Foreign Assistance Act of 1961

15 (22 U.S.C. 2367) is amended—

16 (1) by inserting in the second sentence ‘‘and the

17 Arms Export Control Act’’ after ‘‘under this Act’’

18 the first place it appears;

19 (2) by striking ‘‘under this Act’’ the second

20 place it appears; and

21 (3) by inserting in the third sentence ‘‘and

22 under the Arms Export Control Act’’ after ‘‘this

23 Act’’.
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1 SEC. 202. SALES OF EXCESS COAST GUARD PROPERTY.

2 Section 21(a)(1) of the Arms Export Control Act (22

3 U.S.C. 2761(a)(1)) is amended in the text above subpara4 graph (A) by inserting ‘‘and the Coast Guard’’ after ‘‘De5 partment of Defense’’.

6 SEC. 203. COMPETITIVE PRICING FOR SALES OF DEFENSE

7 ARTICLES.

8 Section 22(d) of the Arms Export Control Act (22

9 U.S.C. 2762(d)) is amended—

10 (1) by striking ‘‘Procurement contracts’’ and

11 inserting ‘‘(1) Procurement contracts’’; and

12 (2) by adding at the end the following:

13 ‘‘(2) Direct costs associated with meeting additional

14 or unique requirements of the purchaser shall be allowable

15 under contracts described in paragraph (1). Loadings ap16 plicable to such direct costs shall be permitted at the same

17 rates applicable to procurement of like items purchased

18 by the Department of Defense for its own use.’’.

19 SEC. 204. REPORTING OF OFFSET AGREEMENTS.

20 (a) GOVERNMENT-TO-GOVERNMENT SALES.—Sec21 tion 36(b)(1) of the Arms Export Control Act (22 U.S.C.

22 2776(b)(1)) is amended in the fourth sentence by striking

23 ‘‘(if known on the date of transmittal of such certifi24 cation)’’ and inserting ‘‘and, if known on the date of trans25 mittal of such certification, a description of the offset
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1 agreement. Such description may be included in the classi2 fied portion of such numbered certification’’.

3 (b) COMMERCIAL SALES.—Section 36(c)(1) of the

4 Arms Export Control Act (22 U.S.C. 2776(c)(1)) is

5 amended in the second sentence by striking ‘‘(if known

6 on the date of transmittal of such certification)’’ and in7 serting ‘‘and, if known on the date of transmittal of such

8 certification, a description of the offset agreement. Such

9 description may be included in the classified portion of

10 such numbered certification’’.

11 SEC. 205. NOTIFICATION OF UPGRADES TO DIRECT COM12 MERCIAL SALES.

13 Section 36(c) of the Arms Export Control Act (22

14 U.S.C. 2776(c)) is amended by adding at the end the fol15 lowing new paragraph:

16 ‘‘(4) The provisions of subsection (b)(5) shall apply

17 to any equipment, article, or service for which a numbered

18 certification has been transmitted to Congress pursuant

19 to paragraph (1) in the same manner and to the same

20 extent as that subsection applies to any equipment, article,

21 or service for which a numbered certification has been

22 transmitted to Congress pursuant to subsection (b)(1).

23 For purposes of such application, any reference in sub24 section (b)(5) to ‘a letter of offer’ or ‘an offer’ shall be

25 deemed to be a reference to ‘a contract’.’’.
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1 SEC. 206. EXPANDED PROHIBITION ON INCENTIVE PAY2 MENTS.

3 (a) IN GENERAL.—Section 39A(a) of the Arms Ex4 port Control Act (22 U.S.C. 2779a(a)) is amended—

5 (1) by inserting ‘‘or licensed’’ after ‘‘sold’’; and

6 (2) by inserting ‘‘or export’’ after ‘‘sale’’.

7 (b) DEFINITION OF UNITED STATES PERSON.—Sec8 tion 39A(d)(3)(B)(ii) of the Arms Export Control Act (22

9 U.S.C. 2779a(d)(3)(B)(ii)) is amended by inserting ‘‘or by

10 an entity described in clause (i)’’ after ‘‘subparagraph

11 (A)’’.

12 SEC. 207. ADMINISTRATIVE FEES FOR LEASING OF DE13 FENSE ARTICLES.

14 Section 61(a) of the Arms Export Control Act (22

15 U.S.C. 2796(a)) is amended in paragraph (4) of the first

16 sentence by inserting after ‘‘including reimbursement for

17 depreciation of such articles while leased,’’ the following:

18 ‘‘a fee for the administrative services associated with proc19 essing such leasing,’’.
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1 TITLE III—STOCKPILING OF DE2 FENSE ARTICLES FOR FOR3 EIGN COUNTRIES

4 SEC. 301. ADDITIONS TO UNITED STATES WAR RESERVE

5 STOCKPILES FOR ALLIES.

6 Paragraph (2) of section 514(b) of the Foreign As7 sistance Act of 1961 (22 U.S.C. 2321h(b)(2)) is amended

8 to read as follows:

9 ‘‘(2)(A) The value of such additions to stock10 piles of defense articles in foreign countries shall not

11 exceed $340,000,000 for fiscal year 1999 and

12 $60,000,000 for fiscal year 2000.

13 ‘‘(B)(i) Of the amount specified in subpara14 graph (A) for fiscal year 1999, not more than

15 $320,000,000 may be made available for stockpiles

16 in the Republic of Korea and not more than

17 $20,000,000 may be made available for stockpiles in

18 Thailand.

19 ‘‘(ii) Of the amount specified in subparagraph

20 (A) for fiscal year 2000, not more than $40,000,000

21 may be made available for stockpiles in the Republic

22 of Korea and not more than $20,000,000 may be

23 made available for stockpiles in Thailand.’’.
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1 SEC. 302. TRANSFER OF CERTAIN OBSOLETE OR SURPLUS

2 DEFENSE ARTICLES IN THE WAR RESERVES

3 STOCKPILE FOR ALLIES.

4 (a) ITEMS IN THE KOREAN STOCKPILE.—

5 (1) IN GENERAL.—Notwithstanding section 514

6 of the Foreign Assistance Act of 1961 (22 U.S.C.

7 2321h), the President is authorized to transfer to

8 the Republic of Korea, in return for concessions to

9 be negotiated by the Secretary of Defense, with the

10 concurrence of the Secretary of State, any or all of

11 the items described in paragraph (2).

12 (2) COVERED ITEMS.—The items referred to in

13 paragraph (1) are munitions, equipment, and mate14 rial such as tanks, trucks, artillery, mortars, general

15 purpose bombs, repair parts, ammunition, barrier

16 material, and ancillary equipment, if such items

17 are—

18 (A) obsolete or surplus items;

19 (B) in the inventory of the Department of

20 Defense;

21 (C) intended for use as reserve stocks for

22 the Republic of Korea; and

23 (D) as of the date of enactment of this

24 Act, located in a stockpile in the Republic of

25 Korea.

26 (b) ITEMS IN THE THAILAND STOCKPILE.—
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1 (1) IN GENERAL.—Notwithstanding section 514

2 of the Foreign Assistance Act of 1961 (22 U.S.C.

3 2321h), the President is authorized to transfer to

4 Thailand, in return for concessions to be negotiated

5 by the Secretary of Defense, with the concurrence of

6 the Secretary of State, any or all of the items in the

7 WRS–T stockpile described in paragraph (2).

8 (2) COVERED ITEMS.—The items referred to in

9 paragraph (1) are munitions, equipment, and mate10 rial such as tanks, trucks, artillery, mortars, general

11 purpose bombs, repair parts, ammunition, barrier

12 material, and ancillary equipment, if such items

13 are—

14 (A) obsolete or surplus items;

15 (B) in the inventory of the Department of

16 Defense;

17 (C) intended for use as reserve stocks for

18 Thailand; and

19 (D) as of the date of enactment of this

20 Act, located in a stockpile in Thailand.

21 (c) VALUATION OF CONCESSIONS.—The value of con22 cessions negotiated pursuant to subsections (a) and (b)

23 shall be at least equal to the fair market value of the items

24 transferred. The concessions may include cash compensa-
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1 tion, services, waiver of charges otherwise payable by the

2 United States, and other items of value.

3 (d) PRIOR NOTIFICATIONS OF PROPOSED TRANS4 FERS.—Not less 30 days before making a transfer under

5 the authority of this section, the President shall transmit

6 to the chairmen of the Committee on Foreign Relations

7 of the Senate and the Committee on International Rela8 tions of the House of Representatives a detailed notifica9 tion of the proposed transfer, which shall include an iden10 tification of the items to be transferred and the conces11 sions to be received.

12 (e) TERMINATION OF AUTHORITY.—No transfer may

13 be made under the authority of this section more than

14 three years after the date of enactment of this Act.

15 TITLE IV—INTERNATIONAL

16 ARMS SALES CODE OF CON17 DUCT ACT OF 1999

18 SEC. 401. SHORT TITLE.

19 This title may be cited as the ‘‘International Arms

20 Sales Code of Conduct Act of 1999’’.

21 SEC. 402. FINDINGS.

22 The Congress finds the following:

23 (1) The proliferation of conventional arms and

24 conflicts around the globe are multilateral problems.

25 The only way to effectively prevent rogue nations
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1 from acquiring conventional weapons is through a

2 multinational ‘‘arms sales code of conduct’’.

3 (2) Approximately 40,000,000 people, over 75

4 percent of whom were civilians, died as a result of

5 civil and international wars fought with conventional

6 weapons during the 45 years of the cold war, dem7 onstrating that conventional weapons can in fact be

8 weapons of mass destruction.

9 (3) Conflict has actually increased in the post

10 cold war era.

11 (4) It is in the national security and economic

12 interests of the United States to reduce dramatically

13 the $840,000,000,000 that all countries spend on

14 armed forces every year, $191,000,000,000 of which

15 is spent by developing countries, an amount equiva16 lent to 4 times the total bilateral and multilateral

17 foreign assistance such countries receive every year.

18 (5) The Congress has the constitutional respon19 sibility to participate with the executive branch in

20 decisions to provide military assistance and arms

21 transfers to a foreign government, and in the formu22 lation of a policy designed to reduce dramatically the

23 level of international militarization.

24 (6) A decision to provide military assistance

25 and arms transfers to a government that is undemo-
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1 cratic, does not adequately protect human rights, or

2 is currently engaged in acts of armed aggression

3 should require a higher level of scrutiny than does

4 a decision to provide such assistance and arms

5 transfers to a government to which these conditions

6 do not apply.

7 SEC. 403. INTERNATIONAL ARMS SALES CODE OF CON8 DUCT.

9 (a) NEGOTIATIONS.—The President shall attempt to

10 achieve the foreign policy goal of an international arms

11 sales code of conduct with all Wassenaar Arrangement

12 countries. The President shall take the necessary steps to

13 begin negotiations with all Wassenaar Arrangement coun14 tries within 120 days after the date of the enactment of

15 this Act. The purpose of these negotiations shall be to con16 clude an agreement on restricting or prohibiting arms

17 transfers to countries that do not meet the following cri18 teria:

19 (1) PROMOTES DEMOCRACY.—The government

20 of the country—

21 (A) was chosen by and permits free and

22 fair elections;

23 (B) promotes civilian control of the mili24 tary and security forces and has civilian institu25 tions controlling the policy, operation, and
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1 spending of all law enforcement and security in2 stitutions, as well as the armed forces;

3 (C) promotes the rule of law, equality be4 fore the law, and respect for individual and mi5 nority rights, including freedom to speak, pub6 lish, associate, and organize; and

7 (D) promotes the strengthening of polit8 ical, legislative, and civil institutions of democ9 racy, as well as autonomous institutions to

10 monitor the conduct of public officials and to

11 combat corruption.

12 (2) RESPECTS HUMAN RIGHTS.—The govern13 ment of the country—

14 (A) does not engage in gross violations of

15 internationally recognized human rights,

16 including—

17 (i) extra judicial or arbitrary execu18 tions;

19 (ii) disappearances;

20 (iii) torture or severe mistreatment;

21 (iv) prolonged arbitrary imprisonment;

22 (v) systematic official discrimination

23 on the basis of race, ethnicity, religion,

24 gender, national origin, or political affili25 ation; and
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1 (vi) grave breaches of international

2 laws of war or equivalent violations of the

3 laws of war in internal conflicts;

4 (B) vigorously investigates, disciplines, and

5 prosecutes those responsible for gross violations

6 of internationally recognized human rights;

7 (C) permits access on a regular basis to

8 political prisoners by international humani9 tarian organizations such as the International

10 Committee of the Red Cross;

11 (D) promotes the independence of the judi12 ciary and other official bodies that oversee the

13 protection of human rights;

14 (E) does not impede the free functioning of

15 domestic and international human rights orga16 nizations; and

17 (F) provides access on a regular basis to

18 humanitarian organizations in situations of con19 flict or famine.

20 (3) NOT ENGAGED IN CERTAIN ACTS OF ARMED

21 AGGRESSION.—The government of the country is not

22 currently engaged in acts of armed aggression in

23 violation of international law.

24 (4) FULL PARTICIPATION IN UNITED NATIONS

25 REGISTER OF CONVENTIONAL ARMS.—The govern-
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1 ment of the country is fully participating in the

2 United Nations Register of Conventional Arms.

3 (b) REPORTS TO CONGRESS.—(1) In the report re4 quired in sections 116(d) and 502B of the Foreign Assist5 ance Act of 1961, the Secretary of State shall describe

6 the extent to which the practices of each country evaluated

7 meet the criteria in paragraphs (1) through (4) of sub8 section (a).

9 (2) Not later than 6 months after the commencement

10 of the negotiations under subsection (a), and not later

11 than the end of every 6-month period thereafter until an

12 agreement described in subsection (a) is concluded, the

13 President shall report to the appropriate committees of the

14 Congress on the progress made during these negotiations.

15 (c) DEFINITION.—The term ‘‘Wassenaar Arrange16 ment countries’’ means Argentina, Australia, Austria, Bel17 gium, Bulgaria, Canada, the Czech Republic, Denmark,

18 Finland, France, Germany, Greece, Hungary, Ireland,

19 Italy, Japan, Luxembourg, Netherlands, New Zealand,

20 Norway, Poland, Portugal, the Republic of Korea, Roma21 nia, Russia, Slovakia, Spain, Sweden, Switzerland, Tur22 key, Ukraine, and the United Kingdom.
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1 TITLE V—AUTHORITY TO EX2 EMPT INDIA AND PAKISTAN

3 FROM CERTAIN SANCTIONS

4 SEC. 501. WAIVER AUTHORITY.

5 (a) AUTHORITY.—

6 (1) IN GENERAL.—Except as provided in sub7 section (b), the President may waive, with respect to

8 India or Pakistan, the application of any sanction or

9 prohibition (or portion thereof) contained in section

10 101 or 102 of the Arms Export Control Act (22

11 U.S.C. 2799aa or 2799aa–1), section 620E(e) of the

12 Foreign Assistance Act of 1961 (22 U.S.C.

13 2375(e)), or section 2(b)(4) of the Export Import

14 Bank Act of 1945 (12 U.S.C. 635(b)(4)).

15 (2) EFFECTIVE DATE.—A waiver of the applica16 tion of a sanction or prohibition (or portion thereof)

17 under paragraph (1) shall be effective only for a pe18 riod ending on or before September 30, 2000.

19 (b) EXCEPTION.—The authority to waive the applica20 tion of a sanction or prohibition (or portion thereof) under

21 subsection (a) shall not apply with respect to a sanction

22 or prohibition contained in subparagraph (B), (C), or (G)

23 of section 102(b)(2) of the Arms Export Control Act.

24 (c) NOTIFICATION.—A waiver of the application of a

25 sanction or prohibition (or portion thereof) contained in
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1 section 541 of the Foreign Assistance Act of 1961 shall

2 not become effective until 15 days after notice of such

3 waiver has been reported to the congressional committees

4 specified in section 634A(a) of such Act in accordance

5 with the procedures applicable to reprogramming notifica6 tions under that section.

7 SEC. 502. CONSULTATION.

8 Prior to each exercise of the authority provided in

9 section 501, the President shall consult with the appro10 priate congressional committees.

11 SEC. 503. REPORTING REQUIREMENT.

12 Not later than August 31, 2000, the Secretary of

13 State shall prepare and submit to the appropriate congres14 sional committees a report on economic and national secu15 rity developments in India and Pakistan.

16 SEC. 504. APPROPRIATE CONGRESSIONAL COMMITTEES

17 DEFINED.

18 In this title, the term ‘‘appropriate congressional

19 committees’’ means—

20 (1) the Committee on International Relations

21 and the Committee on Appropriations of the House

22 of Representatives; and

23 (2) the Committee on Foreign Relations and

24 the Committee on Appropriations of the Senate.
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1 TITLE VI—TRANSFER OF NAVAL

2 VESSELS TO CERTAIN FOR3 EIGN COUNTRIES

4 SEC. 601. AUTHORITY TO TRANSFER NAVAL VESSELS.

5 (a) DOMINICAN REPUBLIC.—The Secretary of the

6 Navy is authorized to transfer to the Government of the

7 Dominican Republic the medium auxiliary floating dry

8 dock AFDM 2. Such transfer shall be on a grant basis

9 under section 516 of the Foreign Assistance Act of 1961

10 (22 U.S.C. 2321j).

11 (b) ECUADOR.—The Secretary of the Navy is author12 ized to transfer to the Government of Ecuador the ‘‘OAK

13 RIDGE’’ class medium auxiliary repair dry dock

14 ALAMOGORDO (ARDM 2). Such transfer shall be on a

15 sales basis under section 21 of the Arms Export Control

16 Act (22 U.S.C. 2761).

17 (c) EGYPT.—The Secretary of the Navy is authorized

18 to transfer to the Government of Egypt the ‘‘NEWPORT’’

19 class tank landing ships BARBOUR COUNTY (LST

20 1195) and PEORIA (LST 1183). Such transfers shall be

21 on a sales basis under section 21 of the Arms Export Con22 trol Act (22 U.S.C. 2761).

23 (d) GREECE.—(1) The Secretary of the Navy is au24 thorized to transfer to the Government of Greece the

25 ‘‘KNOX’’ class frigate CONNOLE (FF 1056). Such
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1 transfer shall be on a grant basis under section 516 of

2 the Foreign Assistance Act of 1961 (22 U.S.C. 2321j).

3 (2) The Secretary of the Navy is authorized to trans4 fer to the Government of Greece the medium auxiliary

5 floating dry dock COMPETENT (AFDM 6). Such trans6 fer shall be on a sales basis under section 21 of the Arms

7 Export Control Act (22 U.S.C. 2761).

8 (e) MEXICO.—The Secretary of the Navy is author9 ized to transfer to the Government of Mexico the ‘‘NEW10 PORT’’ class tank landing ship NEWPORT (LST 1179)

11 and the ‘‘KNOX’’ class frigate WHIPPLE (FF 1062).

12 Such transfers shall be on a sales basis under section 21

13 of the Arms Export Control Act (22 U.S.C. 2761).

14 (f) POLAND.—The Secretary of the Navy is author15 ized to transfer to the Government of Poland the ‘‘OLI16 VER HAZARD PERRY’’ class guided missile frigate

17 CLARK (FFG 11). Such transfer shall be on a grant basis

18 under section 516 of the Foreign Assistance Act of 1961

19 (22 U.S.C. 2321j).

20 (g) TAIWAN.—The Secretary of the Navy is author21 ized to transfer to the Taipei Economic and Cultural Rep22 resentative Office in the United States (which is the Tai23 wan instrumentality designated pursuant to section 10(a)

24 of the Taiwan Relations Act) the ‘‘NEWPORT’’ class

25 tank landing ship SCHENECTADY (LST 1185). Such
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1 transfer shall be on a sales basis under section 21 of the

2 Arms Export Control Act (22 U.S.C. 2761).

3 (h) THAILAND.—The Secretary of the Navy is au4 thorized to transfer to the Government of Thailand the

5 ‘‘KNOX’’ class frigate TRUETT (FF 1095). Such trans6 fer shall be on a grant basis under section 516 of the For7 eign Assistance Act of 1961 (22 U.S.C. 2321j).

8 (i) TURKEY.—The Secretary of the Navy is author9 ized to transfer to the Government of Turkey the ‘‘OLI10 VER HAZARD PERRY’’ class guided missile frigates

11 FLATLEY (FFG 21) and JOHN A. MOORE (FFG 19).

12 Such transfers shall be on a sales basis under section 21

13 of the Arms Export Control Act (22 U.S.C. 2761).

14 SEC. 602. INAPPLICABILITY OF AGGREGATE ANNUAL LIMI15 TATION ON VALUE OF TRANSFERRED EXCESS

16 DEFENSE ARTICLES.

17 The value of a vessel transferred to another country

18 on a grant basis under section 516 of the Foreign Assist19 ance Act of 1961 (22 U.S.C. 2321j) pursuant to authority

20 provided by section 601 shall not be counted for the pur21 poses of section 516(g) of the Foreign Assistance Act of

22 1961 in the aggregate value of excess defense articles

23 transferred to countries under that section in any fiscal

24 year.
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1 SEC. 603. COSTS OF TRANSFERS.

2 Any expense incurred by the United States in connec3 tion with a transfer of a vessel authorized by section 601

4 shall be charged to the recipient.

5 SEC. 604. EXPIRATION OF AUTHORITY.

6 The authority to transfer vessels under section 601

7 shall expire at the end of the 2-year period beginning on

8 the date of the enactment of this Act.

9 SEC. 605. REPAIR AND REFURBISHMENT OF VESSELS IN

10 UNITED STATES SHIPYARDS.

11 The Secretary of the Navy shall require, to the max12 imum extent possible, as a condition of a transfer of a

13 vessel under section 601, that the country to which the

14 vessel is transferred have such repair or refurbishment of

15 the vessel as is needed, before the vessel joins the naval

16 forces of that country, performed at a shipyard located

17 in the United States, including a United States Navy ship18 yard.

19 SEC. 606. SENSE OF THE CONGRESS RELATING TO TRANS20 FER OF NAVAL VESSELS AND AIRCRAFT TO

21 THE GOVERNMENT OF THE PHILIPPINES.

22 (a) SENSE OF THE CONGRESS.—It is the sense of the

23 Congress that—

24 (1) the President should transfer to the Govern25 ment of the Philippines, on a grant basis under sec26 tion 516 of the Foreign Assistance Act of 1961 (22
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1 U.S.C. 2321j), the excess defense articles described

2 in subsection (b); and

3 (2) the United States should not oppose the

4 transfer of F–5 aircraft by a third country to the

5 Government of the Philippines.

6 (b) EXCESS DEFENSE ARTICLES.—The excess de7 fense articles described in this subsection are the fol8 lowing:

9 (1) UH–1 helicopters, A–4 aircraft, and the

10 ‘‘POINT’’ class Coast Guard cutter POINT

11 EVANS.

12 (2) Amphibious landing craft, naval patrol ves13 sels (including patrol vessels of the Coast Guard),

14 and other naval vessels (such as frigates), if such

15 vessels are available.

16 TITLE VII—MISCELLANEOUS

17 PROVISIONS

18 SEC. 701. ANNUAL MILITARY ASSISTANCE REPORTS.

19 Section 655(b) of the Foreign Assistance Act of 1961

20 (22 U.S.C. 2415(b)) is amended to read as follows:

21 ‘‘(b) INFORMATION RELATING TO MILITARY ASSIST22 ANCE AND MILITARY EXPORTS.—Each such report shall

23 show the aggregate dollar value and quantity of defense

24 articles (including excess defense articles), defense serv25 ices, and international military education and training ac-
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1 tivities authorized by the United States and of such arti2 cles, services, and activities provided by the United States,

3 excluding any activity that is reportable under title V of

4 the National Security Act of 1947, to each foreign country

5 and international organization. The report shall specify,

6 by category, whether such defense articles—

7 ‘‘(1) were furnished by grant under chapter 2

8 or chapter 5 of part II of this Act or under any

9 other authority of law or by sale under chapter 2 of

10 the Arms Export Control Act;

11 ‘‘(2) were furnished with the financial assist12 ance of the United States Government, including

13 through loans and guarantees; or

14 ‘‘(3) were licensed for export under section 38

15 of the Arms Export Control Act.’’.

16 SEC. 702. PUBLICATION OF ARMS SALES CERTIFICATIONS.

17 Section 36 of the Arms Export Control Act (22

18 U.S.C. 2776) is amended in the second subsection (e) (as

19 added by section 155 of Public Law 104–164)—

20 (1) by inserting ‘‘in a timely manner’’ after ‘‘to

21 be published’’; and

22 (2) by striking ‘‘the full unclassified text of’’

23 and all that follows and inserting the following: ‘‘the

24 full unclassified text of—
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1 ‘‘(1) each numbered certification submitted pur2 suant to subsection (b);

3 ‘‘(2) each notification of a proposed commercial

4 sale submitted under subsection (c); and

5 ‘‘(3) each notification of a proposed commercial

6 technical assistance or manufacturing licensing

7 agreement submitted under subsection (d).’’.

8 SEC. 703. NOTIFICATION REQUIREMENTS FOR COMMER9 CIAL EXPORT OF SIGNIFICANT MILITARY

10 EQUIPMENT ON UNITED STATES MUNITIONS

11 LIST.

12 (a) NOTIFICATION REQUIREMENT.—Section 38 of

13 the Arms Export Control Act (22 U.S.C. 2778) is amend14 ed by adding at the end the following:

15 ‘‘(i) As prescribed in regulations issued under this

16 section, a United States person to whom a license has been

17 granted to export an item identified as significant military

18 equipment on the United States Munitions List shall, not

19 later than 15 days after the item is exported, submit to

20 the Department of State a report containing all shipment

21 information, including a description of the item and the

22 quantity, value, port of exit, and destination of the item.’’.

23 (b) QUARTERLY REPORTS TO CONGRESS.—Section

24 36(a) of the Arms Export Control Act (22 U.S.C.

25 2776(a)) is amended—
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1 (A) in paragraph (11), by striking ‘‘and’’

2 at the end;

3 (B) in paragraph (12), by striking ‘‘third4 party transfers.’’ and inserting ‘‘third-party

5 transfers; and’’; and

6 (C) by adding after paragraph (12) (but

7 before the last sentence of the subsection), the

8 following:

9 ‘‘(13) a report on all exports of significant mili10 tary equipment for which information has been pro11 vided pursuant to section 38(i).’’.

12 SEC. 704. ENFORCEMENT OF ARMS EXPORT CONTROL ACT.

13 The Arms Export Control Act (22 U.S.C. 2751 et

14 seq.) is amended in sections 38(e), 39A(c), and 40(k) by

15 inserting after ‘‘except that’’ each place it appears the fol16 lowing: ‘‘section 11(c)(2)(B) of such Act shall not apply,

17 and instead, as prescribed in regulations issued under this

18 section, the Secretary of State may assess civil penalties

19 for violations of this Act and regulations prescribed there20 under and further may commence a civil action to recover

21 such civil penalties, and except further that’’.

22 SEC. 705. VIOLATIONS RELATING TO MATERIAL SUPPORT

23 TO TERRORISTS.

24 Section 38(g)(1)(A)(iii) of the Arms Export Control

25 Act (22 U.S.C. 2778(g)(1)(A)(iii)) is amended by adding
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1 at the end before the comma the following: ‘‘or section

2 2339A of such title (relating to providing material support

3 to terrorists)’’.

4 SEC. 706. AUTHORITY TO CONSENT TO THIRD PARTY

5 TRANSFER OF EX-U.S.S. BOWMAN COUNTY TO

6 USS LST SHIP MEMORIAL, INC.

7 (a) FINDINGS.—Congress makes the following find8 ings:

9 (1) It is the long-standing policy of the United

10 States Government to deny requests for the re11 transfer of significant military equipment that origi12 nated in the United States to private entities.

13 (2) In very exceptional circumstances, when the

14 United States public interest would be served by the

15 proposed retransfer and end-use, such requests may

16 be favorably considered.

17 (3) Such retransfers to private entities have

18 been authorized in very exceptional circumstances

19 following appropriate demilitarization and receipt of

20 assurances from the private entity that the item to

21 be transferred would be used solely in furtherance of

22 Federal Government contracts or for static museum

23 display.
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1 (4) Nothing in this section should be construed

2 as a revision of long-standing policy referred to in

3 paragraph (1).

4 (5) The Government of Greece has requested

5 the consent of the United States Government to the

6 retransfer of HS Rodos (ex-U.S.S. Bowman County

7 (LST 391)) to the USS LST Ship Memorial, Inc.

8 (b) AUTHORITY TO CONSENT TO RETRANSFER.—

9 (1) IN GENERAL.—Subject to paragraph (2),

10 the President may consent to the retransfer by the

11 Government of Greece of HS Rodos (ex-U.S.S. Bow12 man County (LST 391)) to the USS LST Ship Me13 morial, Inc.

14 (2) CONDITIONS FOR CONSENT.—The President

15 should not exercise the authority under paragraph

16 (1) unless USS LST Memorial, Inc.—

17 (A) utilizes the vessel for public, nonprofit,

18 museum-related purposes;

19 (B) submits a certification with the import

20 application that no firearms frames or receivers,

21 ammunition, or other firearms as defined in

22 section 5845 of the National Firearms Act (26

23 U.S.C. 5845) will be imported with the vessel;

24 and
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1 (C) complies with regulatory policy re2 quirements related to the facilitation of moni3 toring by the Federal Government of, and the

4 mitigation of potential environmental hazards

5 associated with, aging vessels, and has a dem6 onstrated financial capability to so comply.

7 SEC. 707. EXCEPTIONS RELATING TO PROHIBITIONS ON AS8 SISTANCE TO COUNTRIES INVOLVED IN

9 TRANSFER OR USE OF NUCLEAR EXPLOSIVE

10 DEVICES.

11 (a) IN GENERAL.—Section 2 of the Agriculture Ex12 port Relief Act of 1998 (Public Law 105–194; 112 Stat.

13 627) is amended—

14 (1) by striking subsection (d); and

15 (2) by striking the second sentence of sub16 section (e).

17 (b) EFFECTIVE DATE.—The amendments made by

18 subsection (a) shall take effect on the date of the enact19 ment of this Act or September 30, 1999, whichever occurs

20 earlier.

21 SEC. 708. CONTINUATION OF THE EXPORT CONTROL REGU22 LATIONS UNDER IEEPA.

23 To the extent that the President exercises the au24 thorities of the International Emergency Economic Pow25 ers Act to carry out the provisions of the Export Adminis-
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1 tration Act of 1979 in order to continue in full force and

2 effect the export control system maintained by the Export

3 Administration regulations issued under that Act, includ4 ing regulations issued under section 8 of that Act, the fol5 lowing shall apply:

6 (1) The penalties for violations of the regula7 tions continued pursuant to the International Emer8 gency Economic Powers Act shall be the same as the

9 penalties for violations under section 11 of the Ex10 port Administration Act of 1979, as if that section

11 were amended—

12 (A) by amending subsection (a) to read as

13 follows:

14 ‘‘(a) IN GENERAL.—Except as provided in subsection

15 (b), whoever knowingly violates or conspires to or attempts

16 to violate any provision of this Act or any license, order,

17 or regulation issued under this Act—

18 ‘‘(1) except in the case of an individual, shall be

19 fined not more than $500,000 or 5 times the value

20 of any exports involved, whichever is greater; and

21 ‘‘(2) in the case of an individual, shall be fined

22 not more than $250,000 or 5 times the value of any

23 exports involved, whichever is greater, or imprisoned

24 not more than 5 years, or both.’’;

25 (B) in subsection (b)—
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1 (i) in paragraphs (1)(A) and (2)(A)

2 by striking ‘‘five times’’ and inserting ‘‘10

3 times’’;

4 (ii) in paragraph (1)(B) by striking

5 ‘‘$250,000’’ and inserting ‘‘$500,000’’;

6 and

7 (iii) in paragraph (2)(B) by striking

8 ‘‘$250,000, or imprisoned not more than 5

9 years’’ and inserting ‘‘$500,000, or impris10 oned not more than 10 years’’;

11 (C) in subsection (c)(1)—

12 (i) by striking ‘‘$10,000’’ and insert13 ing ‘‘$250,000’’; and

14 (ii) by striking ‘‘except that the civil

15 penalty’’ and all that follows through the

16 end of the paragraph and inserting ‘‘except

17 that the civil penalty for a violation of the

18 regulations issued pursuant to section 8

19 may not exceed $50,000.’’; and

20 (D) in subsection (h)(1), by inserting after

21 ‘‘Arms Export Control Act (22 U.S.C. 2778)’’

22 the following: ‘‘section 16 of the Trading with

23 the enemy Act (50 U.S.C. 16), or, to the extent

24 the violation involves the export of goods or

25 technology controlled under this or any other
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1 Act or defense articles or defense services con2 trolled under the Arms Export Control Act, sec3 tion 371 or 1001 of title 18, United States

4 Code,’’.

5 (2) The authorities set forth in section 12(a) of

6 the Export Administration Act of 1979 may be exer7 cised in carrying out the regulations continued pur8 suant to the International Emergency Economic

9 Powers Act.

10 (3) The provisions of sections 12(c) and 13 of

11 the Export Administration Act of 1979 shall apply

12 in carrying out the regulations continued pursuant

13 to the International Emergency Economic Powers

14 Act.

15 (4) The continuation of the provisions of the

16 Export Administration Regulations pursuant to the

17 International Emergency Economic Powers Act shall

18 not be construed as not having satisfied the require19 ments of that Act.

Passed the House of Representatives June 15, 1999.

Attest: JEFF TRANDAHL,

Clerk.