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[Senate Report 107-122]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 276
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-122

======================================================================

 
                    SECURITY ASSISTANCE ACT OF 2001

                                _______
                                

               December 11, 2001.--Ordered to be printed

                                _______
                                

          Mr. Biden, from the Committee on Foreign Relations,
                        submitted the following

                              R E P O R T

                         [To accompany S. 1803]

    The Committee on Foreign Relations, having had under 
consideration an original bill (S. 1803) to authorize 
appropriations under the Arms Export Control Act and the 
Foreign Assistance Act of 1961 for security assistance for 
fiscal years 2002 and 2003, and for other purposes, reports 
favorably thereon and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Background and Purpses of the Bill...............................1
 II. Committee Action.................................................3
III. Section-by-Section Analysis......................................3
 IV. Regulatory Impact Statement.....................................30
  V. Cost Estimate...................................................30
 VI. Changes in Existing Law.........................................36

                 I. Background and Purposes of the Bill

    The Committee on Foreign Relations is the committee of 
jurisdiction in the Senate for most foreign military 
assistance, including Foreign Military Financing (FMF) and 
International Military Education and Training (IMET), for 
international arms transfers, and for a variety of arms 
control, nonproliferation and anti-terrorism programs under the 
purview of the Under Secretary of State for Arms Control and 
International Security. The principal laws governing these 
functions are the Foreign Assistance Act of 1961, as Amended 
(P.L. 87-195), and the Arms Export Control Act (P.L. 90-629). 
The principal means of authorizing these programs and up-dating 
the law in this area are regular security assistance acts or 
similar provisions incorporated in Department of State 
authorization acts.
    The Security Assistance Act of 2001 covers all the above 
programs and includes both routine adjustments and some 
potentially significant initiatives. For example, a 5-year 
National Security Assistance Strategy is mandated, so as to 
provide country-by-country foreign policy guidance to a 
function that may tend otherwise to operate on the basis more 
of military or bureaucratic concerns. Several provisions are 
intended to streamline the arms export control system, so as to 
make it more efficient and responsive to competitive 
requirements in a global economy, without sacrificing controls 
that serve foreign policy or nonproliferation purposes.
    Nonproliferation and anti-terrorism have been a major focus 
of Foreign Relations Committee interest in the past year. 
Nonproliferation programs in the former Soviet Union were the 
subject of a hearing on March 28, 2001, that featured former 
Senator Howard Baker and former White House counsel Lloyd 
Cutler, and were discussed in other hearings with the Secretary 
of State and others. The threat of bioterrorism was addressed 
in a hearing on September 5, 2001, that featured three 
participants in the ``Dark Winter'' scenario exercise 
(involving a notional smallpox attack on three U.S. cities): 
former Senator Sam Nunn, former Director of Central 
Intelligence R. James Woolsey, Jr., and Dr. Donald A. 
Henderson, who led the World Health Organization's smallpox 
eradication campaign.
    The Security Assistance Act of 2001 includes several 
nonproliferation and anti-terrorism measures. Among these, the 
ban on arms sales to state supporters of terrorism (in section 
40(d) of the Arms Export Control Act) is broadened to include 
states engaging in the proliferation of chemical, biological or 
radiological weapons. An interagency committee is mandated to 
coordinate nonproliferation programs directed at the 
independent states of the former Soviet Union. The Secretary of 
State is encouraged to seek an increase in the regular budget 
of the International Atomic Energy Agency, beyond that required 
to keep pace with inflation, and funds are authorized for the 
U.S. share of such an enlarged budget. The President is 
authorized to offer Soviet-era debt reduction to the Russian 
Federation in the context of an arrangement whereby a 
significant proportion of the savings to the Russian Federation 
would be invested in agreed nonproliferation programs or 
projects, provided that the Russian Federation makes material 
progress in stemming Russian proliferation to state sponsors of 
terrorism. And a statement of U.S. policy on nuclear and 
missile proliferation in South Asia, incorporating a list of 
objectives to be achieved by India and Pakistan by the end of 
fiscal year 2003, underscores the Committee's belief in the 
critical importance of nonproliferation to U.S. national 
security interests and regional stability.

                          II. Committee Action

    On November 14, 2001, Chairman Joseph R. Biden, Jr., along 
with the Ranking Republican Member, Jesse Helms, introduced 
this original bill in Committee. The Committee subsequently 
debated and amended the measure and ordered reported this bill 
by a roll-call vote of 19-0 (ayes: Mr. Biden, Mr. Sarbanes, Mr. 
Dodd, Mr. Kerry, Mr. Feingold, Mr. Wellstone, Mrs. Boxer, Mr. 
Torricelli, Mr. Nelson, Mr. Rockefeller, Mr. Helms, Mr. Lugar, 
Mr. Hagel, Mr. Smith, Mr. Frist, Mr. Chafee, Mr. Allen, Mr. 
Brownback, and Mr. Enzi).

                    III. Section-by-Section Analysis

Sec. 1. Short title; table of contents

    This Act may be cited as the ``Security Assistance Act of 
2001''.

Sec. 2. Definitions

    This section sets forth some routine definitions. The term 
``appropriate committees of Congress'' means the Committee on 
Foreign Relations of the Senate and the Committee on 
International Relations of the House of Representatives.

 TITLE I--VERIFICATION OF ARMS CONTROL AND NONPROLIFERATION AGREEMENTS

Sec. 101. Verification and Compliance Bureau personnel

    The Bureau of Verification and Compliance in the Department 
of State has been unable, with its current personnel and its 
wide responsibilities (which include some services of common 
concern for other bureaus), to fully support compliance 
analysis and enforcement, as well as U.S. negotiations in which 
verification is an important issue. The Committee therefore 
authorized a larger budget than requested for this Bureau, 
including $1.8 million for additional personnel, which should 
remedy the problem.

Sec. 102. Key Verification Assets Fund

    The Key Verification Assets Fund has had few funds since it 
was created pursuant to section 1111 of the Arms Control and 
Nonproliferation Act of 1999, but has demonstrated an ability 
to leverage the work of other departments and agencies in 
technical aspects of arms control verification. Too often, 
Department of State funds are required to keep other 
departments' or agencies' verification assets functioning. 
While this is a valid and vital use of the Key Verification 
Assets Fund, the Committee hopes that most of the increased 
funds authorized in this section can be used to promote 
improved verification, rather than merely to prevent 
significant degradation of U.S. verification capabilities.

Sec. 103. Revised verification and compliance reporting requirements

    Under current law, a report on arms control, 
nonproliferation, and disarmament policy and compliance is due 
on January 31 of each year. This objective has rarely been 
achieved, if ever. The Committee expects the deadline of April 
15 set by this section to be a more realistic date and urges 
the executive branch to honor this revised requirement.

               TITLE II--MILITARY AND RELATED ASSISTANCE

      Subtitle A--Foreign Military Sales and Financing Authorities

Sec. 201. Authorization of appropriations

    The fiscal year 2002 authorization of $3,674,000,000 is the 
same amount authorized for that year in last year's 
legislation. The fiscal year 2003 authorization of 
$4,267,000,000 is consistent with Department of State and 
Department of Defense planning.

Sec. 202. Relationship of foreign military sales to United States 
        nonproliferation interests

    Section 4 of the Arms Export Control Act permits U.S. arms 
sales or leases ``solely for internal security, for legitimate 
self-defense, to permit the recipient country to participate in 
regional or collective arrangements or measures consistent with 
the Charter of the United Nations, or otherwise to permit the 
recipient country to participate in collective measures 
requested by the United Nations for the purpose of maintaining 
or restoring international peace and security, or for the 
purpose of enabling foreign military forces in less developed 
friendly countries to construct public works and to engage in 
other activities helpful to the economic and social development 
of such friendly countries.'' The Committee's amendment to that 
section makes clear that such sales or leases are also 
permitted ``for preventing or hindering the proliferation of 
weapons of mass destruction and of the means for delivering 
such weapons.'' The urgent and significant nature of these 
threats to U.S. national security makes it necessary to marshal 
all available programs, including arms transfers, as 
appropriate, to halt proliferation.

Sec. 203. Special Defense Acquisition Fund for nonproliferation and 
        counter-narcotics purposes

    The Special Defense Acquisition Fund was established 20 
years ago by Chapter 5 of the Arms Export Control Act, as a 
revolving fund to finance Department of Defense acquisition of 
defense articles and defense services for transfer to other 
countries. The original purposes were to keep certain defense 
articles and defense services on continuous order and to 
acquire defense articles particularly suited for use for 
narcotics control purposes.
    Section 203 revives the Special Defense Acquisition Fund, 
limits its size to $200,000,000, establishes that funds may be 
made available for obligation through regular legislation, and 
authorizes $20,000,000 for fiscal year 2003. It also provides 
that the Fund shall be used for acquiring defense articles and 
defense services for use for nonproliferation and export 
control purposes, such as weapons of mass destruction materials 
detection equipment. Recent concerns that Osama bin Laden may 
have acquired chemical, biological, or even radiological or 
nuclear materials from independent states in the former Soviet 
Union only highlight the urgent need to improve the 
nonproliferation and export control capabilities of countries 
around the world. Detection equipment for that purpose will be 
needed in many locations, so use of a revolving fund to finance 
its bulk acquisition would be a sensible approach to meeting a 
pressing national security need.

Sec. 204. Representation allowances

    This section amends section 43(c) of the Arms Export 
Control Act (22 U.S.C. 2792) to increase the annual limit on 
the amount of funds that may be expended for official reception 
and representation expenses under the Arms Export Control Act 
from $72,500 to $86,500. Reception and representational 
expenses are an important part of successfully conducting the 
Security Cooperation Program. Since 1993, the amount authorized 
for these expenses has remained at the same ceiling of $72,500.
    An additional increase for representational and 
entertainment expenses is being sought by the Department of 
Defense through the fiscal year 2002 budget request for the 
Foreign Military Financing (FMF) Program included in the 
Foreign Operations Appropriation. That FMF request, combined 
with section 204, results in the total representational fund 
budget used by the Security Cooperation Organizations, to 
include the Security Assistance Offices (SAOs). Since 1993, an 
additional 33 SAOs have been opened. These additional 33 SAOs 
require new representational funding that is comparable to what 
SAOs in other countries receive, which is $2,000 per office. 
The Department of Defense has indicated that section 204 will 
result in no additional costs to the Department.

Sec. 205. Arms Export Control Act prohibition on transactions with 
        countries that have repeatedly provided support for acts of 
        international terrorism

    Section 40 of the Arms Export Control Act (or AECA, 22 
U.S.C. 2780) prohibits various arms transactions with certain 
countries, and subsection (d) of that section applies those 
limits to any country that the Secretary of State determines 
has repeatedly provided support for acts of international 
terrorism. Such acts shall include all activities that the 
Secretary determines willfully aid or abet the international 
proliferation of nuclear explosive devices to individuals or 
groups or willfully aid or abet an individual or groups in 
acquiring unsafeguarded special nuclear material.
    The Committee believes that willfully aiding or abetting 
the proliferation of chemical, biological, or radiological 
agents to individuals or groups is an activity equally 
deserving of sanction under section 40 of AECA. Inclusion of 
the term ``radiological agents'' is not meant to bar legitimate 
and legal transfers of radiological material, such as nuclear 
reactor fuel or medical or industrial isotopes, for purely 
peaceful purposes. The Committee does intend, however, that if 
a country contributes to the proliferation of such materials to 
be used as or in radiological weapons, or with the knowledge or 
reason to believe that they would be so used, then section 40 
of AECA should be applied.

       Subtitle B--International Military Education and Training

Sec. 211. Authorization of appropriations

    The fiscal year 2002 authorization of $75,000,000 is the 
same amount authorized for that year in last year's 
legislation. The fiscal year 2003 authorization of $85,290,000 
is consistent with Department of State and Department of 
Defense planning.

Sec. 212. Annual human rights reports

    Current U.S. law requires that prospective International 
Military Education and Training (IMET) participants be screened 
to ensure that they do not have records of human rights 
violations. There is no requirement, however, to monitor their 
human rights records after receiving U.S. training. Last year, 
Congress mandated a new Department of Defense database on IMET 
participants after December 31, 2000, which does not require 
new collection of information but should help the Defense 
Department to keep track of the training it provides and where 
its former students go as their careers progress.
    The Committee believes that if a former IMET participant is 
found to have been involved in a human rights violation that is 
to be reported in the Department of State's annual human rights 
report, the fact of previous IMET training should be included 
in that report. To assist the Secretary of State in determining 
whether there was any such involvement, section 212 authorizes 
the Secretary to obtain from the Secretary of Defense annually 
any IMET participant database information with respect to a 
list containing the names of foreign personnel or military 
units. If it should be determined as a result that a former 
IMET participant was involved in a human rights violation, the 
Department of Defense shall update its IMET participant 
database to reflect that information. This process will give 
policy-makers--and especially the Department of Defense 
itself--new information with which to evaluate and improve the 
effectiveness of IMET courses.

          Subtitle C--Security Assistance for Select Countries

Sec. 221. Security assistance for Israel and Egypt

    Last year, the United States began to reduce Economic 
Support Funds (ESF) assistance to the countries of Israel and 
Egypt and to replace 50 percent of the reductions in ESF for 
Israel with an increase in the Foreign Military Financing (FMF) 
funds for that country. Section 221 continues that process. 
Section 221(b) permits $100,000,000 of the FMF assistance for 
Israel to be used to establish a U.S. production line for the 
Arrow missile, in cooperation with a U.S. company. This should 
enable Israel to speed up the production and deployment of its 
missile defense system. Section 221(c) makes available to 
Israel as grant assistance certain funds that were returned to 
the United States by Israel last year due to a general 
recision. The Committee believes that maintaining its 
assistance to Israel at the level originally requested by the 
President is in the national security interests of the United 
States.

Sec. 222. Security assistance for Greece and Turkey

    This section continues policies established previously, 
notably in section 512 of the Security Assistance Act of 2000. 
The fiscal year 2002 authorizations are the same amounts 
authorized for that year in last year's legislation. The fiscal 
year 2003 authorizations reflect a multiplier that is 
consistent with overall Department of State and Department of 
Defense planning.

Sec. 223. Security assistance for other countries

    The Committee has traditionally specified security 
assistance amounts for a number of countries of particular 
concern. In this year's bill, Foreign Military Financing (FMF) 
and International Military Education and Training (IMET) 
amounts are specified for the Baltic states, Bulgaria, the 
Czech Republic, Georgia, Hungary, Jordan, Malta, the 
Philippines, Poland, Romania, Slovakia and Slovenia.
    Actual FMF or IMET expenditures on a given country often 
vary significantly from those forecast at the beginning of a 
fiscal year. Section 223(c) requires that the President submit 
to the appropriate committees of Congress a written explanation 
of the reasons for any determination to exceed or fall short of 
mandated FMF or IMET levels for a country specified in this 
section by more than 5 percent.

      Subtitle D--Excess Defense Article and Drawdown Authorities

Sec. 231. Excess defense articles for certain other countries

    The Excess Defense Articles (EDA) program enables the 
United States to meet foreign policy objectives while 
simultaneously supporting U.S. friends and allies by improving 
their defense capabilities and enhancing interoperability, and 
to reduce U.S. stocks of excess equipment.
    Most Central and Southern European and Newly Independent 
States countries urgently seek U.S. EDA to replace former 
Soviet equipment as both a political statement and a way to 
enhance interoperability with NATO. In addition, certain 
countries, such as Estonia, Latvia and Lithuania, continue to 
require EDA as they build their defense forces from zero. 
Unfortunately, most of these countries cannot afford the 
packing, crating, handling and transportation (PCH&T) costs 
associated with EDA as they convert to market economies. 
Without extended authority to assume those costs, the EDA 
program becomes virtually unavailable to these countries.
    In the Fiscal Year 2000 and 2001 Foreign Relations 
Authorization Act, Title XII--Security Assistance, sections 
1211 and 1212, contained in the Fiscal Year 2001 Appropriations 
Act, P.L. 106-113, such authority was granted for fiscal year 
2000 and fiscal year 2001 for EDA provided to Estonia, Georgia, 
Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, 
Poland, Slovakia, Ukraine, and Uzbekistan. The same authority 
was provided for Mongolia for fiscal year 2001 and fiscal year 
2002 in the Security Assistance Act of 2000, Section 707, P.L. 
106-80.
    Section 231 expands these current authorities to fiscal 
year 2002 and fiscal year 2003 for certain specified Central 
and Southern European and certain other countries. Newly 
included countries include India, Pakistan, Tajikistan and 
Turkmenistan, all of which have offered assistance in the war 
on international terrorism.

Sec. 232. Annual briefing on projected availability of excess defense 
        articles

    Given the increasing strategic role that the transfer of 
Excess Defense Articles (EDA) plays in U.S. relations with 
other countries, the Committee believes that such transfers 
should be the product of strategic thinking and planning. In 
order to encourage such a process, section 232 mandates an 
annual briefing for the appropriate committees of Congress on 
defense articles that are expected to become available during 
the coming fiscal year. The Department of Defense shall provide 
a similar briefing to relevant offices of the Department of 
State, contributing to preparation of the National Security 
Assistance Strategy mandated by section 501 of this Act.

Sec. 233. Expanded drawdown authority

    This section allows defense drawdowns to include defense or 
other articles or commodities, or defense or other services, 
that are acquired by contract for the purposes of the drawdown 
in question, if that would be cheaper than providing such 
articles or services from existing agency assets. Existing law 
already allows an agency to contract specially for the supply 
of commercial transportation and related services, if that 
would save the United States Government money.

Sec. 234. Duration of security assistance leases

    Section 2796(b) of title 22, U.S.C., currently provides 
that the President may lease defense articles from the stocks 
of the Department of Defense to eligible foreign countries and 
international organizations for a fixed duration of not more 
than five years. Some defense articles require major 
refurbishment work prior to delivery to the eligible foreign 
country or international organization. By including the time 
needed to complete this required refurbishment work in the 
five-year limit on the overall lease, the actual amount of time 
the eligible party has the beneficial use of the leased defense 
article is often significantly reduced. Section 234 provides 
authority to the President to enter into such leases for fixed 
periods of time longer than five years, with the period of time 
for which a particular lease may exceed five years being 
defined by the time required to perform the required 
refurbishment work. The recipient of the leased defense article 
will pay for the actual cost of the refurbishment work.
    In recent years, as an economical and expeditious way to 
acquire modern defense capabilities to meet their defense 
requirements in the near term, several NATO allies have sought 
leases of non-excess U.S. military fighter aircraft, ships and 
tanks that needed major refurbishment. As a result, these 
allies have committed millions of dollars for the refurbishment 
work as well as for the actual lease payments for the defense 
articles. In addition, they agree to return the refurbished 
defense articles in as good a condition as when received by 
them while taking into consideration normal wear and tear. 
These major refurbishments may take 18 months or even more, 
such as with military fighter aircraft. Including the 
refurbishment time in the five-year lease limit can and often 
does seriously impact the actual beneficial time of use by the 
recipient.
    In addition, adding a definition of ``major refurbishment 
work'' clearly identifies the specific activity that is 
acceptable outside the five-year lease limit and articulates 
the minimum period of time for such activity. The specific 
activity must be ``major refurbishment work'' and the minimum 
period of time for such activity is established at six months. 
The time required to complete the major refurbishment work, 
rather than the costs associated with this activity, must be 
the defining point because it is the delay in delivery and the 
subsequent reduced amount of time of beneficial use by the 
recipient that is the major concern.

            Subtitle E--Other Political-Military Assistance

Sec. 241. Destruction of surplus weapons stockpiles

    From time to time, the United States has supported programs 
in developing countries to buy back and/or destroy small arms, 
light weapons, and other munitions that might otherwise be used 
in criminal activities or ethnic conflicts. Such programs can 
be especially useful in a country that is emerging from a 
period of civil war, as was the case in the country of Mali a 
few years ago when a U.S.-assisted gun buy-back program 
succeeded in removing from circulation a large number of 
weapons.
    The Committee believes that carefully chosen programs of 
this sort should be encouraged. Since such programs may be 
vital to giving a country the stability that is needed for 
social and economic development, the Committee believes also 
that judicious use of development assistance funds for this 
purpose is warranted. Section 241 authorizes the use of up to 
$10,000,000 annually for this purpose in fiscal years 2002 and 
2003.

Sec. 242. Identification of funds for demining programs

    One of the great human tragedies of the last generation has 
been the tremendous damage caused by anti-personnel land mines 
left over from the world's many wars, both international and 
civil. From Angola and Mozambique to Afghanistan, Cambodia and 
Nicaragua, land mines have wreaked havoc on civilian 
populations and hindered rural reconstruction long after the 
end of the wars in which they were deployed.
    The United States has been a leading supporter of 
humanitarian demining, but clearly more could be done. Section 
242 continues the $40,000,000 program funded under the 
Nonproliferation, Anti-terrorism, Demining and Related Programs 
(NADR) budget element. The Committee believes that in addition 
to this effort, however, some use of development assistance 
funds for this purpose is warranted. Section 242 also 
authorizes, therefore, the use of up to $40,000,000 of such 
funds annually for this purpose in fiscal years 2002 and 2003.

                  Subtitle F--Antiterrorism Assistance

Sec. 251. Authorization of appropriations

    These programs are maintained at the current level of 
effort, with a small increase for inflation. The Committee has 
consistently supported the Department of State's antiterrorism 
assistance programs, which play an important role in improving 
other countries' ability to protect U.S. diplomatic and 
military personnel overseas.

Sec. 252. Specific program objectives

    Both Pakistan and the Philippines face international 
terrorist groups on their territory and are used by such groups 
as transit and meeting points. Section 272 allows $2,000,000 in 
antiterrorism assistance funds to be used to provide these 
countries the Pisces system to provide their border security 
personnel more timely information on terrorist groups.

                       Subtitle G--Other Matters

Sec. 261. Revised military assistance reporting requirements

    Section 656 of the Foreign Assistance Act of 1961 requires 
a detailed annual report on all military training provided to 
foreign military personnel, with all unclassified portions of 
that report also being posted on the Internet. The executive 
branch has noted, and the Committee agrees, that such training 
provided to our closest allies is rarely an issue of concern. 
In the interests of avoiding unnecessary paperwork, therefore, 
section 261 relieves the executive branch of this burden for 
training provided to NATO and major non-NATO allies, unless the 
chairman or ranking minority member of the Senate Foreign 
Relations Committee or the House International Relations 
Committee requests, in writing and at least 45 days prior to 
the due date for the report, inclusion in the report of one or 
more particular countries from this group.

       TITLE III--NONPROLIFERATION AND EXPORT CONTROL ASSISTANCE

                     Subtitle A--General Provisions

Sec. 301. Authorization of appropriations

    This section authorizes funds for Department of State non-
proliferation and export control programs and specifies funding 
amounts for an export control training program established by 
section 305 of this Act ($2,000,000) and for the International 
Science and Technology Centers (ISTC) program that creates jobs 
for former weapons experts in the former Soviet Union 
($65,000,000). The ISTC authorization is substantially higher 
than the amount requested. The Committee is confident that the 
full $65,000,000 can usefully be invested in viable projects, 
many of which have already been proposed and vetted by ISTC 
staff. The ISTC program has been noted for its pathbreaking 
work on exempting its investments from Russian federal taxation 
and using periodic audits both to monitor projects and to train 
recipients in modern business methods.

Sec. 302. Interagency program to prevent diversion of sensitive United 
        States technology

    The Department of Commerce and the U.S. Customs Service 
have much to contribute to U.S. nonproliferation and export 
control programs. These organizations already play a major role 
in training foreign government export control personnel, under 
a program funded in the Department of State, and they also 
contribute personnel who serve in a diplomatic capacity and 
forge cooperative ties with export control officials in foreign 
countries.
    The Committee believes that still more can and should be 
done. One possibility is for the State Department to develop 
joint programs with the Department of Commerce and/or the U.S. 
Customs Service to safeguard U.S. technology and sensitive 
items. Another is for the Department of State to hire retired 
inspectors and investigators of the Customs Service and the 
Bureau of Export Enforcement to serve in U.S. missions 
overseas, notably in countries that are frequently transited by 
proliferation-related shipments of cargo. Section 302 
authorizes both such programs and provides funding for them. 
The Committee does not intend that these programs will take 
away from any existing programs or authorities. Rather, these 
are intended to be two very specific additions to the 
nonproliferation and export control tool kit.

Sec. 303. Joint State Department-Defense Department programs

    Sometimes a Department of Defense counterproliferation 
program can provide useful material or equipment for use in 
Department of State nonproliferation efforts. One example might 
be a battlefield sensor of chemical, biological, nuclear or 
radiological weapons that could be modified for use by friendly 
foreign countries in their export control programs. The 
Committee believes that the Secretary of State should have the 
ability to offer supplementary funding to the Department of 
Defense in such a case, so as to take full advantage of Defense 
Department programs that can serve State Department needs. 
Section 303 provides $1,000,000 annually for this purpose.

Sec. 304. Nonproliferation technology acquisition programs for friendly 
        foreign countries

    The Committee on Foreign Relations has consistently 
supported programs to improve the border security and export 
control programs of friendly foreign countries. Providing 
reasonably sophisticated detection equipment to those countries 
can help stem the flow of materials usable in weapons of mass 
destruction, be they radioactive materials or equipment for the 
manufacture of chemical weapons. To this end, section 304 
authorizes the Department of State to spend up to $5 million 
annually to buy nuclear, chemical and biological detection 
systems for other countries' export control services, as well 
as $10 million a year for x-ray systems to image sea-cargo 
containers. The Committee does not intend that these programs 
will take away from any existing programs or authorities. 
Rather, these are intended to be two very specific additions to 
the nonproliferation and export control tool kit.
    To make use of these funds, however, the Secretary must 
have first developed and budgeted for a multiyear training plan 
to assist foreign personnel in the utilization of these 
detection systems. This will guard against the provision of 
equipment that is never used or that falls quickly into 
disrepair. The Secretary is also directed to use the Special 
Defense Acquisition Fund (which is addressed in section 203 of 
this Act), to the maximum extent practicable, in fiscal year 
2003.

Sec. 305. International nonproliferation and export control training

    The Department of State, working with other U.S. Government 
agencies and with governments and non-governmental 
organizations in friendly countries, has done much to improve 
export control law, regulations, procedures and equipment 
around the world--and most notably in the independent states of 
the former Soviet Union. The Committee on Foreign Relations has 
supported these programs and worked to expand them. The 
Committee believes that such training, and especially training 
conducted in the United States where participants can observe a 
sophisticated export control system first-hand, deserves 
specific attention in the law. Section 305 therefore adds 
nonproliferation export control training to the activities 
specifically authorized by Chapter 9 of Part II of the Foreign 
Assistance Act.
    Education and training conducted under this section shall 
be of a technical nature, emphasizing techniques for detecting, 
deterring, monitoring, interdicting, and countering 
proliferation. The Committee sees education and training in 
export control law, regulation, organization and procedures as 
fully compliant with this requirement, although we must also 
train foreign personnel in detection and investigative 
techniques. The Committee also intends that this section not 
interfere with education and training programs that take place 
overseas. Rather, it reflects the Committee's belief that one 
important element in export control training consists of 
exposing participants to how our own export control system 
combines effectiveness with adherence to democratic principles 
and the rule of law.

Sec. 306. Relocation of scientists

    From 1992 through its expiration in 1996, the Soviet 
Scientists Immigration Act (P.L. 102-509) allowed a total of up 
to 750 highly skilled scientists and their families to be 
admitted to the United States without meeting the normal 
requirement that an alien's services in the sciences, arts, or 
business be sought by an employer in the United States. Section 
306 revives this law for another 4 years and increases to 950 
the total number of such scientists who, over the two 4-year 
periods, having met criteria set by the Attorney General, may 
be so admitted. The Attorney General is directed to consult 
with other departments and agencies to determine whether any 
changes are needed in the regulations governing this program, 
and use of this provision is denied to a scientist who has 
previously been granted the status of an alien lawfully 
admitted for permanent residence.

Sec. 307. Audits of the International Science and Technology Centers 
        Program

    Nonproliferation assistance programs in the former Soviet 
Union can be very difficult to administer. Funding agencies 
must guard not only against inefficiency or corruption, but 
also against use of their funds by individuals or institutes to 
support continued work on weapons of mass destruction--all the 
while endeavoring to create useful and lasting careers for 
former weapons scientists who, for reasons of economic 
necessity, might otherwise fall prey to entreaties from rogue 
states or terrorist groups. Add to this a culture that has 
provided little or no preparation to even its most talented 
people for life in a capitalist world, and the challenge is 
daunting.
    The International Science and Technology Centers (ISTC) 
program is generally considered perhaps the most successful in 
meeting this management challenge, and one reason is its 
emphasis upon audits and oversight. Last year, a General 
Accounting Office report on programs involving former 
biological weapons scientists cited ISTC's ``staff of over 100 
to provide management and financial oversight,'' and went on to 
say:

          Program managers from the Science Center review 
        programmatic and financial documents on a quarterly 
        basis, and the Science Center requires a final audit of 
        every project before it releases an overhead payment to 
        an institute. In addition, the U.S. Defense Contract 
        Audit Agency has conducted internal control audits for 
        10 Science Center biotechnology projects through 
        1999.\1\
---------------------------------------------------------------------------
    \1\ United States General Accounting Office, Biological Weapons: 
Effort to Reduce Former Soviet Threat Offers Benefits, Poses New Risks, 
GAO/NSIAD-00-138, April 2000, pp. 8, 32.

The report notes that it identified some accounting weaknesses, 
but adds that the Science Center is working with the institutes 
to address them.
    The Committee favors expanding the ISTC program, and it is 
widely reported that the Administration shares this view. In 
order to support both that expansion and the needed expansion 
of other nonproliferation programs in the former Soviet Union, 
ISTC's experience with project audits should be codified and 
reported. To the extent that ISTC is engaging in ``best 
practices,'' its experience should be set forth for others to 
emulate. To the extent that ISTC has learned lessons on how 
best to manage these projects, now--when the Administration is 
completing its review of nonproliferation programs and when 
Russia appears to be open to significant increases in some 
programs--is the time to share those lessons with other 
programs and with the appropriate committees of Congress.

Sec. 308. International Atomic Energy Agency regular budget assessments

    The International Atomic Energy Agency (IAEA) is a 
particularly important international organization. It furthers 
U.S. national security objectives by helping to prevent the 
proliferation of nuclear weapons material, especially through 
its work on effective verification and safeguards measures. The 
Department of State has concluded that the IAEA ``is a critical 
and effective instrument for verifying compliance with 
international nuclear nonproliferation agreements, and serves 
as an essential barrier to the spread of nuclear weapons.'' The 
organization is poised to become even more active and 
important, moreover, as more countries sign the new model 
safeguards protocol that grants the IAEA the right to inspect 
undeclared facilities and as the nuclear weapons states seek 
its help in verifying warhead or fissile material storage or 
destruction agreements.
    Nearly two decades of ``zero budget growth'' have impaired 
the ability of the IAEA to carry out its mission and to hire 
and retain the most qualified inspectors and managers. The 
proportion of safeguards inspectors who hold doctorate degrees 
has fallen from 32 percent in 1985 to 19 percent in 2000. In 
June, IAEA Director General Dr. Mohamed ElBaradei told his 
Board of Governors that zero real growth had left the 
safeguards mission underfunded by $20 million in the regular 
budget, which ``led to a situation where . . . we are in a 
position to carry out only adequate safeguards, not optimum 
safeguards, owing to our inability to modernize equipment and 
make full use of available new technologies.'' Voluntary 
contributions by the United States lessen the IAEA's budgetary 
constraints, but they cannot readily be used for the long-term 
capital investments or permanent staff increases necessary to 
an effective IAEA safeguards regime.
    In light of these real problems in an agency upon which the 
United States depends to enforce the Nuclear Nonproliferation 
Treaty, the Committee believes that a gradual and sustained 
increase in the IAEA's regular budget should begin this year. 
The Committee also believes that more of that budget should be 
devoted to nuclear nonproliferation activities, but this cannot 
be achieved unless the total pie increases as well. In order to 
make clear to other IAEA member states that the United States 
is serious in this regard, section 308 authorizes $60,000,000 
in fiscal year 2002 and $75,000,000 in fiscal year 2003 for the 
U.S. assessment. The requested funding was only about 
$49,000,000. (Since assessments are partly in Austrian 
currency, the dollar value fluctuates over time.)
    The Committee has been informed of the Administration's 
intent to insist that its approximate share of the IAEA budget 
be reduced from 25 percent to 22 percent, in keeping with 
reductions that are required by law in our contributions to 
most United Nations organizations. Section 308 makes clear that 
it was not the intent of Congress that the United States' 
contributions to all United Nations-related organizations and 
activities be reduced pursuant to the Admiral James W. Nance 
and Meg Donovan Foreign Relations Authorization Act, Fiscal 
Years 2000 and 2001 (contained in Appendix G of P.L. 106-113), 
which sets 22 percent assessment rates as benchmarks for the 
general United Nations budget, the Food and Agricultural 
Organization, the World Health Organization, and the 
International Labor Organization. Rather, contributions for 
important and effective agencies--and especially the IAEA--
should be maintained at levels commensurate with the 
criticality of its mission.

Sec. 309. Revised nonproliferation reporting requirements

    Section 308 of P.L. 102-182 (22 U.S.C. 5606), which is 
deleted by section 309 of this Act, requires an annual report 
to Congress on efforts of other countries to obtain or produce 
chemical or biological weapons. This requirement substantially 
overlaps other report requirements, such as those established 
by section 1097 of the National Defense Authorization Act for 
Fiscal Years 1992 and 1993 (22 U.S.C. 2751 note) and Condition 
(10) of the resolution of ratification of the Chemical Weapons 
Convention, enacted on April 29, 1997.

   Subtitle B--Russian Federation Debt Reduction for Nonproliferation

Sec. 311. Short title

    This subtitle may be cited as the ``Russian Federation Debt 
Reduction for Nonproliferation Act of 2001.''

Sec. 312. Findings and purposes

    The findings set forth United State security interests in 
preventing the spread of weapons of mass destruction and 
reducing world stockpiles of such weapons, especially in the 
Russian Federation. Among the findings are that existing 
nonproliferation assistance programs have made substantial 
progress, but that the threats posed by inadequate management 
of weapons of mass destruction stockpiles and complexes in the 
Russian Federation remain urgent, especially the threat that 
weapons of mass destruction materials or technology will be 
sold or stolen and diverted to rogue states or terrorists.
    New funding streams are needed for programs to stem these 
threats, and the burden will have to be shared by the Russian 
Federation, the United States, and other governments. Russia's 
substantial Soviet-era debt burden taxes its budget, will do so 
even more in 2003 and thereafter, and is among the factors that 
have led Russian officials to recognize that its future lies 
with the West. Debt reduction could be designed to provide 
additional funding for nonproliferation and arms reduction 
initiatives, and this funding could be especially large if U.S. 
allies--which hold most of the Russian Federation's Soviet-era 
debt--were to follow the U.S. lead in this regard.
    Paragraph 312(a)(2) states that it is in the vital national 
security interests of the United States that:

          (A) all stocks of nuclear weapons and weapons-usable 
        nuclear material in the Russian Federation are secure 
        and accounted for;
          (B) stocks of nuclear weapons and weapons-usable 
        nuclear material that are excess to military needs in 
        the Russian Federation are monitored and reduced;
          (C) any chemical or biological weapons, related 
        materials, and facilities in the Russian Federation are 
        destroyed;
          (D) the Russian Federation's nuclear weapons complex 
        is reduced to a size appropriate to its post-Cold War 
        missions, and its experts in weapons of mass 
        destruction technologies are shifted to gainful and 
        sustainable civilian employment;
          (E) the Russian Federation's export control system 
        blocks any proliferation of weapons of mass 
        destruction, the means of delivering such weapons, and 
        materials, equipment, know-how, or technology that 
        would be used to develop, produce, or deliver such 
        weapons; and
          (F) these objectives are accomplished with sufficient 
        monitoring and transparency to provide confidence that 
        they have in fact been accomplished and that the funds 
        provided to accomplish these objectives have been spent 
        efficiently and effectively.

Subsection (b) states that the purposes of this subtitle are to 
recognize these vital interests, to facilitate the 
accomplishment of the United States objectives described in the 
findings set forth in subsection (a) by providing for the 
alleviation of a portion of the Russian Federation's foreign 
debt, thus allowing the use of additional resources for 
nonproliferation purposes, and to assure that the Russian 
resources freed through debt reduction are targeted to the 
accomplishment of these objectives.

Sec. 313. Definitions

    Section 313 defines three terms of art. In particular, in 
this subtitle, the term ``appropriate congressional 
committees'' means the Committee on International Relations and 
the Committee on Appropriations of the House of 
Representatives, and the Committee on Foreign Relations and the 
Committee on Appropriations of the Senate.

Sec. 314. Establishment of the Russian Nonproliferation Investment 
        Facility

    There is established in the Department of the Treasury an 
entity to be known as the ``Russian Nonproliferation Investment 
Facility'' for the purpose of providing for the administration 
of debt reduction in accordance with this subtitle. This has 
been standard practice in past debt relief programs such as the 
several debt-for-nature and debt-for-environment swaps.

Sec. 315. Reduction of Russian Federation's Soviet-era debt owed to the 
        United States, generally

    The Russian Federation has assumed the debts owed by the 
former Soviet Union, including roughly $600,000,000 in Lend-
Lease debt dating back to U.S. assistance during World War II. 
Section 315 authorizes the President to reduce this debt, other 
than debt owed to the United States as a result of credits 
extended under Title I of the Agricultural Trade Development 
and Assistance Act of 1954 (which is addressed in section 316), 
after notifying the appropriate congressional committees of his 
intention at least 15 days in advance of any formal 
determination to do so, and allocates $50,000,000 in fiscal 
year 2002 and $100,000,000 in fiscal year 2003 for the cost of 
reduction in this debt. Actual cost of any debt reduction will 
be determined by the executive branch based on a calculation of 
the realistically expected value of the loan, in light of 
projections regarding the Russian Federation's economy. Such 
factors as world energy prices (for the Russian Federation is a 
major exporter of oil and gas), the ability of the Russian 
Federation to raise and collect taxes, and the climate for 
outside investment may all contribute to this calculation.
    The Committee intends, through sections 315-317, to give 
the President a menu of options for reducing the Russian 
Federation's Soviet-era debt. In each case, the intent is that 
most or all of the savings that accrue to Russia as a result of 
debt reduction will be invested in agreed nonproliferation or 
arms reduction programs or projects. Subparagraph (b)(1)(A) of 
sections 315 and 316 requires that debt reduction be 
implemented pursuant to the terms of a Russian Nonproliferation 
Investment Agreement authorized under section 318. The 
Committee intends that a similar arrangement be made with any 
buyers of an existing loan pursuant to section 317, or in 
fostering independent media and the rule of law in the Russian 
Federation pursuant to section 320.
    If a new obligation is required, as will be the case if 
there is a reduction in the principal owed or in the rate of 
interest charged, the new obligation is to be formal and shall 
require payment of both principal and interest in the same 
manner as is required in the Enterprise for the Americas 
Initiative (sections 705 and 706 of the Foreign Assistance Act 
of 1961, as amended). Thus, principal repayments shall be in 
United States dollars. Interest payments shall also be in 
United States dollars, unless the Russian Nonproliferation 
Investment Agreement provides for their deposit in a fund or 
account for investments in agreed programs or projects. The 
Committee does not intend that such a fund or account must be a 
precise analogue to an Americas Fund, but rather that the terms 
governing any such fund or account be established by the 
Agreement.

Sec. 316. Reduction of debt owed to the United States as a result of 
        credits extended under title I of the Agricultural Trade 
        Development and Assistance Act of 1954

    Most of the Russian Federation's Soviet-era debt to the 
United States (by some estimates, about $2,000,000,000) is the 
result of credits extended by the Commodity Credit Corporation 
to finance wheat sales to the Soviet Union. The authority and 
funding provided for this purpose are analogous to those 
provided in the preceding section, and so is the Committee's 
intent regarding the circumstances under which the President 
will use such authority.

Sec. 317. Authority to engage in debt-for-nonproliferation exchanges 
        and debt buybacks

    A third approach to debt reduction for the Russian 
Federation would be to sell part or all of a debt to a third 
party, or to the Russian Federation itself, in return for 
suitable assurances that this will result in substantial funds 
being invested in programs or projects that further the 
objectives described in the findings. An arrangement of this 
type might be especially appropriate if the third party had an 
agreement with the Russian Federation to be the executive agent 
for a particular program or project that furthered these 
objectives. Such a third party might be able to obtain a 
management role that the Russian Federation would be loath to 
assign to any foreign government.
    Similarly, it is possible that the government of the 
Russian Federation could buy back a loan at a concessional rate 
in return for an agreement to undertake certain tangible 
actions--such as putting certain amounts of fissile material 
from particular sources under international storage and 
monitoring--with no direct U.S. involvement or auditing, but 
with penalty clauses in the event that international monitors 
could not verify the achievement of specific milestones. In 
such a case, this approach might be best adapted to achieving 
the objectives described in the findings. The Committee 
expects, however, that the President will not use this approach 
to ignore the concerns regarding confidence and transparency 
that underlie the Committee's expectations for a Russian 
Nonproliferation Investment Agreement, as set forth in section 
318(b).

Sec. 318. Russian Nonproliferation Investment Agreement

    The Secretary of State is authorized, in consultation with 
other appropriate officials of the Federal Government, to enter 
into a ``Russian Nonproliferation Investment Agreement'' with 
the Russian Federation concerning the use of the funds saved by 
that country as a result of any debt reduction provided 
pursuant to this subtitle. The Committee intends that such an 
agreement govern any debt reduction provided pursuant to 
sections 315 or 316.
    The Committee is especially cognizant of the need to ensure 
that funds provided through Russian debt reduction be invested 
in nonproliferation programs or projects in an efficient and 
transparent manner. The Russian Nonproliferation Investment 
Agreement shall therefore ensure that: (1) a significant 
proportion of the funds saved by the Russian Federation as a 
result of any debt relief provided pursuant to this subtitle is 
devoted to nonproliferation programs and projects; (2) funding 
of each such program or project is approved by the United 
States Government, either directly or through its 
representation on any governing board that may be directed or 
established to manage these funds; (3) administration and 
oversight of non-proliferation programs and projects 
incorporate best practices from established threat reduction 
and nonproliferation assistance programs; (4) each program or 
project funded pursuant to the Agreement is subject to audits 
conducted by or for the United States Government; (5) 
unobligated funds for investments pursuant to the Agreement are 
segregated from other Russian Federation funds and invested in 
financial instruments guaranteed or insured by the United 
States Government; (6) the funds that are devoted to programs 
and projects pursuant to the Agreement are not subject to any 
taxation by the Russian Federation; (7) all matters relating to 
the intellectual property rights and legal liabilities of 
United States firms in a given project are agreed upon before 
the expenditure of funds is authorized for that project; and 
(8) not less than 75 percent of the funds made available for 
each nonproliferation program or project under the Agreement is 
spent in the Russian Federation.
    One way to maximize the efficiency of nonproliferation 
investments may be to take advantage of the most successful 
existing programs in Russia. Subsection 318(c) therefore states 
the sense of Congress that, to the extent practicable, the 
boards and administrative mechanisms of existing threat 
reduction and nonproliferation programs should be used in the 
administration and oversight of programs and projects under the 
Agreement.

Sec. 319. Structure of debt-for-nonproliferation arrangements

    It is the sense of Congress that any debt-for-
nonproliferation arrangements with the Russian Federation 
should provide for gradual debt relief over a period of years, 
with debt relief to be suspended if more than two years' worth 
of funds remain unobligated for approved nonproliferation 
programs or projects. This may not be feasible if debt relief 
takes the form of an up-front reduction of the amount of 
principal owed, but it might be workable if, say, debt relief 
were in the form of a significant reduction in the interest 
rate for a set term.

Sec. 320. Independent media and the rule of law

    The United States has an important interest in encouraging 
development of an independent media sector and the rule of law 
in the Russian Federation. Such developments would help develop 
Russian involvement in and cooperation with Western political 
and economic institutions, thereby increasing Russia's economic 
well-being and its likelihood of maintaining nonproliferation 
programs on its own (through increased transparency and a 
decreased incentive to profit from illicit technology sales). 
They would also make it less likely that a rogue operation to 
engage in proliferation could ever go undetected or unexposed.
    Section 320 therefore provides that up to 10 percent of the 
funds saved by the Russian Federation as a result of any debt 
relief provided pursuant to this subtitle may be used to 
promote a vibrant, independent media sector and the rule of law 
in the Russian Federation. The mechanism for this would be an 
endowment to support the establishment of a ``Center for an 
Independent Press and the Rule of Law'' in the Russian 
Federation, which shall be directed by a joint United States-
Russian Board of Directors in which the majority of members, 
including the chairman, shall be United States personnel, and 
which shall be responsible for management of the endowment, its 
funds, and the Center's programs. Such use of up to 10 percent 
of the funds is not required by section 320 (although the 
mechanism for such use is mandatory), but because of recent 
events in Russia, wherein independent media outlets have been 
closed or placed under government control, the Committee 
strongly urges the executive branch to explore this option with 
the Russian Federation.

Sec. 321. Nonproliferation requirement

    Central to the premise of debt-for-nonproliferation is the 
need for the Russian Federation to stem the flow of sensitive 
goods, technologies, material, and know-how related to the 
design, development, and production of weapons of mass 
destruction and the means to deliver them to countries that 
have been determined by the Secretary of State to have 
repeatedly provided support for acts of international 
terrorism. Section 321 therefore conditions all the sections 
relating to authority to grant debt reduction upon the 
President's certification to the appropriate committees of 
Congress that the Russian Federation is making ``material 
progress'' toward that end. Until that certification can be 
made, no debt reduction can be provided.
    If, in any annual report to Congress submitted pursuant to 
section 325, the President cannot certify that the Russian 
Federation continues to meet the condition required in 
subsection (a)(1), then, unless the President waives this 
requirement pursuant to the provisions of subsection (c), the 
authorities granted under this subtitle may not be exercised, 
and funds may not be expended, unless and until such 
certification is made to the appropriate congressional 
committees. The President may waive the requirements of 
subsection (b) for a fiscal year if the President determines 
that imposition of those requirements in that fiscal year would 
be counter to the national interest of the United States and so 
reports to the appropriate committees of Congress.

Sec. 322. Discussion of Russian Federation debt reduction for 
        nonproliferation with other creditor states

    Other Western countries hold roughly 90 percent of the 
Russian Federation's Soviet-era bilateral debt. If United 
States leadership were to lead them to join in offering debt-
for-nonproliferation, the funds thus made available for 
investment in Russian nonproliferation programs and projects 
would be increased several-fold. If, on the other hand, the 
United States were to offer debt reduction to Russia without 
first consulting with its fellow Paris Club holders of the 
Russian Federation's Soviet-era debt, our efforts might lead to 
an unwanted rift with our allies. Section 322 therefore 
mandates discussions in the Paris Club, with the objectives of 
reaching agreement that each member is authorized to negotiate 
debt-for-nonproliferation arrangements with the Russian 
Federation, convincing other member states to join us, and 
reaching agreement, as appropriate, on a unified fund to manage 
the resulting Russian nonproliferation investments.

Sec. 323. Implementation of United States policy

    It is the sense of Congress that implementation of debt-
for-nonproliferation programs with the Russian Federation 
should be overseen by the Committee on Nonproliferation 
Assistance to the Independent States of the Former Soviet Union 
(established pursuant to section 334 of this Act). That 
interagency committee is intended to coordinate all U.S. 
Government nonproliferation programs in the former Soviet 
Union. It will be in the best position to de-conflict existing 
programs and those programs or projects resulting from any debt 
reduction.

Sec. 324. Consultations with Congress

    The President shall consult with the appropriate 
congressional committees on a periodic basis to review the 
operations of the Facility and the Russian Federation's 
eligibility for benefits from the Facility, notably pursuant to 
section 321.

Sec. 325. Annual report to Congress

    A report to Congress, due by December 31, 2002, and 
annually thereafter, shall include a description of the 
activities undertaken by the Facility during the preceding 
fiscal year, a description of any agreement entered into under 
this subtitle, a description of any grants that have been 
provided pursuant to the agreement and a summary of the results 
of audits performed in the preceding fiscal year pursuant to 
the agreement.

          Subtitle C--Nonproliferation Assistance Coordination

Sec. 331. Short title

    This subtitle may be cited as the ``Nonproliferation 
Assistance Coordination Act of 2001.''

Sec. 332. Findings

    United States nonproliferation efforts in the independent 
states of the former Soviet Union have achieved important 
results in keeping weapons of mass destruction and related 
material, technology and knowledge out of the hands of 
terrorists and rogue states. The many U.S. programs are managed 
by several departments, however, and repeated studies have 
cited a lack of effective coordination. For example, the Russia 
Task Force of the Secretary of Energy Advisory Board, chaired 
by former Senator (and now ambassador) Howard Baker and former 
White House counsel Lloyd Cutler, said of these programs: 
``Coordination within and among U.S. Government agencies is 
insufficient and must be improved.'' \2\ The Administration has 
formed an interagency mechanism for its review of these 
programs, and the Committee believes that a similar approach is 
needed for continuing high-level coordination among programs.
---------------------------------------------------------------------------
    \2\ Howard Baker and Lloyd Cutler, Co-Chairs, Russia Task Force, 
Secretary of Energy Advisory Board, A Report Card on the Department of 
Energy's Nonproliferation Programs with Russia, January 10, 2001, p. 
23.

    Private sector spending and foreign investment are 
increasingly important sources of employment for ex-weapons 
scientists in the former Soviet Union. Some of these efforts 
are channeled through United States Government or U.S.-
supported institutions like the Department of Energy's 
Initiatives for Proliferation Prevention program, the State 
Department's International Science and Technology Centers 
program and the Cooperative Research and Development 
Foundation. Non-governmental efforts, like those of Ted 
Turner's Nuclear Threat Initiative, will also play an important 
role, however, and the U.S. Government should coordinate its 
efforts with those of the private sector.

Sec. 333. Independent states of the former Soviet Union defined

    In this subtitle, the term ``independent states of the 
former Soviet Union'' has the meaning given the term in section 
3 of the FREEDOM Support Act (22 U.S.C. 5801).

Sec. 334. Establishment of Committee on Nonproliferation Assistance to 
        the Independent States of the Former Soviet Union

    An interagency ``Committee on Nonproliferation Assistance 
to the Independent States of the Former Soviet Union'' is 
established, with representation (at the Assistant Secretary 
level or higher) of the Departments of State, Energy, Defense 
and Commerce, and a representative of the Assistant to the 
President for National Security Affairs, who shall serve as 
Chair of the committee. The Chair may invite the head of any 
other department or agency of the United States to designate a 
representative of that department or agency to participate from 
time to time in the activities of the Committee.

Sec. 335. Duties of Committee

    The interagency committee shall commission analyses on 
issues relating to coordination of nonproliferation assistance 
programs within the U.S. Government, between the U.S. public 
and private sectors, and between the United States and other 
countries. Within the U.S. Government, the committee shall 
provide guidance to coordinate, de-conflict and maximize the 
utility of nonproliferation assistance programs. It shall also 
consider, and make recommendations, as necessary, to the 
President and Congress regarding, proposals for new legislation 
or regulations relating to U.S. nonproliferation efforts in the 
independent states of the former Soviet Union. Given the large 
number of departments and congressional committees with a role 
in this effort, it will be especially useful for the 
Administration to bring agencies together and make coherent 
recommendations regarding the increased nonproliferation 
efforts that are clearly required today. As the Baker-Cutler 
task force stated in its report to the Secretary of Energy:

          The most urgent unmet national security threat to the 
        United States today is the danger that weapons of mass 
        destruction or weapons-usable material in Russia could 
        be stolen and sold to terrorists or hostile nation-
        states and used against American troops abroad or 
        citizens at home.\3\
---------------------------------------------------------------------------
    \3\ Ibid., p. iii.

Sec. 336. Administrative support

    All United States departments and agencies shall provide, 
to the extent permitted by law, such information and assistance 
as may be requested by the Committee in carrying out its 
functions and activities under this subtitle.

Sec. 337. Confidentiality of information

    Information which has been submitted or received in 
confidence shall not be publicly disclosed, except to the 
extent required by law, and such information shall be used by 
the Committee only for the purpose of carrying out the 
functions and activities set forth in this chapter. This 
provision does not, in and of itself, exempt such information 
from the Freedom of Information Act. It is intended, rather, to 
underscore the need for departmental representatives to discuss 
candidly the successes and shortfalls of their nonproliferation 
assistance programs and to enable committee members to ``think 
outside the box'' in formulating guidance for executive branch 
programs and recommendations to the President and Congress.

Sec. 338. Statutory construction

    Section 338 makes clear that the Nonproliferation 
Assistance Coordination Act of 2001 does not remove the 
existing authority of any U.S. department or agency over 
nonproliferation eforts in the independent states of the former 
Soviet Union. The interagency committee is not to be an 
operational agency. This subtitle does not give it the 
budgetary authority vested in the executive branch departments 
or in the Office of Management and Budget. Neither does this 
subtitle apply to any activity that is reportable pursuant to 
title V of the National Security Act of 1947 (50 U.S.C. 413 et 
seq.).

          TITLE IV--EXPEDITING THE MUNITIONS LICENSING PROCESS

Sec. 401. License officer staffing

    Effective export control is vital to achieving United 
States nonproliferation and foreign policy objectives. At the 
same time, however, in a global economy this function must be 
exercised speedily and efficiently, so that avoidable delays in 
processing do not deny to U.S. firms sales or contracts that 
are consistent with U.S. policy. The Committee has worked for 
several years to provide the State Department's Office of 
Defense Trade Controls (ODTC) the personnel that it needs to 
achieve maximum efficiency. To that end, section 401 requires 
that not less than $10,000,000 shall be made available each 
fiscal year for ODTC salaries and expenses, and that the 
Secretary of State assign to ODTC a sufficient number of 
license review officers to ensure that the average weekly 
caseload for each officer does not exceed 40. It is important 
to note that, given the qualitative differences between 
individual cases (e.g., in their technical complexity), the 
caseload for some license review officers might apporpriately 
be significantly fewer than 40 cases per week.
    This section also encourages the Secretary of Defense to 
ensure that 10 military officers are continuously detailed to 
ODTC on a nonreimbursable basis. Even in wartime, arms export 
control is an important activity in which military expertise is 
required. These sales affect the war fighting capabilities of 
other countries, the viability of U.S. companies upon which our 
military relies, and sometimes also the cost of weapons systems 
sold to the U.S. Government. If personnel detailed to ODTC must 
be given other wartime assignments, then the Committee believes 
that it is greatly in the national interest that the Secretary 
of Defense find qualified interim or permanent replacements for 
those detailees as soon as possible.

Sec. 402. Funding for database automation

    The Committee believes that up-to-date information 
management systems are vital to maintaining ODTC's ability to 
fulfill its function in a manner that minimizes the unintended 
impact on U.S. companies. Section 402 requires that not less 
than $4,000,000 be made available to ODTC each fiscal year for 
the modernization of these systems.

Sec. 403. Information management priorities

    In recent years, with the Committee's encouragement, the 
Census Bureau has implemented the Automated Export System (AES) 
by which Shippers' Export Declarations are filed 
electronically, instead of by paper. This results in more 
timely information and can improve interagency review processes 
significantly. The Committee believes that a similar approach 
to the receipt and handling of export license applications 
would serve both the national interest and the needs of U.S. 
companies.
    The receipt, review and approval of arms export license 
applications must move into the 21st century. Section 403 
therefore both requires and funds the establishment of a 
secure, Internet-based system for this purpose. Such a system 
must also be capable of exchanging data with the relevant 
automated systems in the Department of Commerce, the Department 
of Defense, the Central Intelligence Agency and the Department 
of Energy.

Sec. 404. Contribution to the Automated Export System

    The Census Bureau's Automated Export System is not yet 
compatible with Department of State information systems. The 
Committee believes that the Department of State should share in 
the expense of making those systems compatible, as it will 
benefit greatly from being able to track actual shipments of 
Munitions List items. Accordingly, not less than $250,000 for 
each fiscal year shall be available for this purpose.
    When the Committee debated this Act before ordering it 
reported favorably, concern was expressed regarding two 
subsections of section 404 that would extend mandatory use of 
the AES to smaller shippers that are not already required to 
use it and would increase the penalties for failure to file a 
declaration or for knowingly submitting false or misleading 
information. It was agreed that these subsections would be 
removed from the Act at this time, with the intent of 
perfecting the language and addressing this issue again later 
in the legislative process for this Act.

Sec. 405. Adjustment of threshold amounts for congressional review 
        purposes

    Pursuant to section 36 of the Arms Export Control Act, the 
Senate Committee on Foreign Relations and the House 
International Relations Committee receive prior notice of 
hundreds of arms sales each year. As inflation and improved 
technology have raised the cost of weapons systems, the old 
dollar thresholds in the law have forced reporting of more and 
more export licenses that are of no substantive interest to 
either committee, but that necessarily subject U.S. companies 
to additional delays due to the requirement for congressional 
consideration.
    New prior notice thresholds of $25,000,000 for major 
defense equipment and $100,000,000 for other items will apply 
to most sales to NATO members, Australia, Japan or New Zealand. 
The one exception will be sales to one or more of those 
countries that incorporate a new or increased sales territory 
that includes a country outside that group. Approval of such a 
sales territory is tantamount to approving future sales to the 
listed countries, and sometimes such third-country sales pose 
security or policy concerns.
    The Committee recognizes that a significant restructuring 
of the system for oversight of arms export licenses is needed. 
At the same time, it believes that merely raising the dollar 
thresholds for reportable licenses is not a workable solution. 
There are low-value sales that are of substantive interest to 
the Committee--sometimes because inexpensive items could be 
used as components in systems of concern, sometimes because the 
recipient country (or a country in a proposed sales territory) 
might misuse the items, and sometimes because conditions in a 
region raise the risk that certain arms sales will fuel a 
regional conflict that would harm U.S. interests. At the same 
time, some very expensive sales raise no concerns at all. The 
Committee intends that its staff work with their counterparts 
on the House side and with relevant executive branch offices to 
develop new options for providing needed prior notice to the 
Committee without slowing down the process for so many license 
applications that are of clearly of no concern.

Sec. 406. Periodic notification of pending applications for export 
        licenses

    U.S. defense industry--and foreign firms with which U.S. 
firms work on large contracts--have alleged for years that the 
Department of State delays needlessly in its processing of arms 
export license applications. The Committee has worked to 
improve ODTC capabilities to handle the load, and it believes 
that the Department of State's overall record is often better 
than people think. It does believe, however, that attention 
should be paid to the minority of applications that take many 
months to be processed.
    The Committee generally refrains from trying to influence 
arms export control cases before the executive branch decides 
to approve a license, and section 406 is not intended to change 
that. A biannual report on those applications that have been 
pending for more than 180 days, however, will enable both the 
Committee and the executive branch to focus on those cases and 
see what can be done to reach conclusions--one way or the 
other--more expeditiously.

             TITLE V--NATIONAL SECURITY ASSISTANCE STRATEGY

Sec. 501. Establishment of the Strategy

    Foreign Military Financing (FMF), transfers of Excess 
Defense Articles (EDA), and International Military Education 
and Training (IMET) are justified not simply in military terms, 
but as contributions to the overall national security of the 
United States. The fact that they are authorized in the Foreign 
Assistance Act of 1961 and the Arms Export Control Act reflects 
a recognition that they are intended primarily to serve foreign 
policy objectives.
    It can be most difficult, however, to keep foreign policy 
objectives in the forefront when the details of program 
implementation involve detailed issues of military efficiency 
at home and abroad. Rather than allowing bureaucratic inertia 
to become a substitute for policy, the State Department must 
develop a National Security Assistance Strategy that integrates 
the FMF, EDA and IMET programs, on a country-by-country basis, 
into the National Security Strategy of the United States. This 
will bring greater coherence to those programs and ensure that 
they achieve maximum benefits for U.S. foreign policy.
    The National Security Assistance Strategy shall: set forth 
a 5-year plan for security assistance programs; be consistent 
with the National Security Strategy of the United States; be 
coordinated with the Secretary of Defense and the Chairman of 
the Joint Chiefs of Staff; identify overarching security 
assistance objectives, including identification of the role 
that specific security assistance programs will play in 
achieving such objectives; identify a primary security 
assistance objective, as well as specific secondary objectives, 
for individual countries; identify, on a country-by-country 
basis, how specific resources will be allocated to accomplish 
both primary and secondary objectives; discuss how specific 
types of assistance, such as FMF and IMET, will be combined at 
the country level to achieve United States objectives; and 
detail how specific types of assistance provided pursuant to 
the Arms Export Control Act and Foreign Assistance Act of 1961 
are coordinated with United States assistance programs 
administered by the Department of Defense and other agencies.

Sec. 502. Security assistance surveys

    Security assistance surveys are an important mechanism for 
assessing a foreign country's military capabilities and 
security requirements, so as to determine how best to assist 
that country. As the Department of State moves to institute a 
National Security Assistance Strategy, therefore, it only makes 
sense to use security assistance surveys, as appropriate, in 
the development of that strategy. Section 502 authorizes 
$2,000,000 to be available to the Secretary either to conduct 
such surveys or to reimburse the Department of Defense or other 
United States Government agencies for conducting surveys 
requested by the Secretary.

                   TITLE VI--MISCELLANEOUS PROVISIONS

Sec. 601. Nuclear and missile nonproliferation in South Asia

    The war against terrorism has made South Asia a military 
theater of operations and has produced new, cooperative 
relations between the United States and both India and 
Pakistan. It has not reduced, however, the risk that this 
region will contribute to the proliferation, or even the use, 
of nuclear weapons. Indeed, concern over the security of 
special nuclear material in South Asia has been heightened by 
the increased tension in the area.
    In promulgating a statement of United States policy on 
nonproliferation objectives in South Asia, the Committee 
intends that the executive branch maintain and demonstrate a 
high priority for these concerns. Osama bin Laden's efforts to 
acquire weapons of mass destruction make clear that 
nonproliferation is now part and parcel of the war on 
terrorism, and not a subsidiary issue. The Committee also 
intends that all U.S. policy and actions on nuclear issues in 
South Asia be consistent with United States obligations under 
the Treaty on the Non-Proliferation of Nuclear Weapons and with 
past U.S. policy on these matters.
    Subsection (b) requires the President to submit to the 
appropriate committees of Congress a report describing United 
States efforts in pursuit of the objectives listed in 
subsection (a), the progress made toward the achievement of 
those objectives, and the likelihood that each objective will 
be achieved by September 30, 2003, the date when the current 
suspension of sanctions is scheduled to end. The report is due 
by March 1, 2003, so that Indian and Pakistani progress may be 
taken into account when the issues of nonproliferation 
sanctions and U.S. foreign assistance are considered by the 
Congress.

Sec. 602. Nonproliferation interests and negotiation of free trade 
        agreements

    In recent years, the United States has entered into 
negotiations of free trade agreements with several countries 
other than our neighbors, including Chile, Jordan and 
Singapore. Although economic benefits may flow from such 
arrangements, international political concerns are at least as 
important in the decision to seek such close economic ties. The 
Committee believes that nonproliferation should be high on the 
U.S. political agenda when entering into these relationships, 
and that the United States Trade Representative should seek 
specific nonproliferation and export control commitments from 
the countries with which the United States negotiates free 
trade agreements.
    The current free trade negotiations with Singapore are a 
good example of a case in which nonproliferation objectives can 
and should be sought. Singapore is an important U.S. ally and a 
force for stability in southeast Asia. It is also a major hub 
for business and shipping, at times including shipments of 
materials or equipment for weapons of mass destruction that 
violate international conventions. When Singapore takes action 
to prevent such dangerous trade, the whole world benefits. 
Section 602 requires, therefore, that the United States Trade 
Representative ensure that any free trade agreement with 
Singapore contains or is accompanied by: a specific commitment 
by Singapore to enact legislation to provide for export, 
transit, and transshipment controls for defense and defense-
related items and dual-use technologies and control over the 
brokering of transactions relating to those items and 
technologies; and a timetable of specific commitments to 
cooperate with the United States in the field of 
nonproliferation and export controls.

Sec. 603. Real-time public availability of raw seismological data

    One area in which policy and science both benefit from 
close collaboration is seismology--the study of disturbances in 
the earth's crust. Scientists measure seismic waves primarily 
to study earthquakes and to differentiate them from rockfalls 
and man-made explosions. Public benefits from this work have 
included a better understanding of earthquakes, improved 
ability to warn of possible tsunamis so that people can move to 
higher ground, monitoring of volcanos for public safety 
purposes, improved techniques to locate oil reserves, and the 
detection and characterization of nuclear weapons tests.
    Data gathered for national security reasons can in turn be 
of great use to science. Pursuant to the Comprehensive Nuclear 
Test-Ban Treaty, an International Monitoring System (IMS) is 
being put in place that will link 170 seismic monitoring 
stations, including some that are new or in locations to which 
outside observers have not previously had access. The United 
States participates in the development of the IMS and receives 
near-real time data from the seismic and other sensors in that 
system. These data, if made available to scientists in a timely 
fashion, would improve world-wide earthquake monitoring 
capabilities. Combining IMS data with seismological data from 
sites outside the IMS will, in turn, enable scientists to 
assist governments--including our own--in determining whether 
an unusual seismic event was a nuclear weapons test.
    The United States has pressed for near-real time release of 
IMS data to the public, but has not achieved international 
consensus in favor of that. The Committee believes that more 
must be done to bring about the timely release of these data. 
The case for letting all the world's experts obtain these data 
in a timely fashion is one that every country should 
understand: more complete data and competitive analysis 
decrease the risk that an event will be misinterpreted. And if, 
as appears to be the case, nearly all countries accept this 
argument, then they ought to act upon that, either through 
appropriate international organizations or through separate 
bilateral or multilateral agreements regarding each country's 
data.
    Section 603 directs the head of the Air Force Technical 
Applications Center (AFTAC) to make available to the public, as 
soon as possible after receipt, all raw seismological data 
provided to the United States Government by any international 
monitoring organization that is directly responsible for 
seismological monitoring. AFTAC is the U.S. agency that gathers 
these data, so its director is an appropriate official to 
release them.

Sec. 604. Detailing United States governmental personnel to 
        international arms control and nonproliferation organizations

    United States Government personnel have performed important 
work for international organizations over the years. One well-
known example was UNSCOM, the United Nations Special Commission 
in Iraq, which conducted inspections in that country in an 
effort to locate and destroy weapons of mass destruction 
capabilities. Such details of U.S. personnel serve both our own 
national interest and the world's need for technical and 
logistical expertise in these crucial organizations.
    Too often, however, the personnel detailed to international 
organizations find that their careers suffer because they have 
spent months or years away from their home offices and outside 
normal personnel career paths. Section 604 directs the 
Secretary of State to develop measures whereby U.S. personnel 
may be detailed to international arms control and non-
proliferation organizations without having their careers 
suffer.

Sec. 605. Diplomatic presence overseas

    As the events since September 11 have made all too clear, 
antiterrorism and nonproliferation are increasingly important 
elements of American foreign and national security policy. 
These are not issues that America can handle alone. Rather, we 
must enlist other nations to do their part as well, both at 
home and in international fora. To meet the challenges of the 
21st century, U.S. missions overseas must have high-level 
personnel who have both language training and substantive 
expertise in nonproliferation and political military affairs. 
Section 605 authorizes the Secretary of State to create the 
position of Counselor for Nonproliferation and Political 
Military Affairs at U.S. missions overseas, to be filled by 
career Civil Service officers or Foreign Service officers who 
will receive, as a rule, 10 months of special substantive or 
language training before assuming their posts.

Sec. 606. Protection against agricultural bioterrorism

    Recent anthrax attacks have made Americans acutely 
sensitive to the risk of biological terrorism. Equally 
troubling, however, is the risk of biological warfare or 
terrorism directed against U.S. crops or livestock. One 
important step in combating that threat is to detect and 
analyze various strains of crop and livestock pathogens. North 
Carolina State University is a center of such efforts, and an 
investment of $1,500,000 will expedite this important work.

Sec. 607. Compliance with the Chemical Weapons Convention

    On April 24, 1997, the Senate provided its advice and 
consent to ratification of the Chemical Weapons Convention 
subject to the condition that no sample collected in the United 
States pursuant to the Convention would be transferred for 
analysis to any laboratory outside the territory of the United 
States. Congress enacted the same condition into law as section 
304(f)(1) of the Chemical Weapons Convention Implementation Act 
of 1998 (22 U.S.C. 6724(f)(1)).
    Part II, paragraph 57, of the Verification Annex of the 
Convention requires that all samples taken during a challenge 
inspection under the Convention shall be analyzed by at least 
two laboratories that have been designated as capable of 
conducting such testing by the Organization for the Prevention 
of Chemical Weapons (OPCW). The only United States laboratory 
currently designated by the OPCW is the United States Army 
Edgewood Forensic Science Laboratory.
    In order to meet the requirements of condition (18) of the 
resolution of ratification of the Chemical Weapons Convention 
and section 304 of the Chemical Weapons Convention 
Implementation Act of 1998 (22 U.S.C. 6724), the United States 
must possess, at a minimum, a second OPCW-designated 
laboratory. The possession of a second laboratory is especially 
necessary in view of the potential for a challenge inspection 
to be initiated against the United States by a foreign nation. 
To qualify as a designated laboratory, a laboratory must be 
certified under ISO Guide 25 or a higher standard, and complete 
three proficiency tests. The laboratory must have the full 
capability to handle substances listed on Schedule 1 of the 
Annex on Schedules of Chemicals of the Convention. In order to 
handle such substances in the United States, a laboratory also 
must operate under a bailment agreement with the United States 
Army.
    Several existing United States commercial laboratories have 
approved quality control systems, already possess bailment 
agreements with the United States Army, and have the 
capabilities necessary to obtain OPCW designation. The 
Committee believes that, in order to safeguard samples taken on 
U.S. territory and bolster the legitimacy of the analysis of 
those samples, thereby protecting the proprietary and business 
interests of U.S. firms, and to promote similar transparency 
and confidence when inspections are conducted abroad, one of 
the United States designated laboratories should not be a 
Government facility.
    Section 607 therefore requires that the United States 
National Authority, by February 1, 2002, select a commercial 
laboratory to pursue designation by the OPCW. This does not 
require the executive branch to stop the pursuit of designation 
for a second United States Government facility as well. Indeed, 
a report is required by March 1, 2002, detailing a plan for 
securing OPCW designation of a third United States laboratory 
by December 1, 2003. With three designated U.S. laboratories, 
the OPCW could randomly send a real sample to two laboratories 
and a false sample to the third, so that a laboratory would 
never be sure what sample it was analyzing. This approach, 
which is in keeping with OPCW intent world-wide, would reduce 
significantly the value of any espionage information that a 
country or company might hope to gain by infiltrating a 
laboratory.

             TITLE VII--AUTHORITY TO TRANSFER NAVAL VESSELS

Sec. 701. Authority to transfer naval vessels to certain foreign 
        countries

    This section provides authority, in subsection (a), for the 
President to transfer by sale under section 21 of the Arms 
Export Control Act (22 U.S.C. 2761) two naval vessels to 
Turkey, and by grant under section 516 of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2321j) one naval vessel to 
Poland and six naval vessels to Turkey. Authority to engage in 
these ship transfers was requested by the Department of 
Defense. Section 7307 of title 10, United States Code, requires 
statutory approval for a disposal (whether by sale, lease, 
grant, loan, barter, transfer, or otherwise) of naval vessels, 
in excess of 3,000 tons or less than 20 years of age, to 
another nation.
    Subsection (b) provides that the value of the naval vessels 
authorized for transfer by grant under this section would not 
be included in determining the aggregate value of transferred 
excess defense articles.
    Subsection (c) provides for the recipient to be charged 
with any expense incurred by the United States in connection 
with a transfer by grant.
    Subsection (d) provides for any necessary repair or 
refurbishment of the vessels to be transferred to be performed 
in United States shipyards to the maximum extent practicable.
    Subsection (e) provides that transfers authorized by this 
section must be executed within two years of the date of 
enactment of the Act of which this section is a part. This 
allows a reasonable opportunity for agreement on terms and for 
execution of the transfers.

                  IV. Evaluation of Regulatory Impact

    In accordance with rule XXVI, paragraph 11(b) of the 
Standing Rules of the Senate, the Committee has concluded that 
there is no regulatory impact from this legislation.

                            V. Cost Estimate

    In accordance with rule XXVI, paragraph 11(a) of the 
Standing Rules of the Senate, the Committee provides the 
following estimate of the cost of this legislation prepared by 
the Congressional Budget Office:
                                     U.S. Congress,
                                Congressional Budget Office
                                  Washington, DC, December 7, 2001.

Hon. Joseph R. Biden, Jr., Chairman,
Committee on Foreign Relations,
United States Senate,
Washington, DC.

    Dear Mr. Chairman:

    The Congressional Budget Office has prepared the enclosed 
cost estimate for the Security Assistance Act of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Joseph C. 
Whitehill.
            Sincerely,
                                          Barry B. Anderson
                                     (for Dan L. Crippen, Director)

    Enclosure:

               Congressional Budget Office Cost Estimate

                    Security Assistance Act of 2001

Summary

    The Security Assistance Act of 2001 would authorize 
appropriations in 2002 and 2003 for foreign military financing, 
international military education and training, 
nonproliferation, and anti-terrorism assistance programs. It 
would create a new debt-for-nonproliferation program with 
Russia and authorize appropriations in 2002 and 2003 for the 
cost of modifying Soviet-era and food-aid loans to Russia. The 
bill also would earmark spending for other security assistance 
and State Department programs. The Security Assistance Act of 
2001 would reestablish the Special Defense Acquisition Fund as 
a revolving fund outside the appropriations process with a 
capitalization of $200 million. Finally, the bill would 
reappropriate $4 million for foreign military financing for 
Israel and authorize the sale of certain naval vessels.
    CBO estimates that implementing the Security Assistance Act 
of 2001 would result in almost $5.9 billion in discretionary 
spending over the 2002-2006 period, assuming the appropriation 
of the authorized amounts. CBO also estimates that enacting the 
bill would reduce direct spending by $31 million over the 2002-
2006 period. This amount includes estimated receipts from asset 
sales of $36 million over the 2002-2003 period. Because the 
Security Assistance Act of 2001 would affect direct spending, 
pay-as-you-go procedures would apply.
    The Security Assistance Act of 2001 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

Estimated cost to the Federal Government

    The estimated budgetary impact of the Security Assistance 
Act of 2001 is shown in Table 1. The costs of this legislation 
fall within budget function 150 (international affairs).

                        TABLE 1.--BUDGETARY IMPACT OF THE SECURITY ASSISTANCE ACT OF 2001
                                    (By fiscal year, in millions of dollars)
----------------------------------------------------------------------------------------------------------------
                                                              2002       2003       2004       2005       2006
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending under Current Law for Security Assistance and
 Related Programs:
    Authorization Level \1\..............................      5,361          0          0          0          0
    Estimated Outlays....................................      5,933      2,500        613        273        147

Proposed Changes:
    Estimated Authorization Level........................        220      6,147          0          0          0
    Estimated Outlays....................................         22      3,175      1,948        523        184

Spending Under the Security Assistance Act of 2001:
    Estimated Authorization Level........................      5,581      6,147          0          0          0
    Estimated Outlays....................................      5,955      5,675      2,561        796        331

                               CHANGES IN DIRECT SPENDING (Excluding AsseE Sales)

Estimated Budget Authority...............................          4         20          0          0          0
Estimated Outlays........................................          4          8          8         -7         -8

                                                   ASSET SALES

Estimated Budget Authority...............................        -18        -I8          0          0          0
Estimated Outlays........................................        -13        -18          0          0          0
----------------------------------------------------------------------------------------------------------------
\1\ The 2002 level is the amount authorized for that year in Public Law 106-280, the Security Assistance Act of
  2000, or appropriated in Public Law 107-77, the Departments of Commerce, Justice, State, the Judiciary, and
  Related Agencies Appropriation Act, Fiscal Year 2002.

Basis of Estimate

    Most of the bill's budgetary impact would stem from 
authorizations for current programs administered by the 
Departments of Defense (DOD) and State. In addition, the bill 
contains earmarks for various programs and activities. Earmarks 
for programs and activities for which funds have not otherwise 
been authorized or appropriated are treated as new 
authorizations and their budgetary impact is included with 
spending subject to appropriation. Earmarks of current 
appropriations could affect direct spending and their effect is 
included with the bill's other provisions that would affect 
direct spending. Finally, the provisions authorizing the 
transfer of naval vessels would increase collections from asset 
sales.
    Spending Subject to Appropriation.--The estimate assumes 
enactment of this legislation before the end of calendar year 
2001 and subsequent appropriation of the authorized amounts for 
each year. CBO estimates that implementing the bill would cost 
about $5.9 billion over the 2002-2006 period. The estimate 
assumes that outlays for existing programs would follow 
historical patterns.
    Spending subject to appropriation would be affected by the 
legislation in two ways. First, the bill specifies 
authorizations of appropriations totaling about $4.1 billion 
for fiscal year 2002, and about $4.8 billion for fiscal year 
2003 (see Table 2). Most of the 2002 level, however, has 
already been authorized by Public Law 106-280, the Security 
Assistance Act of 2002.
    In addition, the bill would earmark additional funds, some 
of which have been previously appropriated. The totals of such 
earmarks are about $1.5 billion for 2002 and about $1.4 billion 
for 2003 (see Table 3).
    Taken together, the specific authorizations and earmarks of 
additional funds result in net new authorizations of $220 
million in 2002 and $6.1 billion in 2003 (as shown under 
``Proposed Changes'' in Table 1).

   TABLE 2.--SPECIFIC AUTHORIZATIONS OF APPROPRIATIONS IN THE SECURITY
                         ASSISTANCE ACT OF 2001
                (By fiscal year, in trillions of dollars)
------------------------------------------------------------------------
             Account/Program                   2002            2003
------------------------------------------------------------------------
Foreign Military Financing \1\..........          $3,674          $4,267
International Military Education and                  75              85
 Training \1\...........................
Nonproliferation Assistance \1\.........              73              75
Anti-terrorism Assistance \1\...........             142             152
Debt for Nonproliferation...............             100             200
                                         -------------------------------
    Total specified authorizations......           4,064           4,779
------------------------------------------------------------------------
\1\ For 2002, the authorizations represent an increase over the amount
  authorized for those programs in Public Law 106-280, the Security
  Assistance Act of 2000, of $47 million for foreign military fnancing
  and $10 million for international military education and training.

    Specific Authorizations.--The Security Assistance Act of 
2001 would authorize appropriations for 2002 and 2003 as shown 
in Table 2. For 2002, the authorizations for existing programs 
represent an increase of $57 million over the amounts 
authorized for those programs in Public Law 106-280.
    Subtitle B of title III would establish a new debt-for-
nonproliferation program and would authorize the appropriation 
of $100 million in 2002 and $200 million in 2003 for the cost 
of modifying Soviet-era and food-aid debt owed to the United 
States by Russia. The bill would authorize the Secretary of 
State to negotiate an agreement with the Russian Federation 
that would segregate a portion of the Federation's budget equal 
to the amount that it would otherwise have to pay the United 
States on the outstanding loans and place it under the 
effective control of the U.S. Government. The bill would 
require that a significant portion of those funds be spent on 
nonproliferation activities. The bill would also authorize the 
use of the funds for activities to promote an independent media 
and the rule of law in Russia. The debt modifications would 
include authority to reduce and to restructure debt, to swap 
the debt, or to sell the debt to an eligible purchaser. The 
amounts authorized in this section would be used to cover the 
cost, as defined by the Federal Credit Reform Act, of modifying 
the debt. CBO estimates no outlays from the appropriation of 
the authorized amounts for this purpose because we believe that 
negotiating a framework agreement under the bill would be 
difficult and would likely not be completed.
    Earmarks of Funds Not Specifically Authorized.--The bill 
contains numerous earmarks that could affect spending. In 
addition to earmarks of amounts specifically authorized, the 
bill would earmark amounts that are not otherwise authorized 
and some funds already appropriated as shown in Table 3.
    The bill would extend earmarks of the economic support fund 
for Israel and Egypt contained in Public Law 106-280, the 
Security Assistance Act of 2000, into 2003. Sections 241 and 
242 would authorize using specific amounts of development 
assistance funds for the destruction of surplus weapons and for 
demining programs. Section 606 also would earmark $1.5 million 
in development assistance funds for a grant to the North 
Carolina State University for research on crop and livestock 
pathogens. Since there is no current authorization for 
development assistance, the estimate treats the $51.5 million 
in earmarks for destruction of surplus weapons, demining 
programs, and the grant to North Carolina State University as 
new authorizations.

    TABLE 3.--ADDITIONAL AUTHORIZATIONS THROUGH EARMARKS OF FUNDS NOT
                          OTHERWISE AUTHORIZED
                (By fiscal year, in millions of dollars)
------------------------------------------------------------------------
            Program/Activity                   2002            2003
------------------------------------------------------------------------
Economic Support Fund for Israel \1\....            $720            $600
Economic Support Fund for Egypt \1\.....             655             615
Assistance for Destruction of Surplus                 10              10
 Weapons................................
Demining Programs.......................              40              40
Grant to North Carolina State University               2               0

State Department, Diplomatic and
 Consular Programs:
  Bureau of Verification and Compliance               16              14
   \2\..................................
  Office of Defense Trade Controls \2\..              10              10
State Department, Capital Investment                   4              10
 Fund \2\...............................

Contribution to International
 Organizations:
  International Atomic Energy Agency \2\              60              75
                                         -------------------------------
    Total Additional Authorizations.....           1,517           1,368
------------------------------------------------------------------------
\1\ The amounts for the 2002 economic support fund were authorized in
  Public Law 106-280, the Security Assistance Act of 2000.
\2\ Funds for 2002 were provided in Public Law 107-77, the Departments
  of Commerce, Justice, State, the Judiciary, and Related Agencies
  Appropriation Act, Fiscal Year 2002.

    The bill would earmark, funds provided in Public Law 107-
77, the Departments of Commerce, Justice, State, the Judiciary, 
and Related Agencies Appropriation Act, Fiscal Year 2002. 
Except for the 2002 contribution to the International Atomic 
Energy Agency (IAEA), the amounts shown in Table 3 for the 
Bureau of Verification and Compliance, the Office of Defense 
Trade Controls, and the State Department, Capital Investment 
Fund are minimum levels that the department must make available 
from existing appropriations. The budgetary effect of these 
earmarks on 2002 spending is discussed below under direct 
spending. For 2003, the amounts specified for these same three 
programs/activities are treated as new authorizations in that 
year. Section 308 would authorize $60 million for the IAEA in 
2002. That amount is $11 million higher than amount already 
appropriated in 2002. CBO considers the additional $11 million 
as an authorization for 2002.

Direct Spending

    The bill contains provisions that would reduce direct 
spending through the sale of naval vessels. It also contains 
provisions with direct spending costs. On balance, CBO 
estimates that enacting the Security Assistance Act of 2001. 
would result in net savings in direct spending totaling $31 
million over the 2002-2006 period.
    The earmarks in title I and title IV would increase 
spending by the State Department's Bureau of Verification and 
Compliance and the Office of Defense Trade Controls. But CBO 
assumes the increases for those programs would be taken from 
unearmarked programs and activities within the department and 
would not significantly affect spending.
    Section 203 would reestablish the Special Defense 
Acquisition Fund (SDAF) as a revolving fund capitalized with 
$200 million from defense offsetting receipts. It would strike 
a provision of existing law that limits obligations by the fund 
to amounts provided in advance in appropriations acts and 
substitutes language that would limit obligations to amounts 
authorized by law. The bill also would authorize $20 million in 
obligations from the fund in 2003. In the past, the SDAF 
purchased defense articles in anticipation of their sale to 
foreign governments. Based on information from the Department 
of Defense, the average lag between obligation by the SDAF and 
sale was two to three years, though some items were held 
longer. While the bill is vague on what items may be purchased 
with the $20 million it would provide, CBO estimates that most 
of the items would be sold over the 2003-2006 period based on 
historical experience.
    Section 221(c) would reappropriate $4 million for foreign 
military financing for Israel, the amount rescinded in 2001 by 
the 0.22 percent across-the-board rescission in Public Law 106-
554, the Consolidated Appropriations Act of 2001.
    Two other sections would have an insignificant effect on 
direct spending. Section 306 would make it easier for certain 
engineers and scientists from the former Soviet Union and the 
Baltic States to obtain immigrant visas. This provision could 
affect the level of fees collected and spent by the Immigration 
and Naturalization Service. However, CBO expects that any such 
effects would be insignificant because the number of persons 
aided by the bill would be small. In addition, section 204 
would increase spending on representation allowances for the 
foreign military sales program by $14,000 a year. The funds 
would come from fees collected for administrative expenses of 
the program.
    Asset Sales.--Section 701 would authorize the transfer of 
10 naval vessels to foreign countries. It would authorize the 
sale of three vessels; the other seven would be given away. 
Information from DOD indicates that the asking price for the 
three ships would be approximately $40 million. There is 
significant uncertainty as to whether all three vessels would 
be sold and what the sale price might be. Reflecting this 
uncertainty, CBO estimates that receipts from these sales would 
total $18 million in 2002 and $18 million in 2003.

Pay-as-you-go Considerations

    The Balanced Budget and Emergency Deficit Control Act sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts. The net changes in outlays that are 
subject to pay-as-you-go procedures are shown in Table 4. For 
the purposes of enforcing pay-as-you-go procedures, only the 
effects in the budget year and the succeeding four years are 
counted.

                            TABLE 4.--ESTIMATED IMPACT OF THE SECURITY ASSISTANCE ACT OF 2001 ON DIRECT SPENDING AND RECEIPTS
                                                        (By fiscal year, in millions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  2002     2003     2004     2005     2006     2007     2003     2009     2010     2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays............................................      -14      -10        8       -7       -8        0        0        0        0        0
Changes in receipts \1\.......................................  .......  .......  .......  .......  .......  .......  .......  .......  .......  .......
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Not applicable.

Intergovernmental and Private-Sector Impact

    The Security Assistance Act of 2001 contains no 
intergovernmental or private-sector mandates as defined in UMRA 
and would impose no costs on state, local, or tribal 
governments.

Previous CBO Estimate

    CBO prepared cost estimates for two other acts that contain 
provisions that would authorize the transfer of the same naval 
vessels as this bill. On May 4, 2001., CBO transmitted an 
estimate for H.R. 1646, the Foreign Relations Authorization 
Act, Fiscal Years 2002 and 2003, as ordered reported by the 
House Committee on International Relations on May 2, 2001. On 
September 19, 2001, CBO transmitted an estimate for S. 1416, 
the National Defense Authorization Act for Fiscal Year 2002, as 
reported by the Senate Committee on Armed Services on September 
12, 2001. Both of those acts would authorize the sale of the 
same vessels specified in the Security Assistance Act of 2001 
along with four additional ships. CBO's estimates of the 
proceeds from the sale of the three ships identified in this 
bill are unchanged from our previous estimates. Differences in 
the other estimated costs reflect differences in the 
legislation.
    ate prepared by.--Federal Costs: Joseph C. Whitehall. 
Impact on State, Local, and Tribal Governments: Elyse Goldman. 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by.--Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      VI. Changes in Existing Law

    In compliance with Rule XXVI, paragraph 12 of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, existing law in which no change is proposed is shown in 
roman):

                     Foreign Assistance Act of 1961

                                 Part I

       Chapter 1--Policy; Development Assistance Authorizations

           *       *       *       *       *       *       *

SEC. 116. HUMAN RIGHTS.

    (a) * * *

           *       *       *       *       *       *       *

    (d) The Secretary of State shall transmit to the Speaker of 
the House of Representatives and the Committee on Foreign 
Relations of the Senate, by February 25 of each year, a full 
and complete report regarding--
          (1) * * *

           *       *       *       *       *       *       *

          (6) * * *
          (7) to the extent practicable, for any violation of 
        internationally recognized human rights reported under 
        this subsection, whether any foreign military or 
        defense ministry civilian participant in education and 
        training activities under chapter 5 of part II of this 
        Act was involved;
          [(7)](8) wherever applicable, violations of religious 
        freedom, including particularly severe violations of 
        religious freedom (as defined in section 3 of the 
        International Religious Freedom Act of 1998) and
          [(8)](9) wherever applicable, consolidated 
        information regarding the commission of war crimes, 
        crimes against humanity, and evidence of acts that may 
        constitute genocide (as defined in article 2 of the 
        Convention on the Prevention and Punishment of the 
        Crime of Genocide and modified by the United States 
        instrument of ratification to that convention and 
        section 2(a) of the Genocide Convention Implementation 
        Act of 1987).

           *       *       *       *       *       *       *

                                Part II

           *       *       *       *       *       *       *

                     Chapter 2--Military Assistance

SEC. 506. SPECIAL AUTHORITY.

    (a)(1) If the President determines and reports to the 
Congress in accordance with section 652 of this Act that--

           *       *       *       *       *       *       *

    [(c) For the purposes of any provision of law that 
authorizes the drawdown of defense or other articles or 
commodities, or defense or other services from an agency of the 
United States Government, such drawdown may include the supply 
of commercial transportation and related services that are 
acquired by contract for the purposes of the drawdown in 
question if the cost to acquire such commercial transportation 
and related services is less than the cost to the United States 
Government of providing such services from existing agency 
assets.]
    (c) For the purposes of any provision of law that 
authorizes the drawdown of defense or other articles or 
commodities, or defense or other services from an agency of the 
United States Government, such drawdown may include the supply 
of commercial transportation and related services and defense 
or other articles or commodities, or defense or other services, 
that are acquired by contract for the purposes of the drawdown 
in question, if the cost to acquire such items or services is 
less than the cost to the United States Government of providing 
such items or services from existing agency assets.

           *       *       *       *       *       *       *

       Chapter 5--International Military Education and Training

           *       *       *       *       *       *       *

SEC. 548. RECORDS REGARDING FOREIGN PARTICIPANTS.

    [In] (a) Development and Maintenance of Database.--In order 
to contribute most effectively to the development of military 
professionalism in foreign countries, the Secretary of Defense 
shall develop and maintain a database containing records on 
each foreign military or defense ministry civilian participant 
in education and training activities conducted under this 
chapter after December 31, 2000. This record shall include the 
type of instruction received, the dates of such instruction, 
whether such instruction was completed successfully, and, to 
the extent practicable, a record of the person's subsequent 
military or defense ministry career and current position and 
location.
  (b) Annual List of Foreign Personnel.--For the purposes of 
preparing the report required pursuant to section 116(d), the 
Secretary of State may annually request the Secretary of 
Defense to provide information contained in the database with 
respect to a list submitted to the Secretary of Defense by the 
Secretary of State, containing the names of foreign personnel 
or military units. To the extent practicable, the Secretary of 
Defense shall provide, and the Secretary of State may take into 
account, the information contained in the database, if any, 
relating to the Secretary of State's submission.
  (c) Updating of Database.--If the Secretary of State 
determines and reports to Congress under section 116(d) that a 
foreign person identified in the database maintained pursuant 
to this section was involved in a violation of internationally 
recognized human rights, the Secretary of Defense shall ensure 
that the database is updated to contain such fact and all 
relevant information.

           *       *       *       *       *       *       *

                  Chapter 8--Antiterrorism Assistance

           *       *       *       *       *       *       *

SEC. 574. AUTHORIZATIONS OF APPROPIATIONS.

    (a) There are authorized to be appropriated to the 
President to carry out this chapter [$72,000,000 for fiscal 
year 2001 and $73,000,000 for fiscal year 2002] $73,000,000 for 
fiscal year 2002 and $75,000,000 for fiscal year 2003.
    (b)* * *

           *       *       *       *       *       *       *

      Chapter 9--Nonproliferation and Export Control Assistance

           *       *       *       *       *       *       *

SEC. 584. INTERNATIONAL NONPROLIFERATION EXPORT CONTROL TRAINING.

  (a) General Authority.--The President is authorized to 
furnish, on such terms and conditions consistent with this 
chapter (but whenever feasible on a reimbursable basis), 
education and training to foreign personnel for the purpose of 
enhancing the nonproliferation and export control capabilities 
of such personnel through their attendance in special courses 
of instruction conducted by the United States.
  (b) Administration of Courses.--The Secretary of State shall 
have overall responsibility for the development and conduct of 
international nonproliferation education and training programs, 
but may utilize other departments and agencies, as appropriate, 
to recommend personnel for the education and training, and to 
administer specific courses of instruction.
  (c) Purposes.--Education and training activities conducted 
under this section shall be--
          (1) of a technical nature, emphasizing techniques for 
        detecting, deterring, monitoring, interdicting, and 
        countering proliferation;
          (2) designed to encourage effective and mutually 
        beneficial relations and increased understanding 
        between the United States and friendly countries; and
          (3) designed to improve the ability of friendly 
        countries to utilize their resources with maximum 
        effectiveness, thereby contributing to greater self-
        reliance by such countries.
  (d) Priority to Certain Countries.--In selecting military and 
foreign governmental personnel for education and training 
pursuant to this section, priority shall be given to personnel 
from countries for which the Secretary of State has given 
priority under section 583(b).

SEC. [584.] 585. LIMITATIONS.

           *       *       *       *       *       *       *

SEC. [585.] 586. AUTHORIZATION OF APPROPRIATIONS.

    (a) Authorization of Appropriations.-- There are authorized 
to be appropriated to the President to carry out this chapter 
[$129,000,000 for fiscal year 2001 and $142,000,000 for fiscal 
year 2002.] $142,000,000 for fiscal year 2002 and $152,000,000 
for fiscal year 2003.
    (b) Availability of Funds.-- * * *
    (c) Treatment of Fiscal Year [2001] 2002 Appropriations.-- 
Amounts made available by the Foreign Operations, Export 
Financing, and Related Programs Appropriations Act, [2001] 
2002, under ``Nonproliferation, Antiterrorism, Demining, and 
Related Programs'' and ``Assistance for the Independent States 
of the Former Soviet Union'' accounts for the activities 
described in subsection (d) shall be considered to be made 
aviailable pursuant to this chapter.

           *       *       *       *       *       *       *

                               Part III

           *       *       *       *       *       *       *

                 Chapter 3--Miscellaneous Provisions

           *       *       *       *       *       *       *

SEC. 655. ANNUAL MILITARY ASSISTANCE REPORT.

    (a) Report Required.-- * * *
    (b) Information Relating to Military Assistance and 
Military Exports.-- * * *
    [(c) Information Relating to Military Imports.--Each such 
report shall also include the total amount of military items 
manufactured outside the United States that were imported into 
the United States during the fiscal year covered by the report. 
For each country of origin the report shall show the type of 
item being imported and the total amount of the items.]
    [(d)] (c) Availability on Internet.--All unclassified 
portions of such report shall be made available to the public 
on the Internet through the Department of State.

           *       *       *       *       *       *       *

                      The Arms Export Control Act

    Chapter 1--Foreign and National Security Policy Objectives and 
                              Restraints

           *       *       *       *       *       *       *

SEC. 3. ELIGIBILITY.

           *       *       *       *       *       *       *

    (d)(1) [The President may not] Subject to paragraph (5), 
the President may not give his consent under paragraph (2) of 
subsection (a) or under the third sentence of such subsection, 
or under section 505(a)(1) or 505(a)(4) of the Foreign 
Assistance Act of 1961, to a transfer of any major defense 
equipment valued (in terms of its original acquisition cost) at 
$14,000,000 or more, or any defense article or related training 
or other defense service valued (in terms of its original 
acquisition cost) at $50,000,000 or more, unless the President 
submits to the Speaker of the House of Representatives and the 
Committee on Foreign Relations of the Senate a written 
certification with respect to such proposed transfer 
containing--

           *       *       *       *       *       *       *

    (3)(A) [The President may not] Subject to paragraph (5), 
the President may not give his consent to the transfer of any 
major defense equipment valued (in terms of its original 
acquisition cost) at $14,000,000 or more, or of any defense 
article or defense service valued (in terms of its original 
acquisition cost) at $50,000,000 or more, the export of which 
has been licensed or approved under section 38 of this Act, 
unless before giving such consent the President submits to the 
Speaker of the House of Representatives and the Chairman of the 
Committee on Foreign Relations of the Senate a certification 
containing the information specified in subparagraphs (A) 
through (E) of paragraph (1). Such certification shall be 
submitted--

           *       *       *       *       *       *       *

  (5) In the case of a transfer to a member country of the 
North Atlantic Treaty Organization (NATO) or Australia, Japan, 
or New Zealand that does not authorize a new sales territory 
that includes any country other than such countries, the 
limitations on consent of the President set forth in paragraphs 
(1) and (3)(A) shall apply only if the transfer is--
          (A) a transfer of major defense equipment valued (in 
        terms of its original acquisition cost) at $25,000,000 
        or more; or
          (B) a transfer of defense articles or defense 
        services valued (in terms of its original acquisition 
        cost) at $100,000,000 or more).

           *       *       *       *       *       *       *

SEC. 4. PURPOSES FOR WHICH MILITARY SALES BY THE UNITED STATES ARE 
                    AUTHORIZED.

    Defense articles and defense services shall be sold or 
leased by the United States Government under this Act to 
friendly countries solely for internal security, for legitimate 
self-defense, for preventing or hindering the proliferation of 
weapons of mass destruction and of the means of delivering such 
weapons, to permit the recipient country to participate in 
regional or collective arrangements or measures consistent with 
the Charter of the United Nations, or otherwise to permit the 
recipient country to participate in collective measures 
requested by the United Nations for the purpose of maintaining 
or restoring international peace and security, or for the 
purpose of enabling foreign military forces in less developed 
friendly countries to construct public works and to engage in 
other activities helpful to the economic and social development 
of such friendly countries. It is the sense of the Congress 
that such foreign military forces should not be maintained or 
established solely for civic action activities and that such 
civic action activities not significantly detract from the 
capability of the military forces to perform their military 
missions and be coordinated with and form part of the total 
economic and social development effort: Provided, That none of 
the funds contained in this authorization shall be used to 
guarantee, or extend credit, or participate in an extension of 
credit in connection with any sale of sophisticated weapons 
systems, such as missile systems and jet aircraft for military 
purposes, to any underdeveloped country other than Greece, 
Turkey, Iran, Israel, the Republic of China, the Philippines, 
and Korea unless the President determines that such financing 
is important to the national security of the United States and 
reports within thirty days each such determination to the 
Congress.

           *       *       *       *       *       *       *

                  Chapter 3--Military Export Controls

           *       *       *       *       *       *       *

SEC. 36. REPORTS ON COMMERCIAL AND GOVERNMENTAL MILITARY EXPORTS; 
                    CONGRESSIONAL ACTION.

    (a) * * *
          (1) * * *

           *       *       *       *       *       *       *

          [(7) an estimate of--
                  [(A) the number of United States military 
                personnel, the number of United States 
                Government civilian personnel, and the United 
                States civilian contract personnel, who were in 
                each foreign country at the end of that 
                quarter, and
                  [(B) the number of members of each such 
                category of personnel who were in each foreign 
                country at any time during that quarter,]

in implementation of sales and commercial exports under this 
Act or of assistance under chapter 2, 5, 6, or 8 of part II of 
the Foreign Assistance Act of 1961, including both personnel 
assigned to the country and personnel temporarily in the 
country by detail or otherwise;
          [(8)](7) a description of each payment, contribution, 
        gift, commission, or fee reported to the Secretary of 
        State under section 39, including (A) the name of the 
        person who made such payment, contribution, gift, 
        commission, or fee; (B) the name of any sales agent or 
        other person to whom such payment, contribution, gift, 
        commission, or fee was paid; (C) the date and amount of 
        such payment, contribution, gift, commission, or fee; 
        (D) a description of the sale in connection with which 
        such payment, contribution, gift, commission, or fee 
        was paid; and (E) the identification of any business 
        information considered confidential by the person 
        submitting it which is included in the report;
          [(9)](8) a listing of each sale under section 29 
        during the quarter for which such report is made, 
        specifying (A) the purchaser, (B) the United States 
        Government department or agency responsible for 
        implementing the sale, (C) an estimate of the dollar 
        amount of the sale, and (D) a general description of 
        the real property facilities to be constructed pursuant 
        to such sale;
          [(10)](9) a listing of the consents to third-party 
        transfers of defense articles or defense services which 
        were granted, during the quarter for which such report 
        is submitted, for purposes of section 3(a)(2) of this 
        Act, the regulations issued under section 38 of this 
        Act, or section 505(a)(1)(B) of the Foreign Assistance 
        Act of 1961, if the value (in terms of original 
        acquisition cost) of the defense articles or defense 
        services to be transferred is $1,000,000 or more;
          [(11)](10) a listing of all munitions items (as 
        defined in section 40(l)(1)) which were sold, leased, 
        or otherwise transferred by the Department of Defense 
        to any other department, agency, or other entity of the 
        United States Government during the quarter for which 
        such report is submitted (including the name of the 
        recipient Government entity and a discussion of what 
        that entity will do with those munitions items) if--
                  (A) the value of the munitions items was 
                $250,000 of more; and
                  (B) the value of all munitions items 
                transferred to that Government department, 
                agency, or other entity during that quarter was 
                $250,000 or more;

        excluding munitions items transferred (i) for 
        disposition or use solely within the United States, or 
        (ii) for use in connection with intelligence activities 
        subject to reporting requirements under title V of the 
        National Security Act of 1947 (50 U.S.C. 413 et seq.; 
        relating to congressional oversight of intelligence 
        activities);
          [(12)](11) a report on all concluded government-to-
        government agreements regarding foreign coproduction of 
        defense articles of United States origin and all other 
        concluded agreements involving coproduction or licensed 
        production outside of the United States of defense 
        articles of United States origin (including 
        coproduction memoranda of understanding or agreement) 
        that have not been previously reported under this 
        subsection, which shall include--

           *       *       *       *       *       *       *

    (b)[(1) In the case of] (1) Subject to paragraph (6), in 
the case of any letter of offer to sell any defense articles or 
services under this Act for $50,000,000 or more, any design and 
construction services for $200,000,000 or more, or any major 
defense equipment for $14,000,000 or more, before such letter 
of offer is issued, the President shall submit to the Speaker 
of the House of Representatives and to the chairman of the 
Committee on Foreign Relations of the Senate a numbered 
certification with respect to such offer to sell containing the 
information specified in clauses (i) through (iv) of subsection 
(a), or (in the case of a sale of design and construction 
services) the information specified in clauses (A) through (D) 
of paragraph (9) of subsection (a), and a description, 
containing the information specified in paragraph (8) of 
subsection (a), of any contribution, gift, commission, or fee 
paid or offered or agreed to be paid in order to solicit, 
promote, or otherwise to secure such letter of offer. Such 
numbered certifications shall also contain an item, classified 
if necessary, identifying the sensitivity of technology 
contained in the defense articles, defense services, or design 
and construction services proposed to be sold, and a detailed 
justification of the reasons necessitating the sale of such 
articles or services in view of the sensitivity of such 
technology. In a case in which such articles or services listed 
on the Missile Technology Control Regime Annex are intended to 
support the design, development, or production of a Category I 
space launch vehicle system (as defined in section 74), such 
report shall include a description of the proposed export and 
rationale for approving such export, including the consistency 
of such export with United States missile nonproliferation 
policy. Each such numbered certification shall contain an item 
indicating whether any offset agreement is proposed to be 
entered into in connection with such letter of offer to sell 
(if known on the date of transmittal of such certification). In 
addition, the President shall, upon the request of such 
committee or the Committee on Foreign Affairs of the House of 
Representatives, transmit promptly to both such committees a 
statement setting forth, to the extent specified in such 
request--
          (A) * * *
    (5) (A) * * *

           *       *       *       *       *       *       *

    [(C) If] (C) Subject to paragraph (6), if the enhancement 
or upgrade in the sensitivity of technology or the capability 
of major defense equipment, defense articles, defense services, 
or design and construction services described in a numbered 
certification submitted under this subsection costs $14,000,000 
or more in the case of any major defense equipment, $50,000,000 
or more in the case of defense articles or defense services, or 
$200,000,000 or more in the case of design or construction 
services, then the President shall submit to the Speaker of the 
House of Representatives and the chairman of the Committee on 
Foreign Relations of the Senate a new numbered certification 
which relates to such enhancement or upgrade and which shall be 
considered for purposes of this subsection as if it were a 
separate letter of offer to sell defense equipment, articles, 
or services, subject to all of the requirements, restrictions, 
and conditions set forth in this subsection. For purposes of 
this subparagraph, references in this subsection to sales shall 
be deemed to be references to enhancements or upgrades in the 
sensitivity of technology or the capability of major defense 
equipment, articles, or services, as the case may be.
    (D) For the purposes of subparagraph (A), the term ``major 
defense article'' shall be construed to include electronic 
devices, which if upgraded, would enhance the mission 
capability of a weapons system.
  (6) The limitation in paragraph (1) and the requirement in 
paragraph (5)(C) shall apply in the case of a letter of offer 
to sell to a member country of the North Atlantic Treaty 
Organization (NATO) or Australia, Japan, or New Zealand that 
does not authorize a new sales territory that includes any 
country other than such countries only if the letter of offer 
involves--
          (A) sale of major defense equipment under this Act 
        for, or enhancement or upgrade of major defense 
        equipment at a cost of, $25,000,000 or more, as the 
        case may be; and
          (B) sale of defense articles or services for, or 
        enhancement or upgrade of defense articles or services 
        at a cost of, $100,000,000 or more, as the case may be; 
        or
          (C) sale of design and construction services for, or 
        enhancement or upgrade of design and construction 
        services at a cost of, $300,000,000 or more, as the 
        case may be.
    (c) [(1) In the case of] Subject to paragraph (5), in the 
case of an application by a person (other than with regard to a 
sale under section 21 or section 22 of this Act) for a license 
for the export of any major defense equipment sold under a 
contract in the amount of $14,000,000 or more or of defense 
articles or defense services sold under a contract in the 
amount of $50,000,000 or more, before issuing such license the 
President shall transmit to the Speaker of the House of 
Representatives and to the chairman of the Committee on Foreign 
Relations of the Senate an unclassified numbered certification 
with respect to such application specifying (A) the foreign 
country or international organization to which such export will 
be made, (B) the dollar amount of the items to be exported, and 
(C) a description of the items to be exported. Each such 
numbered certification shall also contain an item indicating 
whether any offset agreement is proposed to be entered into in 
connection with such export and a description of any such 
offset agreement. In addition, the President shall, upon the 
request of such committee or the Committee on Foreign Affairs 
of the House of Representatives, transmit promptly to both such 
committees a statement setting forth, to the extent specified 
in such request a description of the capabilities of the items 
to be exported, an estimate of the total number of United 
States personnel expected to be needed in the foreign country 
concerned in connection with the items to be exported and an 
analysis of the arms control impact pertinent to such 
application, prepared in consultation with the Secretary of 
Defense and a description from the person who has submitted the 
license application of any offset agreement proposed to be 
entered into in connection with such export (if known on the 
date of transmittal of such statement). In a case in which such 
articles or services are listed on the Missile Technology 
Control Regime Annex and are intended to support the design, 
development, or production of a Category I space launch vehicle 
system (as defined in section 74), such report shall include a 
description of the proposed export and rationale for approving 
such export, including the consistency of such export with 
United States missile nonproliferation policy. A certification 
transmitted pursuant to this subsection shall be unclassified, 
except that the information specified in clause (B) and the 
details of the description specified in clause (C) may be 
classified if the public disclosure thereof would be clearly 
detrimental to the security of the United States, in which case 
the information shall be accompanied by a description of the 
damage to the national security that could be expected to 
result from public disclosure of the information.

           *       *       *       *       *       *       *

  (5) In the case of an application by a person (other than 
with regard to a sale under section 21 or 22 of this Act) for a 
license for the export to a member country of the North 
Atlantic Treaty Organization (NATO) or Australia, Japan, or New 
Zealand that does not authorize a new sales territory that 
includes any country other than such countries, the limitation 
on the issuance of the license set forth in paragraph (1) shall 
apply only if the license is for export of--
          (A) major defense equipment sold under a contract in 
        the amount of $25,000,000 or more; or
          (B) defense articles or defense services sold under a 
        contract in the amount of $100,000,000 or more.

           *       *       *       *       *       *       *

SEC. 40. TRANSACTIONS WITH COUNTRIES SUPPORTING ACTS OF INTERNATIONAL 
                    TERRORISM.

    (a) * * *

           *       *       *       *       *       *       *

    (d) Countries Covered by Prohibition.--The prohibitions 
contained in this section apply with respect to a country if 
the Secretary of State determines that the government of that 
country has repeatedly provided support for acts of 
international terrorism. For purposes of this subsection, such 
acts shall include all activities that the Secretary determines 
willfully aid or abet the international proliferation of 
nuclear explosive devices or chemical, biological, or 
radiological agents to individuals or groups or willfully aid 
or abet an individual or groups in acquiring unsafeguarded 
special nuclear material or chemical, biological, or 
radiological agents.

           *       *       *       *       *       *       *

    Chapter 4--General, Administrative, and Miscellaneous Provisions

           *       *       *       *       *       *       *

SEC. 43. ADMINISTRATIVE EXPENSES.

    (a) * * *
    (b) * * *
    (c) Not more than [$72,500] $86,500 of the funds derived 
from charges for administrative services pursuant to section 
21(e)(1)(A) of this Act may be used each fiscal year for 
official reception and representation expenses.

           *       *       *       *       *       *       *

SEC. 47. DEFINITIONS.

    (1) * * *

           *       *       *       *       *       *       *

    (8) ``design and construction services'' means, with 
respect to sales under section 29 of this Act, the design and 
construction of real property facilities, including necessary 
construction equipment and materials, engineering services, 
construction contract management services relating thereto, and 
technical advisory assistance in the operation and maintenance 
of real property facilities provided or performed by any 
department or agency of the Department of Defense or by a 
contractor pursuant to a contract with such department or 
agency; [and]
    (9) ``significant military equipment'' means articles--
          (A) for which special export controls are warranted 
        because of the capacity of such articles for 
        substantial military utility or capability; and
          (B) identified on the United States Munitions 
        List[.]; and
    (10) ``weapons of mass destruction'' has the meaning 
provided by section 1403(1) of the Defense Against Weapons of 
Mass Destruction Act of 1996 (title XIV of Public Law 104-201; 
110 Stat. 2717; 50 U.S.C. 2302(1)).

           *       *       *       *       *       *       *

              Chapter 5--Special Defense Acquisition Fund

SEC. 51. SPECIAL DEFENSE ACQUISITION FUND.

    (a)(1) * * *

           *       *       *       *       *       *       *

    (4) The Fund shall also be used to acquire defense articles 
that are particularly suited [for use for narcotics control 
purposes and are appropriate to the needs of recipient 
countries, such as small boats, planes (including helicopters), 
and communications equipment.] for use for--
          (A) narcotics control purposes and are appropriate to 
        the needs of recipient countries, such as small boats, 
        planes (including helicopters), and communications 
        equipment; and
          (B) nonproliferation and export control purposes, 
        such as nuclear, radiological, chemical, and biological 
        warfare materials detection equipment.

           *       *       *       *       *       *       *

    (c)(1) The size of the Fund may not exceed [such dollar 
amount as is prescribed in section 114(c) of title 10, United 
States Code. For purposes of this limitation, the size of the 
Fund is the amounts in the Fund plus the value (in terms of 
acquisition cost) of the defense articles acquired under this 
chapter which have not been transferred from the Fund in 
accordance with this chapter.] $200,000,000.
    (2) Amounts in the Fund shall be available for obligation 
in any fiscal year only to such extent or in such amounts as 
are [provided in advance in appropriation Acts] specifically 
authorized by law in advance.

           *       *       *       *       *       *       *

     Chapter 6--Leases of Defense Articles and Loan Authority for 
             Cooperative Research and Development Purposes

           *       *       *       *       *       *       *

SEC. 61. LEASING AUTHORITY.

    (a) * * *

           *       *       *       *       *       *       *

    (b) Each lease agreement under this section shall be for a 
fixed duration [of not to exceed five years] that may not 
exceed 5 years, plus a period of time specified in the lease as 
may be necessary for major refurbishment work to be performed 
prior to final delivery by the lessor of the defense articles, 
and shall provide that, at any time during the duration of the 
lease, the President may terminate the lease and require the 
immediate return of the leased articles.
    (c) * * *
    (d) In this section, the term ``major refurbishment work'' 
means refurbishment work performed over a period estimated to 
be 6 months or more.

           *       *       *       *       *       *       *

SEC. 63. LEGISLATIVE REVIEW.

    (a) [In the case of] (1) Subject to paragraph (2), in the 
case of any agreement involving the lease under this chapter, 
or the loan under chapter 2 of part II of the Foreign 
Assistance Act of 1961, to any foreign country or international 
organization for a period of one year or longer of any defense 
articles which are either (i) major defense equipment valued 
(in terms of its replacement cost less any depreciation in its 
value) at $14,000,000 or more, or (ii) defense articles valued 
(in terms of their replacement cost less any depreciation in 
their value) at $50,000,000 or more, the agreement may not be 
entered into or renewed if the Congress, within the 15-day or 
30-day period specified in section 62(c) (1) or (2), as the 
case may be, enacts a joint resolution prohibiting the proposed 
lease or loan.
    (2) In the case of an agreement described in paragraph (1) 
that is entered into with a member country of the North 
Atlantic Treaty Organization (NATO) or Australia, Japan, or New 
Zealand, the limitation in paragraph (1) shall apply only if 
the agreement involves a lease or loan of--
          (A) major defense equipment valued (in terms of its 
        replacement cost less any depreciation in its value) at 
        $25,000,000 or more; or
          (B) defense articles valued (in terms of their 
        replacement cost less any depreciation in their value) 
        at $100,000,000 or more.

           *       *       *       *       *       *       *

                  The Security Assistance Act of 2000

           *       *       *       *       *       *       *

        Title III--Nonproliferation and Export Control Assistance

           *       *       *       *       *       *       *

[SEC. 302. NONPROLIFERATION AND EXPORT CONTROL TRAINING IN THE UNITED 
                    STATES.

    [Of the amounts made available for fiscal years 2001 and 
2002 under chapter 9 of part II of the Foreign Assistance Act 
of 1961, as added by section 301, $2,000,000 is authorized to 
be available each such fiscal year for the purpose of training 
and education of personnel from friendly countries in the 
United States.]

           *       *       *       *       *       *       *

           Title V--Integrated Security Assistance Planning

           *       *       *       *       *       *       *

             SUBTITLE B--ALLOCATIONS FOR CERTAIN COUNTRIES

SEC. 511. SECURITY ASSISTANCE FOR NEW NATO MEMBERS.

    [(a) Foreign Military Financing.--Of the amounts made 
available for the fiscal years 2001 and 2002 under section 23 
of the Arms Export Control Act (22 U.S.C. 2763), $30,300,000 
for fiscal year 2001 and $35,000,000 for fiscal year 2002 are 
authorized to be available on a grant basis for all of the 
following countries: the Czech Republic, Hungary, and Poland.
    [(b) Military Education and Training.--Of the amounts made 
available for the fiscal years 2001 and 2002 to carry out 
chapter 5 of part II of the Foreign Assistance Act of 1961 (22 
U.S.C. 2347 et seq.), $5,100,000 for fiscal year 2001 and 
$7,000,000 for fiscal year 2002 are authorized to be available 
for all of the following countries: the Czech Republic, 
Hungary, and Poland.]
    (c) Select Priorities.--In providing assistance under this 
section, the President shall give priority to supporting 
activities that are consistent with the objectives set forth in 
the following conditions of the Senate resolution of 
ratification for the Protocols to the North Atlantic Treaty of 
1949 on the Accession of Poland, Hungary, and the Czech 
Republic:
          (1) Condition (1)(A)(v), (vi), and (vii), relating to 
        common threats, the core mission of NATO, and the 
        capacity to respond to common threats.
          (2) Condition (1)(B), relating to the fundamental 
        importance of collective defense.
          (3) Condition (1)(C), relating to defense planning, 
        command structures, and force goals.
          (4) Conditions (4)(B)(i) and (4)(B)(ii), relating to 
        intelligence matters.

[SEC. 512. INCREASED TRAINING ASSISTANCE FOR GREECE AND TURKEY.

    [(a) In General.--Of the amounts made available for the 
fiscal years 2001 and 2002 to carry out chapter 5 of part II of 
the Foreign Assistance Act of 1961 (22 U.S.C. 2347 et seq.)--
          [(1) $1,000,000 for fiscal year 2001 and $1,000,000 
        for fiscal year 2002 are authorized to be available for 
        Greece; and
          [(2) $2,500,000 for fiscal year 2001 and $2,500,000 
        for fiscal year 2002 are authorized to be available for 
        Turkey.
    [(b) Use for Professional Military Education.--Of the 
amounts available under paragraphs (1) and (2) of subsection 
(a) for fiscal year 2002, $500,000 of each such amount should 
be available for purposes of professional military education.
    [(c) Use for Joint Training.--It is the sense of the 
Congress that, to the maximum extent practicable, amounts 
available under subsection (a) that are used in accordance with 
subsection (b) should be used for joint training of Greek and 
Turkish officers.]

SEC. 513. ASSISTANCE FOR ISRAEL.

    (a) Definitions.-- * * *

           *       *       *       *       *       *       *

    (b) ESF Assistance.--
          (1) In general.--Of the amounts made available for 
        each of the fiscal years [2001 and 2002] 2002 and 2003 
        for ESF assistance, the amount specified in paragraph 
        (2) for each such fiscal year is authorized to be made 
        available for Israel.

           *       *       *       *       *       *       *

    (c) FMF Program.--
          (1) In general.--Of the amount made available for 
        each of the fiscal years [2001 and 2002] 2002 and 2003 
        for assistance under the Foreign Military Financing 
        Program, the amount specified in paragraph (2) for each 
        such fiscal year is authorized to be made available on 
        a grant basis for Israel.

SEC. 514. ASSISTANCE FOR EGYPT.

    (a) Definitions.-- * * *

           *       *       *       *       *       *       *

    (b) ESF Assistance.--
          (1) In general.--Of the amounts made available for 
        each of the fiscal years [2001 and 2002] 2002 and 2003 
        for ESF assistance, the amount specified in paragraph 
        (2) for each such fiscal year is authorized to be made 
        available for Egypt.

           *       *       *       *       *       *       *

    (c) FMF Program.--Of the amount made available for each of 
the fiscal years [2001 and 2002] 2002 and 2003 for assistance 
under the Foreign Military Financing Program, $1,300,000,000 is 
authorized to be made available on a grant basis for Egypt.

           *       *       *       *       *       *       *

[SEC. 515. SECURITY ASSISTANCE FOR CERTAIN COUNTRIES.

    [(a) Foreign Military Financing.--Of the amounts made 
available for the fiscal years 2001 and 2002 under section 23 
of the Arms Export Control Act (22 U.S.C. 2763)--
          [(1) $18,200,000 for fiscal year 2001 and $20,500,000 
        for fiscal year 2002 are authorized to be available on 
        a grant basis for all of the following countries: 
        Estonia, Latvia, and Lithuania;
          [(2) $2,000,000 for fiscal year 2001 and $5,000,000 
        for fiscal year 2002 are authorized to be available on 
        a grant basis for the Philippines;
          [(3) $4,500,000 for fiscal year 2001 and $5,000,000 
        for fiscal year 2002 are authorized to be available on 
        a grant basis for Georgia;
          [(4) $3,000,000 for fiscal year 2001 and $3,500,000 
        for fiscal year 2002 are authorized to be available on 
        a grant basis for Malta;
          [(5) $3,500,000 for fiscal year 2001 and $4,000,000 
        for fiscal year 2002 are authorized to be available on 
        a grant basis for Slovenia;
          [(6) $8,400,000 for fiscal year 2001 and $8,500,000 
        for fiscal year 2002 are authorized to be available on 
        a grant basis for Slovakia;
          [(7) $11,000,000 for fiscal year 2001 and $11,100,000 
        for fiscal year 2002 are authorized to be available on 
        a grant basis for Romania;
          [(8) $8,500,000 for fiscal year 2001 and $8,600,000 
        for fiscal year 2002 are authorized to be available on 
        a grant basis for Bulgaria; and
          [(9) $100,000,000 for fiscal year 2001 and 
        $105,000,000 for fiscal year 2002 are authorized to be 
        available on a grant basis for Jordan.
    [(b) IMET.--Of the amounts made available for the fiscal 
years 2001 and 2002 to carry out chapter 5 of part II of the 
Foreign Assistance Act of 1961 (22 U.S.C. 2347 et seq.)--
          [(1) $2,300,000 for fiscal year 2001 and $4,000,000 
        for fiscal year 2002 are authorized to be available for 
        all of the following countries: Estonia, Latvia, and 
        Lithuania;
          [(2) $1,400,000 for fiscal year 2001 and $1,500,000 
        for fiscal year 2002 are authorized to be available for 
        the Philippines;
          [(3) $475,000 for fiscal year 2001 and $1,000,000 for 
        fiscal year 2002 are authorized to be available for 
        Georgia;
          [(4) $200,000 for fiscal year 2001 and $1,000,000 for 
        fiscal year 2002 are authorized to be available for 
        Malta;
          [(5) $700,000 for fiscal year 2001 and $1,000,000 for 
        fiscal year 2002 are authorized to be available for 
        Slovenia;
          [(6) $700,000 for fiscal year 2001 and $1,000,000 for 
        fiscal year 2002 are authorized to be available for 
        Slovakia;
          [(7) $1,300,000 for fiscal year 2001 and $1,500,000 
        for fiscal year 2002 are authorized to be available for 
        Romania; and
          [(8) $1,100,000 for fiscal year 2001 and $1,200,000 
        for fiscal year 2002 are authorized to be available for 
        Bulgaria.]

           *       *       *       *       *       *       *

                   Arms Control and Disarmament Act

           *       *       *       *       *       *       *

SEC. 403. ANNUAL REPORT TO CONGRESS.

    (a) In General.--Not later than [January 31] April 15 of 
each year, the President shall submit to the Speaker of the 
House of Representatives and to the chairman of the Committee 
on Foreign Relations of the Senate a report prepared by the 
Secretary of State with the concurrence of the Director of 
Central Intelligence and in consultation with the Secretary of 
Defense, the Secretary of Energy, and the Chairman of the Joint 
Chiefs of Staff on the status of United States policy and 
actions with respect to arms control, nonproliferation, and 
disarmament. Such report shall include--

           *       *       *       *       *       *       *

Act of July 21, 1996 (P.L. 104-164)

           *       *       *       *       *       *       *

SEC. 105. EXCESS DEFENSE ARTICLES FOR CERTAIN EUROPEAN COUNTRIES.

    Notwithstanding section 516(e) of the Foreign Assistance 
Act of 1961, as added by this Act, during each of the fiscal 
years [2001 and 2002] 2002 and 2003, funds available to the 
Department of Defense may be expended for crating, packing, 
handling, and transportation of excess defense articles 
transferred under the authority of section 516 of such Act to 
countries that are eligible to participate in the Partnership 
for Peace and that are eligible for assistance under the 
Support for East European Democracy (SEED) Act of 1989.

           *       *       *       *       *       *       *

              Soviet Scientists Immigration Act of 1992

           *       *       *       *       *       *       *

SEC. 4. CLASSIFICATION OF INDEPENDENT STATES SCIENTISTS AS HAVING 
                    EXCEPTIONAL ABILITY.

    (a) In General.--The Attorney General shall designate a 
class of eligible independent states and Baltic scientists, 
based on their level of expertise, as aliens who possess 
``exceptional ability in the sciences'', for purposes of 
section 203(b)(2)(A) of the Immigration and Nationality Act (8 
U.S.C. 1153(b)(2)(A)), whether or not such scientists possess 
advanced degrees. A scientist is not eligible for designation 
under this subsection if the scientist has previously been 
granted the status of an alien lawfully admitted for permanent 
residence (as defined in section 101(a)(20) of the Immigration 
and Nationality Act (8 U.S.C. 1101(a)(20).
    (b) Regulations.--The Attorney General shall p[rescribe 
regulations to carry out subsection (a).
    (c) Limitation.--Not more than [750] 950 eligible 
independent states and Baltic scientists (excluding spouses and 
children if accompanying or following to join) within the class 
designated under subsection (a) may be allotted visas under 
section 203(b)(2)(A) of the Immigration and Nationality Act (8 
U.S.C. 1153(b)(2)(A)).
    [(d) Termination.--The authority of subsection (a) shall 
terminate 4 years after the date of enactment of this Act.]
  (d) Duration of Authority.--The authority under subsection 
(a) shall be in effect during the following periods:
          (1) The period beginning on the date of the enactment 
        of this Act and ending 4 years after such date.
          (2) The period beginning on the date of the enactment 
        of the Security Assistance Act of 2001 and ending 4 
        years after such date.

           *       *       *       *       *       *       *

Chemical and Biological Weapons Control and Warfare Elimination Act of 
                       1991 (Public Law 102-182)

             Title III--Control and Elimination of Chemical
                            
                        and Biological Weapons

           *       *       *       *       *       *       *

[SEC. 308. PRESIDENTIAL REPORTING REQUIREMENTS.

    [(a) Reports to Congress.--Not later than 90 days after the 
date of the enactment of this title, and every 12 months 
thereafter, the President shall transmit to the Congress a 
report which shall include--
          [(1) a description of the actions taken to carry out 
        this title, including the amendments made by this 
        title;
          [(2) a description of the current efforts of foreign 
        countries and subnational groups to acquire equipment, 
        materials, or technology to develop, produce, or use 
        chemical or biological weapons, together with an 
        assessment of the current and likely future 
        capabilities of such countries and groups to develop, 
        produce, stockpile, deliver, transfer, or use such 
        weapons;
          [(3) a description of--
                  [(A) the use of chemical weapons by foreign 
                countries in violation of international law,
                  [(B) the use of chemical weapons by 
                subnational groups,
                  [(C) substantial preparations by foreign 
                countries and subnational groups to do so, and
                  [(D) the development, production, 
                stockpiling, or use of biological weapons by 
                foreign countries and subnational groups; and
          [(4) a description of the extent to which foreign 
        persons or governments have knowingly and materially 
        assisted third countries or subnational groups to 
        acquire equipment, material, or technology intended to 
        develop, produce, or use chemical or biological 
        weapons.
    [(b) Protection of Classified Information.--To the extent 
practicable, reports submitted under subsection (a) or any 
other provision of this title should be based on unclassified 
information. Portions of such reports may be classified.]

                                  
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