79–006

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 106–868

SECURITY ASSISTANCE ACT OF 2000

SEPTEMBER 19, 2000.—Ordered to be printed

Mr. GOODLING, from the Committee of Conference,

submitted the following

CONFERENCE REPORT

[To accompany H.R. 4919]

The committee of conference on the disagreeing votes of the

two Houses on the amendment of the Senate to the bill (H.R.

4919), to amend the Foreign Assistance Act of 1961 and the Arms

Export Control Act to make improvements to certain defense and

security assistance provisions under those Acts, to authorize the

transfer of naval vessels to certain foreign countries, and for other

purposes, having met, after full and free conference, have agreed

to recommend and do recommend to their respective Houses as follows:

That the House recede from its disagreement to the amendment of the Senate and agree to the same with an amendment as

follows:

In lieu of the matter proposed to be inserted by the Senate

amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Security Assistance Act of 2000’’.

(b) TABLE OF CONTENTS.—The table of contents for this Act is

as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definition.

TITLE I—MILITARY AND RELATED ASSISTANCE

Subtitle A—Foreign Military Sales and Financing Authorities

Sec. 101. Authorization of appropriations.

Sec. 102. Requirements relating to country exemptions for licensing of defense items

for export to foreign countries.

Subtitle B—Stockpiling of Defense Articles for Foreign Countries

Sec. 111. Additions to United States war reserve stockpiles for allies.

Sec. 112. Transfer of certain obsolete or surplus defense articles in the war reserve

stockpiles for allies to Israel.

2

Subtitle C—Other Assistance

Sec. 121. Defense drawdown special authorities.

Sec. 122. Increased authority for the transport of excess defense articles.

TITLE II—INTERNATIONAL MILITARY EDUCATION AND TRAINING

Sec. 201. Authorization of appropriations.

Sec. 202. Additional requirements.

TITLE III—NONPROLIFERATION AND EXPORT CONTROL ASSISTANCE

Sec. 301. Nonproliferation and export control assistance.

Sec. 302. Nonproliferation and export control training in the United States.

Sec. 303. Science and technology centers.

Sec. 304. Trial transit program.

Sec. 305. Exception to authority to conduct inspections under the Chemical Weapons

Convention Implementation Act of 1998.

TITLE IV—ANTITERRORISM ASSISTANCE

Sec. 401. Authorization of appropriations.

TITLE V—INTEGRATED SECURITY ASSISTANCE PLANNING

Subtitle A—Establishment of a National Security Assistance Strategy

Sec. 501. National Security Assistance Strategy.

Subtitle B—Allocations for Certain Countries

Sec. 511. Security assistance for new NATO members.

Sec. 512. Increased training assistance for Greece and Turkey.

Sec. 513. Assistance for Israel.

Sec. 514. Assistance for Egypt.

Sec. 515. Security assistance for certain countries.

Sec. 516. Border security and territorial independence.

TITLE VI—TRANSFERS OF NAVAL VESSELS

Sec. 601. Authority to transfer naval vessels to certain foreign countries.

Sec. 602. Inapplicability of aggregate annual limitation on value of transferred excess defense articles.

Sec. 603. Costs of transfers.

Sec. 604. Conditions relating to combined lease-sale transfers.

Sec. 605. Funding of certain costs of transfers.

Sec. 606. Repair and refurbishment in United States shipyards.

Sec. 607. Sense of Congress regarding transfer of naval vessels on a grant basis.

Sec. 608. Expiration of authority.

TITLE VII—MISCELLANEOUS PROVISIONS

Sec. 701. Utilization of defense articles and defense services.

Sec. 702. Annual military assistance report.

Sec. 703. Report on government-to-government arms sales end-use monitoring program.

Sec. 704. MTCR report transmittals.

Sec. 705. Stinger missiles in the Persian Gulf region.

Sec. 706. Sense of Congress regarding excess defense articles.

Sec. 707. Excess defense articles for Mongolia.

Sec. 708. Space cooperation with Russian persons.

Sec. 709. Sense of Congress relating to military equipment for the Philippines.

Sec. 710. Waiver of certain costs.

SEC. 2. DEFINITION.

In this Act, 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.

3

TITLE I—MILITARY AND RELATED

ASSISTANCE

Subtitle A—Foreign Military Sales and

Financing Authorities

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated for grant assistance

under section 23 of the Arms Export Control Act (22 U.S.C. 2763)

and for the subsidy cost, as defined in section 502(5) of the Federal

Credit Reform Act of 1990, of direct loans under such section

$3,550,000,000 for fiscal year 2001 and $3,627,000,000 for fiscal

year 2002.

SEC. 102. REQUIREMENTS RELATING TO COUNTRY EXEMPTIONS FOR

LICENSING OF DEFENSE ITEMS FOR EXPORT TO FOREIGN

COUNTRIES.

(a) REQUIREMENTS OF EXEMPTION.—Section 38 of the Arms Export Control Act (22 U.S.C. 2778) is amended by adding at the end

the following:

‘‘(j) REQUIREMENTS RELATING TO COUNTRY EXEMPTIONS FOR

LICENSING OF DEFENSE ITEMS FOR EXPORT TO FOREIGN COUNTRIES.—

‘‘(1) REQUIREMENT FOR BILATERAL AGREEMENT.—

‘‘(A) IN GENERAL.—The President may utilize the regulatory or other authority pursuant to this Act to exempt a

foreign country from the licensing requirements of this Act

with respect to exports of defense items only if the United

States Government has concluded a binding bilateral

agreement with the foreign country. Such agreement

shall—

‘‘(i) meet the requirements set forth in paragraph

(2); and

‘‘(ii) be implemented by the United States and the

foreign country in a manner that is legally-binding

under their domestic laws.

‘‘(B) EXCEPTION.—The requirement to conclude a bilateral agreement in accordance with subparagraph (A) shall

not apply with respect to an exemption for Canada from the

licensing requirements of this Act for the export of defense

items.

‘‘(2) REQUIREMENTS OF BILATERAL AGREEMENT.—A bilateral

agreement referred to paragraph (1)—

‘‘(A) shall, at a minimum, require the foreign country,

as necessary, to revise its policies and practices, and promulgate or enact necessary modifications to its laws and

regulations to establish an export control regime that is at

least comparable to United States law, regulation, and policy requiring—

‘‘(i) conditions on the handling of all United

States-origin defense items exported to the foreign

country, including prior written United States Government approval for any reexports to third countries;

4

‘‘(ii) end-use and retransfer control commitments,

including securing binding end-use and retransfer control commitments from all end-users, including such

documentation as is needed in order to ensure compliance and enforcement, with respect to such United

States-origin defense items;

‘‘(iii) establishment of a procedure comparable to a

‘watchlist’ (if such a watchlist does not exist) and full

cooperation with United States Government law enforcement agencies to allow for sharing of export and

import documentation and background information on

foreign businesses and individuals employed by or otherwise connected to those businesses; and

‘‘(iv) establishment of a list of controlled defense

items to ensure coverage of those items to be exported

under the exemption; and

‘‘(B) should, at a minimum, require the foreign country,

as necessary, to revise its policies and practices, and promulgate or enact necessary modifications to its laws and

regulations to establish an export control regime that is at

least comparable to United States law, regulation, and policy regarding—

‘‘(i) controls on the export of tangible or intangible

technology, including via fax, phone, and electronic

media;

‘‘(ii) appropriate controls on unclassified information relating to defense items exported to foreign nationals;

‘‘(iii) controls on international arms trafficking

and brokering;

‘‘(iv) cooperation with United States Government

agencies, including intelligence agencies, to combat efforts by third countries to acquire defense items, the export of which to such countries would not be authorized pursuant to the export control regimes of the foreign country and the United States; and

‘‘(v) violations of export control laws, and penalties

for such violations.

‘‘(3) ADVANCE CERTIFICATION.—Not less than 30 days before

authorizing an exemption for a foreign country from the licensing requirements of this Act for the export of defense items, the

President shall transmit to the Committee on International Relations of the House of Representatives and the Committee on

Foreign Relations of the Senate a certification that—

‘‘(A) the United States has entered into a bilateral

agreement with that foreign country satisfying all requirements set forth in paragraph (2);

‘‘(B) the foreign country has promulgated or enacted all

necessary modifications to its laws and regulations to comply with its obligations under the bilateral agreement with

the United States; and

‘‘(C) the appropriate congressional committees will continue to receive notifications pursuant to the authorities,

procedures, and practices of section 36 of this Act for defense exports to a foreign country to which that section

5

would apply and without regard to any form of defense export licensing exemption otherwise available for that country.

‘‘(4) DEFINITIONS.—In this section:

‘‘(A) DEFENSE ITEMS.—The term ‘defense items’ means

defense articles, defense services, and related technical

data.

‘‘(B) APPROPRIATE CONGRESSIONAL COMMITTEES.—The

term ‘appropriate congressional committees’ means—

‘‘(i) the Committee on International Relations and

the Committee on Appropriations of the House of Representatives; and

‘‘(ii) the Committee on Foreign Relations and the

Committee on Appropriations of the Senate.’’.

(b) NOTIFICATION OF EXEMPTION.—Section 38(f) of the Arms Export Control Act (22 U.S.C. 2778(f)) is amended—

(1) by inserting ‘‘(1)’’ after ‘‘(f)’’; and

(2) by adding at the end the following:

‘‘(2) The President may not authorize an exemption for a foreign

country from the licensing requirements of this Act for the export of

defense items under subsection (j) or any other provision of this Act

until 30 days after the date on which the President has transmitted

to the Committee on International Relations of the House of Representatives and the Committee on Foreign Relations of the Senate

a notification that includes—

‘‘(A) a description of the scope of the exemption, including

a detailed summary of the defense articles, defense services, and

related technical data covered by the exemption; and

‘‘(B) a determination by the Attorney General that the bilateral agreement concluded under subsection (j) requires the compilation and maintenance of sufficient documentation relating

to the export of United States defense articles, defense services,

and related technical data to facilitate law enforcement efforts

to detect, prevent, and prosecute criminal violations of any provision of this Act, including the efforts on the part of countries

and factions engaged in international terrorism to illicitly acquire sophisticated United States defense items.

‘‘(3) Paragraph (2) shall not apply with respect to an exemption

for Canada from the licensing requirements of this Act for the export of defense items.’’.

(c) EXPORTS OF COMMERCIAL COMMUNICATIONS SATELLITES.—

(1) AMENDMENT OF THE ARMS EXPORT CONTROL ACT.—Section 36(c)(2) of the Arms Export Control Act (22 U.S.C.

2776(c)(2)) is amended—

(A) by striking ‘‘and’’ at the end of subparagraph (A);

(B) by redesignating subparagraph (B) as subparagraph (C); and

(C) by inserting after subparagraph (A) the following:

‘‘(B) in the case of a license for an export of a commercial

communications satellite for launch from, and by nationals of,

the Russian Federation, Ukraine, or Kazakhstan, shall not be

issued until at least 15 calendar days after the Congress receives such certification, and shall not be issued then if the

Congress, within that 15-day period, enacts a joint resolution

prohibiting the proposed export; and’’.

6

(2) SENSE OF CONGRESS.—It is the sense of Congress that

the appropriate committees of Congress and the appropriate

agencies of the United States Government should review the

commodity jurisdiction of United States commercial communications satellites.

(d) SENSE OF CONGRESS ON SUBMISSION TO THE SENATE OF

CERTAIN AGREEMENTS AS TREATIES.—It is the sense of Congress

that, prior to amending the International Traffic in Arms Regulations, the Secretary of State should consult with the appropriate

committees of Congress for the purpose of determining whether certain agreements regarding defense trade with the United Kingdom

and Australia should be submitted to the Senate as treaties.

Subtitle B—Stockpiling of Defense Articles

for Foreign Countries

SEC. 111. ADDITIONS TO UNITED STATES WAR RESERVE STOCKPILES

FOR ALLIES.

Section 514(b)(2) of the Foreign Assistance Act of 1961 (22

U.S.C. 2321h(b)(2)) is amended to read as follows:

‘‘(2)(A) The value of such additions to stockpiles of defense arti- cles in foreign countries shall not exceed $50,000,000 for fiscal year

2001.

‘‘(B) Of the amount specified in subparagraph (A), not more than $50,000,000 may be made available for stockpiles in the Republic of Korea.’’.

SEC. 112. TRANSFER OF CERTAIN OBSOLETE OR SURPLUS DEFENSE

ARTICLES IN THE WAR RESERVE STOCKPILES FOR ALLIES

TO ISRAEL.

(a) TRANSFERS TO ISRAEL.— (1) AUTHORITY.—Notwithstanding section 514 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321h), the President is

authorized to transfer to Israel, in return for concessions to be

negotiated by the Secretary of Defense, with the concurrence of

the Secretary of State, any or all of the items described in paragraph (2).

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

(1) are munitions, equipment, and material such as armor, artillery, automatic weapons ammunition, and missiles that—

(A) are obsolete or surplus items;

(B) are in the inventory of the Department of Defense;

(C) are intended for use as reserve stocks for Israel;

and

(D) as of the date of the enactment of this Act, are located in a stockpile in Israel.

(b) CONCESSIONS.—The value of concessions negotiated pursuant to subsection (a) shall be at least equal to the fair market value

of the items transferred. The concessions may include cash compensation, services, waiver of charges otherwise payable by the

United States, and other items of value.

(c) ADVANCE NOTIFICATION OF TRANSFER.—Not less than 30

days before making a transfer under the authority of this section,

the President shall transmit to the Committee on Foreign Relations

of the Senate and the Committee on International Relations of the

7

House of Representatives a notification of the proposed transfer. The

notification shall identify the items to be transferred and the concessions to be received.

(d) EXPIRATION OF AUTHORITY.—No transfer may be made

under the authority of this section 3 years after the date of the enactment of this Act.

Subtitle C—Other Assistance

SEC. 121. DEFENSE DRAWDOWN SPECIAL AUTHORITIES.

(a) EMERGENCY DRAWDOWN.—Section 506(a)(2)(B) of the Foreign Assistance Act of 1961 (22 U.S.C. 2318(a)(2)(B)) is amended by

striking ‘‘$150,000,000’’ and inserting ‘‘$200,000,000’’.

(b) ADDITIONAL DRAWDOWN.—Section 506(a)(2)(A)(i) of such Act

(22 U.S.C. 2318(a)(2)(A)(i)) is amended—

(1) by striking ‘‘or’’ at the end of subclause (II); and

(2) by striking subclause (III) and inserting the following:

‘‘(III) chapter 8 of part II (relating to

antiterrorism assistance);

‘‘(IV) chapter 9 of part II (relating to nonproliferation assistance); or

‘‘(V) the Migration and Refugee Assistance Act

of 1962; or’’.

SEC. 122. INCREASED AUTHORITY FOR THE TRANSPORT OF EXCESS

DEFENSE ARTICLES.

Section 516(e)(2)(C) of the Foreign Assistance Act of 1961 (22

U.S.C. 2321j(e)(2)(C)) is amended by striking ‘‘25,000’’ and inserting

‘‘50,000’’.

TITLE II—INTERNATIONAL MILITARY

EDUCATION AND TRAINING

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the President $55,000,000 for fiscal year 2001 and $65,000,000 for fiscal year

2002 to carry out chapter 5 of part II of the Foreign Assistance Act

of 1961 (22 U.S.C. 2347 et seq.).

SEC. 202. ADDITIONAL REQUIREMENTS.

Chapter 5 of part II of the Foreign Assistance Act of 1961 (22

U.S.C. 2347 et seq.) is amended by adding at the end the following

new sections:

‘‘SEC. 547. CONSULTATION REQUIREMENT.

‘‘The selection of foreign personnel for training under this chapter shall be made in consultation with the United States defense attache to the relevant country.

‘‘SEC. 548. RECORDS REGARDING FOREIGN PARTICIPANTS.

‘‘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

8

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.’’.

TITLE III—NONPROLIFERATION AND

EXPORT CONTROL ASSISTANCE

SEC. 301. NONPROLIFERATION AND EXPORT CONTROL ASSISTANCE.

Part II of the Foreign Assistance Act of 1961 (22 U.S.C. 2301

et seq.) is amended by adding at the end the following new chapter:

‘‘CHAPTER 9—NONPROLIFERATION AND EXPORT

CONTROL ASSISTANCE

‘‘SEC. 581. PURPOSES.

‘‘The purposes of assistance under this chapter are to halt the

proliferation of nuclear, chemical, and biological weapons, and conventional weaponry, through support of activities designed—

‘‘(1) to enhance the nonproliferation and export control capabilities of friendly countries by providing training and equipment to detect, deter, monitor, interdict, and counter proliferation;

‘‘(2) to strengthen the bilateral ties of the United States

with friendly governments by offering concrete assistance in this

area of vital national security interest;

‘‘(3) to accomplish the activities and objectives set forth in

sections 503 and 504 of the FREEDOM Support Act (22 U.S.C.

5853, 5854), without regard to the limitation of those sections

to the independent states of the former Soviet Union; and

‘‘(4) to promote multilateral activities, including cooperation with international organizations, relating to nonproliferation.

‘‘SEC. 582. AUTHORIZATION OF ASSISTANCE.

‘‘Notwithstanding any other provision of law (other than section

502B or section 620A of this Act), the President is authorized to furnish, on such terms and conditions as the President may determine,

assistance in order to carry out the purposes of this chapter. Such

assistance may include training services and the provision of funds,

equipment, and other commodities related to the detection, deterrence, monitoring, interdiction, and prevention or countering of proliferation, the establishment of effective nonproliferation laws and

regulations, and the apprehension of those individuals involved in

acts of proliferation of such weapons.

‘‘SEC. 583. TRANSIT INTERDICTION.

‘‘(a) ALLOCATION OF FUNDS.—In providing assistance under

this chapter, the President should ensure that not less than onequarter of the total of such assistance is expended for the purpose

of enhancing the capabilities of friendly countries to detect and

interdict proliferation-related shipments of cargo that originate

from, and are destined for, other countries.

‘‘(b) PRIORITY TO CERTAIN COUNTRIES.—Priority shall be given

in the apportionment of the assistance described under subsection

(a) to any friendly country that has been determined by the SecVerDate 11-MAY-2000 14:26 Sep 20, 2000 Jkt 079060 PO 00000 Frm 00008 Fmt 6659 Sfmt 6603 E:\HR\OC\HR868.XXX pfrm03 PsN: HR868
9

retary of State to be a country frequently transited by proliferationrelated shipments of cargo.

‘‘SEC. 584. LIMITATIONS.

‘‘The limitations contained in section 573 (a) and (d) of this Act

shall apply to this chapter.

‘‘SEC. 585. 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.

‘‘(b) AVAILABILITY OF FUNDS.—Funds made available under

subsection (a) may be used notwithstanding any other provision of

law (other than section 502B or 620A) and shall remain available

until expended.’’.

‘‘(c) TREATMENT OF FISCAL YEAR 2001 APPROPRIATIONS.—

Amounts made available by the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 2001, 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 available pursuant to this chapter.

‘‘(d) COVERED ACTIVITIES.—The activities referred to in subsection (c) are—

‘‘(1) assistance under the Nonproliferation and Disarmament Fund;

‘‘(2) assistance for science and technology centers in the

independent states of the former Soviet Union;

‘‘(3) export control assistance; and

‘‘(4) export control and border assistance under chapter 11

of part I of the Foreign Assistance Act of 1961 (22 U.S.C. 2295

et seq.) or the FREEDOM Support Act (22 U.S.C. 5801 et

seq.).’’.

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.

SEC. 303. SCIENCE AND TECHNOLOGY CENTERS.

(a) AVAILABILITY OF FUNDS.—Of the amounts made available

for the fiscal years 2001 and 2002 under chapter 9 of part II of the

Foreign Assistance Act of 1961, as added by section 301,

$59,000,000 for fiscal year 2001 and $65,000,000 for fiscal year

2002 are authorized to be available for science and technology centers in the independent states of the former Soviet Union.

(b) SENSE OF CONGRESS.—It is the sense of Congress, taking

into account section 1132 of H. R. 3427 of the One Hundred and

Sixth Congress (as enacted by section 1000(a)(7) of Public Law 106–

113), that the practice of auditing entities receiving funds authorized under this section should be significantly expanded and that

the burden of supplying auditors should be spread equitably within

the United States Government.

10

SEC. 304. TRIAL TRANSIT PROGRAM.

(a) ALLOCATION OF FUNDS.—Of the amount made available for

fiscal year 2001 under chapter 9 of the Foreign Assistance Act of

1961, as added by section 301, $5,000,000 is authorized to be available to establish a static cargo x-ray facility in Malta, if the Secretary of State first certifies to the appropriate committees of Congress that the Government of Malta has provided adequate assurances that such a facility will be utilized in connection with random

cargo inspections by Maltese customs officials of container traffic

transiting through the Malta Freeport.

(b) REQUIREMENT OF WRITTEN ASSESSMENT.—In the event that

a facility is established in Malta pursuant to subsection (a), the Secretary of State shall submit a written assessment to the appropriate

committees of Congress not later than 270 days after such a facility

commences operation detailing—

(1) statistics on utilization of the facility by Malta;

(2) the contribution made by the facility to United States

nonproliferation and export control objectives; and

(3) the feasibility of establishing comparable facilities in

other countries identified by the Secretary of State pursuant to

section 583 of the Foreign Assistance Act of 1961, as added by

section 301.

(c) TREATMENT OF ASSISTANCE.—Assistance under this section

shall be considered as assistance under section 583(a) of the Foreign

Assistance Act of 1961 (relating to transit interdiction), as added by

section 301.

SEC. 305. EXCEPTION TO AUTHORITY TO CONDUCT INSPECTIONS

UNDER THE CHEMICAL WEAPONS CONVENTION IMPLEMENTATION ACT OF 1998.

Section 303 of the Chemical Weapons Convention Implementation Act of 1998 (22 U.S.C. 6723) is amended by adding at the end

the following new subsection:

‘‘(c) EXCEPTION.—The requirement under subsection (b)(2)(A)

shall not apply to inspections of United States chemical weapons destruction facilities (as used within the meaning of part IV(C)(13) of

the Verification Annex to the Convention).’’.

TITLE IV—ANTITERRORISM

ASSISTANCE

SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

Section 574(a) of the Foreign Assistance Act of 1961 (22 U.S.C.

2349aa–4(a)) is amended by striking ‘‘$9,840,000’’ and all that follows through the period and inserting the following: ‘‘$72,000,000

for fiscal year 2001 and $73,000,000 for fiscal year 2002.’’.

11

TITLE V—INTEGRATED SECURITY

ASSISTANCE PLANNING

Subtitle A—Establishment of a National

Security Assistance Strategy

SEC. 501. NATIONAL SECURITY ASSISTANCE STRATEGY.

(a) MULTIYEAR PLAN.—Not later than 180 days after the date

of enactment of this Act, and annually thereafter at the time of submission of the congressional presentation materials of the foreign

operations appropriations budget request, the Secretary of State

should submit to the appropriate committees of Congress a plan setting forth a National Security Assistance Strategy for the United

States.

(b) ELEMENTS OF THE STRATEGY.—The National Security Assistance Strategy should—

(1) set forth a multi-year plan for security assistance programs;

(2) be consistent with the National Security Strategy of the

United States;

(3) be coordinated with the Secretary of Defense and the

Chairman of the Joint Chiefs of Staff;

(4) be prepared, in consultation with other agencies, as appropriate;

(5) identify overarching security assistance objectives, including identification of the role that specific security assistance

programs will play in achieving such objectives;

(6) identify a primary security assistance objective, as well

as specific secondary objectives, for individual countries;

(7) identify, on a country-by-country basis, how specific resources will be allocated to accomplish both primary and secondary objectives;

(8) discuss how specific types of assistance, such as foreign

military financing and international military education and

training, will be combined at the country level to achieve United

States objectives; and

(9) detail, with respect to each of the paragraphs (1)

through (8), how specific types of assistance provided pursuant

to the Arms Export Control Act and the Foreign Assistance Act

of 1961 are coordinated with United States assistance programs

managed by the Department of Defense and other agencies.

(c) COVERED ASSISTANCE.—The National Security Assistance

Strategy should cover assistance provided under—

(1) section 23 of the Arms Export Control Act (22 U.S.C.

2763);

(2) chapter 5 of part II of the Foreign Assistance Act of

1961 (22 U.S.C. 2347 et seq.); and

(3) section 516 of the Foreign Assistance Act of 1961 (22

U.S.C. 2321i).

12

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 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.—In this section:

(1) ESF ASSISTANCE.—The term ‘‘ESF assistance’’ means

assistance under chapter 4 of part II of the Foreign Assistance

13

Act of 1961 (22 U.S.C. 2346 et seq.), relating to the economic

support fund.

(2) FOREIGN MILITARY FINANCING PROGRAM.—The term

‘‘Foreign Military Financing Program’’ means the program authorized by section 23 of the Arms Export Control Act (22

U.S.C. 2763).

(b) ESF ASSISTANCE.—

(1) IN GENERAL.—Of the amounts made available for each

of the fiscal years 2001 and 2002 for ESF assistance, the

amount specified in paragraph (2) for each such fiscal year is

authorized to be made available for Israel.

(2) COMPUTATION OF AMOUNT.—Subject to subsection (d),

the amount referred to in paragraph (1) is equal to—

(A) the amount made available for ESF assistance for

Israel for the preceding fiscal year, minus

(B) $120,000,000.

(c) FMF PROGRAM.—

(1) IN GENERAL.—Of the amount made available for each of

the fiscal years 2001 and 2002 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 for Israel.

(2) COMPUTATION OF AMOUNT.—Subject to subsection (d),

the amount referred to in paragraph (1) is equal to—

(A) the amount made available for assistance under the

Foreign Military Financing Program for Israel for the preceding fiscal year, plus

(B) $60,000,000.

(3) DISBURSEMENT OF FUNDS.—Funds authorized to be

available for Israel under paragraph (1) for fiscal year 2001

shall be disbursed not later than 30 days after the date of enactment of an Act making appropriations for foreign operations,

export financing, and related programs for fiscal year 2001, or

October 31, 2000, whichever date is later.

(4) AVAILABILITY OF FUNDS FOR ADVANCED WEAPONS SYSTEMS.—To the extent the Government of Israel requests that

funds be used for such purposes, grants made available for

Israel out of funds authorized to be available under paragraph

(1) for Israel for fiscal year 2001 shall, as agreed by Israel and

the United States, be available for advanced weapons systems,

of which not less than $520,000,000 shall be available for the

procurement in Israel of defense articles and defense services,

including research and development.

(d) EXCLUSION OF RESCISSIONS AND SUPPLEMENTAL APPROPRIATIONS.—For purposes of this section, the computation of

amounts made available for a fiscal year shall not take into account

any amount rescinded by an Act or any amount appropriated by an

Act making supplemental appropriations for a fiscal year.

SEC. 514. ASSISTANCE FOR EGYPT.

(a) DEFINITIONS.—In this section:

(1) ESF ASSISTANCE.—The term ‘‘ESF assistance’’ means

assistance under chapter 4 of part II of the Foreign Assistance

Act of 1961 (22 U.S.C. 2346 et seq.), relating to the economic

support fund.

14

(2) FOREIGN MILITARY FINANCING PROGRAM.—The term

‘‘Foreign Military Financing Program’’ means the program authorized by section 23 of the Arms Export Control Act (22

U.S.C. 2763).

(b) ESF ASSISTANCE.—

(1) IN GENERAL.—Of the amounts made available for each

of the fiscal years 2001 and 2002 for ESF assistance, the

amount specified in paragraph (2) for each such fiscal year is

authorized to be made available for Egypt.

(2) COMPUTATION OF AMOUNT.—Subject to subsection (d),

the amount referred to in paragraph (1) is equal to—

(A) the amount made available for ESF assistance for

Egypt during the preceding fiscal year, minus

(B) $40,000,000.

(c) FMF PROGRAM.—Of the amount made available for each of

the fiscal years 2001 and 2002 for assistance under the Foreign

Military Financing Program, $1,300,000,000 is authorized to be

made available for Egypt.

(d) EXCLUSION OF RESCISSIONS AND SUPPLEMENTAL APPROPRIATIONS.—For purposes of this section, the computation of

amounts made available for a fiscal year shall not take into account

any amount rescinded by an Act or any amount appropriated by an

Act making supplemental appropriations for a fiscal year.

(e) DISBURSEMENT OF FUNDS.—Funds estimated to be outlayed

for Egypt under subsection (c) during fiscal year 2001 shall be disbursed to an interest-bearing account for Egypt in the Federal Reserve Bank of New York within 30 days of the date of enactment of

this Act, or by October 31, 2000, whichever is later, provided that—

(1) withdrawal of funds from such account shall be made

only on authenticated instructions from the Defense Finance

and Accounting Service of the Department of Defense;

(2) in the event such account is closed, the balance of the

account shall be transferred promptly to the appropriations account for the Foreign Military Financing Program; and

(3) none of the interest accrued by such account should be

obligated unless the Committee on Appropriations and the

Committee on Foreign Relations of the Senate and the Committee on Appropriations and the Committee on International

Relations of the House of Representatives are notified.

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;

15

(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.

SEC. 516. BORDER SECURITY AND TERRITORIAL INDEPENDENCE.

(a) GUUAM COUNTRIES AND ARMENIA.—For the purpose of carrying out section 499C of the Foreign Assistance Act of 1961 and assisting GUUAM countries and Armenia to strengthen national control of their borders and to promote the independence and territorial

sovereignty of such countries, the following amounts are authorized

to be made available for fiscal years 2001 and 2002:

(1) $5,000,000 for fiscal year 2001 and $20,000,000 for fiscal year 2002 are of the amounts made available under section

23 of the Arms Export Control Act (22 U.S.C. 2763).

(2) $2,000,000 for fiscal year 2001 and $10,000,000 for fiscal year 2002 of the amounts made available under chapter 9

of part II of the Foreign Assistance Act of 1961, as added by

section 301.

(3) $500,000 for fiscal year 2001 and $5,000,000 for fiscal

year 2002 of the amounts made available to carry out chapter

16

5 of part II of the Foreign Assistance Act of 1961 (22 U.S.C.

2347 et seq.).

(4) $1,000,000 for fiscal year 2001 and $2,000,000 for fiscal

year 2002 of the amounts made available to carry out chapter

8 of part II of the Foreign Assistance Act.

(b) GUUAM COUNTRIES DEFINED.—In this section, the term

‘‘GUUAM countries’’ means the group of countries that signed a protocol on quadrilateral cooperation on November 25, 1997, together

with Uzbekistan.

TITLE VI—TRANSFERS OF NAVAL

VESSELS

SEC. 601. AUTHORITY TO TRANSFER NAVAL VESSELS TO CERTAIN FOREIGN COUNTRIES.

(a) BRAZIL.—The President is authorized to transfer to the Government of Brazil two ‘‘THOMASTON’’ class dock landing ships

ALAMO (LSD 33) and HERMITAGE (LSD 34), and four ‘‘GARCIA’’

class frigates BRADLEY (FF 1041), DAVIDSON (FF 1045), SAMPLE (FF 1048) and ALBERT DAVID (FF 1050). Such transfers

shall be on a grant basis under section 516 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j).

(b) CHILE.—The President is authorized to transfer to the Government of Chile two ‘‘OLIVER HAZARD PERRY’’ class guided

missile frigates WADSWORTH (FFG 9), and ESTOCIN (FFG 15).

Such transfers shall be on a combined lease-sale basis under sections 61 and 21 of the Arms Export Control Act (22 U.S.C. 2796,

2761).

(c) GREECE.—The President is authorized to transfer to the Government of Greece two ‘‘KNOX’’ class frigates VREELAND (FF

1068), and TRIPPE (FF 1075). Such transfers shall be on a grant

basis under section 516 of the Foreign Assistance Act of 1961 (22

U.S.C. 2321j).

(d) TURKEY.—The President is authorized to transfer to the

Government of Turkey two ‘‘OLIVER HAZARD PERRY’’ class guided missile frigates JOHN A. MOORE (FFG 19), and FLATLEY

(FFG 21). Such transfers shall be on a combined lease-sale basis

under sections 61 and 21 of the Arms Export Control Act (22 U.S.C.

2796, 2761). The authority granted by this subsection is in addition

to that granted under section 1018(a)(9) of Public Law 106–65.

SEC. 602. INAPPLICABILITY OF AGGREGATE ANNUAL LIMITATION ON

VALUE OF TRANSFERRED EXCESS DEFENSE ARTICLES.

The value of naval vessels authorized under section 601 to be

transferred on a grant basis under section 516 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321j) shall not be included in the aggregate annual value of transferred excess defense articles which is

subject to the aggregate annual limitation set forth in section 516(g)

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

SEC. 603. COSTS OF TRANSFERS.

Any expense of the United States in connection with a transfer

authorized by this title shall be charged to the recipient.

17

SEC. 604. CONDITIONS RELATING TO COMBINED LEASE-SALE TRANSFERS.

A transfer of a vessel on a combined lease-sale basis authorized

by section 601 shall be made in accordance with the following requirements:

(1) The President may initially transfer the vessel by lease,

with lease payments suspended for the term of the lease, if the

country entering into the lease for the vessel simultaneously enters into a foreign military sales agreement for the transfer of

title to the vessel.

(2) The President may not deliver to the purchasing country

title to the vessel until the purchase price of the vessel under

such a foreign military sales agreement is paid in full.

(3) Upon payment of the purchase price in full under such

a sales agreement and delivery of title to the recipient country,

the President shall terminate the lease.

(4) If the purchasing country fails to make full payment of

the purchase price in accordance with the sales agreement by

the date required under the sales agreement—

(A) the sales agreement shall be immediately terminated;

(B) the suspension of lease payments under the lease

shall be vacated; and

(C) the United States shall be entitled to retain all

funds received on or before the date of the termination

under the sales agreement, up to the amount of the lease

payments due and payable under the lease and all other

costs required by the lease to be paid to that date.

(5) If a sales agreement is terminated pursuant to paragraph (4), the United States shall not be required to pay any

interest to the recipient country on any amount paid to the

United States by the recipient country under the sales agreement and not retained by the United States under the lease.

SEC. 605. FUNDING OF CERTAIN COSTS OF TRANSFERS.

There are authorized to be appropriated to the Defense Vessels

Transfer Program Account such funds as may be necessary to cover

the costs (as defined in section 502 of the Congressional Budget Act

of 1974 (2 U.S.C. 661a)) of the lease-sale transfers authorized by

section 601. Funds authorized to be appropriated under the preceding sentence for the purpose described in that sentence may not

be available for any other purpose.

SEC. 606. REPAIR AND REFURBISHMENT IN UNITED STATES SHIPYARDS.

To the maximum extent practicable, the President shall require,

as a condition of the transfer of a vessel under section 601, that the

country to which the vessel is transferred will have such repair or

refurbishment of the vessel as is needed, before the vessel joins the

naval forces of that country, performed at a shipyard located in the

United States, including a United States Navy shipyard.

SEC. 607. SENSE OF CONGRESS REGARDING TRANSFER OF NAVAL VESSELS ON A GRANT BASIS.

It is the sense of Congress that naval vessels authorized under

section 601 to be transferred to foreign countries on a grant basis

under section 516 of the Foreign Assistance Act of 1961 (22 U.S.C.

2321j) should be so transferred only if the United States receives apVerDate 11-MAY-2000 14:26 Sep 20, 2000 Jkt 079060 PO 00000 Frm 00017 Fmt 6659 Sfmt 6603 E:\HR\OC\HR868.XXX pfrm03 PsN: HR868
18

propriate benefits from such countries for transferring the vessel on

a grant basis.

SEC. 608. EXPIRATION OF AUTHORITY.

The authority granted by section 601 shall expire two years

after the date of enactment of this Act.

TITLE VII—MISCELLANEOUS

PROVISIONS

SEC. 701. UTILIZATION OF DEFENSE ARTICLES AND DEFENSE SERVICES.

Section 502 of the Foreign Assistance Act of 1961 (22 U.S.C.

2302) is amended in the first sentence by inserting ‘‘(including for

antiterrorism and nonproliferation purposes)’’ after ‘‘internal security’’.

SEC. 702. ANNUAL MILITARY ASSISTANCE REPORT.

Section 655(b)(3) of the Foreign Assistance Act of 1961 (22

U.S.C. 2415(b)(3)) is amended by inserting before the period at the

end the following: ‘‘and, if so, a specification of those defense articles

that were exported during the fiscal year covered by the report’’.

SEC. 703. REPORT ON GOVERNMENT-TO-GOVERNMENT ARMS SALES

END-USE MONITORING PROGRAM.

Not later than 180 days after the date of the enactment of this

Act, the President shall prepare and transmit to the appropriate

committees of Congress a report that contains a summary of the status of the efforts of the Defense Security Cooperation Agency to implement the End-Use Monitoring Enhancement Plan relating to government-to-government transfers of defense articles, defense services,

and related technologies.

SEC. 704. MTCR REPORT TRANSMITTALS.

For purposes of section 71(d) of the Arms Export Control Act

(22 U.S.C. 2797(d)), the requirement that reports under that section

shall be transmitted to the Congress shall be considered to be a requirement that such reports shall be transmitted to the Committee

on International Relations of the House of Representatives and the

Committee on Foreign Relations and the Committee on Banking,

Housing and Urban Affairs of the Senate.

SEC. 705. STINGER MISSILES IN THE PERSIAN GULF REGION.

(a) PROHIBITION.—Notwithstanding any other provision of law

and except as provided in subsection (b), the United States may not

sell or otherwise make available under the Arms Export Control Act

or chapter 2 of part II of the Foreign Assistance Act of 1961 any

Stinger ground-to-air missiles to any country bordering the Persian

Gulf.

(b) ADDITIONAL TRANSFERS AUTHORIZED.—In addition to other

defense articles authorized to be transferred by section 581 of the

Foreign Operations, Export Financing, and Related Programs Appropriation Act, 1990, the United States may sell or make available,

under the Arms Export Control Act or chapter 2 of part II of the

Foreign Assistance Act of 1961, Stinger ground-to-air missiles to

any country bordering the Persian Gulf in order to replace, on a

one-for-one basis, Stinger missiles previously furnished to such

19

country if the Stinger missiles to be replaced are nearing the scheduled expiration of their shelf-life.

SEC. 706. SENSE OF CONGRESS REGARDING EXCESS DEFENSE ARTICLES.

It is the sense of Congress that the President should make expanded use of the authority provided under section 21(a) of the

Arms Export Control Act to sell excess defense articles by utilizing

the flexibility afforded by section 47 of such Act to ascertain the

‘‘market value’’ of excess defense articles.

SEC. 707. EXCESS DEFENSE ARTICLES FOR MONGOLIA.

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

section 516(e) of the Foreign Assistance Act of 1961 (22 U.S.C.

2321j(e)), during the fiscal years 2001 and 2002, 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 that Act to Mongolia.

(b) CONTENT OF CONGRESSIONAL NOTIFICATION.—Each notification required to be submitted under section 516(f) of the Foreign

Assistance Act of 1961 (22 U.S.C. 2321j(f)) with respect to a proposed transfer of a defense article described in subsection (a) shall

include an estimate of the amount of funds to be expended under

subsection (a) with respect to that transfer.

SEC. 708. SPACE COOPERATION WITH RUSSIAN PERSONS.

(a) ANNUAL CERTIFICATION.— (1) REQUIREMENT.—The President shall submit each year

to the appropriate committees of Congress, with respect to each

Russian person described in paragraph (2), a certification that

the reports required to be submitted to Congress during the preceding calendar year under section 2 of the Iran Nonproliferation Act of 2000 (Public Law 106–178) do not identify that person on account of a transfer to Iran of goods, services, or technology described in section 2(a)(1)(B) of such Act.

(2) APPLICABILITY.—The certification requirement under

paragraph (1) applies with respect to each Russian person that,

as of the date of the certification, is a party to an agreement relating to commercial cooperation on MTCR equipment or technology with a United States person pursuant to an arms export

license that was issued at any time since January 1, 2000.

(3) EXEMPTION.—No activity or transfer which specifically

has been the subject of a Presidential determination pursuant

to section 5(a) (1), (2), or (3) of the Iran Nonproliferation Act

of 2000 (Public Law 106–178) shall cause a Russian person to

be considered as having been identified in the reports submitted

during the preceding calendar year under section 2 of that act

for the purposes of the certification required under paragraph

(1).

(4) COMMENCEMENT AND TERMINATION OF REQUIREMENT.—

(A) TIMES FOR SUBMISSION.—The President shall

submit—

(i) the first certification under paragraph (1) not

later than 60 days after the date of the enactment of

this Act; and

(ii) each annual certification thereafter on the anniversary of the first submission.

20

(B) TERMINATION OF REQUIREMENT.—No certification

is required under paragraph (1) after termination of cooperation under the specific license, or five years after the

date on which the first certification is submitted, whichever

is the earlier date.

(b) TERMINATION OF EXISTING LICENSES.—If, at any time after

the issuance of a license under section 36(c) of the Arms Export Control Act relating to the use, development, or co-production of commercial rocket engine technology with a foreign person, the President determines that the foreign person has engaged in any action

described in section 73(a)(1) of the Arms Export Control Act (22

U.S.C. 2797b(a)(1)) since the date the license was issued, the President may terminate the license.

(c) REPORT ON EXPORT LICENSING OF MTCR ITEMS UNDER

$50,000,000.—Section 71(d) of the Arms Export Control Act (22

U.S.C. 2797(d)) is amended by striking ‘‘Within 15 days’’ and all

that follows through ‘‘MTCR Annex,’’ and inserting ‘‘Within 15 days

after the issuance of a license (including any brokering license) for

the export of items valued at less than $50,000,000 that are controlled under this Act pursuant to United States obligations under

the Missile Technology Control Regime and are goods or services

that are intended to support the design, utilization, development, or

production of a space launch vehicle system listed in Category I of

the MTCR Annex,’’.

(d) DEFINITIONS.—In this section:

(1) FOREIGN PERSON.—The term ‘‘foreign person’’ has the

meaning given the term in section 74(7) of the Arms Export

Control Act (22 U.S.C. 2797c(7)).

(2) MTCR EQUIPMENT OR TECHNOLOGY.—The term ‘‘MTCR

equipment or technology’’ has the meaning given the term in

section 74(5) of the Arms Export Control Act (22 U.S.C.

2797c(5)).

(3) PERSON.—The term ‘‘person’’ has the meaning given the

term in section 74(8) of the Arms Export Control Act (22 U.S.C.

2797c(8)).

(4) UNITED STATES PERSON.—The term ‘‘United States person’’ has the meaning given the term in section 74(6) of the

Arms Export Control Act (22 U.S.C. 2797c(6)).

SEC. 709. SENSE OF CONGRESS RELATING TO MILITARY EQUIPMENT

FOR THE PHILIPPINES.

(a) IN GENERAL.—It is the sense of Congress that the United

States Government should work with the Government of the Philippines to enable that Government to procure military equipment

that can be used to upgrade the capabilities and to improve the

quality of life of the armed forces of the Philippines.

(b) MILITARY EQUIPMENT.—Military equipment described in

subsection (a) should include—

(1) naval vessels, including amphibious landing crafts, for

patrol, search-and-rescue, and transport;

(2) F–5 aircraft and other aircraft that can assist with reconnaissance, search-and-rescue, and resupply;

(3) attack, transport, and search-and-rescue helicopters;

and

(4) vehicles and other personnel equipment.

21

SEC. 710. WAIVER OF CERTAIN COSTS.

Notwithstanding any other provision of law, the President may

waive the requirement to impose an appropriate charge for a proportionate amount of any nonrecurring costs of research, development, and production under section 21(e)(1)(B) of the Arms Export

Control Act (22 U.S.C. 2761(e)(1)(B)) for the November 1999 sale of

5 UH–60L helicopters to the Republic of Colombia in support of

counternarcotics activities.

And the Senate agree to the same.

BENJAMIN A. GILMAN,

BILL GOODLING,

SAM GEJDENSON,

Managers on the Part of the House.

JESSE HELMS,

RICHARD G. LUGAR,

CHUCK HAGEL,

JOE BIDEN,

PAUL S. SARBANES,

Managers on the Part of the Senate.

(23)

JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF

CONFERENCE

The managers on the part of the House and the Senate at the

conference on the disagreeing votes of the two Houses on the

amendment of the Senate to the bill (H.R. 4919) to amend the Foreign Assistance Act of 1961 and the Arms Export Control Act to

make improvements to certain defense and security assistance provisions under those Acts, to authorize the transfer of naval vessels

to certain foreign countries, and for other purposes, submit the following joint statement to the House and the Senate in explanation

of the effect of the action agreed upon by the managers and recommended in the accompanying conference report:

SECURITY ASSISTANCE ACT OF 2000

The conferees note that, during the past 10 years, the pool of

money available for security assistance to United States allies and

partners has decreased dramatically. At the same time, the number

of countries with which the United States needs to engage, whether

to combat proliferation or terrorism or to bolster regional security,

has steadily increased. For instance, three countries of the former

Warsaw Pact are now NATO members and receive both Foreign

Military Financing and International Military Education and

Training from the United States. Other countries which were once

part of the Soviet Union itself are now free and independent, and

enjoy important security relationships with the United States. An

even larger number of countries, now free from the Soviet orbit, are

also free to pursue closer military relationships with the United

States. Thus, for instance, this bill makes Mongolia eligible for Department of Defense expenditures relating to excess defense articles for the first time in history.

The conferees are concerned that a steadily increasing number

of countries are pursuing a relationship with the United States

which is funded by a steadily decreasing amount of money. Additionally, 98 percent of the Foreign Military Financing (FMF) account is currently committed to just three countries as a result of

various peace accord commitments. Even if the President’s budget

request is fully funded, only $18,200,000 in FMF would actually be

available for the United States to build security ties to the rest of

the world. This legislation seeks to arrest and reverse this decline.

Section 101 authorizes an increase in FY 2001 of $12,000,000 in

grant Foreign Military Financing over the President’s budget request, and in FY 2002, with an increase of $89,000,000, will bring

the total amount of truly ‘‘discretionary’’ FMF spending to

$272,200,000. Even so, this will not return security assistance to

1990 spending levels.

Similarly, Section 201 fully funds the President’s request for

the International Military Education and Training program by auVerDate 11-MAY-2000 14:26 Sep 20, 2000 Jkt 079060 PO 00000 Frm 00023 Fmt 6601 Sfmt 6601 E:\HR\OC\HR868.XXX pfrm03 PsN: HR868
24

thorizing $55,000,000 in FY 2001 and provides a $10,000,000 increase for FY 2002.

Section 301, which establishes a new chapter in the Foreign

Assistance Act, consolidates all nonproliferation funding, except for

assistance to the International Atomic Energy Agency, under a single funding line. In so doing, it will protect nonproliferation assistance from numerous foreign aid restrictions that govern the current appropriations process.

This legislation fully funds the President’s request and authorizes funding for one additional, Congressionally-mandated nonproliferation and export control initiative in Malta. It also funds

the International Science and Technology Centers (ISTC) program

at maximum capacity. Moreover, this legislation will strengthen

the hand of the newly-created Nonproliferation Bureau of the Department of State in shaping a coherent U.S. nonproliferation and

export control policy. Likewise, the President’s antiterrorism funding request is fully authorized, and the conferees have applied additional resources to ensure that the fledgling Terrorist Interdiction

Program is funded in fiscal year 2001 at the same level as in fiscal

year 2000.

In total, this bill authorizes $38,806,000,000 in security assistance funding for fiscal year 2001. This is an increase of $30,800,000

over the President’s budget request for fiscal year 2001. It further

authorizes $3,907,000,000 for fiscal year 2002.

TITLE I—MILITARY AND RELATED ASSISTANCE

Subtitle A—Foreign Military Sales and Financing Authority

AUTHORIZATION OF APPROPRIATIONS

Section 101 of the conference agreement, which has been modified from the Senate proposal, authorizes $3,550,000,000 for fiscal

year 2001, and $3,627,000,000 for fiscal year 2002, for the Foreign

Military Financing (FMF) Program. The administration request for

fiscal year 2001 for FMF (grants and loans) is $3,538,200,000. The

actual level of FMF funding for fiscal year 2000 is $3,420,000,000.

REQUIREMENTS RELATING TO COUNTRY EXEMPTIONS FOR LICENSING

OF DEFENSE ITEMS FOR EXPORT TO FOREIGN COUNTRIES

Section 102 of the conference agreement, which has been modified from the House proposal, codifies in statute requirements relating to country exemptions for licensing of defense items for export to foreign countries.

On May 24, 2000, the Administration unveiled a major initiative—the Defense Trade Security Initiative—to improve transatlantic cooperation in the area of defense trade. The initiative was

a package of seventeen separate proposals geared toward promoting U.S. defense exports of NATO countries, Japan and Australia. The Committees on Foreign Relations and International Relations, which were not consulted in a timely fashion on the Defense Trade Security Initiative, nevertheless welcome most of the

proposed changes to the International Traffic in Arms Regulations

(ITAR).

25

The overall objective of DTSI is to improve transatlantic cooperation in defense trade, particularly as that may aid us in

strengthening NATO, supporting the Defense Capabilities Initiative (DCI), improving the interoperability of our forces and contributing to the health and productivity of defense industries on both

sides of the Atlantic.

Most of the seventeen separate proposals deal with reforming

the U.S. defense export control licensing process. They are noncontroversial. They include proposals to establish new procedures

for U.S. industry to secure export license for arms sales to NATO

countries and other friendly countries and the establishment of a

robust common database. Indeed, several of the initiatives mirror

recommendations made by the two committees at various times.

Under Article 1, Section 8, of the United States Constitution,

the Congress possesses sole constitutional authority to ‘‘regulate

Commerce with foreign Nations.’’ The President may only engage

in such an exercise to the extent he has been authorized to do so

by the Congress. Most of the seventeen DTSI measures, which

clearly relate to the regulation of commerce, have been implicitly

authorized in advance by Congress. The Arms Export Control Act

(AECA) requires the President to administer export controls for

certain commodities and also contains a measure of flexibility, allowing the President to alter export control requirements through

regulatory changes. Indeed, numerous regulatory modifications

have been made using this authority. Thus the constitutionality of

a regulatory change to implement many of the proposed initiatives

is well established.

The conferees remain concerned, however, with certain other of

the proposals. The most important—and controversial—initiative is

entitled ‘‘Extension of International Traffic in Arms Regulations

(ITAR) Exemption to Qualified Countries’’. Pursuant to this initiative, the Administration is prepared to establish new ITAR licensing exemptions for unclassified defense items to qualified companies in foreign countries with whom the United States signs a bilateral agreement and that adopt and demonstrate export controls

that are comparable in effectiveness to those of the United States.

For several years, the United States has, under Section

38(b)(2) of the AECA, permitted unlicensed trade in defense articles and defense services with Canada. This practice, popularly

called the ‘‘Canada exemption,’’ has been supported by Congress in

light of the unique defense trade relationship between the United

States and Canada. In a June 28, 2000, letter to Chairman Helms,

the Secretary of Defense stated his intent ‘‘to negotiate a Canadastyle exemption to the ITAR with the U[nited] K[ingdom] and Australia.’’ On March 16, 2000, in a letter to the Secretary of State,

the Chairmen of the Senate Committee on Foreign Relations and

the House Committee on International Relations—the two Congressional Committees with sole jurisdiction over the AECA and regulation of defense trade—expressed concern about expanding the Canadian exemption. The Canada exemption is a unique one, based

on an intertwined defense industrial base, a close law enforcement

relationship, and geographical considerations. These same considerations do not apply to either the United Kingdom or Australia (to

say nothing of other countries), despite the close military, intelVerDate 11-MAY-2000 14:26 Sep 20, 2000 Jkt 079060 PO 00000 Frm 00025 Fmt 6601 Sfmt 6601 E:\HR\OC\HR868.XXX pfrm03 PsN: HR868
26

ligence, and law enforcement relationships that the U.S. government has with the governments in London and Canberra. For instance, defense commodities being shipped between the United

States and Canada are far less susceptible to diversion than items

shipped longer distances on cargo vessels which must make multiple port calls before arriving in the final port of destination.

Moreover, unlike the case in Canada, many major U.K. defense

companies are now jointly partnered with other European firms.

For these reasons and others, the Secretary of State and the

Attorney General raised serious questions about how a Canada-like

exemption would affect U.S. export controls and law enforcement

efforts. Their concerns turned, in short, on the fact that elimination

of a licensing requirement for various weapons and defense commodities would remove an important law enforcement capability for

the United States, placing heightened reliance upon the United

Kingdom and Australia to stop diversions of U.S. equipment and

to provide the type of evidence needed to prosecute violations of the

AECA.

In his June 28, 2000 letter, the Secretary of Defense assured

the Committee on Foreign Relations that the licensing exemption

for certain countries would need to be accomplished through ‘‘legally binding agreement to ensure their export control and technology security regimes are congruent to our own. In exchange for

these ironclad arrangements, we are prepared to offer an exemption to the ITAR similar to that long-provided to Canada.’’

The conferees are pleased to note this emphasis on extending

a broad ITAR exemption in a legally-binding agreement and, accordingly, are equally pleased to codify the requirement in statute.

As the Department of State noted in connection with the START

Treaty: ‘‘An undertaking or commitment that is understood to be

legally binding carries with it both the obligation to comply with

the undertaking and the right each Party to enforce the obligation

under international law.’’ This right of enforcement is of singular

importance in this case, because noncompliance with the undertaking presumably could result in the diversion of United States

weaponry or technology.

Essential to the initiative to provide license-free trade to various countries is the operation of domestic export control laws in

such countries. Accordingly, the underlying rationale governing

Section 102 is that the United States should not provide the benefit

of an exemption from licensing of U.S. defense exports unless a foreign country agrees to apply, in a legally-binding fashion and in accordance with a bilateral agreement with the United States, the

full range of United States export control and laws, regulations,

and policies appropriate to the sensitivity of defense items exported

to a foreign country under the exemption.

In that regard, the section requires that in order to provide an

exemption from licensing of defense exports to a foreign country,

the United States must negotiate a legally binding bilateral agreement including specific requirements. The President must then certify that the bilateral agreement meets those specific requirements

and, importantly, that the foreign country has promulgated or enacted all necessary modifications to its laws and regulations to

27

comply with its obligations under the bilateral agreement before

implementing the exemption.

The specific requirements include but are not limited to securing end-use and retransfer commitments from all end-users, controls on reexports to foreign countries including a requirement for

prior written U.S. government approval for such reexports, and the

establishment of a list of controlled defense items that will include

those items covered by the exemption, which are required to be notified to the Congress under subsection (b) of this section.

The conferees expect to exercise close oversight of any agreements reached with foreign nations that provide for unlicensed

trade in defense articles and defense services. The conferees reserve judgment on whether any agreements contemplated with the

United Kingdom or Australia in this area should be undertaken in

executive agreements, or as treaties, subject to advice and consent

of the Senate. The conferees expect, as stated in subsection (d),

that the Secretary of State will consult with the two Committees

as to whether the DTSI licensing exemption for various countries

should be codified as a treaty. Were the Secretary of State to conclude bilateral treaties with the United Kingdom and Australia to

achieve the objectives set forth under the DTSI initiative, the Senate conferees would support the earliest possible consideration of

such important measures. Alternatively, the Congress has the option of amending Section 38(b)(2) of the AECA to limit the President’s flexibility to approve unlicensed trade—with Canada or any

other nation.

Finally, the conferees address in subsection (c) the issue of exports of commercial communication satellites. Without prejudice to

the outcome of a review, the conferees believe that both Congress

and the Executive Branch should re-evaluate the issue of the correct and appropriate commodity jurisdiction for export control of

U.S. commercial communication satellites.

Subtitle B—Stockpiling of Defense Articles for Foreign Countries

ADDITIONS TO UNITED STATES WAR RESERVE STOCKPILES FOR ALLIES

Section 111 was proposed by the House. Pursuant to Section

514 of the Foreign Assistance Act of 1961, as amended, the Department of Defense can make additions to the War Reserve Stockpiles

for Allies stockpiles only as periodically provided for in legislation.

For fiscal year 2000, the President requested authority to make additions to stockpiles in South Korea ($40,000,000) and Thailand

($20,000,000). The conferees provided this authority under Section

1231 of the ‘‘Admiral James W. Nance and Meg Donovan Foreign

Relations Authorization Act, Fiscal Years 2000 and 2001’’ (P.L.

106–113). For fiscal year 2001 the Department of Defense has

asked for an additional $50,000,000 authorization for the Korean

program. Section 111 provides this authority for fiscal year 2001.

TRANSFER OF CERTAIN OBSOLETE OR SURPLUS DEFENSE ARTICLES IN

THE WAR RESERVE STOCKPILES FOR ALLIES TO ISRAEL

Section 112 has been modified from the House proposal. Periodically the Department of Defense requests authorization to transfer defense articles out of War Reserve Stockpiles to the host counVerDate 11-MAY-2000 14:26 Sep 20, 2000 Jkt 079060 PO 00000 Frm 00027 Fmt 6601 Sfmt 6601 E:\HR\OC\HR868.XXX pfrm03 PsN: HR868
28

try in question. The defense articles are to be sold to the host nation, or to be transferred in exchange for other non-monetary concessions. The Committee provided similar authority to make such

transfers to South Korea and Thailand pursuant to Section 1232 of

the ‘‘Admiral James W. Nance and Meg Donovan Foreign Relations

Authorization Act, Fiscal Years 2000 and 2001’’ (P.L. 106–113).

Subtitle C—Other Assistance

DEFENSE DRAWDOWN SPECIAL AUTHORITIES

Section 121, which has been modified from the Senate proposal, increases the special drawdown authorities of defense articles and services from defense stocks, and for military education

and training, to assist foreign countries from $150 million to $200

million.

Current law grants the President the authority to draw down

from existing stocks within the Department of Defense to assist in

emergencies or when he determines it is in the national interest.

This section expands the authority by making nonproliferation and

antiterrorism activities eligible for the special drawdown authorities relating to defense articles and services, and to military education and training, to assist foreign countries. The increase in financial authority is meant to allow for incorporation of nonproliferation and antiterrorism objectives without sacrificing the

President’s flexibility to respond to unforeseen emergencies and foreign policy objectives relating to combating international narcotics,

international disaster assistance, and migration and refugee assistance.

INCREASED AUTHORITY FOR THE TRANSPORT OF EXCESS DEFENSE

ARTICLES

Section 122, proposed by the Senate, raises the space available

weight limitation that is imposed on the transportation of excess

defense articles (EDA) from 25,000 pounds to 50,000 pounds. Currently, a variety of limitations are imposed on the use of Department of Defense funds to transfer excess defense articles to foreign

nations and international organizations. Moreover, even when such

an expenditure is authorized, free transportation of EDA may only

be provided on a space available basis if it is in the U.S. national

interest to do so, the recipient nation is a developing nation which

receives less than $10,000,000 in FMF and IMET, and the weight

of the items to be transferred does not exceed 25,000 pounds.

In limiting the weight of defense articles to no more than

25,000 pounds, current law will preclude the transportation of a

large number of United States Coast Guard ‘‘self-righting’’ patrol

craft which have recently been declared excess but which weigh approximately 33,000 pounds. Over the next four years, more than 50

of these vessels will be eligible for transfer to foreign nations under

the EDA program. However, the current weight limitation will preclude shipment of the vessels on a space available basis to foreign

countries. This, in turn, will increase the cost of transfer of the defense article to would-be recipients, and likely would cause many

nations to decline U.S. offers of these vessels. As a result, the Untied States Coast Guard could incur unnecessary expenses due to

29

delays in finding foreign recipients of the craft, and possibly be

forced to demilitarize vessels for whom a foreign customer could

not be secured. Raising the weight limit to 50,000 pounds will obviate this problem.

TITLE II—INTERNATIONAL MILITARY EDUCATION AND TRAINING

AUTHORIZATION OF APPROPRIATIONS

Section 201, which has been modified from the Senate pro- posal, authorizes $55,000,000 for fiscal year 2001 and $65,000,000

for fiscal year 2002 to carry out international military education

and training (IMET) of military and related civilian personnel of

foreign countries. The administration request for fiscal year 2001

for IMET is $55,000,000. The actual level of IMET funding for fiscal year 2000 is $50,000,000. IMET is provided on a grant basis to

students from allied and friendly nations, and is designed to expose

foreign students to the U.S. professional military establishment

and the American way of life, including the U.S. regard for democratic values, respect for individual and human rights and belief in

the rule of law. Section 201 authorizes funding of the IMET program in 2002 at its maximum capacity. Funding beyond this level

cannot be absorbed due to limitations in number of courses and

classes.

ADDITIONAL REQUIREMENTS RELATING TO INTERNATIONAL MILITARY

EDUCATION AND TRAINING

Section 202, proposed by the Senate, amends Chapter 5 of part

I of the Foreign Assistance Act of 1961, relating to International

Military Education and Training (IMET), by adding two new requirements. First, selection of foreign personnel for the IMET program will be done in consultation with United States defense attaches, who are uniquely positioned to recommend candidates. The

conferees are concerned to note that defense attaches are, on occasion, excluded from this process. By mandating consultation, the

conferees intend to secure the complete involvement of defense attaches in nominating individuals for the IMET program. Naturally,

selection of foreign personnel, and overall management of the

IMET program remain the responsibility of the Department of

State.

Section 202 also requires that the Secretary of Defense 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 it 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. The conferees expect that the record of a person’s subsequent

career will include positions held, reports of exceptional successes

or failures in those positions, and any credible reports of involvement in criminal activity or human rights abuses. The conferees

believe that such a database will improve the effectiveness of foreign military education and training activities by enabling the Department of Defense to better determine: what follow up training

30

may be most appropriate for previously trained personnel; which

courses are most effective in improving the performance of foreign

military personnel; and where personnel are located in foreign defense establishments who, by virtue of their prior training, are

most likely to understand U.S. modes of operation and share U.S.

standards of military professionalism. This section does not require, however, that the Department of Defense institute dramatic

new collection programs to gather information for the database.

TITLE III—NONPROLIFERATION AND EXPORT CONTROL ASSISTANCE

NONPROLIFERATION AND EXPORT CONTROL ASSISTANCE

Section 301 has been modified from the Senate proposal. Every

major category of U.S. foreign assistance, except for nonproliferation and export control assistance, is governed under multiple sections, or entire chapters, of the Foreign Assistance Act of 1961

(FAA). The FAA contains chapters authorizing international narcotics control, military assistance, peacekeeping operations,

antiterrorism assistance, IMET, development assistance, and funding for international organizations, to name a few. Although the

President has declared a state of national emergency to combat the

proliferation of weapons of mass destruction and associated delivery systems, the FAA does not contain a specific chapter to authorize and direct such a clearly important form of U.S. foreign aid.

Funding for the nonproliferation and export control activities of the

Department of State derives from a variety of disparate authorizations passed at various times. As a result, this category of funding

does not enjoy the same status as other types of foreign assistance.

Appropriation of funds for nonproliferation and export control

activities is cobbled together annually by the Appropriations Committee under a catch-all account that also includes demining and

contributions to certain international organizations. Thus the Department of State is invariably forced to make ‘‘trade-offs’’ between

nonproliferation and export control funding and funding for other

activities. Finally, other nonproliferation and export control funding is contained within the amounts appropriated for the ‘‘newly

independent’’ states of the former Soviet Union, and is thus subject

to restrictions if the President cannot certify that Russia is not proliferating technology to Iran (which he has, to date, been unable to

do).

By adding a new chapter to Part II of the FAA, the conferees

intend U.S. nonproliferation and export control assistance to be

given equal stature with other authorized activities. The conferees

expect the Department of State, in the future, to consolidate all of

its nonproliferation funding, except for funding for the International Atomic Energy Agency (which is governed by a separate

authorization under the FAA), into a single, integrated request to

be authorized under Chapter 9 of the FAA. The conferees further

expect that the Nonproliferation Bureau of the Department of State

will be given authority over the use of funds authorized by this

chapter.

The new chapter to the FAA incorporates existing authorities

under Sections 503 and 504 of the FREEDOM Support Act (which

are the principal extant authorities for nonproliferation and export

31

control activities). The new sections 581 and 582 carry forward

those authorities, but also emphasize the need for programs to bolster the indigenous capabilities of foreign countries to monitor and

interdict proliferation shipments. Section 583 directs the President

to ensure that sufficient funds are allocated to the transit interdiction effort. To this end, the section contains authority for the Secretary of State to establish a list of countries that should be given

priority in U.S. transit interdiction funding. The conferees suggest

that the initial designation of the transit country list include those

countries mentioned in the fiscal year 1999 Congressional presentation document as ‘‘key global transit points’’ (e.g., the countries

of Central Asia and the Caucasus, the Baltics, Central and Eastern

Europe, Singapore, Hong Kong, Taiwan, Cyprus, Malta, Jordan,

and the UAE).

Section 584, which will be part of the new chapter of the FAA,

makes clear that two of the same limitations which apply to

antiterrorism assistance also apply to nonproliferation and export

control assistance. Section 584 permits the use of unrelated accounts to furnish services and commodities consistent with, and in

furtherance of, Chapter 9 of the FAA. However, it requires that the

foreign nation receiving such services or commodities pay in advance for the item or service, and that the reimbursement be credited to the account from which the service or commodity is furnished or subsidized. Foreign Military Financing may not be used

to make such payments. Section 584 also makes clear that Chapter

9 does not apply to information exchange activities conducted

under other authorities of law.

Section 585 authorizes $129,000,000 for fiscal year 2001, and

$142,000,000 for fiscal year 2002, for activities conducted pursuant

to Chapter 9 of the FAA. This amount captures several activities

currently appropriated within the Nonproliferation, Anti-Terrorism,

Demining, and Related Programs Account, and the FREEDOM

Support Act Assistance for the New Independent States (NIS) of

the Former Soviet Union. The covered programs, at the administration’s requested levels of funding for FY2001, are: $15,000,000 for

the Nonproliferation and Disarmament Fund; $14,000,000 for Export Control Assistance; $45,000,000 for the Science Centers; and

$36,000,000 in NIS export control and border assistance funding.

The administration request for fiscal year 2001 thus totals

$110,000,000 for all Chapter 9 authorized activities. The increase

of $19,000,000 above the administration’s requested levels is intended to support two initiatives contained in sections 303 and 304.

Specifically, this increase supports funding of the International

Science and Technology Centers at maximum capacity (which requires an additional $14,000,000) and establishment of a static

cargo x-ray facility in Malta as the first of the transit interdiction

programs to be managed under the new authorities of the FAA (a

$5,000,000 program).

NONPROLIFERATION AND EXPORT CONTROL TRAINING IN THE UNITED

STATES

Section 302, which has been modified from the Senate proposal, authorizes the expenditure of $2,000,000 during both fiscal

years 2001 and 2002 in nonproliferation and export control funding

32

for the training and education of personnel from friendly countries

in the United States. The Department of State already engages in

a vigorous training program, and funds numerous activities which

are implemented by Department of Commerce personnel. However,

much of this training is conducted overseas. The conferees urge the

Department of State to place emphasis on bringing a select group

of officials from friendly governments back to the United States to

engage in an intensive training program which draws upon the expertise of all relevant U.S. government agencies. This training

should focus on those nonproliferation and export control activities

which would most benefit from being conducted in the United

States. Finally, the conferees are concerned with declining travel

and training budgets of U.S. government agencies tasked with combating proliferation. The conferees hope this trend will be arrested,

but urge the Department of State, in the interim, to seek to offset

the effects of this decline using the funds authorized under this

section.

SCIENCE AND TECHNOLOGY CENTERS

Section 303, which has been modified from the Senate proposal, authorizes $59,000,000 for fiscal year 2001, and $65,000,000

in fiscal year 2002, in nonproliferation and export control funding

for the Department of State’s international science and technology

centers. The administration request for fiscal year 2001 is

$45,000,000. The actual level of funding for fiscal year 2000 is

$59,000,000. The conferees expect that this not only will fully fund

all ongoing activities at these centers, but will allow a significant

expansion in the number of research grants offered to Russian scientists formerly employed in the development of missiles and

chemical and biological warfare programs.

Section 303 also expresses the view of the conferees that frequent audits should be conducted of entities receiving ISTC funds.

This will be necessary in light of the administration’s interest in

expanding the role of the ISTC to provide funds to redirect the expertise associated with the Soviet Union’s biological warfare program. U.S. obligations under the Chemical and Biological Weapons

Conventions, as well as under domestic law (e.g., P.L. 106–113),

prohibit the furnishing of assistance to offensive biological warfare

programs. It thus is essential that the United States audit entities

that receive assistance to ensure that the United States is not contributing, albeit unknowingly, to an offensive biological warfare

program (or to entities that are proliferating technology to rogue

states). Moreover, the obligation to conduct audits should be spread

equitably throughout the United States Government.

TRIAL TRANSIT PROGRAM

Section 304, proposed by the Senate, authorizes $5,000,000 in

nonproliferation and export control funding to establish a static

cargo x-ray facility in Malta, provided that the Government of

Malta first gives satisfactory assurances that Maltese customs officials will engage in random cargo inspections of container traffic

passing through the Malta Freeport, and will utilize the x-ray facility to examine random shipping containers.

33

Malta is the ideal location for a trial transit interdiction program. The country’s location, along one of the busiest trade routes

in the world, has made it a crucial shipping center. The Malta

Freeport is ideally situated as a redistribution point, linking trade

between Europe, Africa, the Middle East, and Asia. For instance,

direct shipments from the Black Sea to Malta take less than 15

days. From various ports in Europe, Russia, and Asia, large cargo

vessels offload their containers into the Freeport. The containers

are then stored temporarily and are reloaded onto smaller ‘‘feeder’’

vessels which service ports in North Africa, including Libya. The

Freeport went into operation in April 1990. According to Maltese

Freeport documents, that year alone, 231 vessels offloaded 94,500

containers. Since that time, the volume of activity at the port has

steadily increased. In 1996, the number of ships calling at the

Freeport reached 1,383. Nearly 600,000 containers transited the facility that year. For 1999, according to a January 10, 2000 article

in a Maltese daily newspaper, 1,464 container ships utilized the

Freeport. At this time, estimates of container traffic are not available, but presumably the number will exceed half a million.

The steadily rising level of container traffic in the Freeport is

noteworthy. The volume can be expected to increase if plans to further expand the port’s services are implemented, thereby making

one of the world’s largest deepwater ports all the more robust. The

Malta Freeport Act, which establishes the Freeport as a legally

separate entity from Malta proper, creates specific proliferation

concerns. Currently the Freeport has its own Minister, and customs

functions have been conferred upon the Freeport Authority which

he oversees. Maltese Customs does not receive information on

transshipments, and may not operate in the Freeport without permission. While the Freeport has never refused such a request, the

fundamental lack of transparency, and the inability of Maltese customs to conduct random inspections, means that effective export

enforcement is impossible at this time.

The conferees are concerned with this situation since Malta is

undeniably being used as a transit point by various entities engaged in weapons proliferation. For example, in one instance of excellent cooperation between the Freeport and Maltese Customs officials, a shipment of chemical warfare precursor chemicals was

seized. Similarly, the United Kingdom recently uncovered a massive shipment of missile parts slated for air delivery to Libya via

Malta. While this latter incident did not involve the Freeport, it

nevertheless is further evidence that various countries are seeking

to use Malta as a transit point for deliveries of dangerous commodities to North Africa.

The conferees note that Maltese-U.S. relations have steadily

improved over the past several years. The Government of Malta

has demonstrated a genuine commitment to nonproliferation and

bolstering its export control capability. Therefore the conferees

favor initiation of a trial transit program with Malta, provided that

the Maltese Government takes the necessary steps to render this

program viable (namely, by opening the Freeport to periodic, random inspections by Maltese Customs officials). The conferees hope

that this program, if successful, might serve as a model for programs in other designated transit countries.

34

EXCEPTION TO AUTHORITY TO CONDUCT INSPECTIONS UNDER THE

CHEMICAL WEAPONS CONVENTION IMPLEMENTATION ACT OF 1998

Section 305 was proposed by the Senate. The Chemical Weapons Convention, which was approved by the Senate in 1997, has an

extensive inspection regime which allows potentially intrusive inspections of chemical companies in the United States. The Senate

was concerned about the threat posed to business proprietary information during the course of an inspection. As a result, the Chemical Weapons Convention Implementation Act of 1998 imposes a requirement that a special agent of the Federal Bureau of Investigation (FBI) accompany every inspection conducted in the United

States.

However, there is minimal benefit to the FBI’s monitoring of

inspections at chemical destruction sites. Such inspections pose little risk to national security or trade secrets and—because of their

lengthy duration—a constant FBI presence would be expensive to

maintain. This section gives the FBI an exemption from the requirement to be present at inspections of U.S. chemical destruction

facilities.

TITLE IV—ANTITERRORISM ASSISTANCE

AUTHORIZATION OF APPROPRIATIONS

Section 401, which has been modified from the Senate pro- posal, authorizes $72,000,000 for fiscal year 2001 and $73,000,000

for fiscal year 2002 in antiterrorism assistance. The administration

request for anti-terrorism assistance for fiscal year 2001 is

$72,000,000 (including the request for the Terrorist Interdiction

Program (TIP)). The actual level of funding for fiscal year 2000, including the TIP, is $38,000,0000.

TITLE V—INTEGRATED SECURITY ASSISTANCE PLANNING

Subtitle A—Establishment of a National Security Assistance

Strategy

NATIONAL SECURITY ASSISTANCE STRATEGY

Section 501, which has been modified from the Senate proposal, strongly urges the annual preparation of a National Security

Assistance Strategy (NSAS) to be submitted in connection with the

annual foreign operations budget request. The purpose of the NSAS

is to establish a clear and coherent multi-year plan, on a country

by country basis, regarding U.S. security assistance programs. The

current process utilized by the United States Government is entirely insufficient and is run, on an ad hoc basis. Seldom is a thoroughly researched, thoroughly justified proposal for security assistance put forward to Congress. This, in turn, has encouraged parallel Congressional initiatives and earmarks which often are put

forward with a comparable level of foresight and planning. As a result, it seems that the Political-Military Affairs Bureau of the Department of State does not currently possess sufficient control over

the allocation of security assistance funds, despite its clear mandate to manage these programs (except for nonproliferation assistance).

35

Currently there is no clearly articulated organizing principle

for U.S. military assistance. Nor is there a coherent set of benchmarks, or measurements, against which the success of individual

programs with various countries can be measured. As a result,

military assistance funding proposals are often vague and seemingly unjustified. For instance, the most recent Congressional presentation documents justify the provision of FMF for Southeast Europe as ‘‘contributing to regional stability in Southeast Europe by

promoting military reform.’’ No further elaboration is given. It is

hardly surprising, in light of this sort of justification, that the administration’s security assistance requests seldom are fully funded

by Congress.

The conferees urge the Department of State to transform fundamentally the way that the United States conceptualizes security

assistance. Utilizing a model more akin to the Department of Defense’s planning process, the Department of State is encouraged to

pull together a comprehensive multi-year plan, which will evolve on

an annual basis, setting forth a specific programmatic objective for

each country and explaining how the requested funds will accomplish that objective. Additional, secondary objectives should be

added as necessary. The conferees believe that the plan for each

country should be developed at the U.S. mission level, and should

be coordinated by the Department of State with all relevant U.S.

government agencies with a role in U.S. security assistance programs. The bottom-up document that results is then to be coordinated with the top-down policy guidance set forth in the National

Security Strategy of the United States, and by the Secretary of

State (in coordination with the Secretary of Defense and the Chairman of the Joint Chiefs of Staff, and in consultation with other relevant agencies, including the intelligence community).

The conferees expect the resultant document to be a comprehensive National Security Assistance Strategy which provides a

robust, detailed justification for security assistance funding that is

requested. Rather than the current process, which yields unclear

and unmeasurable objectives for U.S. security assistance programs,

it is expected that the NSAS process will ensure that the type and

amount of assistance given a country is determined programmatically. Progress can thus be measured by the administration

and the Congress. In turn, the conferees anticipate that such an

initiative, led by the Political-Military Affairs Bureau of the Department of State, will substantially improve Congressional understanding of the administration’s initiatives and bolster Congressional support for the President’s military assistance request.

Subtitle B—Allocations for Certain Countries

SECURITY ASSISTANCE FOR NEW NATO MEMBERS

Section 511, which has been modified from the Senate proposal, authorizes $30,300,000 for fiscal year 2001 and $35,000,000

for fiscal year 2002 in grant Foreign Military Financing for the

Czech Republic, Hungary, and Poland. Section 511 also authorizes

$5,100,000 for fiscal year 2001 and $7,000,000 for fiscal year 2002

in IMET funding for these three new NATO members. The administration request for fiscal year 2001 for these three countries is

36

$30,300,000 in grant FMF and $5,100,000 in IMET funding. The

actual level of grant FMF funding for the three for fiscal year 2000

is $22,000,000. The actual level for IMET funding for fiscal year

2000 is $4,570,000.

Section 511 also directs the President to give priority to supporting the objectives set forth by the Senate in its resolution of

ratification for the protocols adding the three new NATO members.

Specifically, the conferees expect the administration to ensure that

FMF and IMET funding is used to support the ability of Poland,

Hungary, and the Czech Republic to fulfill their collective defense

requirements under Article V of the Washington Treaty. The conferees also expect the administration to use the additional funds

provided to expand U.S. efforts to improve the ability of these countries to protect themselves from hostile foreign intelligence services.

INCREASED TRAINING ASSISTANCE FOR GREECE AND TURKEY

Section 512, which has been modified from the Senate pro- posal, authorizes $1,000,000 in IMET funding for Greece and

$2,500,000 in IMET funding for Turkey for each of the fiscal years

2001 and 2002. The administration request for IMET for fiscal year

2001 is $25,000 for Greece and $1,600,000 for Turkey. The actual

level of IMET funding for Greece for fiscal year 2000 is $25,000.

For Turkey, the actual level of IMET funding for fiscal year 2000

is $1,500,000.

The conferees are encouraged by numerous indications of a

warming in Greek-Turkish relations. This improvement has manifested itself in several ways, ranging from Greek agreement to

Turkish candidacy for membership in the European Union to the

large number of bilateral agreements that have recently been

signed during reciprocal visits of foreign ministers (including agreements on transportation, tourism, cultural heritage, and customs

issues). In the interest of bolstering this process the conferees authorize a substantial increase in funds for International Military

Education and Training (IMET). It is the conferees’ expectation

that the administration will use these additional funds to support

the process of rapprochement between Greece and Turkey. Specifically, the conferees urge the administration to ensure that

$1,000,000 of the additional resources, evenly divided between the

two countries, is used for joint professional military education of

Greek and Turkish officers. The conferees note that this type of

training will build personal relationships between the militaries of

these two important NATO allies, and will reinforce the process

that is already underway.

ASSISTANCE FOR ISRAEL

Section 513, which has been modified from the Senate proposal, sets into place the formula for a phase-out of annual U.S.

Economic Support Funds to Israel. Operating from a baseline of

$1.2 billion ESF per annum, beginning in FY 1999, the United

States and Israel agreed to a plan whereby Israel’s annual economic assistance would be reduced in equal increments of 10 percent (equivalent to $120,000,000 per annum), resulting in the ultimate elimination of ESF for Israel. In order to ensure Israel’s conVerDate 11-MAY-2000 14:26 Sep 20, 2000 Jkt 079060 PO 00000 Frm 00036 Fmt 6601 Sfmt 6601 E:\HR\OC\HR868.XXX pfrm03 PsN: HR868
37

tinued security in the face of the loss of annual economic support,

Israel requested—and the United States agreed to—an annual increase in Foreign Military Finance equal to half the reduced ESF

amount (or $60,000,000). Section 513 authorizes this process for

both fiscal years 2001 and 2002, and will result in an aggregate reduction in authorized foreign assistance of $120,000,000. Specifically, this section authorizes $1,980,000,000 for fiscal year 2001

and $2,040,000,000 for fiscal year 2002 in FMF. The administration’s request for fiscal year 2001 is $1,980,000,000.

The authorization provided by the section is without prejudice

to any rescissions or supplemental appropriations which might be

required. The conferees intend for this formula for the reduction of

Israel’s ESF be in place through fiscal year 2008, and intend to authorize accordingly in future Acts.

In addition, this section directs that FMF funds for Israel for

fiscal year 2001 be disbursed not later than 30 days after enactment of this Act or on October 31, 2000, whichever is later. To the

extent that Israel makes a request, FMF funds shall, as agreed by

Israel and the United States, be available for advanced weapons

systems. Additionally, not less than $520,000,000 can be used for

procurement in Israel of defense articles and defense services, including research and development. The conferees expect that

Israel’s annual aid package will be provided under the usual terms,

including early disbursal of both ESF and FMF, offshore procurement, and that the aid will be provided in the form of a grant.

The conferees will view favorably additional requests for authority required in the event of a peace agreement in the Middle

East.

ASSISTANCE FOR EGYPT

Section 514, which has been modified from the Senate proposal, provides a similar formula for Egypt as that applied under

Section 513. In providing an authorization for ESF to Egypt for fiscal years 2001 and 2002, Section 514 sets in place the phase-out

of Economic Support Funds for Egypt at a rate of $40,000,000 per

year. This section, which also contains a two-year authorization for

FMF, will result in an aggregate reduction of $80,000,000 in ESF.

The authorization provided by the section is without prejudice to

any rescissions or supplemental appropriations which might be required.

Further, the section directs that FMF estimated to be outlayed

during fiscal year 2001 shall be disbursed to an interest bearing account for Egypt in the Federal Reserve Bank of New York. However, withdrawal of funds from the account can be made only on

authenticated instructions from the Defense Finance and Accounting Service and, in the event that the interest bearing account is

closed, the balance of the account is to be transferred promptly to

the appropriations account for Foreign Military Financing. The conferees urge that before any of the interest accrued by the account

is obligated, the Committees on Appropriations and Foreign Relations of the Senate, and the Committees on Appropriations and

International Relations of the House, be notified.

38

SECURITY ASSISTANCE FOR CERTAIN COUNTIES

Section 515, which has been modified from the Senate proposal, provides individual authorizations for fiscal years 2001 and

2002 of grant FMF and IMET funding for various countries.

BORDER SECURITY AND TERRITORIAL INDEPENDENCE

Section 516, which has been modified from the Senate proposal, provides an integrated authorization of security assistance

funds for the GUUAM countries (e.g., Georgia, Ukraine,

Uzbekistan, Azerbaijan, and Moldova) and Armenia. Specifically,

for fiscal year 2001, Section 516 authorizes a package of $5,000,000

in grant FMF, $2,000,000 in nonproliferation and export control assistance, $500,000 in IMET funding, and $1,000,000 in

antiterrorism assistance. For fiscal year 2002, that package is:

$20,000,000 in grant FMF, $10,000,000 in nonproliferation and export control assistance, $5,000,000 in IMET funding, and

$2,000,000 in antiterrorism assistance. These funds must be expended in accordance with the individual requirements of their respective accounts. Thus, for instance, the grant FMF may only be

utilized for activities authorized in connection with the FMF program. Likewise, nonproliferation and export control funds must be

spent on the objectives set forth under Chapter 9 of the Foreign Assistance Act of 1961. Similar restrictions apply to the other authorized forms of security assistance. Thus, as assistance to Azerbaijan

under this section is still subject to section 907 of the FREEDOM

Support Act, such assistance may be provided only for

antiterrorism or nonproliferation and export control purposes.

The funds authorized under Section 516 must be spent for the

purpose of assisting the GUUAM countries and Armenia in

strengthening control of their borders, and for the purpose of promoting the independence and territorial sovereignty of these countries. These funds also are specifically authorized, pursuant to Section 499C of the Foreign Assistance Act of 1961, for the purpose

of enhancing the abilities of the national border guards, coast

guard, and customs officials of the GUUAM countries and Armenia

to secure their borders against narcotics trafficking, proliferation,

and transnational organized crime. The conferees intend that funds

authorized by this section be used in Uzbekistan solely for nonproliferation purposes. Finally, it bears emphasizing that the conferees strongly support the cooperation on political, security, and

economic matters promoted and facilitated through the GUUAM

group. The United States should promote these endeavors as part

of its strategy to help these states consolidate their independence

and strengthen their sovereignty, to help resolve and prevent conflicts in their respective regions, and to promote democracy and

human rights. In addition, the conferees strongly support political,

security, and economic cooperation between the United States and

Armenia.

Finally, the conferees note the successes of the Department of

Defense’s two international counterproliferation programs—the

DOD/FBI Counterproliferation Program and the DOD/Customs

Counterproliferation Program. With minimal funding, and through

excellent management, these programs are contributing to efforts

39

to halt the spread of dangerous technology across the borders of the

former Soviet Union, Eastern and Central Europe, and the Baltic

states. The conferees hope that the Department of Defense will continue to support these programs and recommend that the Department of State coordinate closely with the Department of Defense on

proliferation matters.

TITLE VI—TRANSFERS OF NAVAL VESSELS

AUTHORITY TO TRANSFER NAVAL VESSELS TO CERTAIN FOREIGN

COUNTRIES

Section 601 of the conference agreement, similar in the House

and Senate proposals, provides authority to the President to transfer twelve naval vessels to Brazil, Chile, Greece, and Turkey. These

naval vessels either displace in excess of 3,000 tons, or are less

than 20 years of age. Therefore statutory approval for the transfers

is required under 10 U.S.C. 7307(a). The two PERRY class frigates

proposed for transfer to Turkey under lease/sale authority were approved by Congress to be transferred to Turkey by sale in the fiscal

year 2000 shop transfer legislation. Because of Turkish financial

uncertainties caused by recent natural disasters, however, this proposal, which is in addition to the sale authority previously granted,

is needed to give Turkey some flexibility in determining the most

appropriate means to acquire the ships. Two KNOX class frigates

are proposed in this section to be transferred to Greece on a grant

basis.

INAPPLICABILITY OF AGGREGATE ANNUAL LIMITATION ON VALUE OF

TRANSFERRED EXCESS DEFENSE ARTICLES

Section 602 of the conference agreement, similar in the House

and Senate proposals, ensures that the value of naval vessels authorized for transfer by grant by this Act will not be included in

determining the aggregate value of transferred excess defense articles.

COSTS OF TRANSFERS

Section 603 of the conference agreement, identical in the House

and Senate proposals, provides that all costs are to be borne by the

foreign recipients, including fleet turnover costs, maintenance, repairs, and training.

CONDITIONS RELATING TO COMBINED LEASE-SALE TRANSFERS

Section 604 of the conference agreement, identical in the House

and Senate proposals, authorizes the transfer of high value ships

on a combined lease-sale basis under Section 61 and 21 of the

Arms Export Control Act (22 U.S.C. 2796 and 2761 respectively).

FUNDING OF CERTAIN COSTS OF TRANSFERS

Section 605 of the conference agreement, identical in the House

and Senate proposals, provides authorization for the appropriation

of funds that may be necessary for the costs of the combined leasesale transfers in order to satisfy the requirements of 2 U.S.C. 661c.

These funds are authorized to be appropriated into the Defense

40

Vessels Transfer Program Account, which was established in the

fiscal year 1999 transfer legislation.

REPAIR AND REFURBISHMENT IN UNITED STATES SHIPYARDS

Section 606 of the conference agreement, proposed by the

House, requires the President, to the maximum extent practicable,

to ensure that repair and refurbishment of naval vessels authorized

for transfer under this title is performed in U.S. shipyards, including U.S. Navy shipyards.

SENSE OF CONGRESS REGARDING TRANSFER OF NAVAL VESSELS ON A

GRANT BASIS

Section 607 of the conference agreement, proposed by the

House, expresses the sense of Congress that naval vessels authorized for transfer to foreign countries on a grant basis under section

516 of the Foreign Assistance Act should be transferred only if the

U.S. receives appropriate benefits from such countries.

EXPIRATION OF AUTHORITY

Section 608 of the conference agreement, identical in the House

and Senate proposals, provides that the transfers authorized by

this Act must be executed within two years of the date of enactment. This allows a reasonable opportunity for agreement on terms

and for execution of the transfer.

TITLE VII—MISCELLANEOUS PROVISIONS

UTILIZATION OF DEFENSE ARTICLES AND SERVICES

Section 701, proposed by the Senate, amends Section 502 of the

Foreign Assistance Act of 1961 to make clear that defense articles

and services may be furnished by the United States to foreign nations for antiterrorism or nonproliferation purposes (in addition to

other currently authorized purposes).

ANNUAL MILITARY ASSISTANCE REPORT

Section 702 of the conference agreement, proposed by the

House, requires the State Department to include information in the

annual military assistance report required by section 655 of the

Foreign Assistance Act which identifies the quantity of exports of

weapons furnished on a direct commercial sales basis. The so-called

‘‘655 report’’ provides a timely and comprehensive account of U.S.

arms transfers. This provision will close a long-standing gap by ensuring that the State Department provides information not only on

the quantity of approved licenses for Direct Commercial Sales

(DCS) but also on the quantity of actual deliveries of weapons exported pursuant to the DCS authority during the fiscal year covered by the report, specifying, if necessary, whether such deliveries

were licensed in preceding fiscal year.

REPORT ON GOVERNMENT-TO-GOVERNMENT ARMS SALES END-USE

MONITORING PROGRAM

Section 703 of the conference agreement, proposed by the

House, requires the President to submit a report on the status of

41

efforts by the Defense Security Cooperation Agency (DSCA) to implement its plan to enhance end-use monitoring on government-togovernment arms transfers to foreign countries.

The conferees direct the State Department to provide DSCA

complete copies of all end-use violation and prior consent reports

required under section 3 of the Arms Export Control Act.

MTCR REPORT TRANSMITTALS

Section 704 includes the Senate Committee on Banking in an

infrequent report required under the Arms Export Control Act.

STINGER MISSILES IN THE PERSIAN GULF REGION

Section 705, proposed by the Senate, permits the replacement,

on a one-for-one basis, of Stinger missiles possessed by Bahrain

and Saudi Arabia that are nearing the scheduled expiration of

their shelf-life.

SENSE OF CONGRESS REGARDING EXCESS DEFENSE ARTICLES

Section 706, proposed by the Senate, calls on the President to

sell more defense articles, rather than merely give them away,

using the authority provided under Section 21 of the Arms Export

Control Act. It urges the President to use the flexibility afforded by

Section 47 of that Act to determine that ‘‘market value’’ of Excess

Defense Articles and to sell such items at a price that can be negotiated. When the Department of Defense uses too rigid a definition

of ‘‘market value,’’ and that price cannot be commanded, the item

is instead transferred on a ‘‘grant’’ basis pursuant to Section 516

of the Foreign Assistance Act of 1961, thereby forgoing revenues.

This section encourages the Department of Defense to ascertain the

‘‘market value’’ on the basis of local market conditions rather than

solely on the basis of a generic formula applied by the Department

of Defense for accounting purposes.

EXCESS DEFENSE ARTICLES FOR MONGOLIA

Section 707 of the conference agreement, which has been modified from the House proposal, provides authority to furnish grant

excess defense articles (EDA) and services to Mongolia for fiscal

years 2001 and 2002. Unfortunately, given the weak nature of its

national economy, which has led to difficulty in funding its military

budget, Mongolia cannot afford the cost of packing, crating, handling, and transportation of EDA, even if the EDA itself is provided

at no cost. Section 707 provides the Department of Defense with

the authority to absorb the costs of transporting EDA to Mongolia,

thereby allowing the receipt of much needed equipment. However,

the Committee intends to continue the practice of requiring from

the Department of Defense a detailed description of such costs in

each proposed transfer. Were such costs to grow beyond a reasonable level, the Committee’s continued support for such authorities

would be jeopardized.

SPACE COOPERATION WITH RUSSIAN PERSONS

Section 708 has been modified from the Senate proposal. This

section amends the Arms Export Control Act, provides for inVerDate 11-MAY-2000 14:26 Sep 20, 2000 Jkt 079060 PO 00000 Frm 00041 Fmt 6601 Sfmt 6601 E:\HR\OC\HR868.XXX pfrm03 PsN: HR868
42

creased reporting and certification to Congress, and expands the

ability of the President to regulate missile-related cooperation by

providing him with the discretionary authority to terminate contracts in the event that he determines that a violation of the MTCR

sanctions law (Section 13(a)(1) of the Arms Export Control Act) has

occurred.

Currently, Chapter 7 of the Arms Export Control Act imposes

mandatory sanctions on proliferating entities. However, those sanctions apply only to prospective licenses and contracts. The authority does not exist, within Chapter 7, to terminate an existing license in the event that an individual has been discovered to have

proliferated missile technology subsequent to the granting of the license. This deficiency became apparent in discussions with the administration regarding the proposed co-production arrangement between Lockheed Martin and a Russian rocket-engine firm, NPO

Energomash. Section 708 provides that missing authority to the

President, should he choose to utilize it. It is important to underscore that this authority is completely discretionary.

Section 708 also requires the President to make an annual certification to the Committee that various Russian space and missile

entities doing business with the United States are not identified in

the report required pursuant to the Iran Nonproliferation Act of

2000. These certifications must be made annually for the first five

years of a license between a U.S. firm and a Russian entity (or for

the life of the license, if less than five years). However, there is no

penalty in the event that a certification cannot be made (presumably because the person or entity has been listed in the report).

The MTCR sanctions law only operates in the event that the President makes a formal determination that a transfer, or a conspiracy

to transfer, occurred. While the certification required under Section

708 does not go beyond the annual report that the President is required to submit to Congress under the Iran Nonproliferation Act

of 2000, it is nevertheless useful because it will ensure that the Department of State continues to focus on Russian entities doing business with the United States. This provision is also intended to encourage U.S. companies working with Russian space entities to

maintain pressure on their counterparts not to proliferate technology to Iran.

Finally, Section 708 rectifies an unintended reporting loophole

in the Arms Export Control Act that resulted from amendments to

integrate the Arms Control and Disarmament Agency within the

Department of State and a subsequent decision by the Department

of State on licensing technical exchanges and brokering services

under Section 36 of the AECA. Specifically, for MTCR-related

transfers governed under Section 36(b) and (c) which fall below the

Congressional notification threshold, the administration currently

must nevertheless submit a report to the Committee explaining the

consistency of such a transfer with U.S. MTCR policy. However,

MTCR-related licenses covered by Section 36(d) which fall below

the notification threshold are not captured fully by this reporting

requirement. Section 708 rectifies this problem.

43

SENSE OF CONGRESS RELATING TO MILITARY EQUIPMENT FOR THE

PHILIPPINES

Section 709 of the conference agreement, proposed by the

House, expresses the sense of the Congress that the U.S. should

work with the Government of the Philippines to enable them to

procure certain military equipment to upgrade the capabilities and

improve the quality of life of the armed forces of the Philippines.

WAIVER OF CERTAIN COSTS

Section 710 of the conference agreement, proposed by the

House, waives the requirement to collect certain nonrecurring

charges associated with the government-to-government sale of 5

UH–60L helicopters to Colombia in November of 1999.

BENJAMIN A. GILMAN,

BILL GOODLING,

SAM GEJDENSON,

Managers on the Part of the House.

JESSE HELMS,

RICHARD G. LUGAR,

CHUCK HAGEL,

JOE BIDEN,

PAUL S. SARBANES,

Managers on the Part of the Senate.

Æ