69–006 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 110–626 

SECURITY ASSISTANCE AND ARMS EXPORT CONTROL 

REFORM ACT OF 2008 

MAY 12, 2008.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. BERMAN, from the Committee on Foreign Affairs, 

submitted the following 

R E P O R T 

[To accompany H.R. 5916] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Foreign Affairs, to whom was referred the bill 

(H.R. 5916) to reform the administration of the Arms Export Control Act, and for other purposes, having considered the same, reports favorably thereon with an amendment and recommends that 

the bill as amended do pass. 

TABLE OF CONTENTS 

Page 

The Amendment ...................................................................................................... 2 

Summary .................................................................................................................. 19 

Background and Purpose for the Legislation ........................................................ 20 

Hearings ................................................................................................................... 22 

Committee Consideration ........................................................................................ 22 

Votes of the Committee ........................................................................................... 22 

Committee Oversight Findings ............................................................................... 22 

New Budget Authority and Tax Expenditures ...................................................... 22 

Congressional Budget Office Cost Estimate .......................................................... 22 

Performance Goals and Objectives ......................................................................... 28 

Constitutional Authority Statement ...................................................................... 28 

New Advisory Committees ...................................................................................... 28 

Congressional Accountability Act ........................................................................... 28 

Earmark Identification ............................................................................................ 28 

Section-by-Section Analysis and Discussion .......................................................... 28 

Changes in Existing Law Made by the Bill, as Reported ..................................... 43 

Exchange of Letters—Armed Services Committee and Foreign Affairs Committee .................................................................................................................... 62 


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THE AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Security Assistance and Arms 

Export Control Reform Act of 2008’’. 

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

Sec. 1. Short title and table of contents. 

TITLE I—REFORM OF ARMS EXPORT CONTROL PROCEDURES 

Subtitle A—Defense Trade Controls Performance Improvement Act of 2008 

Sec. 101. Short title. 

Sec. 102. Findings. 

Sec. 103. Strategic review and assessment of the United States export controls system. 

Sec. 104. Performance goals for processing of applications for licenses to export items on USML. 

Sec. 105. Requirement to ensure adequate staff and resources for DDTC of the Department of State. 

Sec. 106. Audit by Inspector General of the Department of State. 

Sec. 107. Increased flexibility for use of defense trade controls registration fees. 

Sec. 108. Review of ITAR and USML. 

Sec. 109. Special licensing authorization for certain exports to NATO member states, Australia, Japan, and 

New Zealand. 

Sec. 110. Availability of information on the status of license applications under chapter 3 of the Arms Export 

Control Act. 

Sec. 111. Sense of Congress. 

Sec. 112. Definitions. 

Sec. 113. Authorization of appropriations. 

Subtitle B—Miscellaneous Provisions 

Sec. 121. Report on self-financing options for export licensing functions of DDTC of the Department of State. 

Sec. 122. Expediting congressional defense export review period for South Korea and Israel. 

Sec. 123. Availability to Congress of Presidential directives regarding United States arms export policies, practices, and regulations. 

Sec. 124. Increase in congressional notification thresholds and expediting congressional review for South Korea 

and Israel. 

Sec. 125. Diplomatic efforts to strengthen national and international arms export controls. 

Sec. 126. Reporting requirement for unlicensed exports. 

Sec. 127. Report on value of major defense equipment and defense articles exported under section 38 of the 

Arms Export Control Act. 

Sec. 128. Report on satellite export controls. 

Sec. 129. Definition. 

TITLE II—SECURITY ASSISTANCE AND RELATED SUPPORT FOR ISRAEL 

Sec. 201. Assessment of Israel’s qualitative military edge over military threats. 

Sec. 202. Report on United States’ commitments to the security of Israel. 

Sec. 203. War Reserves Stockpile. 

Sec. 204. Implementation of Memorandum of Understanding with Israel. 

Sec. 205. Definitions. 

TITLE III—WAIVER OF CERTAIN SANCTIONS TO FACILITATE DENUCLEARIZATION ACTIVITIES IN 

NORTH KOREA 

Sec. 301. Waiver authority and exceptions. 

Sec. 302. Certification regarding waiver of certain sanctions. 

Sec. 303. Congressional notification and report. 

Sec. 304. Termination of waiver authority. 

Sec. 305. Expiration of waiver authority. 

Sec. 306. Continuation of restrictions against the Government of North Korea. 

Sec. 307. Report on verification measures relating to North Korea’s nuclear programs. 

Sec. 308. Definitions. 

TITLE IV—MISCELLANEOUS PROVISIONS 

Sec. 401. Authority to build the capacity of foreign military forces. 

Sec. 402. Maintenance of European Union arms embargo against China. 

Sec. 403. Reimbursement of salaries of members of the reserve components in support of security cooperation missions. 

Sec. 404. Foreign Military Sales Stockpile Fund. 

Sec. 405. Congressional notification requirements under the Arms Export Control Act. 

Sec. 406. Sense of Congress. 

TITLE V—AUTHORITY TO TRANSFER NAVAL VESSELS 

Sec. 501. Authority to transfer naval vessels to certain foreign recipients. 


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TITLE I—REFORM OF ARMS EXPORT CONTROL 

PROCEDURES 

Subtitle A—Defense Trade Controls Performance 

Improvement Act of 2008 

SEC. 101. SHORT TITLE. 

This subtitle may be cited as the ‘‘Defense Trade Controls Performance Improvement Act of 2008’’. 

SEC. 102. FINDINGS. 

Congress finds the following: 

(1) In a time of international terrorist threats and a dynamic global economic 

and security environment, United States policy with regard to export controls 

is in urgent need of a comprehensive review in order to ensure such controls 

are protecting the national security and foreign policy interests of the United 

States. 

(2) In January 2007, the Government Accountability Office designated the effective identification and protection of critical technologies as a governmentwide, high-risk area, warranting a strategic reexamination of existing programs, 

including programs relating to arms export controls. 

(3) Federal Government agencies must review licenses for export of munitions 

in a thorough and timely manner to ensure that the United States is able to 

assist United States allies and to prevent nuclear and conventional weapons 

from getting into the hands of enemies of the United States. 

(4) Both staffing and funding that relate to the Department of State’s arms 

export control responsibilities have not kept pace with the increased workload 

relating to such responsibilities, especially over the last five years. 

(5) Outsourcing and off-shoring of defense production and the policy of many 

United States trading partners to require offsets for major sales of defense and 

aerospace articles present a potential threat to United States national security 

and economic well-being and serve to weaken the defense industrial base. 

(6) Export control policies can have a negative impact on United States employment, nonproliferation goals, and the health of the defense industrial base, 

particularly when facilitating the overseas transfer of technology or production 

and other forms of outsourcing, such as offsets (direct and indirect), co-production, subcontracts, overseas investment and joint ventures in defense and commercial industries. Federal Government agencies must develop new and effective procedures for ensuring that export control systems address these problems 

and the threat they pose to national security. 

(7) In the report to Congress required by the Conference Report (Report 109–

272) accompanying the bill, H.R. 2862 (the Science, State, Justice, Commerce 

and Related Agencies Appropriations Act, 2006; Public Law 109–108), the Department of State concluded that—

(A) defense trade licensing has become much more complex in recent 

years as a consequence of the increasing globalization of the defense industry; 

(B) the most important challenge to the Department of State’s licensing 

process has been the sheer growth in volume of applicants for licenses and 

agreements, without the corresponding increase in licensing officers; 

(C) fiscal year 2005 marked the third straight year of roughly 8 percent 

annual increases in licensing volume; 

(D) although an 8 percent increase in workload equates to a requirement 

for three additional licensing officers per year, there has been no increase 

in licensing officers during this period; and 

(E) the increase in licensing volume without a corresponding increase in 

trained and experienced personnel has resulted in delays and increased 

processing times. 

(8) In 2006, the Department of State processed over three times as many licensing applications as the Department of Commerce with about a fifth of the 

staff of the Department of Commerce. 

(9) On July 27, 2007, in testimony delivered to the Subcommittee on Terrorism, Nonproliferation and Trade of the House Committee on Foreign Affairs 

to examine the effectiveness of the United States export control regime, the 

Government Accountability Office found that—


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(A) the United States Government needs to conduct assessments to determine its overall effectiveness in the area of arms export control; and 

(B) the processing times of the Department of State doubled over the period from 2002 to 2006. 

(10) Although the current number of unprocessed applications for licenses to 

export defense items is less than 3,800 applications, due to the extraordinary 

efforts of the personnel and management of the Department of State’s Directorate of Defense Trade Controls, at the end of 2006, the Department of State’s backlog of such unprocessed applications reached its highest level at more than 

10,000 unprocessed applications. This resulted in major management and personnel challenges for the Directorate of Defense Trade Controls. 

(11)(A) Allowing a continuation of the status quo in resources for defense 

trade licensing could ultimately harm the United States defense industrial base. 

The 2007 Institute for Defense Analysis report entitled ‘‘Export Controls and 

the U.S. Defense Industrial Base’’ found that the large backlog and long processing times by the Department of State for applications for licenses to export 

defense items led to an impairment of United States firms in some sectors to 

conduct global business relative to foreign competitors. 

(B) Additionally, the report found that United States commercial firms have 

been reluctant to engage in research and development activities for the Department of Defense because this raises the future prospects that the products 

based on this research and development, even if intrinsically commercial, will 

be saddled by Department of State munitions controls due to the link to that 

research. 

(12) According to the Department of State’s fiscal year 2008 budget justification to Congress, commercial exports licensed or approved under the Arms Export Control Act exceeded $30,000,000,000, with nearly eighty percent of these 

items exported to United States NATO allies and other major non-NATO allies. 

(13) A Government Accountability Office report of October 9, 2001 (GAO–02– 120), documented ambiguous export control jurisdiction affecting 25 percent of 

the items that the United States Government agreed to control as part of its 

commitments to the Missile Technology Control Regime. The United States 

Government has not clearly determined which department has jurisdiction over 

these items, which increases the risk that these items will fall into the wrong 

hands. During both the 108th and 109th Congresses, the House of Representatives passed legislation mandating that the Administration clarify this issue. 

SEC. 103. STRATEGIC REVIEW AND ASSESSMENT OF THE UNITED STATES EXPORT CONTROLS 

SYSTEM. 

(a) REVIEW AND ASSESSMENT.— (1) IN GENERAL.—Not later than March 31, 2009, the President shall conduct 

a comprehensive and systematic review and assessment of the United States 

arms export controls system in the context of the national security interests and 

strategic foreign policy objectives of the United States. 

(2) ELEMENTS.—The review and assessment required under paragraph (1) 

shall—

(A) determine the overall effectiveness of the United States arms export 

controls system in order to, where appropriate, strengthen controls, improve 

efficiency, and reduce unnecessary redundancies across Federal Government agencies, through administrative actions, including regulations, and 

to formulate legislative proposals for new authorities that are needed; 

(B) develop processes to ensure better coordination of arms export control 

activities of the Department of State with activities of other departments 

and agencies of the United States that are responsible for enforcing United 

States arms export control laws; 

(C) ensure that all items on the Missile Technology Control Regime 

Annex are subject to stringent control by the United States Government; 

(D) determine the overall effect of arms export controls on 

counterterrorism, law enforcement, and infrastructure protection missions 

of the Department of Homeland Security; 

(E) contain a detailed summary of known attempts by unauthorized endusers (such as international arms traffickers, foreign intelligence agencies, 

and foreign terrorist organizations) to acquire items on the United States 

Munitions List, including—

(i) data on—

(I) commodities sought, such as M–4 rifles, night vision devices, 

F–14 spare parts; 

(II) parties involved, such as the intended end-users, brokers, 

consignees, and shippers; 

(III) destination countries and transit countries; 


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(IV) modes of transport; 

(V) trafficking methods, such as use of false documentation and 

front companies registered under flags of convenience; 

(VI) whether the attempted illicit transfer was successful; and 

(VII) any administrative or criminal enforcement actions taken 

by the United States and any other government in relation to the 

attempted illicit transfer; 

(ii) a thorough evaluation of the Blue Lantern Program, including the 

adequacy of current staffing and funding levels; 

(iii) a detailed analysis of licensing exemptions and their successful 

exploitation by unauthorized end-users; and 

(iv) an examination of the extent to which the increased tendency toward outsourcing and off-shoring of defense production harm United 

States national security and weaken the defense industrial base, including direct and indirect impact on employment, and formulate policies to address these trends as well as the policy of some United States 

trading partners to require offsets for major sales of defense articles; 

and 

(F) assess the extent to which export control policies and practices under 

the Arms Export Control Act promote the protection of basic human rights. 

(b) CONGRESSIONAL BRIEFINGS.—The President shall provide periodic briefings to 

the appropriate congressional committees on the progress of the review and assessment conducted under subsection (a). The requirement to provide congressional 

briefings under this subsection shall terminate on the date on which the President 

transmits to the appropriate congressional committees the report required under 

subsection (c). 

(c) REPORT.—Not later than 18 months after the date of the enactment of this Act, 

the President shall transmit to the appropriate congressional committees a report 

that contains the results of the review and assessment conducted under subsection 

(a). The report required by this subsection shall contain a certification that the requirement of subsection (a)(2)(C) has been met, or if the requirement has not been 

met, the reasons therefor. The report required by this subsection shall be submitted 

in unclassified form, but may contain a classified annex, if necessary. 

SEC. 104. PERFORMANCE GOALS FOR PROCESSING OF APPLICATIONS FOR LICENSES TO EXPORT ITEMS ON USML. 

(a) IN GENERAL.—The Secretary of State, acting through the head of the Directorate of Defense Trade Controls of the Department of State, shall establish the following goals: 

(1) The processing time for review of each application for a license to export 

items on the United States Munitions List (other than applications for approval 

of agreements under part 124 of title 22, Code of Federal Regulations (or successor regulations)) shall be not more than 60 days from the date of receipt of 

the application. 

(2) The processing time for review of each application for a commodity jurisdiction determination shall be not more than 60 days from the date of receipt 

of the application. 

(3) The total number of applications described in paragraph (1) that are unprocessed shall be not more than 7 percent of the total number of such applications submitted in the preceding calendar year. 

(b) ADDITIONAL REVIEW.—(1) If an application described in paragraph (1) or (2) 

of subsection (a) is not processed within the time period described in the respective 

paragraph of such subsection, then the Managing Director of the Directorate of Defense Trade Controls or the Deputy Assistant Secretary for Defense Trade and Regional Security of the Department of State, as appropriate, shall review the status 

of the application to determine if further action is required to process the application. 

(2) If an application described in paragraph (1) or (2) of subsection (a) is not processed within 90 days from the date of receipt of the application, then the Assistant 

Secretary for Political-Military Affairs of the Department of State shall— (A) review the status of the application to determine if further action is required to process the application; and 

(B) submit to the appropriate congressional committees a notification of the 

review conducted under subparagraph (A), including a description of the application, the reason for delay in processing the application, and a proposal for further action to process the application. 

(3) For each calendar year, the Managing Director of the Directorate of Defense 

Trade Controls shall review not less than 2 percent of the total number of applications described in paragraphs (1) and (2) of subsection (a) to ensure that the processing of such applications, including decisions to approve, deny, or return without 


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action, is consistent with both policy and regulatory requirements of the Department of State. 

(c) UNITED STATES ALLIES.—Congress states that—

(1) it shall be the policy of the Directorate of Defense Trade Controls of the 

Department of State to ensure that, to the maximum extent practicable, the 

processing time for review of applications described in subsection (a)(1) to export items that are not subject to the requirements of section 36(b) or (c) of the 

Arms Export Control Act (22 U.S.C. 2776(b) or (c)) to United States allies in 

direct support of combat operations or peacekeeping or humanitarian operations 

with United States Armed Forces is not more than 7 days from the date of receipt of the application; and 

(2) it shall be the goal, as appropriate, of the Directorate of Defense Trade 

Controls to ensure that, to the maximum extent practicable, the processing time 

for review of applications described in subsection (a)(1) to export items that are 

not subject to the requirements of section 36(b) or (c) of the Arms Export Control Act to government security agencies of United States NATO allies, Australia, New Zealand, Japan, South Korea, Israel, and, as appropriate, other 

major non-NATO allies for any purpose other than the purpose described in 

paragraph (1) is not more than 30 days from the date of receipt of the application. 

(d) REPORT.—Not later than December 31, 2010, and December 31, 2011, the Secretary of State shall submit to the appropriate congressional committees a report 

that contains a detailed description of—

(1)(A) the average processing time for and number of applications described 

in subsection (a)(1) to—

(i) United States NATO allies, Australia, New Zealand, Japan, South 

Korea, and Israel; 

(ii) other major non-NATO allies; and 

(iii) all other countries; and 

(B) to the extent practicable, the average processing time for and number of 

applications described in subsection (b)(1) by item category; 

(2) the average processing time for and number of applications described in 

subsection (a)(2); 

(3) the average processing time for and number of applications for agreements 

described in part 124 of title 22, Code of Federal Regulations (relating to the 

International Traffic in Arms Regulations); 

(4) any management decisions of the Directorate of Defense Trade Controls 

of the Department of State that have been made in response to data contained 

in paragraphs (1) through (3); and 

(5) any advances in technology that will allow the time-frames described in 

subsection (a)(1) to be substantially reduced. 

(e) CONGRESSIONAL BRIEFINGS.—If, at the end of any month beginning after the 

date of the enactment of this Act, the total number of applications described in subsection (a)(1) that are unprocessed is more than 7 percent of the total number of 

such applications submitted in the preceding calendar year, then the Secretary of 

State, acting through the Under Secretary for Arms Control and International Security, the Assistant Secretary for Political-Military Affairs, or the Deputy Assistant 

Secretary for Defense Trade and Regional Security of the Department of State, as 

appropriate, shall brief the appropriate congressional committees on such matters 

and the corrective measures that the Directorate of Defense Trade Controls will 

take to comply with the requirements of subsection (a). 

(f) TRANSPARENCY OF COMMODITY JURISDICTION DETERMINATIONS.—

(1) DECLARATION OF POLICY.—Congress declares that the complete confidentiality surrounding several hundred commodity jurisdiction determinations 

made each year by the Department of State pursuant to the International Traffic in Arms Regulations is not necessary to protect legitimate proprietary interests of persons or their prices and customers, is not in the best security and 

foreign policy interests of the United States, is inconsistent with the need to ensure a level playing field for United States exporters, and detracts from United 

States efforts to promote greater transparency and responsibility by other countries in their export control systems. 

(2) PUBLICATION ON INTERNET WEBSITE.—The Secretary of State shall—

(A) upon making a commodity jurisdiction determination referred to in 

paragraph (1) publish on the Internet website of the Department of State 

not later than 30 days after the date of the determination—

(i) the name of the manufacturer of the item; 

(ii) a brief general description of the item; 

(iii) the model or part number of the item; and 


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(iv) the United States Munitions List designation under which the 

item has been designated, except that—

(I) the name of the person or business organization that sought 

the commodity jurisdiction determination shall not be published if 

the person or business organization is not the manufacturer of the 

item; and 

(II) the names of the customers, the price of the item, and any 

proprietary information relating to the item indicated by the person or business organization that sought the commodity jurisdiction determination shall not be published; and 

(B) maintain on the Internet website of the Department of State an archive, that is accessible to the general public and other departments and 

agencies of the United States, of the information published under subparagraph (A). 

(g) RULE OF CONSTRUCTION.—Nothing in this section shall be construed to prohibit the President or Congress from undertaking a thorough review of the national 

security and foreign policy implications of a proposed export of items on the United 

States Munitions List. 

SEC. 105. REQUIREMENT TO ENSURE ADEQUATE STAFF AND RESOURCES FOR DDTC OF THE 

DEPARTMENT OF STATE. 

(a) REQUIREMENT.—The Secretary of State shall ensure that the Directorate of 

Defense Trade Controls of the Department of State has the necessary staff and resources to carry out this subtitle and the amendments made by this subtitle. 

(b) MINIMUM NUMBER OF LICENSING OFFICERS.—For fiscal year 2010 and each 

subsequent fiscal year, the Secretary of State shall ensure that the Directorate of 

Defense Trade Controls has at least 1 licensing officer for every 1,250 applications 

for licenses and other authorizations to export items on the United States Munitions 

List by not later than the third quarter of such fiscal year, based on the number 

of licenses and other authorizations expected to be received during such fiscal year. 

The Secretary shall ensure that in meeting the requirement of this subsection, the 

performance of other functions of the Directorate of Defense Trade Controls is maintained and adequate staff is provided for those functions. 

(c) MINIMUM NUMBER OF STAFF FOR COMMODITY JURISDICTION DETERMINATIONS.—For each of the fiscal years 2009 through 2011, the Secretary of State shall 

ensure that the Directorate of Defense Trade Controls has, to the extent practicable, 

not less than three individuals assigned to review applications for commodity jurisdiction determinations. 

(d) ENFORCEMENT RESOURCES.—In accordance with section 127.4 of title 22, Code 

of Federal Regulations, U.S. Immigration and Customs Enforcement is authorized 

to investigate violations of the International Traffic in Arms Regulations on behalf 

of the Directorate of Defense Trade Controls of the Department of State. The Secretary of State shall ensure that the Directorate of Defense Trade Controls has adequate staffing for enforcement of the International Traffic in Arms Regulations. 

SEC. 106. AUDIT BY INSPECTOR GENERAL OF THE DEPARTMENT OF STATE. 

(a) AUDIT.—Not later than the end of each of the fiscal years 2010 and 2011, the 

Inspector General of the Department of State shall conduct an independent audit 

to determine the extent to which the Department of State is meeting the requirements of sections 104 and 105 of this Act. 

(b) REPORT.—The Inspector General shall submit to the appropriate congressional 

committees a report that contains the result of each audit conducted under subsection (a). 

SEC. 107. INCREASED FLEXIBILITY FOR USE OF DEFENSE TRADE CONTROLS REGISTRATION 

FEES. 

(a) IN GENERAL.—Section 45 of the State Department Basic Authorities Act of 

1956 (22 U.S.C. 2717) is amended—

(1) in the first sentence—

(A) by striking ‘‘For’’ and inserting ‘‘(a) IN GENERAL.—For’’; and 

(B) by striking ‘‘Office’’ and inserting ‘‘Directorate’’; 

(2) by amending the second sentence to read as follows: 

‘‘(b) AVAILABILITY OF FEES.—Fees credited to the account referred to in subsection 

(a) shall be available only for payment of expenses incurred for—

‘‘(1) management, 

‘‘(2) licensing (in order to meet the requirements of section 105 of the Defense 

Trade Controls Performance Improvement Act of 2008 (relating to adequate 

staff and resources of the Directorate of Defense Trade Controls)), 

‘‘(3) compliance, 

‘‘(4) policy activities, and 


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‘‘(5) facilities, 

of defense trade controls functions.’’; and 

(3) by adding at the end the following: 

‘‘(c) ALLOCATION OF FEES.—In allocating fees for payment of expenses described 

in subsection (b), the Secretary of State shall accord the highest priority to payment 

of expenses incurred for personnel and equipment of the Directorate of Defense 

Trade Controls, including payment of expenses incurred to meet the requirements 

of section 105 of the Defense Trade Controls Performance Improvement Act of 

2008.’’. 

(b) CONFORMING AMENDMENT.—Section 38(b)(3)(A) of the Arms Export Control 

Act (22 U.S.C. 2778(b)(3)(A)) is amended to read as follows: 

‘‘(3)(A) For each fiscal year, 100 percent of registration fees collected pursuant to 

paragraph (1) shall be credited to a Department of State account, to be available 

without fiscal year limitation. Fees credited to that account shall be available only 

for the payment of expenses incurred for—

‘‘(i) management, 

‘‘(ii) licensing (in order to meet the requirements of section 105 of the Defense 

Trade Controls Performance Improvement Act of 2008 (relating to adequate 

staff and resources of the Directorate of Defense Trade Controls)), 

‘‘(iii) compliance, 

‘‘(iv) policy activities, and 

‘‘(v) facilities, 

of defense trade controls functions.’’. 

(c) USE OF CIVIL PENALTIES.—Not more than $10,000,000 of the amount of civil 

penalties collected in each of fiscal years 2008, 2009, 2010, 2011 and 2012 pursuant 

to section 38(e) of the Arms Export Control Act (22 U.S.C. 2778(e)) shall be made 

available for the expenses of the Directorate of Defense Trade Controls of the Department of State. 

SEC. 108. REVIEW OF ITAR AND USML. 

(a) IN GENERAL.—The Secretary of State shall review, with the assistance of 

United States manufacturers and other interested parties described in section 

111(2) of this Act, the International Traffic in Arms Regulations and the United 

States Munitions List to determine those technologies and goods that warrant different or additional controls. 

(b) CONDUCT OF REVIEW.—In carrying out the review required under subsection 

(a), the Secretary of State shall review not less than 20 percent of the technologies 

and goods on the International Traffic in Arms Regulations and the United States 

Munitions List in each calendar year so that for the 5-year period beginning with 

calendar year 2009, and for each subsequent 5-year period, the International Traffic 

in Arms Regulations and the United States Munitions List will be reviewed in their 

entirety. 

(c) REPORT.—The Secretary of State shall submit to the appropriate congressional 

committees an annual report on the results of the review carried out under this section. 

SEC. 109. SPECIAL LICENSING AUTHORIZATION FOR CERTAIN EXPORTS TO NATO MEMBER 

STATES, AUSTRALIA, JAPAN, AND NEW ZEALAND. 

(a) IN GENERAL.—Section 38 of the Arms Export Control Act (22 U.S.C. 2778) is 

amended by adding at the end the following: 

‘‘(k) SPECIAL LICENSING AUTHORIZATION FOR CERTAIN EXPORTS TO NATO MEMBER

STATES, AUSTRALIA, JAPAN, NEW ZEALAND, ISRAEL, AND SOUTH KOREA.—

‘‘(1) AUTHORIZATION.—(A) The President may provide for special licensing authorization for exports of United States-manufactured spare and replacement 

parts or components listed in an application for such special licensing authorization in connection with defense items previously exported to NATO member 

states, Australia, Japan, New Zealand, Israel, and South Korea. A special licensing authorization issued pursuant to this clause shall be effective for a period not to exceed 5 years. 

‘‘(B) An authorization may be issued under subparagraph (A) only if the applicable government of the country described in subparagraph (A), acting through 

the applicant for the authorization, certifies that—

‘‘(i) the export of spare and replacement parts or components supports a 

defense item previously lawfully exported; 

‘‘(ii) the spare and replacement parts or components will be transferred 

to a defense agency of a country described in subparagraph (A) that is a 

previously approved end-user of the defense items and not to a distributor 

or a foreign consignee of such defense items; 


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‘‘(iii) the spare and replacement parts or components will not to be used 

to materially enhance, optimize, or otherwise modify or upgrade the capability of the defense items; ‘‘(iv) the spare and replacement parts or components relate to a defense 

item that is owned, operated, and in the inventory of the armed forces a 

country described in subparagraph (A); ‘‘(v) the export of spare and replacement parts or components will be effected using the freight forwarder designated by the purchasing country’s diplomatic mission as responsible for handling transfers under chapter 2 of 

this Act as required under regulations; and ‘‘(vi) the spare and replacement parts or components to be exported under 

the special licensing authorization are specifically identified in the application. ‘‘(C) An authorization may not be issued under subparagraph (A) for purposes 

of establishing offshore procurement arrangements or producing defense articles 

offshore. ‘‘(D)(i) For purposes of this subsection, the term ‘United States-manufactured 

spare and replacement parts or components’ means spare and replacement 

parts or components— ‘‘(I) with respect to which— ‘‘(aa) United States-origin content costs constitute at least 85 percent 

of the total content costs; 

‘‘(bb) United States manufacturing costs constitute at least 85 percent of the total manufacturing costs; and 

‘‘(cc) foreign content, if any, is limited to content from countries eligible to receive exports of items on the United States Munitions List 

under the International Traffic in Arms Regulations (other than de 

minimis foreign content); and 

‘‘(II) that were last substantially transformed in the United States. 

‘‘(ii) For purposes of clause (i)(I)(aa) and (bb), the costs of non-United Statesorigin content shall be determined using the final price or final cost associated 

with the non-United States-origin content. 

‘‘(2) INAPPLICABILITY PROVISIONS.—(A) The provisions of this subsection shall 

not apply with respect to re-exports or re-transfers of spare and replacement 

parts or components and related services of defense items described in paragraph (1). 

‘‘(B) The congressional notification requirements contained in section 36(c) of 

this Act shall not apply with respect to an authorization issued under paragraph (1).’’. 

(b) EFFECTIVE DATE.—The President shall issue regulations to implement amendments made by subsection (a) not later than 180 days after the date of the enactment of this Act. 

SEC. 110. AVAILABILITY OF INFORMATION ON THE STATUS OF LICENSE APPLICATIONS 

UNDER CHAPTER 3 OF THE ARMS EXPORT CONTROL ACT. 

Chapter 3 of the Arms Export Control Act (22 U.S.C. 2771 et seq.) is amended 

by inserting after section 38 the following new section: 

‘‘SEC. 38A. AVAILABILITY OF INFORMATION ON THE STATUS OF LICENSE APPLICATIONS 

UNDER THIS CHAPTER. 

‘‘(a) AVAILABILITY OF INFORMATION.—Not later than one year after the date of the 

enactment of the Defense Trade Controls Performance Improvement Act of 2008, the 

President shall make available to persons who have pending license applications 

under this chapter and the committees of jurisdiction the ability to access electronically current information on the status of each license application required to be 

submitted under this chapter. 

‘‘(b) MATTERS TO BE INCLUDED.—The information referred to in subsection (a) 

shall be limited to the following: 

‘‘(1) The case number of the license application. 

‘‘(2) The date on which the license application is received by the Department 

of State and becomes an ‘open application’. 

‘‘(3) The date on which the Directorate of Defense Trade Controls makes a determination with respect to the license application or transmits it for interagency review, if required. 

‘‘(4) The date on which the interagency review process for the license application is completed, if such a review process is required. 

‘‘(5) The date on which the Department of State begins consultations with the 

congressional committees of jurisdiction with respect to the license application. 

‘‘(6) The date on which the license application is sent to the congressional 

committees of jurisdiction.’’. 


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SEC. 111. SENSE OF CONGRESS. 

It is the sense of Congress that—

(1)(A) the advice provided to the Secretary of State by the Defense Trade Advisory Group (DTAG) supports the regulation of defense trade and helps ensure 

that United States national security and foreign policy interests continue to be 

protected and advanced while helping to reduce unnecessary impediments to legitimate exports in order to support the defense requirements of United States 

friends and allies; and 

(B) therefore, the Secretary of State should share significant planned rules 

and policy shifts with DTAG for comment; and 

(2) recognizing the constraints imposed on the Department of State by the nature of a voluntary organization such as DTAG, the Secretary of State is encouraged to ensure that members of DTAG are drawn from a representative 

cross-section of subject matter experts from the United States defense industry, 

relevant trade and labor associations, academic, and foundation personnel. 

SEC. 112. DEFINITIONS. 

In this subtitle: 

(1) APPROPRIATE CONGRESSIONAL COMMITTEES.—The term ‘‘appropriate congressional committees’’ means the Committee on Foreign Affairs of the House 

of Representatives and the Committee on Foreign Relations of the Senate. 

(2) INTERNATIONAL TRAFFIC IN ARMS REGULATIONS; ITAR.—The term ‘‘International Traffic in Arms Regulations’’ or ‘‘ITAR’’ means those regulations contained in parts 120 through 130 of title 22, Code of Federal Regulations (or successor regulations). 

(3) MAJOR NON-NATO ALLY.—The term ‘‘major non-NATO ally’’ means a country that is designated in accordance with section 517 of the Foreign Assistance 

Act of 1961 (22 U.S.C. 2321k) as a major non-NATO ally for purposes of the 

Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.) and the Arms Export 

Control Act (22 U.S.C. 2751 et seq.). 

(4) MISSILE TECHNOLOGY CONTROL REGIME; MTCR.—The term ‘‘Missile Technology Control Regime’’ or ‘‘MTCR’’ has the meaning given the term in section 

11B(c)(2) of the Export Administration Act of 1979 (50 U.S.C. App. 2401b(c)(2)). 

(5) MISSILE TECHNOLOGY CONTROL REGIME ANNEX; MTCR ANNEX.—The term 

‘‘Missile Technology Control Regime Annex’’ or ‘‘MTCR Annex’’ has the meaning 

given the term in section 11B(c)(4) of the Export Administration Act of 1979 (50 

U.S.C. App. 2401b(c)(4)). 

(6) OFFSETS.—The term ‘‘offsets’’ includes compensation practices required of 

purchase in either government-to-government or commercial sales of defense articles or defense services under the Arms Export Control Act (22 U.S.C. 2751 

et seq.) and the International Traffic in Arms Regulations. 

(7) UNITED STATES MUNITIONS LIST; USML.—The term ‘‘United States Munitions List’’ or ‘‘USML’’ means the list referred to in section 38(a)(1) of the Arms 

Export Control Act (22 U.S.C. 2778(a)(1)). 

SEC. 113. AUTHORIZATION OF APPROPRIATIONS. 

There are authorized to be appropriated such sums as may be necessary for fiscal 

year 2009 and each subsequent fiscal year to carry out this subtitle and the amendments made by this subtitle. 

Subtitle B—Miscellaneous Provisions 

SEC. 121. REPORT ON SELF-FINANCING OPTIONS FOR EXPORT LICENSING FUNCTIONS OF 

DDTC OF THE DEPARTMENT OF STATE. 

Not later than 90 days after the date of the enactment of this Act, the Secretary 

of State shall submit to the appropriate congressional committees a report on possible mechanisms to place the export licensing functions of the Directorate of Defense Trade Controls of the Department of State on a 100 percent self-financing 

basis. 

SEC. 122. EXPEDITING CONGRESSIONAL DEFENSE EXPORT REVIEW PERIOD FOR SOUTH 

KOREA AND ISRAEL. 

The Arms Export Control Act (22 U.S.C. 2751 et seq.) is amended—

(1) in sections 3(d)(2)(B), 3(d)(3)(A)(i), 3(d)(5), 21(e)(2)(A), 36(b)(2), 36(c)(2)(A), 

36(d)(2)(A), 62(c)(1), and 63(a)(2) by inserting ‘‘the Republic of Korea, Israel,’’

before ‘‘or New Zealand’’; 

(2) in section 3(b)(2) by inserting ‘‘the Government of the Republic of Korea,’’

before ‘‘or the Government of New Zealand’’; and 


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(3) in section 21(h)(1)(A), by inserting ‘‘the Republic of Korea,’’ before ‘‘or 

Israel’’. 

SEC. 123. AVAILABILITY TO CONGRESS OF PRESIDENTIAL DIRECTIVES REGARDING UNITED 

STATES ARMS EXPORT POLICIES, PRACTICES, AND REGULATIONS. 

(a) IN GENERAL.—The President shall make available to the appropriate congressional committees the text of each Presidential directive regarding United States export policies, practices, and regulations relating to the implementation of the Arms 

Export Control Act (22 U.S.C. 2751 et seq.) not later than 15 days after the date 

on which the directive has been signed or authorized by the President. 

(b) TRANSITION PROVISION.—Any Presidential directive described in subsection (a) 

that is signed or authorized by the President on or after January 1, 2008, and before 

the date of the enactment of this Act shall be made available to the appropriate congressional committees not later than 90 days after the date of the enactment of this 

Act. 

(c) FORM.—To the maximum extent practicable, the Presidential directives required to be made available to the appropriate congressional committees under this 

section shall be made available on an unclassified basis. 

SEC. 124. INCREASE IN CONGRESSIONAL NOTIFICATION THRESHOLDS AND EXPEDITING CONGRESSIONAL REVIEW FOR SOUTH KOREA AND ISRAEL. 

(a) FOREIGN MILITARY SALES.—

(1) IN GENERAL.—Subsection (b) of section 36 of the Arms Export Control Act 

(22 U.S.C. 2776) is amended—

(A) by redesignating paragraphs (2) through (6) as paragraphs (3) 

through (7), respectively; and 

(B) by striking ‘‘The letter of offer shall not be issued’’ and all that follows 

through ‘‘enacts a joint resolution’’ and inserting the following: 

‘‘(2) The letter of offer shall not be issued—

‘‘(A) with respect to a proposed sale of any defense articles or defense 

services under this Act for $200,000,000 or more, any design and construction services for $300,000,000 or more, or any major defense equipment for 

$75,000,000 or more, to the North Atlantic Treaty Organization (NATO), 

any member country of NATO, Japan, Australia, the Republic of Korea, 

Israel, or New Zealand, if Congress, within 15 calendar days after receiving 

such certification, or 

‘‘(B) with respect to a proposed sale of any defense articles or services 

under this Act for $100,000,000 or more, any design and construction services for $200,000,000 or more, or any major defense equipment for 

$50,000,000 or more, to any other country or organization, if Congress, 

within 30 calendar days after receiving such certification, 

enacts a joint resolution’’. 

(2) TECHNICAL AND CONFORMING AMENDMENTS.—Such section is further 

amended—

(A) in subsection (b)—

(i) in paragraph (6)(C), as redesignated, by striking ‘‘Subject to paragraph (6), if’’ and inserting ‘‘If’’; and 

(ii) by striking paragraph (7), as redesignated; and 

(B) in subsection (c)(4), by striking ‘‘subsection (b)(5)’’ each place it appears and inserting ‘‘subsection (b)(6)’’. 

(b) COMMERCIAL SALES.—Subsection (c) of such section is amended—

(1) in paragraph (2)—

(A) in subparagraph (A)—

(i) by inserting after ‘‘for an export’’ the following: ‘‘of any major defense equipment sold under a contract in the amount of $75,000,000 or 

more or of defense articles or defense services sold under a contract in 

the amount of $200,000,000 or more, (or, in the case of a defense article 

that is a firearm controlled under category I of the United States Munitions List, $1,000,000 or more)’’; and 

(ii) by striking ‘‘Organization,’’ and inserting ‘‘Organization (NATO),’’

and by further striking ‘‘that Organization’’ and inserting ‘‘NATO’’; and 

(B) in subparagraph (C), by inserting after ‘‘license’’ the following: ‘‘for an 

export of any major defense equipment sold under a contract in the amount 

of $50,000,000 or more or of defense articles or defense services sold under 

a contract in the amount of $100,000,000 or more, (or, in the case of a defense article that is a firearm controlled under category I of the United 

States Munitions List, $1,000,000 or more)’’; and 

(2) by striking paragraph (5). 


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SEC. 125. DIPLOMATIC EFFORTS TO STRENGTHEN NATIONAL AND INTERNATIONAL ARMS EXPORT CONTROLS. 

(a) SENSE OF CONGRESS.—It is the sense of Congress that the President should 

redouble United States diplomatic efforts to strengthen national and international 

arms export controls by establishing a senior-level initiative to ensure that such 

arms export controls are comparable to and supportive of United States arms export 

controls, particularly with respect to countries of concern to the United States. 

(b) REPORT.—No later than one year after the date of the enactment of this Act, 

and annually thereafter for four years, the President shall transmit to the appropriate committees of Congress a report on United States diplomatic efforts described 

in subsection (a). 

SEC. 126. REPORTING REQUIREMENT FOR UNLICENSED EXPORTS. 

Section 655(b) of the Foreign Assistance Act of 1961 (22 U.S.C. 2415(b)) is amended—

(1) in paragraph (2), by striking ‘‘or’’ at the end; 

(2) in paragraph (3), by striking the period at the end and inserting ‘‘; or’’; 

and 

(3) by adding at the end the following: 

‘‘(4) were exported without a license under section 38 of the Arms Export Control Act (22 U.S.C. 2778) pursuant to an exemption established under the International Traffic in Arms Regulations, other than defense articles exported in 

furtherance of a letter of offer and acceptance under the Foreign Military Sales 

program or a technical assistance or manufacturing license agreement, including the specific exemption provision in the regulation under which the export 

was made.’’. 

SEC. 127. REPORT ON VALUE OF MAJOR DEFENSE EQUIPMENT AND DEFENSE ARTICLES EXPORTED UNDER SECTION 38 OF THE ARMS EXPORT CONTROL ACT. 

Section 38 of the Arms Export Control Act (22 U.S.C. 2778) is amended by adding 

at the end the following: 

‘‘(l) REPORT.—

‘‘(1) IN GENERAL.—The President shall transmit to the appropriate congressional committees a report that contains a detailed listing, by country and by 

international organization, of the total dollar value of major defense equipment 

and defense articles exported pursuant to licenses authorized under this section 

for the previous fiscal year. 

‘‘(2) INCLUSION IN ANNUAL BUDGET.—The report required by this subsection 

shall be included in the supporting information of the annual budget of the 

United States Government required to be submitted to Congress under section 

1105 of title 31, United States Code. 

‘‘(3) APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.—In this subsection, 

the term ‘appropriate congressional committees’ means the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate.’’. 

SEC. 128. REPORT ON SATELLITE EXPORT CONTROLS. 

(a) REPORT.—The President shall report to the appropriate committees of the Congress, not later than 180 days after the date of the enactment of this Act regarding—

(1) the extent to which current United States export controls on satellites and 

related items under the Arms Export Control Act are successfully preventing 

the transfer of militarily-sensitive technologies to countries of concern, especially the People’s Republic of China; 

(2) the extent to which comparable satellites and related items are available 

from foreign sources without comparable export controls; and 

(3) whether the current export controls on satellites and related items should 

be altered and in what manner, including whether other incentives or disincentives should also be employed to discourage exports of satellites and related 

items to the People’s Republic of China by any country. 

(b) DEFINITIONS.—In this section, the terms ‘‘satellite’’ and ‘‘related items’’ mean 

satellites and all specifically designed or modified systems or subsystems, components, parts, accessories, attachments, and associated equipment for satellites as 

covered under category XV of the International Traffic in Arms Regulations (as in 

effect on the date of the enactment of this Act). 

SEC. 129. DEFINITION. 

In this subtitle, the term ‘‘appropriate congressional committees’’ means the Committee on Foreign Affairs of the House of Representatives and the Committee on 

Foreign Relations of the Senate. 


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TITLE II—SECURITY ASSISTANCE AND 

RELATED SUPPORT FOR ISRAEL 

SEC. 201. ASSESSMENT OF ISRAEL’S QUALITATIVE MILITARY EDGE OVER MILITARY THREATS. 

(a) ASSESSMENT REQUIRED.—The President shall carry out an empirical and qualitative assessment on an ongoing basis of the extent to which Israel possesses a qualitative military edge over military threats to Israel. The assessment required under 

this subsection shall be sufficiently robust so as to facilitate comparability of data 

over concurrent years. 

(b) USE OF ASSESSMENT.—The President shall ensure that the assessment required under subsection (a) is used to inform the review by the United States of 

applications to sell defense articles and defense services under the Arms Export 

Control Act (22 U.S.C. 2751 et seq.) to countries in the Middle East. 

(c) REPORTS.—

(1) INITIAL REPORT.—Not later than 180 days after the date of the enactment 

of this Act, the President shall transmit to the appropriate congressional committees a report on the initial assessment required under subsection (a). 

(2) QUADRENNIAL REPORT.—Not later than four years after the date on which 

the President transmits the initial report under paragraph (1), and every four 

years thereafter, the President shall transmit to the appropriate congressional 

committees a report on the most recent assessment required under subsection 

(a). 

(d) CERTIFICATION.—Section 36 of the Arms Export Control Act (22 U.S.C. 2776) 

is amended by adding at the end the following: 

‘‘(h) CERTIFICATION REQUIREMENT RELATING ISRAEL’S QUALITATIVE MILITARY

EDGE.—

‘‘(1) IN GENERAL.—Any certification relating to a proposed sale or export of defense articles or defense services under this section to any country in the Middle 

East other than Israel shall include a determination that the sale or export of 

the defense articles or defense services will not adversely affect Israel’s qualitative military edge over military threats to Israel. 

‘‘(2) DEFINITION.—In this subsection, the term ‘qualitative military edge’ has 

the meaning given the term in section 205 of the Security Assistance and Arms 

Export Control Reform Act of 2008.’’. 

SEC. 202. REPORT ON UNITED STATES’ COMMITMENTS TO THE SECURITY OF ISRAEL. 

(a) INITIAL REPORT.—Not later than 30 days after the date of the enactment of 

this Act, the President shall transmit to the appropriate congressional committees 

a report that contains—

(1) a complete, unedited, and unredacted copy of each assurance made by 

United States Government officials to officials of the Government of Israel regarding Israel’s security and maintenance of Israel’s qualitative military edge, 

as well as any other assurance regarding Israel’s security and maintenance of 

Israel’s qualitative military edge provided in conjunction with exports under the 

Arms Export Control Act (22 U.S.C. 2751 et seq.), for the period beginning on 

January 1, 1975, and ending on the date of the enactment of this Act; and 

(2) an analysis of the extent to which, and by what means, each such assurance has been and is continuing to be fulfilled. 

(b) SUBSEQUENT REPORTS.—

(1) NEW ASSURANCES AND REVISIONS.—The President shall transmit to the appropriate congressional committees a report that contains the information required under subsection (a) with respect to—

(A) each assurance described in subsection (a) made on or after the date 

of the enactment of this Act, or 

(B) revisions to any assurance described in subsection (a) or subparagraph (A) of this paragraph, 

within 15 days of the new assurance or revision being conveyed. 

(2) 5-YEAR REPORTS.—Not later than 5 years after the date of the enactment 

of this Act, and every 5 years thereafter, the President shall transmit to the 

appropriate congressional committees a report that contains the information required under subsection (a) with respect to each assurance described in subsection (a) or paragraph (1)(A) of this subsection and revisions to any assurance 

described in subsection (a) or paragraph (1)(A) of this subsection during the preceding 5-year period. 

(c) FORM.—Each report required by this section shall be transmitted in unclassified form, but may contain a classified annex, if necessary. 


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SEC. 203. WAR RESERVES STOCKPILE. 

(a) DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2005.—Section 12001(d) of the 

Department of Defense Appropriations Act, 2005 (Public Law 108–287; 118 Stat. 

1011), is amended by striking ‘‘4’’ and inserting ‘‘6’’. (b) FOREIGN ASSISTANCE ACT OF 1961.—Section 514(b)(2)(A) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321h(b)(2)(A)) is amended by striking ‘‘fiscal years 2007 

and 2008’’ and inserting ‘‘fiscal years 2009 and 2010’’. (c) EFFECTIVE DATE.—The amendment made by subsection (a) takes effect on August 5, 2008. 

SEC. 204. IMPLEMENTATION OF MEMORANDUM OF UNDERSTANDING WITH ISRAEL. 

(a) IN GENERAL.—Of the amount made available for fiscal year 2009 for assistance 

under the program authorized by section 23 of the Arms Export Control Act (22 

U.S.C. 2763) (commonly referred to as the ‘‘Foreign Military Financing Program’’), 

the amount specified in subsection (b) is authorized to be made available on a grant 

basis for Israel. 

(b) COMPUTATION OF AMOUNT.—The amount referred to in subsection (a) is the 

amount equal to— (1) the amount specified under the heading ‘‘Foreign Military Financing Program’’ for Israel for fiscal year 2008; plus (2) $150,000,000. 

SEC. 205. DEFINITIONS. 

In this subtitle— (1) the term ‘‘appropriate congressional committees’’ means the Committee on 

Foreign Affairs of the House of Representatives and the Committee on Foreign 

Relations of the Senate; and 

(2) the term ‘‘qualitative military edge’’ means the ability to counter and defeat any credible conventional military threat from any individual state or possible coalition of states or from non-state actors, while sustaining minimal damages and casualties, through the use of superior military means, possessed in 

sufficient quantity, including weapons, command, control, communication, intelligence, surveillance, and reconnaissance capabilities that in their technical 

characteristics are superior in capability to those of such other individual or 

possible coalition of states or non-state actors. 

TITLE III—WAIVER OF CERTAIN SANCTIONS 

TO FACILITATE DENUCLEARIZATION ACTIVITIES IN NORTH KOREA 

SEC. 301. WAIVER AUTHORITY AND EXCEPTIONS. 

(a) WAIVER AUTHORITY.—Except as provided in subsection (b), the President may 

waive, in whole or in part, the application of any sanction contained in subparagraph (A), (B), (D), or (G) of section 102(b)(2) of the Arms Export Control Act (22 

U.S.C. 2799aa–1(b)(2)) with respect to North Korea in order to provide material, direct, and necessary assistance for disablement, dismantlement, verification, and 

physical removal activities in the implementation of the commitment of North 

Korea, undertaken in the Joint Statement of September 19, 2005, ‘‘to abandoning 

all nuclear weapons and existing nuclear programs’’ as part of the verifiable 

denuclearization of the Korean Peninsula. 

(b) EXCEPTIONS.—The waiver authority under subsection (a) may not be exercised 

with respect to the following: 

(1) Any export of lethal defense articles that would be prevented by the application of section 102(b)(2)(B) of the Arms Export Control Act. 

(2) Any sanction relating to credit or credit guarantees contained in section 

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

SEC. 302. CERTIFICATION REGARDING WAIVER OF CERTAIN SANCTIONS. 

Assistance described in subparagraph (B) or (G) of section 102(b)(2) of the Arms 

Export Control Act (22 U.S.C. 2799aa–1(b)(2)) may be provided with respect to 

North Korea by reason of the exercise of the waiver authority under section 301 

only if the President first determines and certifies to the appropriate congressional 

committees that—

(1) all necessary steps will be taken to ensure that the assistance will not be 

used to improve the military capabilities of the armed forces of North Korea; 

and 

(2) the exercise of the waiver authority is in the national security interests 

of the United States. 


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SEC. 303. CONGRESSIONAL NOTIFICATION AND REPORT. 

(a) NOTIFICATION.—The President shall notify the appropriate congressional committees in writing not later than 15 days before exercising the waiver authority 

under section 301. 

(b) REPORT.—Not later than 60 days after the date of the enactment of this Act, 

and annually thereafter for such time during which the exercise of the waiver authority under section 301 remains in effect, the President shall transmit to the appropriate congressional committees a report that— (1) describes in detail the progress that is being made in the implementation 

of the commitment of North Korea described in section 301; 

(2) describes in detail any failures, shortcomings, or obstruction by North 

Korea with respect to the implementation of the commitment of North Korea 

described in section 301; 

(3) describes in detail the progress or lack thereof in the preceding 12-month 

period of all other programs promoting the elimination of North Korea’s capability to develop, deploy, transfer, or maintain weapons of mass destruction or 

their delivery systems; and 

(4) beginning with the second report required by this subsection, a justification for the continuation of the waiver exercised under section 301 and, if applicable, section 302, for the fiscal year in which the report is submitted. 

SEC. 304. TERMINATION OF WAIVER AUTHORITY. 

Any waiver in effect by reason of the exercise of the waiver authority under section 301 shall terminate if the President determines that North Korea—

(1)(A) on or after September 19, 2005, transferred to a non-nuclear-weapon 

state, or received, a nuclear explosive device; or 

(B) on or after October 10, 2006, detonated a nuclear explosive device; or 

(2) on or after September 19, 2005—

(A) transferred to a non-nuclear-weapon state any design information or 

component which is determined by the President to be important to, and 

known by North Korea to be intended by the recipient state for use in, the 

development or manufacture of any nuclear explosive device, or 

(B) sought and received any design information or component which is determined by the President to be important to, and intended by North Korea 

for use in, the development or manufacture of any nuclear explosive device, 

unless the President determines and certifies to the appropriate congressional 

committees that such waiver is vital to the national security interests of the 

United States. 

SEC. 305. EXPIRATION OF WAIVER AUTHORITY. 

Any waiver in effect by reason of the exercise of the waiver authority under section 301 shall terminate on the date that is 4 years after the date of the enactment 

of this Act. The waiver authority under section 301 may not be exercised beginning 

on the date that is 3 years after the date of the enactment of this Act. 

SEC. 306. CONTINUATION OF RESTRICTIONS AGAINST THE GOVERNMENT OF NORTH KOREA. 

(a) IN GENERAL.—Except as provided in section 301(a), restrictions against the 

Government of North Korea that were imposed by reason of a determination of the 

Secretary of State that North Korea is a state sponsor of terrorism shall remain in 

effect, and shall not be lifted pursuant to the provisions of law under which the determination was made, unless the President certifies to the appropriate congressional committees that—

(1) the Government of North Korea is no longer engaged in the transfer of 

technology related to the acquisition or development of nuclear weapons, particularly to the Governments of Iran, Syria, or any other country that is a state 

sponsor of terrorism; 

(2) in accordance with the Six-Party Talks Agreement of February 13, 2007, 

the Government of North Korea has ‘‘provided a complete and correct declaration of all its nuclear programs,’’ and there are measures to effectively verify 

this declaration by the United States which, ‘‘[a]t the request of the other Parties,’’ is leading ‘‘disablement activities’’ and ‘‘provid[ing] the funding for those 

activities’’; and 

(3) the Government of North Korea has agreed to the participation of the 

International Atomic Energy Agency in the monitoring and verification of the 

shutdown and sealing of the Yongbyon nuclear facility. 

(b) STATE SPONSOR OF TERRORISM DEFINED.—In this section, the term ‘‘state sponsor of terrorism’’ means a country the government of which the Secretary of State 

has determined, for purposes of section 6(j) of the Export Administration Act of 1979 

(as continued in effect pursuant to the International Emergency Economic Powers 

Act), section 40 of the Arms Export Control Act, section 620A of the Foreign AssistVerDate Aug 31 2005 00:57 May 13, 2008 Jkt 069006 PO 00000 Frm 00015 Fmt 6659 Sfmt 6621 E:\HR\OC\HR626.XXX HR626

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ance Act of 1961, or any other provision of law, is a government that has repeatedly 

provided support for acts of international terrorism. 

SEC. 307. REPORT ON VERIFICATION MEASURES RELATING TO NORTH KOREA’S NUCLEAR 

PROGRAMS. 

(a) IN GENERAL.—Not later than 15 days after the date of enactment of this Act, 

the Secretary of State shall submit to the appropriate congressional committees a 

report on verification measures relating to North Korea’s nuclear programs under 

the Six-Party Talks Agreement of February 13, 2007, with specific focus on how 

such verification measures are defined under the Six-Party Talks Agreement and 

understood by the United States Government. 

(b) MATTERS TO BE INCLUDED.—The report required under subsection (a) shall include, among other elements, a detailed description of—

(1) the methods to be utilized to confirm that North Korea has ‘‘provided a 

complete and correct declaration of all of its nuclear programs’’; 

(2) the specific actions to be taken in North Korea and elsewhere to ensure 

a high and ongoing level of confidence that North Korea has fully met the terms 

of the Six-Party Talks Agreement relating to its nuclear programs; 

(3) any formal or informal agreement with North Korea regarding verification 

measures relating to North Korea’s nuclear programs under the Six-Party Talks 

Agreement; and 

(4) any disagreement expressed by North Korea regarding verification measures relating to North Korea’s nuclear programs under the Six-Party Talks 

Agreement. 

(c) FORM.—The report required under subsection (a) shall be submitted in unclassified form, but may include a classified annex. 

SEC. 308. DEFINITIONS. 

In this title—

(1) the term ‘‘appropriate congressional committees’’ means—

(A) the Committee on Foreign Affairs and the Committee on Appropriations of the House of Representatives; and 

(B) the Committee on Foreign Relations and the Committee on Appropriations of the Senate; 

(2) the terms ‘‘non-nuclear-weapon state’’, ‘‘design information’’, and ‘‘component’’ have the meanings given such terms in section 102 of the Arms Export 

Control Act (22 U.S.C. 2799aa–1); and 

(3) the term ‘‘Six-Party Talks Agreement of February 13, 2007’’ or ‘‘Six-Party 

Talks Agreement’’ means the action plan released on February 13, 2007, of the 

Third Session of the Fifth Round of the Six-Party Talks held in Beijing among 

the People’s Republic of China, the Democratic People’s Republic of Korea 

(North Korea), Japan, the Republic of Korea (South Korea), the Russian Federation, and the United States relating to the denuclearization of the Korean Peninsula, normalization of relations between the North Korea and the United 

States, normalization of relations between North Korea and Japan, economy 

and energy cooperation, and matters relating to the Northeast Asia Peace and 

Security Mechanism. 

TITLE IV—MISCELLANEOUS PROVISIONS 

SEC. 401. AUTHORITY TO BUILD THE CAPACITY OF FOREIGN MILITARY FORCES. 

(a) AUTHORITY.—The Secretary of State is authorized to conduct a program to respond to contingencies in foreign countries or regions by providing training, procurement, and capacity-building of a foreign country’s national military forces and dedicated counter-terrorism forces in order for that country to—

(1) conduct counterterrorist operations; or 

(2) participate in or support military and stability operations in which the 

United States is a participant. 

(b) TYPES OF CAPACITY-BUILDING.—The program authorized under subsection (a) 

may include the provision of equipment, supplies, and training. 

(c) LIMITATIONS.—

(1) ANNUAL FUNDING LIMITATION.—The Secretary of State may use up to 

$25,000,000 of funds available under the Foreign Military Financing program 

for each of the fiscal years 2009 and 2010 to conduct the program authorized 

under subsection (a). 

(2) ASSISTANCE OTHERWISE PROHIBITED BY LAW.—The Secretary of State may 

not use the authority in subsection (a) to provide any type of assistance described in subsection (b) that is otherwise prohibited by any provision of law. 


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(3) LIMITATION ON ELIGIBLE COUNTRIES.—The Secretary of State may not use 

the authority in subsection (a) to provide assistance described in subsection (b) 

to any foreign country that is otherwise prohibited from receiving such type of 

assistance under any other provision of law. 

(d) FORMULATION AND EXECUTION OF ACTIVITIES.—The Secretary of State is authorized to coordinate with the head of any other appropriate department or agency 

in the formulation and execution of the program authorized under subsection (a). 

(e) CONGRESSIONAL NOTIFICATION.—

(1) ACTIVITIES IN A COUNTRY.—Not less than 15 days before obligating funds 

for activities in any country under the program authorized under subsection (a), 

the Secretary of State shall submit to the congressional committees specified in 

paragraph (3) a notice of the following: 

(A) The country whose capacity to engage in activities in subsection (a) 

will be assisted. 

(B) The budget, implementation timeline with milestones, and completion 

date for completing the activities. 

(2) SPECIFIED CONGRESSIONAL COMMITTEES.—The congressional committees 

specified in this paragraph are the following: 

(A) The Committee on Foreign Affairs and the Committee on Appropriations of the House of Representatives. 

(B) The Committee on Foreign Relations and the Committee on Appropriations of the Senate. 

SEC. 402. MAINTENANCE OF EUROPEAN UNION ARMS EMBARGO AGAINST CHINA. 

(a) FINDINGS.—Congress makes the following findings: 

(1) Congress has previously expressed its strong concerns in House Resolution 

57 of February 2, 2005, and Senate Resolution 91 of March 17, 2005, with the 

transfer of armaments and related technology to the People’s Republic of China 

by member states of the European Union, which increased eightfold from 2001 

to 2003, and with plans to terminate in the near future the arms embargo they 

imposed in 1989 following the Tiananmen Square massacre. 

(2) The deferral of a decision by the European Council to terminate its arms 

embargo following adoption of the resolutions specified in paragraph (1), the 

visit by the President of the United States to Europe, and growing concern 

among countries in the regions and the general public on both sides of the Atlantic, was welcomed by the Congress. 

(3) The decision by the European Parliament on April 14, 2005, by a vote of 

421 to 85, to oppose the lifting of the European Union’s arms embargo on the 

People’s Republic of China, and resolutions issued by a number of elected parliamentary bodies in Europe also opposing the lifting of the arms embargo, was 

also welcomed by the Congress as a reassurance that its European friends and 

allies understood the gravity of prematurely lifting the embargo. 

(4) The onset of a strategic dialogue between the European Commission and 

the Government of the United States on the security situation in East Asia 

holds out the hope that a greater understanding will emerge of the consequences of European assistance to the military buildup of the People’s Republic of China for peace and stability in that region, to the security interests of 

the United States and its friends and allies in the region, and, in particular, 

to the safety of United States Armed Forces whose presence in the region has 

been a decisive factor in ensuring peace and prosperity since the end of World 

War II. 

(5) A more intensive dialogue with Europe on this matter will clarify for 

United States’ friends and allies in Europe how their ‘‘non-lethal’’ arms transfers improve the force projection of the People’s Republic of China, are far from 

benign, and enhance the prospects for the threat or use of force in resolving the 

status of Taiwan. 

(6) This dialogue may result in an important new consensus between the 

United States and its European partners on the need for coordinated policies 

that encourage the development of democracy in the People’s Republic of China 

and which discourage, not assist, China’s unjustified military buildup and pursuit of weapons that threaten its neighbors. 

(7) However, the statement by the President of France in Beijing in November 

2007 that the European Union arms embargo should be lifted is troubling, especially since France will assume the six-month presidency of the European Union 

in July 2008. 

(8) There continues to be wide-spread concerns regarding the lack of any significant progress by the Government of the People’s Republic of China in respecting the civil and political rights of the Chinese people. 


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(b) STATEMENT OF POLICY.—It shall be the policy of the United States Government to oppose any diminution or termination of the arms embargo that was established by the Declaration of the European Council of June 26, 1989, and to take 

whatever diplomatic and other measures that are appropriate to convince the Member States of the European Union, individually and collectively, to continue to observe this embargo in principle and in practice. Appropriate measures should include prohibitions on entering into defense procurement contracts or defense-related 

research and development arrangements with European Union Member States that 

do not observe such an embargo in practice. 

(c) REPORT.—Not later than 180 days after the date of the enactment of this Act, 

and every six months thereafter until December 31, 2010, the President shall transmit to the Committee on Foreign Affairs and Committee on Armed Services of the 

House of Representatives and the Committee on Foreign Relations and the Committee on Armed Services of the Senate a report on all efforts and activities of the 

United States Government to ensure the success of the policy declared in subsection 

(b). 

SEC. 403. REIMBURSEMENT OF SALARIES OF MEMBERS OF THE RESERVE COMPONENTS IN 

SUPPORT OF SECURITY COOPERATION MISSIONS. 

Section 632(d) of the Foreign Assistance Act of 1961 (22 U.S.C. 2392(d)) is amended—

(1) by striking ‘‘(d) Except as otherwise provided’’ and inserting ‘‘(d)(1) Except 

as otherwise provided’’; and 

(2) by adding at the end the following: 

‘‘(2) Notwithstanding provisions concerning the exclusion of the costs of salaries 

of members of the Armed Forces in section 503(a) of this Act and paragraph (1) of 

this subsection, the full cost of salaries of members of the reserve components of 

the Armed Forces (specified in section 10101 of title 10, United States Code) may, 

during each of fiscal years 2009 and 2010, be included in calculating pricing or 

value for reimbursement charged under section 503(a) of this Act and paragraph (1) 

of this subsection, respectively.’’. 

SEC. 404. FOREIGN MILITARY SALES STOCKPILE FUND. 

(a) IN GENERAL.—Subsection (a) of section 51 of the Arms Export Control Act (22 

U.S.C. 2795) is amended—

(1) in paragraph (1), by striking ‘‘Special Defense Acquisition Fund’’ and inserting ‘‘Foreign Military Sales Stockpile Fund’’; and 

(2) in paragraph (4), by inserting ‘‘building the capacity of recipient countries 

and’’ before ‘‘narcotics control purposes’’. 

(b) CONTENTS OF FUND.—Subsection (b) of such section is amended—

(1) in paragraph (2), by striking ‘‘and’’ at the end; 

(2) in paragraph (3), by inserting ‘‘and’’ at the end; and 

(3) by inserting after paragraph (3) the following: 

‘‘(4) collections from leases made pursuant to section 61 of this Act,’’. 

(c) AVAILABILITY.—Subsection (c)(2) of such section is amended to read as follows: 

‘‘(2) Amounts credited to the Fund under subsection (b) shall remain available 

until expended.’’. 

(d) CONFORMING AMENDMENTS.—(1) The heading of such section is amended by 

striking ‘‘SPECIAL DEFENSE ACQUISITION FUND’’ and inserting ‘‘FOREIGN MILITARY

SALES STOCKPILE FUND’’. 

(2) The heading of chapter 5 of the Arms Export Control Act is amended by striking ‘‘SPECIAL DEFENSE ACQUISITION FUND’’ and inserting ‘‘FOREIGN 

MILITARY SALES STOCKPILE FUND’’. 

SEC. 405. CONGRESSIONAL NOTIFICATION REQUIREMENTS UNDER THE ARMS EXPORT CONTROL ACT. 

The Arms Export Control Act (22 U.S.C. 2751 et seq.) is amended—

(1) by striking ‘‘Speaker of the House of Representatives and the Committee 

on Foreign Relations of the Senate’’ each place it appears and inserting ‘‘Committee on Foreign Affairs of the House of Representatives and the Committee 

on Foreign Relations of the Senate’’; 

(2) by striking ‘‘Speaker of the House of Representatives and the Chairman 

of the Committee on Foreign Relations of the Senate’’ and ‘‘Speaker of the 

House of Representatives and the chairman of the Committee on Foreign Relations of the Senate’’ each place they appear and inserting ‘‘Chairman of the 

Committee on Foreign Affairs of the House of Representatives and the Chairman of the Committee on Foreign Relations of the Senate’’; 

(3) by striking ‘‘Speaker of the House of Representatives and to the chairman 

of the Committee on Foreign Relations’’ each place it appears and inserting 


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‘‘Chairman of the Committee on Foreign Affairs of the House of Representatives 

and to the Chairman of the Committee on Foreign Relations’’; 

(4) by striking ‘‘Speaker of the House of Representatives and the Committees 

on Armed Services and Foreign Relations of the Senate’’ each place it appears 

and inserting ‘‘Committees on Foreign Affairs and Armed Services of the House 

of Representatives and the Committees on Foreign Relations and Armed Services of the Senate’’; 

(5) by striking ‘‘Speaker of the House of Representatives, the chairman of the 

Committee on Foreign Relations of the Senate, and the chairman of the Committee on Armed Services of the Senate’’ each place it appears and inserting ‘‘Chairmen of the Committees on Foreign Affairs and Armed Services of the 

House of Representatives and the Chairmen of the Committees on Foreign Relations and Armed Services of the Senate’’; and 

(6) by striking ‘‘Speaker of the House of Representatives, and to the chairman 

of the Committee on Foreign Relations’’ each place it appears and inserting ‘‘Chairman of the Committee on Foreign Affairs of the House of Representatives 

and to the Chairman of the Committee on Foreign Relations’’ each place it appears. 

SEC. 406. SENSE OF CONGRESS. 

It is the sense of Congress that the United States should not provide security assistance or arms exports to nations contributing to massive, widespread, and systematic violations of human rights or acts of genocide, particularly with respect to 

Darfur, Sudan. 

TITLE V—AUTHORITY TO TRANSFER NAVAL 

VESSELS 

SEC. 501. AUTHORITY TO TRANSFER NAVAL VESSELS TO CERTAIN FOREIGN RECIPIENTS. 

(a) TRANSFERS BY GRANT.—The President is authorized to transfer vessels to foreign countries on a grant basis under section 516 of the Foreign Assistance Act of 

1961 (22 U.S.C. 2321j), as follows: 

(1) PAKISTAN.—To the Government of Pakistan, the OLIVER HAZARD 

PERRY class guided missile frigate MCINERNEY (FFG–8). 

(2) GREECE.—To the Government of Greece, the OSPREY class minehunter 

coastal ships OSPREY (MHC–51) and ROBIN (MHC–54). 

(3) CHILE.—To the Government of Chile, the KAISER class oiler ANDREW 

J. HIGGINS (AO–190). 

(4) PERU.—To the Government of Peru, the NEWPORT class amphibious tank 

landing ships FRESNO (LST–1182) and RACINE (LST–1191). 

(b) GRANTS NOT COUNTED IN ANNUAL TOTAL OF TRANSFERRED EXCESS DEFENSE

ARTICLES.—The value of a vessel transferred to a recipient on a grant basis pursuant to authority provided by subsection (a) shall not be counted against the aggregate value of excess defense articles transferred in any fiscal year under section 

516(g) of the Foreign Assistance Act of 1961. 

(c) COSTS OF TRANSFERS.—Any expense incurred by the United States in connection with a transfer authorized by this section shall be charged to the recipient. 

(d) 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 this section, that the recipient to which the vessel is transferred have 

such repair or refurbishment of the vessel as is needed before the vessel joins the 

naval forces of the recipient performed at a shipyard located in the United States, 

including a United States Navy shipyard. 

(e) EXPIRATION OF AUTHORITY.—The authority to transfer a vessel under this section shall expire at the end of the 2-year period beginning on the date of the enactment of this Act. 

SUMMARY

H.R. 5916, the Security Assistance and Arms Export Control Reform Act of 2008 makes various reforms to streamline and increase 

Congressional oversight over the U.S. arms export licensing process 

and adds South Korea and Israel to countries receiving expedited 

Congressional review for arms exports. It also makes a number of 

reforms to U.S. security assistance programs, including requiring 

objective analysis of Israel’s military capability vis-a`-vis convenVerDate Aug 31 2005 00:57 May 13, 2008 Jkt 069006 PO 00000 Frm 00019 Fmt 6659 Sfmt 6601 E:\HR\OC\HR626.XXX HR626

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tional and unconventional threats, increasing oversight over the 

U.S.-Israeli security relationship and authorizing the first year of 

the U.S.-Israel Memorandum of Understanding regarding security 

assistance. The bill grants a limited waiver to the Arms Export 

Control Act (AECA) to facilitate U.S. denuclearization activities in 

North Korea; requires the President to certify that North Korea 

has met certain conditions for the President to exercise this waiver, 

and requires a report on verification of North Korea’s nuclear declaration. 

BACKGROUND AND PURPOSE FOR THE LEGISLATION

This bill provides for a number of important measures to 

strengthen and reform the U.S. security assistance and defense 

trade licensing and review process, a principal area of jurisdiction 

for the Committee on Foreign Affairs. 

The Department of State, through the Directorate of Defense 

Trade Controls (DDTC), has primary responsibility to ensure that 

arms exports fully comport with U.S. foreign policy and security objectives. That process has been in disarray for at least a decade, 

with the system in recent years verging on becoming dysfunctional. 

The Department of State had so badly managed the process that 

in November 2006 there was an extraordinary backlog of some 

10,000 unprocessed and unreviewed applications to export defense 

items or services. Multiple reports by the Government Accountability Office (GAO), and the long-standing experience of this Committee, confirm that DDTC was significantly mismanaged and 

overwhelmed by the demands placed upon it. At the same time, 

DDTC was also not accorded the necessary resources by the Department of State to administer the licensing process in a timely 

manner while appropriately safeguarding U.S. national security. 

The concern with management shortcomings extend beyond the 

challenge of expeditious processing of license applications; process 

breakdowns can also threaten U.S. security by diverting attention 

from careful consideration of the national security risk in approving a license to the urgent need to clear massive backlogs of applications. Severe stress in the licensing system can also fundamentally undermine support within the Administration, Congress and 

Industry for a robust export control system. 

This legislation builds on recent management reforms initiated 

by new leadership at the DDTC to begin the process of reforming 

U.S. defense trade policies and practices, in particular by ensuring 

a more effective arms export licensing process. In particular, H.R. 

5916 incorporates the bipartisan work of the Chairman of the Subcommittee on Terrorism, Nonproliferation, and Trade, and the 

Ranking Member of the Subcommittee on Asia, the Pacific, and the 

Global Environment, by incorporating the ‘‘Defense Trade Controls 

Performance Improvement Act of 2008’’. 

This bill also strengthens the vital security relationship with our 

close friends and allies, South Korea and Israel. It includes provisions of H.R. 5443, introduced by the Ranking Member of the Subcommittee on Terrorism, Nonproliferation, and Trade, adding 

South Korea to the list of countries in the AECA that receive expedited Congressional review of 15 instead of 30 days, along with 

NATO, Australia, New Zealand and Japan. This is a significant 

symbolic recognition of the critical importance of South Korea to 


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U.S. national security and to peace and stability throughout East 

Asia. 

H.R. 5916 also grants Israel the same recognition, for the same 

reasons. This bill authorizes the initial phase-in of the Foreign 

Military Financing (FMF) formula that was recently agreed to by 

the United States and Israel under the Memorandum of Understanding signed on August 16, 2007. 

In addition, H.R. 5916 increases Congressional oversight over the 

security assurances and guarantees given Israel by the United 

States since 1975, as well as to the revisions that are sometimes 

made to those assurances. Finally, it requires the Administration 

to empirically assess on an ongoing basis the state of Israel’s 

‘‘Qualitative Military Edge’’ (QME) against conventional or nonconventional security threats, to report that assessment to Congress every 4 years, and to use that assessment when reviewing 

arms exports to other countries in the Middle East. 

This Act also grants the Administration’s request for a waiver 

from current restrictions limiting the expenditure of U.S. funds in 

North Korea that is needed to enhance its ability to carry out activities to disable and dismantle North Korea’s nuclear programs, 

including facilities, as provided for in agreements reached in the 

Six-Party Talks. With this waiver, the Administration will be able 

to use Department of Energy funds for these activities instead of 

having to rely on the limited resources of the State Department’s 

Nonproliferation and Disarmament Fund, thereby allowing the latter to focus on other high-priority demands. 

This waiver narrows the Administration’s proposal for the removal of virtually all existing statutory restrictions on the use of 

funds and resources regarding North Korea. Instead it provides 

sufficient authority to the Administration to carry out its current 

activities in North Korea more effectively, as well as to prepare for 

and implement more extensive programs that are contemplated 

under the phased approach of the Six-Party Talks. Sufficient authority is also provided to implement effective verification measures to ensure that North Korea is adhering to its denuclearization 

commitments. 

The legislation also specifies that the statutory restrictions regarding North Korea resulting from its designation by the State 

Department as a state sponsor of terrorism may not be lifted until 

the President certifies that North Korea is not proliferating nuclear-related technology or materials to other countries, especially 

to other state sponsors of terrorism; has provided a complete and 

correct declaration of all of its nuclear programs and that there are 

means to effectively verify this declaration; and has agreed to participation by the International Atomic Energy Agency in the disabling of the Yongbyon nuclear facility. 

The legislation requires the Secretary of State to submit a report 

on verification measures that specifies the methods to be used, the 

actions to be taken, any formal or informal agreement with North 

Korea on this subject, and any significant disagreement expressed 

by North Korea regarding the verification measures. The report is 

unclassified but may include a classified annex. 

This Act also grants to the Secretary of State the authority to 

train and equip foreign military forces to better cooperate with our 


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forces and engage in counter-terrorism operations, using unobligated FMF funds. 

Finally, this Act declares it to be U.S. policy to oppose the lifting 

of the E.U. arms embargo on China and to take whatever diplomatic and economic steps to convince E.U. Member States from 

taking that step. It requires the President to report to the Congress 

on all efforts the U.S. is taking to accomplish this goal. 

HEARINGS

The Subcommittee on Terrorism, Nonproliferation, and Trade 

held a hearing on defense and dual-use export controls on July 26, 

2007, entitled ‘‘Exports Controls: Are We Protecting Security and 

Facilitating Exports?’’

COMMITTEE CONSIDERATION

The Committee considered H.R. 5916 on April 30, 2008, and reported the bill favorably to the House, as amended, by voice vote, 

a quorum being present. 

VOTES OF THE COMMITTEE

There were no recorded votes during consideration of H.R. 5916. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

The legislation authorizes $2.55 billion in Foreign Military Financing (FMF) for Israel for FY 2009. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, Washington, DC, May 8, 2008. 

Hon. HOWARD L. BERMAN, Chairman, 

Committee on Foreign Affairs, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 5916, the Security Assistance and Arms Export Control Reform Act of 2008. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Sunita D’Monte, who can 

be reached at 226–2840. 

Sincerely, 

PETER R. ORSZAG. Enclosure 

cc: Honorable Ileana Ros-Lehtinen 


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Ranking Member 

H.R. 5916—Security Assistance and Arms Export Control Reform 

Act of 2008. 

SUMMARY

H.R. 5916 would authorize security assistance for Israel and 

other countries, and assistance to North Korea in dismantling its 

nuclear facilities. In addition, the bill would require the Department of State to improve the review and processing of export licenses for defense articles, and would authorize the appropriation 

of such sums as may be necessary in 2009 and future years for that 

purpose. CBO estimates that enacting H.R. 5916 would increase 

discretionary spending by $3.2 billion over the 2009–2013 period, 

assuming appropriation of the estimated amounts. Implementing 

the bill would increase direct spending by $500 million over the 

2009–2018 period, primarily by allowing a Department of Defense 

(DoD) revolving fund to spend balances without appropriations action. Implementing the bill would not affect revenues. 

H.R. 5916 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would not affect the budgets of state, local, or tribal governments. 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 5916 is shown in Table 

1. The costs of this legislation fall within budget functions 050 (national defense) and 150 (international affairs). 

TABLE 1. BUDGETARY IMPACT OF H.R. 5916, THE SECURITY ASSISTANCE 

AND ARMS EXPORT CONTROL REFORM ACT OF 2008 

By Fiscal Year, in Millions of Dollars 

2009 2010 2011 2012 2013 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Foreign Military Financing Program 

Estimated Authorization Level 2,575 25 0 0 0 

Estimated Outlays 2,559 20 14 4 1 

Assistance to Dismantle Nuclear 

Facilities in North Korea 

Estimated Authorization Level 300 200 50 25 0 

Estimated Outlays 165 200 133 59 15 

Export Licenses for Defense Articles 

Estimated Authorization Level 8 7 7 7 8 

Estimated Outlays 7 7 7 7 7 

Total Changes 

Estimated Authorization Level 2,883 232 57 32 8 

Estimated Outlays 2,731 227 153 70 24 

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority 55 55 55 55 55 

Estimated Outlays 54 55 55 55 55 


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BASIS OF ESTIMATE

For this estimate, CBO assumes that H.R. 5916 will be enacted 

before the end of fiscal year 2008, that the estimated authorization 

amounts will be appropriated near the start of each fiscal year, and 

that outlays will follow historical spending patterns for similar programs. 

Spending Subject to Appropriation 

H.R. 5916 would authorize the Department of State to provide 

security assistance to Israel and other foreign countries. Title III 

would authorize the President to lift certain sanctions against 

North Korea, thereby enabling the Department of Energy (DOE) to 

assist the government of North Korea in disabling and dismantling 

its nuclear facilities. Finally, title I would require the Department 

of State to improve the review and processing of export licenses for 

defense goods. In total, CBO estimates that implementing those 

provisions would cost $3.2 billion over the 2009–2013 period, assuming appropriation of the necessary amounts. 

Foreign Military Financing Program. Section 204 would authorize the State Department to provide security assistance in the form 

of a grant to Israel in 2009, and specifies that the amount provided 

should be an increase of $150 million over the level of assistance 

specified for the Foreign Military Financing Program for Israel in 

the 2008 appropriations act. CBO estimates that the grant would 

total $2.55 billion in 2009, assuming appropriation of the estimated 

amount. Section 401 would authorize the appropriation of up to $25 

million a year in 2009 and 2010 for security assistance to foreign 

countries. Those funds would be used for training, procurement, 

and building the capacity of their military forces. CBO estimates 

that implementing both sections would cost almost $2.6 billion over 

the 2009–2013 period, assuming appropriation of the estimated 

amounts. 

Assistance to Dismantle Nuclear Facilities in North Korea. Title 

III of H.R. 5916 would authorize the President to waive certain 

sanctions that were imposed against North Korea after it tested a 

nuclear device in 2006. Specifically, the bill would allow the United 

States to assist North Korea over the 2009–2012 period to dismantle three nuclear facilities at Yongbyon: the reactor, the nearby 

plant that fabricates natural uranium into fuel for the reactor core, 

and the chemical reprocessing plant where plutonium is separated 

from the spent fuel rods. 

Under an agreement with the United States, South Korea, 

Japan, China, and Russia, North Korea has started to disable the 

Yongbyon facilities. All three facilities are scheduled to be disabled 

by the end of 2008, allowing the process of dismantling the facilities and removing the control rods from North Korea to begin in 

2009. Based on information from the State Department and DOE, 

CBO estimates that the costs of dismantling the nuclear reactor 

and the nearby fabrication and reprocessing plants, as well as the 

costs for transporting and reprocessing the spent fuel outside of 

North Korea, would total about $570 million over the 2009–2013 

period, assuming appropriation of the estimated amounts, and contingent on North Korea allowing the facilities to be dismantled. 


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Export Licenses for Defense Articles. Title I would require the Department of State to institute specified performance goals at its Directorate of Defense Trade Controls to improve the review and 

processing of applications for export licenses (particularly for major 

allies such as Israel, South Korea, Japan, Australia, New Zealand, 

and members of the North Atlantic Treaty Organization) and 

would authorize such sums as may be necessary in 2009 and future 

years for staffing and resources to meet that objective. 

In 2007, the directorate processed approximately 85,000 applications for export licenses and 400 requests on commodity jurisdiction (some items for export fall within the jurisdiction of the Department of Commerce), with a staff of about 47 people. The bill 

would require the directorate to have three staff members dedicated to requests on commodity jurisdiction and one licensing officer for every 1,250 license applications. Title I also would require 

expedited reviews for exports to major allies, increased review and 

enforcement of federal laws and regulations governing arms exports, and increased oversight and management of the licensing 

process. 

Based on information from the Department of State, CBO expects the department would need an additional 55 employees to 

meet the requirements of the bill: 35 licensing officers, five staff 

members to review commodity jurisdiction, four staff members to 

oversee and review processing goals, one person to review regulations and the U.S. Munitions List, and 10 staff members for compliance and enforcement of export controls. CBO estimates that hiring those personnel would cost an average of $110,000 per person 

and that the department would require additional appropriations of 

$6 million in 2009 and $31 million over the 2009–2013 period, after 

adjusting for inflation. 

In addition, section 103 would require the President to conduct 

a thorough review and assessment of the nation’s arms export controls. Based on information from the Department of State, CBO estimates this provision would cost $1 million in 2009, assuming appropriation of the estimated amounts. 

Finally, other sections of title I would require the Department of 

State to review and assess current programs, make periodic reports 

to the Congress, and strengthen diplomatic efforts to improve controls on the international arms trade; CBO estimates the department would require additional appropriations of $1 million a year 

to implement those provisions. In total, after adjusting for inflation, CBO estimates that implementing title I would cost $36 million over the 2009–2013 period, assuming appropriation of the estimated amounts. 

Reimbursement for Salaries of Reservists. Section 403 would 

allow the Department of State to reimburse DoD for the salaries 

of members of the reserves who participate in international peacekeeping missions or other programs of the Department of State. 

Under current law, those costs are borne by DoD. While CBO expects that this provision could increase the number of reservists 

who are called up to active duty, we estimate those numbers would 

be small, and this provision would have an insignificant effect on 

spending subject to appropriation. 


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Direct Spending 

CBO estimates that enacting H.R. 5916 would increase direct 

spending by $500 million over the 2009–2018 period (see table 2), 

by allowing amounts in a DoD revolving fund to be available for 

spending without prior appropriation and by authorizing the Department of State to spend certain civil penalties. 

Foreign Military Sales Stockpile Fund. Section 404 would rename 

the Special Defense Acquisition Fund, allow the deposit of certain 

lease payments into the fund, and delete a requirement under current law that restricts spending of fund balances to only those 

amounts provided in advance in appropriations acts. Under current 

law, DoD may deposit into the fund the proceeds from selling military equipment not intended to be replaced and other defense articles from the fund’s inventory. The Defense Security Cooperation 

Agency (DSCA) has indicated that the fund is moribund and has 

no balances left, but that it would use the authorities provided 

under the bill to replenish the fund with sales proceeds and lease 

payments, and use the fund to purchase defense articles for use by 

U.S. allies. 

Based on sales proceeds from recent years and information from 

DSCA, CBO estimates that deposits into the fund would begin in 

2009 with sales proceeds and lease payments worth about $45 million a year, and that the agency would spend roughly the same 

amount each year over the 2009–2018 period. 

Civil Penalties and Fees. Section 107 would authorize the Department of State to spend up to $10 million in civil penalties collected 

each year over the 2008–2012 period for the expenses of its Directorate of Defense Trade Controls. Under current law, the department enforces certain laws and regulations governing exports of defense articles and has the authority to assess civil penalties of up 

to $500,000 for each noncriminal violation. Civil penalties are deposited into the Treasury as revenues. Collections from civil penalties assessed by the department totaled $23 million in 2007. CBO 

estimates that collections would become available in the year after 

they were collected and that implementing this provision would increase direct spending by $50 million over the 2009–2018 period. 

The section also would allow registration fees collected by the directorate to be used for new expenses that are prohibited under 

current law. Recent data for collections and spending indicate that 

the directorate collects and spends about $8 million in any given 

year; thus, CBO estimates that this provision would have no significant effect. 


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TABLE 2. ESTIMATED IMPACT OF H.R. 5916 ON DIRECT SPENDING 

By Fiscal Year, in Millions of Dollars 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 

Total 

2009– 

2013 

Total 

2009– 

2018 

CHANGES IN DIRECT SPENDING 

Foreign Military Sales Stockpile Fund 

Estimated Budget 

Authority 45 45 45 45 45 45 45 45 45 45 225 450 

Estimated Outlays 45 45 45 45 45 45 45 45 45 45 225 450 

Civil Penalties and Fees 

Estimated Budget 

Authority 10 10 10 10 10 0 0 0 0 0 50 50 

Estimated Outlays 9 10 10 10 10 1 * * 0 0 49 50 

Total 

Estimated Budget 

Authority 55 55 55 55 55 45 45 45 45 45 275 500 

Estimated Outlays 54 55 55 55 55 46 45 45 45 45 274 500 

Note: * = less than $500,000. 

Transfer of Defense Articles in the U.S. War Reserve Stockpile for 

Allies (USWRSA). Section 203 would amend the President’s authority to transfer to Israel obsolete or surplus defense articles in the 

USWRSA in Israel in return for concessions to be negotiated by the 

Secretary of Defense. The bill would raise the cap on the maximum 

amount that could be transferred from $100 million to $200 million 

in 2009 and 2010. Under current law, the authority to make transfers to Israel expires in August 2008; therefore this section would 

have no effect. 

Even if the transfer authority were extended, CBO estimates this 

provision would not affect direct spending. The concessions negotiated by DoD may include cash, services, waiver of charges otherwise payable by the United States, or other items of value. Although the authority provided by section 203 could be used to negotiate noncash concessions instead of selling the articles, DSCA has 

indicated that the existing authority has not been used for Israel 

in the past, and CBO expects it is unlikely to be used in the next 

few years. 

INTERGOVERNMENTAL AND PRIVATE–SECTOR IMPACT

H.R. 5916 contains no intergovernmental or private-sector mandates as defined in UMRA and would not affect the budgets of 

state, local, or tribal governments. 

ESTIMATE PREPARED BY: 

Federal Costs: 

Assistance to Dismantle Nuclear Facilities in North Korea—Raymond Hall (226–2840) 

Other Federal Costs—Sunita D’Monte (226–2840) 

Impact on State, Local, and Tribal Governments: Neil Hood (225–

3220) 

Impact on the Private Sector: MarDestinee Perez (226–2940) 

ESTIMATE APPROVED BY: 

Theresa Gullo 


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Deputy Assistant Director for Budget Analysis 

PERFORMANCE GOALS AND OBJECTIVES

This Act seeks to significantly improve the performance of the 

U.S. defense trade exports licensing system through setting performance goals for licensing processes, increasing Congressional 

oversight of the export process and expediting Congressional license review periods, all in the interest of improving the U.S. defense industry’s global competitiveness while safeguarding U.S. national security. This Act also supports the U.S.-South Korea and 

Israel relationship by expediting defense export licensing review for 

these countries, and also mandates the U.S. create an objective 

measure of Israel’s military capabilities relative to those of its 

neighbors to better inform U.S. licensing decisions for future arms 

sales to other countries in the Middle East. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8 of the Constitution. 

NEW ADVISORY COMMITTEES

H.R. 5916 does not establish or authorize any new advisory committees. 

CONGRESSIONAL ACCOUNTABILITY ACT

H.R. 5916 in general does not apply to the legislative branch, except in Sec. 124, which increases the value threshold for the Congressional review period for proposed arms sales. 

EARMARK IDENTIFICATION

H.R. 5916 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9(d), 9(e), 

or 9(f) of rule XXI. 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

Sec. 1. Short Title and Table of Contents. 

Subsection (a) provides that this Act may be cited as the ‘‘Security Assistance and Arms Export Control Reform Act of 2008.’’

Subsection (b) provides for a table of contents. 

TITLE I: REFORM OF ARMS EXPORT CONTROL PROCEDURES

SUBTITLE A: DEFENSE TRADE CONTROLS PERFORMANCE IMPROVEMENT

ACT OF 2008

Sec. 101. Short Title. 

Section 101 provides the short title for Title I, Subtitle A, the Defense Trade Controls Improvement Act of 2008. This subtitle was 

originally introduced by Reps. Brad Sherman and Don Manzullo as 

H.R. 4246. 


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Sec. 102. Findings. 

Section 102 contains various findings that detail past performance problems and staffing shortfalls at the Directorate of Defense 

Trade Controls (DDTC), the State Department agency responsible 

for adjudicating licenses for commercial arms sales; notes the importance of this function to national security; describes the growth 

in the volume and complexity of licensing applications; notes with 

concern the increased tendency toward offshoring and outsourcing 

in the defense industry; and notes the need to update export control policies to address these trends. 

Sec. 103. Strategic review and assessment of the United States export controls system. 

Section 103 requires that the President conduct an 18-month 

strategic review of defense trade controls beginning in 2009 to determine the effectiveness of the current export control regime, and 

make improvements where necessary. The review would also seek 

to identify ways to make the system more efficient and seek to improve coordination across government agencies responsible for export controls and enforcement. The President will be required to review known attempts to circumvent export controls with a view to 

improving enforcement. The review will also examine offshoring 

and outsourcing in the defense industry as well as the policy of 

U.S. trade partners to require ‘‘offsets’’ for arms sales. The section 

requires that the President report on the results of the review. 

The Committee requires this review in response to the January 

2007 decision by the GAO to designate the protection of high technology critical to U.S. national security as a ‘‘high risk’’ area. GAO 

found that export control policies and procedures were in need of 

assessment for both effectiveness and efficiency. Given the changing nature of the security threats facing the United States from 

terrorism and nuclear proliferation, rapid advances in defense technology, and the continued efforts by state and non-state actors to 

evade U.S. export controls, the Committee believes that a highlevel government-wide review of arms export control and enforcement policies is necessary. 

GAO also found that coordination between the various agencies 

involved in export control and enforcement policies is lacking. 

Therefore, the strategic review should focus on ways that interagency cooperation and coordination can be improved. This is intended to be a government-wide review, and should not be limited 

to the DDTC’s policies and procedures. 

The review should thoroughly examine all known attempts—successful and unsuccessful—to circumvent U.S. export controls and 

enforcement mechanisms. The United States, as the leader in defense technology development and defense production, is a target 

for criminal proliferation rings and foreign security and intelligence 

agencies. The damage done when a group or state agent is able to 

circumvent export controls is not limited to the potential use of 

U.S. hardware by an adversary. Ineffective export controls and enforcement policies can seriously erode U.S. supremacy in critical 

military technologies and lead to the development of technology 

that can defeat U.S. defense systems. 

In conducting this review, the Administration should also devote 

significant attention to how export control policy facilitates the 


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movement of technology and defense production overseas, and the 

national security implications of off-shoring and outsourcing in defense production. Defense cooperation with allies is essential; however, the Committee is concerned that the defense industrial base 

has been harmed by the growing trend to offshore defense production, and that the spread of defense technology and production capacity to foreign countries, especially those with inadequate export 

controls, may harm American security. Protecting the defense industrial base and American technological supremacy need to be top 

priorities for arms export control policy. 

Section 103 requires that the Administration periodically brief 

relevant Congressional committees on the progress of the review. 

This requirement is included to ensure Congressional oversight 

over the conduct of the strategic review while it is ongoing and to 

help ensure that the final product is fully responsive to Congressional concerns. 

Sec. 104. Performance goals for processing of applications for licenses to export items on USML. 

Section 104 sets a goal of 60 days for the DDTC to process licenses to export defense hardware to U.S. friends and allies. It also 

sets the goal at 30 days for applications to export defense hardware 

to NATO and major non-NATO allies. It further sets a goal of 7 

days in cases where the hardware is to be supplied to an ally operating with the United States in a combat, peacekeeping or humanitarian deployment. It requires that applications which have not 

been processed within 60 days be reviewed by the top political or 

civil servants at DDTC; applications older than 90 days would require review by the relevant Assistant Secretary. It requires reporting on the average processing times for various categories of license. Section 104 also sets a goal for processing commodity jurisdiction (CJ) requests in 60 days, and requires increased transparency of those decisions (exporters seek CJs to determine if an 

item is on the U.S. Munitions List and thus subject to State Department licensing requirements). 

Section 104 essentially codifies Presidential Directives issued in 

January 2008 that set a ‘‘soft’’ deadline of 60 days for the processing of applications for licenses to export items on the U.S. Munitions List. Nothing in this section or in the Presidential Directives 

requires that a decision on any specific application be made within 

60 days. The Committee recognizes that additional time may be 

needed to review an application to ensure that the export is consistent with U.S. national security. The presidential directives 

identify five factors that would require more than 60 days to adjudicate a license application. Section 104 does not alter the Administration policy. 

Nevertheless, U.S. exporters should have reasonable assurance 

that their licenses will be adjudicated in a fairly predictable timeframe. Unnecessary delays in adjudication can cause U.S. suppliers 

to be viewed as unreliable, and U.S. firms are made less competitive. Defense trade business may increasingly go to foreign competitors if there are long delays in licensing decisions. In late 2006, 

the DDTC was found to have a backlog of some 10,000 open applications. As a result, applications were left to languish, sometimes 

for months. While the current management of DDTC has elimiVerDate Aug 31 2005 00:57 May 13, 2008 Jkt 069006 PO 00000 Frm 00030 Fmt 6659 Sfmt 6601 E:\HR\OC\HR626.XXX HR626

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nated a number of the factors that led to that backlog and the resulting processing delays, the Committee believes that codified 

goals for processing times are essential to ensure predictability for 

U.S. exporters, and for internal resource planning at the DDTC. 

Section 104 also requires that DDTC management brief relevant 

congressional committees on the steps they will implement to address any significant backlog that arises in the future to ensure 

that growing backlogs and proposed remedial measures come to the 

attention of Congress in a timely fashion. 

The goals for license processing times contained in Section 104 

do not cover agreements under Part 124 of the International Traffic 

in Arms Regulations (ITAR) for defense services. These include 

technical assistance agreements and manufacturing agreements, 

which are needed to convey technical know-how and permission to 

produce USML items overseas. These agreements are often of 

greater complexity and have potentially greater impacts on national security, including by weakening the defense industrial base. 

As noted, the Committee is concerned about the increased tendency 

to offshore production of defense items. DDTC should place the 

highest priority on processing license applications that provide for 

the export of U.S. hardware to allies, and should generally give 

manufacturing and technical assistance agreements a significantly 

higher level of scrutiny. Furthermore, consistent with U.S. national 

security, licensing resources should be allocated first and foremost 

to ensuring that the processing goals of section 104 are generally 

being met. 

The Committee believes that the goals established by this section 

reflect the priority that the Department should be giving to the respective categories. The Committee believes that DDTC should 

therefore give the highest priority to processing of applications that 

are in direct support of combat operations or peacekeeping or humanitarian operations with United States Armed Forces; followed 

by giving the next highest priority to processing of applications to 

government security agencies of United States NATO allies, Australia, New Zealand, Japan, South Korea, Israel, and as appropriate, other major non-NATO allies; and other applications will be 

prioritized in addition in a manner determined by the Director.’’

Section 104 also includes a requirement that the managing director of the DDTC review a small percentage of the applications received by the agency to ensure that the decisions in those cases 

were consistent with applicable statute, regulations and DDTC 

policies. This requirement will serve to ensure that senior management determine whether the decisions of licensing officers are 

being made consistent with U.S. export control policy and practice. 

It will also allow for the identification and rectification of common 

mistakes, and to ensure that the ‘‘return-without-action’’ device is 

not used excessively to clear or effectively restart the clock on difficult cases. 

Section 104 also requires that the Secretary submit a report to 

Congress in 2010 and 2011 on average processing times for various 

categories of license across different categories of allied or friendly 

country, and any management decisions taken to address trends in 

the data. This reporting requirement responds to GAO criticism of 

DDTC for not seeking to analyze trends in licensing data when setting policies and allocating the resources of the agency. 


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Section 104 requires the Secretary to make the results of commodity jurisdiction (CJ) decisions public via the Internet. This requirement responds to concerns raised by U.S. manufacturers and 

NGOs that the lack of transparency in the CJ process has led to 

a lack of consistency in CJ decisions, is unfair to some exporters, 

and does not provide for meaningful criticism of CJ decisions, 

which are essentially secret. This provision is tailored to ensure 

that only the minimum amount of information necessary to provide 

meaningful disclosure is released; to the greatest extent possible, 

the proprietary information of the CJ applicant is protected. 

Sec. 105. Requirement to ensure adequate staff and resources for 

DDTC of the Department of State. 

Section 105 requires that the Secretary ensure adequate staffing 

of the DDTC and mandates that there be one licensing officer on 

staff for every 1250 applications that the agency is estimated to receive in a given year. DDTC currently has only roughly 40 licensing officers to process approximately 85,000 applications per year. 

The Committee believes that many of the past performance problems at DDTC relate to understaffing. As noted, while the licensing 

caseload has increased significantly, the number of licensing personnel at DDTC has not. The requirement that DDTC have at least 

one licensing officer for every 1,250 applications expected for a 

given fiscal year does not place a limit on the number of cases any 

one licensing officer may handle in a given year. Not all applications require the same level of staff attention, and officers who 

handle relatively uncomplicated applications will presumably handle more than those handling more complicated cases. 

The State Department will have until the third quarter of 2010 

to comply with this increased staffing requirement to allow for recruitment and training of additional licensing officers. Rather than 

prescribe a specific number of officers, the Committee decided to 

mandate a staff-to-application ratio to ensure that staffing increases are made if applications continue to increase over successive years. 

Section 105’s staffing mandates are necessary not only to provide 

for the efficiency of the agency, but to ensure its national security 

function is met. Applications are not only increasing in number, 

they are becoming more complicated. Leaving aside efficiency and 

processing speed, a staffing increase is necessary to ensure that 

DDTC’s licensing decisions are consistent with American national 

security and foreign policy goals. 

Section 105 requires that the Secretary maintain staffing levels 

in other areas of DDTC responsibility, especially including policy 

and enforcement. In order to meet the mandates of Section 105, the 

DDTC has to hire more people and sustain adequate staff in all of 

its functions throughout any given year. The requirement for licensing officers should not be met by merely pulling personnel off 

other functions and making them licensing officers. Nor should 

DDTC use temporary assignments or other schemes to merely 

move personnel around the DDTC to fulfill the licensing officer 

mandate. 


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Sec. 106. Audit by Inspector General of the Department of State. 

Section 106 requires that State’s IG conduct an audit in 2010 

and 2011 to determine whether DDTC is meeting the goals set out 

in sections 104 and 105. 

Sec. 107. Increased flexibility for use of defense trade controls registration fees. 

Section 107 provides DDTC with the ability to use the fees that 

it collects from arms manufacturers and exporters for all expenses 

associated with the agency. Provides that no more than $10 million 

in enforcement fines collected for violations of the Arms Export 

Control Act may be made available to pay for the expenses of the 

agency. 

The committee recognizes that allowing an agency to in effect 

keep enforcement penalties can be a perverse incentive, leading to 

overzealous enforcement. The DDTC has collected $20 million or 

more in fines over the last several years. By capping the amount 

available to the agency at an amount well below anticipated collections, there should be no incentive for improper and overzealous 

enforcement actions against exporters. Also, assuming that the 

State Department would like to see this authority subsequently extended beyond the 5 years provided in this legislation, the expiration of the provision in 2012 should also deter such improper enforcement actions. Nonetheless, the committee intends to conduct 

vigorous oversight over the Department’s exercise of this authority. 

Sec. 108. Review of ITAR and USML. 

Section 108 requires that the Secretary review 20 percent of the 

USML every year, with input from U.S. defense manufacturers, 

NGOs, and labor and small business organizations, to determine if 

controls on various items should be relaxed or strengthened. 

This section will also ensure that the entire USML is reviewed 

every 5 years. 

Section 108 provides that the USML and the wider ITAR should 

be reviewed in their entirety every 5 years to ensure that export 

controls keep up with advances in defense technology. The Commerce Department generally conducts a similar 5-year review of its 

Control List. The 20-percent-per-year review requirement should be 

a floor, not a ceiling for the Administration, however. The Secretary also should not wait to place a section of the USML under 

review where technological advances warrant an immediate review 

simply because it is not yet that section’s ‘‘turn’’ in the 5-year rotation. In coordination with other relevant government agencies that 

review the USML, including the Department of Defense, the Secretary should ensure that a broad cross-section of the defense industry is represented in the conduct of the review, including smalland medium-size domestic enterprises that serve as suppliers for 

the large defense companies. The committee believes that it is critical to include labor and arms control groups in these consultations 

in order to ensure a balanced review. 

Sec. 109. Special licensing authorization for Certain Exports to 

NATO Member States, Australia, Japan, and New Zealand. 

Section 109 provides for a special, 5-year blanket license for the 

export of spare parts and components for specific USML items preVerDate Aug 31 2005 00:57 May 13, 2008 Jkt 069006 PO 00000 Frm 00033 Fmt 6659 Sfmt 6601 E:\HR\OC\HR626.XXX HR626

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viously exported to U.S. allies. The previously-exported equipment 

would have to be in inventory of a security agency of a close U.S. 

ally and the spare parts and components would be limited to relatively non-sensitive items (no Significant Military Equipment). 

The spare parts and components would have to be made in the US 

in order to qualify for licensing under this special type of license. 

Exporters have expressed concern about the need to obtain multiple licenses for spare parts and components for defense systems 

that have been previously exported. Section 109 provides for a special licensing procedure for spare parts and components that meet 

the criteria set out in the section. The special licensing authorization provided for by this section is in effect a blanket license for 

the export of multiple spare parts and components for defense 

items in the inventory of an allied country. Section 109 sets out a 

number of limitations and conditions on the use of this special license, including: The spare parts and components must be shipped 

to and used by a security agency of the allied country for an item 

in its inventory; they may not be used to enhance the performance 

of the previously exported defense items; and the freight forwarder 

utilized for shipment must be the one designated by the recipient 

country for the Foreign Military Sales program. These conditions 

are designed to ensure maximum security against misuse and diversion. 

The licensing procedure provided for by section 109 does not replace, amend or eliminate any other license or exemption provided 

for by current law or regulations, including the exemption for the 

temporary import and subsequent export of defense items serviced 

or repaired in the United States provided for in Section 123.4 of 

the ITAR. 

The provision is limited to parts and components with a high 

U.S. content that have been manufactured in the United States. A 

part or component must include 85 percent American content on a 

total content basis—inclusive of all costs, including raw materials, 

but exclusive of costs associated with research and development, 

intellectual property and legal services. Eighty-five percent of the 

costs associated with the manufacturing of a spare part or component must also be attributable to work done in the United States 

in order for a part or component to qualify for licensing under this 

provision. The requirement that the last substantial modification 

be done in the United States is designed to exclude from this licensing procedure any part or component whose final assembly is 

done abroad. The requirement that any foreign content value be 

calculated based on the final price or final cost paid of the foreign 

item or service precludes an applicant from calculating foreign content using a price paid for that foreign content by an agent or middleman that is not reflective of the actual, final cost to the applicant. Foreign content, if any, is limited, content from countries that 

are eligible to receive exports of USML items, save for de minimis 

amounts. The Committee appreciates that it may be impossible for 

an applicant to trace the origin of every screw, washer and nut. 

However, all significant parts and processing that go into the product must be of U.S. or eligible foreign origin. 


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Sec. 110. Availability of information on the Status of License Applications Under Chapter 3 of the Arms Export Control Act. 

Section 110 requires that information on the status of applications be made available electronically to the applicant and relevant 

Congressional committees. 

Sec. 111. Sense of Congress. 

The Defense Trade Advisory Group (DTAG) is an advisory committee that consults with the State Department on export control 

issues. Section 111 calls on the State Department to make its membership more diverse by including labor, NGOs, and academics, in 

addition to the defense industry itself. 

Sec. 112. Definitions. 

Section 112 provides various definitions that are necessary for 

the Act. 

Sec. 113. Authorization of Appropriations. 

Section 113 provides ‘‘such sums’’ authorization for FY2009 and 

every subsequent fiscal year. 

SUBTITLE B: MISCELLANEOUS PROVISIONS

Sec. 121. Report on Self-Financing Options for Export Licensing 

Functions of DDTC of the Department of State. 

Section 121 requires the Secretary of State to report 90 days 

after enactment of this Act to the Committees on Foreign Affairs 

and Foreign Relations on possible mechanisms to place the Department of State defense trade licensing functions on a 100% self-financing basis. 

Currently, the licensing agency that processes Foreign Military 

Sales operates on a 100% self-financing basis, and is able to adapt 

to its changing needs without the need for annual appropriations. 

It would be useful to have State’s licensing functions on a similar 

basis, for similar reasons. This report will force the Department of 

State to seriously consider this possibility and inform the oversight 

committees as we legislate on these issues in the future. 

Sec. 122. Expediting Congressional Defense Export Review Period 

for South Korea and Israel. 

This section adds South Korea and Israel to the ‘‘NATO+3’’

(NATO countries plus Australia, Japan, New Zealand) list in various Arms Export Control Act provisions for special treatment regarding the export of U.S. defense items and services, including a 

15-day Congressional review instead of 30 days. 

Sec. 122 strengthens the vital security relationship with our close 

friends and allies, South Korea and Israel. It adds South Korea and 

Israel to the list of countries in the AECA that receive expedited 

Congressional review of 15 instead of 30 days, along with NATO, 

Australia, New Zealand and Japan, as well as other similar privileges. This is a significant and symbolic recognition of the critical 

importance of South Korea and Israel to U.S. national security and 

to peace and stability throughout East Asia and the Middle East. 


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Sec. 123. Availability to Congress of Presidential Directives Regarding United States Arms Export Policies, Practices and Regulations. 

Section 123 requires the President to make all Presidential Directives regarding U.S. export policies available to the Congressional Committees on Foreign Affairs and Foreign Relations, the 

committees of jurisdiction over arms exports. Ideally, the President 

should provide copies of such directives to the Committees. 

In January 2008, the President issued two ‘‘directives’’ with specific changes and taskings relating to our export control system. 

Unfortunately, the Administration has refused to allow representatives from the House Committee on Foreign Affairs or the Senate 

Foreign Relations Committee to even read these directives, much 

less provide copies. This provision is to ensure that the Committees 

of jurisdiction and oversight over arms export control policies are 

able to see the content of U.S. arms export policies. 

Sec. 124. Increase in Congressional Notification Thresholds and Expediting Congressional Review for South Korea and Israel. 

Section 124 increases monetary thresholds for Congressional review periods of FMS and commercial arms sales: 

• For NATO+5—from $25 to $75 million for Significant Military Equipment (SME), $100 million to $200 million for total 

contract value. 

• For all other countries—from $15 to $50 Million for SME, 

$50 to $100 Million for total contract value. 

This provision increases the threshold level for the Congressional 

15/30-day resolution-of-disapproval review period. However, it also 

retains existing statutory threshold levels for notification of the export to Congress. 

The result is that the Committees on Foreign Affairs and Foreign 

Relations, the committees of jurisdiction over U.S. arms exports, 

will still see and evaluate arms exports to all parties at existing 

levels, thereby ensuring that Congressional oversight is retained. 

This occurs through a longstanding, informal ‘‘preconsultation’’

process that this and previous Administrations engage in with the 

Committee, through which questions and concerns are addressed, 

and alterations made. This preconsultation process will continue at 

the current threshold notification levels. 

For defense exports below the new, higher formal 15/30-day Congressional review threshold that this bill will establish, export licenses can be awarded 2–4 weeks faster, thereby increasing U.S. 

defense exports’ competitiveness. As such, this is a ‘‘win-win’’ outcome: Congressional oversight for national security is preserved, 

but defense exporters are able to be more competitive. 

Sec. 125. Diplomatic Efforts to Strengthen National and International Arms Export Controls. 

Section 125 states the Sense of Congress that the President 

should increase efforts to strengthen multilateral export control regimes, with a 5-year annual report on U.S. efforts to do so. 


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Sec. 126. Reporting Requirement for Unlicensed Exports. 

Section 126 adds a requirement to report on exempted commercial arms sales to an existing annual report. This provision was 

previously approved by the House in the 109th Congress. 

Sec. 127. Reporting on Value of Major Defense Equipment and Defense Articles Exported Under Section 38 of the Arms Export 

Control Act. 

Section 127 requires an annual listing of the value of actual arms 

deliveries by country as part of the annual Congressional Budget 

Justification to improve the transparency of the U.S. arms export 

process and facilitate Congressional oversight. 

Sec. 128. Report on Satellite Export Controls. 

Section 128 requires a report 180 days after enactment on the efficacy of current satellite export controls, especially regarding 

China, and whether any changes need to be made. 

It has been 9 years since the Congress, in reaction to the revelations of the Cox Commission on U.S. companies sharing sensitive 

space technology with China during an investigation over a Chinese launch failure, mandated that the licensing of all satellites 

and related components be moved from the Commerce Control List 

at the Department of Commerce to the U.S. Munitions List at the 

Department of State. It is appropriate at this point that the record 

of bringing U.S. satellite exports under the more rigorous USML licensing system be reviewed. 

The Committee is especially concerned over reports that a subsidiary of a European defense company, Thales/Alenia, is actively 

engaged in selling satellites that are allegedly free of any U.S-origin or U.S.-derived component to China and others. The sales to 

China directly undermine U.S. export controls on China. Sales of 

such satellites to other recipients would allow those recipients to 

utilize the cut-rate Chinese ‘‘Long March’’ space launch vehicle; 

buyers of satellites with U.S. components cannot do likewise, since 

any such launch can only occur with the consent of the United 

States Government. 

Utilization of Chinese launchers also undermine U.S. export controls in that greater commercial use garners China greater experience and therefore greater expertise in space launch operations and 

technology, which is directly applicable to its military ballistic missile program. 

The Committee requests that the President devote particular attention to this troubling development by Thales/Alenia in the report required by this section, and report on what actions the 

United States will take to address and rectify this matter. 

Sec. 129. Definition. 

Section 129 defines ‘‘appropriate congressional committees’’ as 

used in this subtitle to mean the Committees on Foreign Affairs 

and Foreign Relations. 


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TITLE II: SECURITY ASSISTANCE AND RELATED SUPPORT FOR ISRAEL

Sec. 201. Assessment of Israel’s Qualitative Military Edge over Military Threats. 

Section 201 requires the President to create a mechanism to empirically evaluate on an ongoing basis the extent to which Israel 

has a qualitative military edge (hereinafter referred to as ‘‘QME’’) 

over all possible military threats from any national source, both individually or collectively, and to use such mechanism when reviewing arms sales to the Middle East. 

It has become clear to the Committee that the Administration 

uses a subjective judgment when evaluating Israel’s QME. State 

and Defense officials have admitted that there is no objective, empirical method of evaluating this critical measure of whether Israel 

maintains a qualitative superiority over potential threats to its security. 

It is also clear that such subjective evaluations are performed 

sale-by-sale, country-by-country, without clear overall consideration 

of the balance of capabilities possessed throughout the region that 

could conceivably affect Israel’s security. 

This provision would remedy this glaring lack of a robust mechanism to make critical security and export decisions that could undermine the security of one of the most important friends and ally 

that we have in the Middle East. 

Section 201 also requires an initial report no later than 180 days 

after enactment, and quadrennially thereafter. It also requires that 

any arms sale to a Middle Eastern country that must be notified 

to Congress for review include a determination that such sale will 

not materially affect Israel’s QME. 

Sec. 202. Report on United States Commitments to the Security of 

Israel. 

Section 202 requires the President to provide copies of all U.S. 

assurances made to Israel regarding its security since 1975 and on 

an ongoing basis, including revisions of past assurances, to the 

Committees on Foreign Affairs and Foreign Relations, to enable 

Congressional oversight over the U.S.-Israel security relationship. 

The United States has made numerous assurances to Israel over 

the years regarding its security, especially regarding conditions 

under which the U.S. would sell arms to Israel’s neighbors. There 

have been subsequent revisions and revocations of these assurances. 

The Congress does not have access to these assurances and revisions, and is therefore limited in its ability to conduct real oversight over this critical U.S. security relationship, and in its ability 

to judge for itself the extent to which such assurances are being 

fulfilled. 

Sec. 203. War Reserves Stockpile. 

This provision extends the dates and amounts of U.S. excess 

equipment that can be transferred to Israel from regional stockpiles. 


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Sec. 204. Implementation of Memorandum of Understanding with 

Israel. 

This section authorizes for Fiscal Year 2009 Foreign Military Financing (FMF) assistance for Israel pursuant to the Memorandum 

of Understanding (MOU) between the United States and Israel. In 

August, 2007, the United States and Israel entered into a memorandum of understanding ‘‘reflecting the unshakeable commitment 

of the United States to Israel’s security.’’ Under the MOU, the 

United States agreed to increase levels of U.S. FMF to Israel over 

a 10-year period beginning in Fiscal Year 2009, with an initial increase of $150 million for that fiscal year, and additional increases 

through Fiscal Year 2013, leveling off at $3.1 billion per year from 

Fiscal Year 2013 to Fiscal Year 2018. The MOU also provides that 

Offshore Procurement should be maintained at 26.3 percent of the 

yearly FMF grant. The Committee strongly supports the full and 

complete implementation of the MOU through Fiscal Year 2018, 

and section 204 represents an authorization of the first year of the 

MOU. 

The Committee notes that the formula contained in section 204 

starts from the baseline of $2,400,000,000 specified under the heading ‘‘Foreign Military Financing’’ in the Department of State, Foreign Operations and Related Programs Appropriations Act, 2008, 

adds $150,000,000 for a total of $2,550,000,000. 

Sec. 205. Definitions. 

This provision defines ‘‘Qualitative Military Edge’’ as used in this 

Title, and that the term ‘‘appropriate congressional committees’’

means the Committee on Foreign Affairs of the House, and the 

Committee on Foreign Relations of the Senate. 

TITLE III: WAIVER OF CERTAIN SANCTIONS TO FACILITATE

DENUCLEARIZATION ACTIVITIES IN NORTH KOREA

Sec. 301. Waiver Authority and Exceptions. 

This section provides the President the authority to waive four 

sanctions under Sec. 102 of the Arms Export Control Act (the 

‘‘Glenn Amendment’’) to provide ‘‘material, direct, and necessary 

assistance’’ to nuclear disablement or dismantlement activities in 

North Korea, including verification of denuclearization and removal 

of nuclear equipment and material from North Korea. Financial assistance that may be directly necessary, such as payment for North 

Korean workers who are currently dismantling the Yongbyon reactor, is permitted, as are non-lethal items that are controlled on the 

U.S. Munitions List and Commerce Control (dual-use) List. It limits the export of any equipment or services that are controlled on 

the U.S. Munitions List that may be necessary to non-lethal equipment and services only, so as not to benefit North Korean military 

capabilities, and prevents any credit or credit guarantees from 

being provided. 

Because of AECA restrictions triggered by North Korea’s nuclear 

test of October 9, 2006, the United States has had to fund disablement activities through the use of the Nonproliferation and Disarmament Fund (NDF), which has the statutory authority to conduct 

nonproliferation activities in countries that may nevertheless be 

subject to U.S. sanctions and restrictions on U.S. assistance. The 


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NDF is a relatively small fund, which is already stressed by the 

Department of Energy’s disablement activities in North Korea; it 

would be incapable of funding the larger ‘‘Phase III’’ dismantlement 

and removal programs that are contemplated, and worthy urgent 

nonproliferation opportunities in other countries could be missed if 

the NDF is depleted. It is therefore necessary to waive the AECA 

restrictions so that the United States can fully fund its obligations 

under the Six-Party Talks and proceed with the disablement, dismantlement and removal of North Korea’s nuclear capabilities, and 

verification of its denuclearization, which is manifestly in the vital 

U.S. national interest. 

Sec. 302. Certification Regarding Waiver of Certain Sanctions. 

The President must certify to the Congress that, before any nonlethal exports of articles or services on the U.S. Munitions List or 

Commerce Control List can occur, that all necessary steps will be 

taken to ensure that such exports will not improve the military capabilities of North Korea’s armed forces, and that such exports are 

in the national security interests of the United States. Section 302 

does not allow the export of any item described in Section 301(b). 

Sec. 303. Congressional Notification and Report. 

The President must notify the foreign affairs and appropriations 

committees 15 days in advance of using the waiver authority, and 

must report annually on the progress, or lack thereof, in the 

verifiable denuclearization activities in North Korea. 

Sec. 304. Termination of Waiver Authority. 

The waiver authority in Sec. 401 terminates if North Korea conducts another nuclear test after October 10, 2006 (the day after 

North Korea’s last nuclear test) or transfers to or receives from another state a nuclear explosive device after September 19, 2005 

(the date after North Korea agreed to denuclearization). If North 

Korea transfers nuclear weapon-related design information or component, according to the standards of the Glenn Amendment, or 

sought or received same, after September 19, 2005, the waiver authority in Sec. 401 terminates unless the President certifies to the 

Congress that the continuation of such waiver is vital to the national security interests of the United States. 

Sec. 305. Expiration of Waiver Authority. 

This authority will terminate 4 years from enactment. 

Sec. 306. Continuation of Restrictions against the Government of 

North Korea. 

Section 306 provides that restrictions against the Government of 

North Korea because of its designation as a state sponsor of terrorism shall remain in effect, and shall not be lifted pursuant to 

the provisions of law under which the determination was made, unless the President certifies to the appropriate congressional committees that (1) the Government of North Korea is no longer engaged in the transfer of technology related to the acquisition or development of nuclear weapons, particularly to the Governments of 

Iran, Syria, or any other country that is a state sponsor of terrorism; (2) in accordance with the Six-Party Talks Agreement of 


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February 13, 2007, the Government of North Korea has ‘provided 

a complete and correct declaration of all its nuclear programs,’ and 

there are measures to effectively verify this declaration by the 

United States which, ‘[a]t the request of the other Parties,’ is leading ‘disablement activities’ and ‘provid[ing] the funding for those 

activities’; and (3) the Government of North Korea has agreed to 

the participation of the International Atomic Energy Agency in the 

monitoring and verification of the shutdown and sealing of the 

Yongbyon nuclear facility. 

The Committee believes that these requirements are fully consistent with the agreements of February and October, 2007, related 

to the Six-Party Talks and how the President’s representatives 

have explained these agreements will be implemented. 

Sec. 307. Report on Verification Measures Relating to North Korea’s 

Nuclear Programs. 

Subsection (a) of this section provides that not later than 15 days 

after the date of enactment of this Act, the Secretary of State shall 

submit to the appropriate congressional committees a report on 

verification measures relating to North Korea’s nuclear programs 

under the Six-Party Talks Agreement of February 13, 2007, with 

specific focus on how such verification measures are defined under 

the Six-Party Talks Agreement and understood by the United 

States Government. 

Subsection (b) provides that the report required under subsection 

(a) shall include, among other elements, a detailed description of: 

(1) the methods to be utilized to confirm that North Korea has ‘provided a complete and correct declaration of all of its nuclear programs’; (2) the specific actions to be taken in North Korea and elsewhere to ensure a high and ongoing level of confidence that North 

Korea has fully met the terms of the Six-Party Talks Agreement 

relating to its nuclear programs; (3) any formal or informal agreement with North Korea regarding verification measures relating to 

North Korea’s nuclear programs under the Six-Party Talks Agreement; and (4) any disagreement expressed by North Korea regarding verification measures relating to North Korea’s nuclear programs under the Six-Party Talks Agreement. 

Subsection (c) provides that the report required under subsection 

(a) shall be submitted in unclassified form, but may include a classified annex. 

Sec. 308. Definitions. 

This provision contains definitions applicable to this title. 

TITLE IV: MISCELLANEOUS PROVISIONS. 

Sec. 401. Authority to Build the Capacity of Foreign Military 

Forces. 

This section grants the Secretary of State train-and-equip au- thority, authorized up to $25,000,000 in unobligated FMF funds for 

the Fiscal Years 2009 and 2010, to respond to contingencies in foreign countries or regions with training, procurement and capacitybuilding of a foreign country’s national military forces. 

This authority is necessary for the Department of State to directly provide assistance to train and equip foreign military forces 


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to support U.S. security operations and to better engage in counterterrorism operations. 

The National Defense Authorization Act of 2006 authorized the 

use of DoD funds to build the capacity of a foreign country’s national military forces in order for that country to conduct 

counterterrorist operations or participate in or support military or 

stability operations in which U.S. Armed Forces are a participant. 

Since FY 2006, the State Department and Defense Department 

have been working to jointly develop and implement programs 

under 1206 authority. The Department of State maintains that 

longstanding security assistance authorities and resources should 

be supplemented to be capable of meeting today’s U.S. strategic requirements. Existing authorities exercised by the Department of 

State for the provision of security assistance include the Foreign 

Military Financing (FMF), International Military Education and 

Training (IMET), and Peacekeeping Operations (PKO) accounts authorized by the Foreign Assistance Act of 1961, as amended (FAA), 

and the Arms Export Control Act (AECA). While the committee 

concurs with the Administration that new security assistance tools 

need to be developed in order to meet the security challenges of the 

21st century, we are also concerned by the apparent migration of 

security assistance authorities from the Department of State to the 

Department of Defense. This provision intends to address that 

trend by designating certain funds for the Secretary of State to use 

the full flexibility under existing law to provide training and equipment for foreign militaries when such assistance meets U.S. foreign 

policy objectives. It draws on unobligated FMF balances for funding. During the last fiscal year, the Department of State had almost $4 million in unobligated funds, which could be useful for financing this program authority. The Committee intends to review 

the management of U.S. security assistance during the remainder 

of this Congress and the next. 

Sec. 402. Maintenance of European Union Arms Embargo against 

China. 

Sec. 402 states U.S. policy to oppose the lifting of the E.U. arms 

embargo and to take whatever diplomatic and economic steps necessary to convince E.U. Member States from taking that step. This 

section also requires the President to report to the Congress on all 

efforts the U.S. is taking to accomplish this goal. 

Last November, President Sarkozy of France declared during his 

visit to Beijing that he wanted to lift this embargo. France will assume the Presidency of the EU in July, and would presumably 

broach this issue with the other Member States of the EU. It is important for the Congress to again send a clear message of opposition to lifting the embargo. 

Sec. 403. Reimbursement of Salaries of Members of the Reserve 

Components in Support of Security Cooperation Missions. 

This section provides an authority for the costs of certain transfers to include the certain personnel costs involved in the transfers. 

In general, the salaries of members of the National Guard and 

Reserve who are performing security cooperation missions outside 

the U.S. cannot be reimbursed as part of an FMS contract for security cooperation, such as training. This section would allow the DeVerDate Aug 31 2005 00:57 May 13, 2008 Jkt 069006 PO 00000 Frm 00042 Fmt 6659 Sfmt 6601 E:\HR\OC\HR626.XXX HR626

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partment of Defense to use other funds to pay Reserve members to 

perform missions that build global partnerships and help win the 

war on terror. 

Sec. 404. Foreign Military Sales Stockpile Fund. 

This section responds to a DoD request to update the moribund 

‘‘Special Defense Acquisition Fund’’ in Sec. 51 of the AECA by adding ‘‘building partner capacity’’ as a purpose of the Fund, allowing 

proceeds from the lease of defense items under Sec. 61 of the AECA 

to go to the Fund, and allowing amounts in the Fund to remain 

available until expended. 

Sec. 405. Congressional Notification Requirements Under the Arms 

Export Control Act. 

This provision replaces ‘‘the Speaker’’ with the ‘‘Chairman of the 

Committee on Foreign Affairs’’ or the ‘‘Committee on Foreign Affairs,’’ as appropriate, throughout the AECA, to match the reporting requirements to the Committee on Foreign Relations of the 

Senate. 

Sec. 406. Sense of Congress. 

Sec. 406 states the sense of Congress that the United States 

should not provide security assistance or export arms to nations 

contributing to massive, widespread, and systematic violations of 

human rights or acts of genocide, particularly with respect to 

Darfur, Sudan. 

TITLE V: AUTHORITY TO TRANSFER NAVAL VESSELS

Sec. 501. Authority to Transfer of Naval Vessels to Certain Foreign 

Recipients. 

This section authorizes the grant of surplus U.S. naval vessels to 

Peru, Chile, Greece and Pakistan. Transfers of naval vessels must 

satisfy certain statutory requirements, which stipulate that naval 

vessels larger than 3,000 tons or less than 20 years old may not 

be transferred to another nation unless approved by law. 

According to the Secretary of the Navy, these proposed transfers 

would improve U.S. political and military relationships with close 

allies. They would support strategic engagement goals and regional 

security cooperation objectives. The U.S. would incur no costs in 

transferring these naval vessels. The recipients would be responsible for all costs associated with the transfers, including maintenance, repairs, training, and fleet turnover costs. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman): 


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SECTION 45 OF THE STATE DEPARTMENT BASIC 

AUTHORITIES ACT OF 1956 

DEFENSE TRADE CONTROLS REGISTRATION FEES

SEC. 45. øFor¿ (a) IN GENERAL.—For each fiscal year, 100 percent of the registration fees collected by the øOffice¿ Directorate of 

Defense Trade Controls of the Department of State shall be credited to a Department of State account, to be available without fiscal 

year limitation. øFees credited to that account shall be available 

only for payment of expenses incurred for—

ø(1) contract personnel to assist in the evaluation of defense 

trade controls license applications, reduction in processing time 

for license applications, and improved monitoring of compliance 

with the terms of licenses; 

ø(2) the automation of defense trade control functions, including compliance and enforcement activities, and the processing of defense trade control license applications, including 

the development, procurement, and utilization of computer 

equipment and related software; and 

ø(3) the enhancement of defense trade export compliance and 

enforcement activities, including compliance audits of United 

States and foreign parties, the conduct of administrative proceedings, monitoring of end-uses in cases of direct commercial 

arms sales or other transfers, and cooperation in proceedings 

for enforcement of criminal laws related to defense trade export controls.¿ 

(b) AVAILABILITY OF FEES.—Fees credited to the account referred 

to in subsection (a) shall be available only for payment of expenses 

incurred for—

(1) management, 

(2) licensing (in order to meet the requirements of section 105 

of the Defense Trade Controls Performance Improvement Act of 

2008 (relating to adequate staff and resources of the Directorate 

of Defense Trade Controls)), 

(3) compliance, 

(4) policy activities, and 

(5) facilities, 

of defense trade controls functions. 

(c) ALLOCATION OF FEES.—In allocating fees for payment of expenses described in subsection (b), the Secretary of State shall accord the highest priority to payment of expenses incurred for personnel and equipment of the Directorate of Defense Trade Controls, 

including payment of expenses incurred to meet the requirements of 

section 105 of the Defense Trade Controls Performance Improvement 

Act of 2008. 

* * * * * * * 

ARMS EXPORT CONTROL ACT 

* * * * * * * 


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Chapter 1.—FOREIGN AND NATIONAL SECURITY POLICY 

OBJECTIVES AND RESTRAINTS 

* * * * * * * 

SEC. 3. ELIGIBILITY.—(a) * * * 

(b) The consent of the President under paragraph (2) of subsection (a) or under paragraph (1) of section 505(a) of the Foreign 

Assistance Act of 1961 (as it relates to subparagraph (B) of such 

paragraph) shall not be required for the transfer by a foreign country or international organization of defense articles sold by the 

United States under this Act if—

(1) * * * 

(2) the recipient is the government of a member country of 

the North Atlantic Treaty Organization, the Government of 

Australia, the Government of Japan, the Government of the Republic of Korea, or the Government of New Zealand; 

* * * * * * * 

(d)(1) Subject to paragraph (5), the President may not give his 

consent under paragraph (2) of subsection (a) or under the third 

sentence of such subsection, or under section 505(a)(1) or 505(a)(4) 

of the Foreign Assistance Act of 1961, to a transfer of any major 

defense equipment valued (in terms of its original acquisition cost) 

at $14,000,000 or more, or any defense article or related training 

or other defense service valued (in terms of its original acquisition 

cost) at $50,000,000 or more, unless the President submits to the 

øSpeaker of the House of Representatives and the Committee on 

Foreign Relations of the Senate¿ Committee on Foreign Affairs of 

the House of Representatives and the Committee on Foreign Relations of the Senate a written certification with respect to such proposed transfer containing—

(A) * * * 

* * * * * * * 

(2)(A) * * * 

(B) In the case of a proposed transfer to the North Atlantic Treaty Organization, or any member country of such Organization, 

Japan, Australia, the Republic of Korea, Israel, or New Zealand, 

unless the President states in the certification submitted pursuant 

to paragraph (1) of this subsection that an emergency exists which 

requires that consent to the proposed transfer become effective immediately in the national security interests of the United States, 

such consent shall not become effective until fifteen calendar days 

after the date of such submission and such consent shall become 

effective then only if the Congress does not enact, within such fifteen-day period, a joint resolution prohibiting the proposed transfer. 

* * * * * * * 

(3)(A) Subject to paragraph (5), the President may not give his 

consent to the transfer of any major defense equipment valued (in 

terms of its original acquisition cost) at $14,000,000 or more, or of 

any defense article or defense service valued (in terms of its original acquisition cost) at $50,000,000 or more, the export of which 

has been licensed or approved under section 38 of this Act, unless 

before giving such consent the President submits to the øSpeaker 

of the House of Representatives and the Chairman of the ComVerDate Aug 31 2005 00:57 May 13, 2008 Jkt 069006 PO 00000 Frm 00045 Fmt 6659 Sfmt 6601 E:\HR\OC\HR626.XXX HR626

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mittee on Foreign Relations of the Senate¿ Chairman of the Committee on Foreign Affairs of the House of Representatives and the 

Chairman of the Committee on Foreign Relations of the Senate a 

certification containing the information specified in subparagraphs 

(A) through (E) of paragraph (1). Such certification shall be submitted—

(i) at least 15 calendar days before such consent is given in 

the case of a transfer to a country which is a member of the 

North Atlantic Treaty Organization or Australia, Japan, the 

Republic of Korea, Israel, or New Zealand; and 

* * * * * * * 

(5) In the case of a transfer to a member country of the North 

Atlantic Treaty Organization (NATO) or Australia, Japan, the Republic of Korea, Israel, or New Zealand that does not authorize a 

new sales territory that includes any country other than such countries, the limitations on consent of the President set forth in paragraphs (1) and (3)(A) shall apply only if the transfer is—

(A) * * * 

* * * * * * * 

(e) If the President receives any information that a transfer of 

any defense article, or related training or other defense service, has 

been made without his consent as required under this section or 

under section 505 of the Foreign Assistance Act of 1961, he shall 

report such information immediately to the øSpeaker of the House 

of Representatives and the Committee on Foreign Relations of the 

Senate¿ Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate. 

* * * * * * * 

SEC. 5. PROHIBITION AGAINST DISCRIMINATION.—(a) * * * 

* * * * * * * 

(c) The President shall promptly transmit reports to the øSpeaker of the House of Representatives and the chairman of the Committee on Foreign Relations of the Senate¿ Chairman of the Committee on Foreign Affairs of the House of Representatives and the 

Chairman of the Committee on Foreign Relations of the Senate concerning any instance in which any United States person (as defined 

in section 7701(a)(30) of the Internal Revenue Code of 1954) is prevented by a foreign government on the basis of race, religion, national origin, or sex, from participating in the performance of any 

sale or licensed transaction under this Act. Such reports shall include (1) a description of the facts and circumstances of any such 

discrimination, (2) the response thereto on the part of the United 

States or any agency or employee thereof, and (3) the result of such 

response, if any. 

* * * * * * * 

SEC. 6. FOREIGN INTIMIDATION AND HARASSMENT OF INDIVIDUALS

IN THE UNITED STATES.—No letters of offer may be issued, no credits or guarantees may be extended, and no export licenses may be 

issued under this Act with respect to any country determined by 

the President to be engaged in a consistent pattern of acts of intimidation or harassment directed against individuals in the 

United States. The President shall report any such determination 


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promptly to the øSpeaker of the House of Representatives and to 

the chairman of the Committee on Foreign Relations¿ Chairman of 

the Committee on Foreign Affairs of the House of Representatives 

and to the Chairman of the Committee on Foreign Relations of the 

Senate. 

* * * * * * * 

Chapter 2.—FOREIGN MILITARY SALES 

AUTHORIZATIONS 

SEC. 21. SALES FROM STOCKS.—(a) * * * 

* * * * * * * 

(e)(1) * * * 

(2)(A) The President may reduce or waive the charge or charges 

which would otherwise be considered appropriate under paragraph 

(1)(B) for particular sales that would, if made, significantly advance 

United States GovernmentArms Export interests in North Atlantic 

Treaty Organization standardization, standardization with the 

Armed Forces of Japan, Australia, the Republic of Korea, Israel, or 

New Zealand in furtherance of the mutual defense treaties between 

the United States and those countries, or foreign procurement in 

the United States under coproduction arrangements. 

* * * * * * * 

(h)(1) The President is authorized to provide (without charge) 

quality assurance, inspection, contract administration services, and 

contract audit defense services under this section—

(A) in connection with the placement or administration of 

any contract or subcontract for defense articles, defense services, or design and construction services entered into after the 

date of enactment of this subsection by, or under this Act on 

behalf of, a foreign government which is a member of the 

North Atlantic Treaty Organization or the Governments of 

Australia, New Zealand, Japan, the Republic of Korea, or 

Israel, if such government provides such services in accordance 

with an agreement on a reciprocal basis, without charge, to the 

United States Government; or 

* * * * * * * 

(i)(1) Sales of defense articles and defense services which could 

have significant adverse effect on the combat readiness of the 

Armed Forces of the United States shall be kept to an absolute 

minimum. The President shall transmit to the øSpeaker of the 

House of Representatives and the Committees on Armed Services 

and Foreign Relations of the Senate¿ Committees on Foreign Affairs and Armed Services of the House of Representatives and the 

Committees on Foreign Relations and Armed Services of the Senate 

on the same day a written statement giving a complete explanation 

with respect to any proposal to sell, under this section or under authority of chapter 2B, any defense articles or defense services if 

such sale could have a significant adverse effect on the combat 

readiness of the Armed Forces of the United States. Each such 

statement shall be unclassified except to the extent that public disclosure of any item of information contained therein would be clearly detrimental to the security of the United States. Any necessarily 


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classified information shall be confined to a supplemental report. 

Each such statement shall include an explanation relating to only 

one such proposal to sell and shall set forth— (A) * * * 

* * * * * * * 

SEC. 27. AUTHORITY OF PRESIDENT TO ENTER INTO COOPERATIVE

PROJECTS WITH FRIENDLY FOREIGN COUNTRIES.—(a) * * * 

* * * * * * * 

(f) Not less than 30 days before a cooperative project agreement 

is signed on behalf of the United States, the President shall transmit to the øSpeaker of the House of Representatives, the chairman 

of the Committee on Foreign Relations of the Senate, and the 

chairman of the Committee on Armed Services of the Senate¿ 

Chairmen of the Committees on Foreign Affairs and Armed Services 

of the House of Representatives and the Chairmen of the Committees on Foreign Relations and Armed Services of the Senate, a numbered certification with respect to such proposed agreement, setting 

forth—

(1) * * * 

* * * * * * * 

Chapter 3.—MILITARY EXPORT CONTROLS 

* * * * * * * 

SEC. 36. REPORTS ON COMMERCIAL AND GOVERNMENTAL MILITARY

EXPORTS; CONGRESSIONAL ACTION.—(a) The President shall transmit to the øSpeaker of the House of Representatives and to the 

chairman of the Committee on Foreign Relations¿ Chairman of the 

Committee on Foreign Affairs of the House of Representatives and 

to the Chairman of the Committee on Foreign Relations of the Senate not more than sixty days after the end of each quarter an unclassified report (except that any material which was transmitted 

in classified form under subsection (b)(1) or (c)(1) of this section 

may be contained in a classified addendum to such report, and any 

letter of offer referred to in paragraph (1) of this subsection may 

be listed in such addendum unless such letter of offer has been the 

subject of an unclassified certification pursuant to subsection (b)(1) 

of this section, and any information provided under paragraph (11) 

of this subsection may also be provided in a classified addendum) 

containing— (1) * * * 

* * * * * * * 

(b)(1) Subject to paragraph (6), in the case of any letter of offer 

to sell any defense articles or services under this Act for 

$50,000,000 or more, any design and construction services for 

$200,000,000 or more, or any major defense equipment for 

$14,000,000 or more, before such letter of offer is issued, the President shall submit to the øSpeaker of the House of Representatives 

and to the chairman of the Committee on Foreign Relations¿ 

Chairman of the Committee on Foreign Affairs of the House of Representatives and to the Chairman of the Committee on Foreign Relations of the Senate a numbered certification with respect to such 

offer to sell containing the information specified in clauses (i) 

through (iv) of subsection (a), or (in the case of a sale of design and 


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construction services) the information specified in clauses (A) 

through (D) of paragraph (9) of subsection (a), and a description, 

containing the information specified in paragraph (8) of subsection 

(a), of any contribution, gift, commission, or fee paid or offered or 

agreed to be paid in order to solicit, promote, or otherwise to secure 

such letter of offer. Such numbered certifications shall also contain 

an item, classified if necessary, identifying the sensitivity of technology contained in the defense articles, defense services, or design 

and construction services proposed to be sold, and a detailed justification of the reasons necessitating the sale of such articles or 

services in view of the sensitivity of such technology. In a case in 

which such articles or services listed on the Missile Technology 

Control Regime Annex are intended to support the design, development, or production of a Category I space launch vehicle system (as 

defined in section 74), such report shall include a description of the 

proposed export and rationale for approving such export, including 

the consistency of such export with United States missile nonproliferation policy. Each such numbered certification shall contain 

an item indicating whether any offset agreement is proposed to be 

entered into in connection with such letter of offer to sell (if known 

on the date of transmittal of such certification). In addition, the 

President shall, upon the request of such committee or the Committee on Foreign Affairs of the House of Representatives, transmit 

promptly to both such committees a statement setting forth, to the 

extent specified in such request— (A) * * * 

* * * * * * * 

A certification transmitted pursuant to this subsection shall be unclassified, except that the information specified in clause (ii) and 

the details of the description specified in clause (iii) of subsection 

(a) may be classified if the public disclosure thereof would be clearly detrimental to the security of the United States, in which case 

the information shall be accompanied by a description of the damage to the national security that could be expected to result from 

public disclosure of the information. øThe letter of offer shall not 

be issued, with respect to a proposed sale to the North Atlantic 

Treaty Organization, any member country of such Organization, 

Japan, Australia, or New Zealand, if the Congress, within fifteen 

calendar days after receiving such certification, or with respect to 

a proposed sale to any other country or organization, if the Congress within thirty calendar days after receiving such certification, 

enacts a joint resolution¿ 

(2) The letter of offer shall not be issued— (A) with respect to a proposed sale of any defense articles or defense services under this Act for $200,000,000 or more, any 

design and construction services for $300,000,000 or more, or 

any major defense equipment for $75,000,000 or more, to the 

North Atlantic Treaty Organization (NATO), any member country of NATO, Japan, Australia, the Republic of Korea, Israel, 

or New Zealand, if Congress, within 15 calendar days after receiving such certification, or 

(B) with respect to a proposed sale of any defense articles or services under this Act for $100,000,000 or more, any design 

and construction services for $200,000,000 or more, or any 

major defense equipment for $50,000,000 or more, to any other 


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country or organization, if Congress, within 30 calendar days 

after receiving such certification, 

enacts a joint resolution prohibiting the proposed sale, unless the 

President states in his certification that an emergency exists which 

requires such sale in the national security interests of the United 

States. If the President states in his certification that an emergency exists which requires the proposed sale in the national security interest of the United States, thus waiving the congressional 

review requirements of this subsection, he shall set forth in the 

certification a detailed justification for his determination, including 

a description of the emergency circumstances which necessitate the 

immediate issuance of the letter of offer and a discussion of the national security interests involved. 

ø(2)¿ (3) Any such joint resolution shall be considered in the Senate in accordance with the provisions of section 601(b) of the International Security Assistance and Arms Export Control Act of 1976, 

except that for purposes of consideration of any joint resolution 

with respect to the North Atlantic Treaty Organization, any member country of such Organization, Japan, Australia, the Republic of 

Korea, Israel, or New Zealand, it shall be in order in the Senate 

to move to discharge a committee to which such joint resolution 

was referred if such committee has not reported such joint resolution at the end of five calendar days after its introduction. 

ø(3)¿ (4) For the purpose of expediting the consideration and enactment of joint resolutions under this subsection, a motion to proceed to the consideration of any such joint resolution after it has 

been reported by the appropriate committee shall be treated as 

highly privileged in the House of Representatives. 

ø(4)¿ (5) In addition to the other information required to be contained in a certification submitted to the Congress under this subsection, each such certification shall cite any quarterly report submitted pursuant to section 28 of this Act which listed a price and 

availability estimate, or a request for the issuance of a letter of 

offer, which was a basis for the proposed sale which is the subject 

of such certification. 

ø(5)¿ (6)(A) * * * 

* * * * * * * 

(C) øSubject to paragraph (6), if¿ If the enhancement or upgrade 

in the sensitivity of technology or the capability of major defense 

equipment, defense articles, defense services, or design and construction services described in a numbered certification submitted 

under this subsection costs $14,000,000 or more in the case of any 

major defense equipment, $50,000,000 or more in the case of defense articles or defense services, or $200,000,000 or more in the 

case of design or construction services, then the President shall 

submit to the øSpeaker of the House of Representatives and the 

chairman of the Committee on Foreign Relations of the Senate¿ 

Chairman of the Committee on Foreign Affairs of the House of Representatives and the Chairman of the Committee on Foreign Relations of the Senate a new numbered certification which relates to 

such enhancement or upgrade and which shall be considered for 

purposes of this subsection as if it were a separate letter of offer 

to sell defense equipment, articles, or services, subject to all of the 

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section to sales shall be deemed to be references to enhancements 

or upgrades in the sensitivity of technology or the capability of 

major defense equipment, articles, or services, as the case may be. 

* * * * * * * 

ø(6) The limitation in paragraph (1) and the requirement in 

paragraph (5)(C) shall apply in the case of a letter of offer to sell 

to a member country of the North Atlantic Treaty Organization 

(NATO) or Australia, Japan, or New Zealand that does not authorize a new sales territory that includes any country other than such 

countries only if the letter of offer involves— ø(A) the sale of major defense equipment under this Act for, 

or the enhancement or upgrade of major defense equipment at 

a cost of, $25,000,000 or more, as the case may be; and 

ø(B) the sale of defense articles or services for, or the enhancement or upgrade of defense articles or services at a cost 

of, $100,000,000 or more, as the case may be; or 

ø(C) the sale of design and construction services for, or the 

enhancement or upgrade of design and construction services at 

a cost of, $300,000,000 or more, as the case may be.¿ 

(c)(1) Subject to paragraph (5), in the case of an application by 

a person (other than with regard to a sale under section 21 or section 22 of this Act) for a license for the export of any major defense 

equipment sold under a contract in the amount of $14,000,000 or 

more or of defense articles or defense services sold under a contract 

in the amount of $50,000,000 or more (or, in the case of a defense 

article that is a firearm controlled under category I of the United 

States Munitions List, $1,000,000 or more), before issuing such license the President shall transmit to the øSpeaker of the House of 

Representatives and to the chairman of the Committee on Foreign 

Relations¿ Chairman of the Committee on Foreign Affairs of the 

House of Representatives and to the Chairman of the Committee on 

Foreign Relations of the Senate an unclassified numbered certification with respect to such application specifying (A) the foreign 

country or international organization to which such export will be 

made, (B) the dollar amount of the items to be exported, and (C) 

a description of the items to be exported. Each such numbered certification shall also contain an item indicating whether any offset 

agreement is proposed to be entered into in connection with such 

export and a description of any such offset agreement. In addition, 

the President shall, upon the request of such committee or the 

Committee on Foreign Affairs of the House of Representatives, 

transmit promptly to both such committees a statement setting 

forth, to the extent specified in such request a description of the 

capabilities of the items to be exported, an estimate of the total 

number of United States personnel expected to be needed in the 

foreign country concerned in connection with the items to be exported and an analysis of the arms control impact pertinent to such 

application, prepared in consultation with the Secretary of Defense. 

In a case in which such articles or services listed on the Missile 

Technology Control Regime Annex are intended to support the design, development, or production of a Category I space launch vehicle system (as defined in section 74), such report shall include a description of the proposed export and rationale for approving such 

export, including the consistency of such export with United States 

missile nonproliferation policy. A certification transmitted pursuant 


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52 

to this subsection shall be unclassified, except that the information 

specified in clause (B) and the details of the description specified 

in clause (C) may be classified if the public disclosure thereof would 

be clearly detrimental to the security of the United States, in which 

case the information shall be accompanied by a description of the 

damage to the national security that could be expected to result 

from public disclosure of the information. 

(2) Unless the President states in his certification that an emergency exists which requires the proposed export in the national security interests of the United States, a license for export described 

in paragraph (1)—

(A) in the case of a license for an export of any major defense 

equipment sold under a contract in the amount of $75,000,000 

or more or of defense articles or defense services sold under a 

contract in the amount of $200,000,000 or more, (or, in the case 

of a defense article that is a firearm controlled under category 

I of the United States Munitions List, $1,000,000 or more) to 

the North Atlantic Treaty øOrganization,¿ Organization 

(NATO), any member country of øthat Organization¿ NATO or 

Australia, Japan, the Republic of Korea, Israel, or New Zealand, 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; 

* * * * * * * 

(C) in the case of any other license for an export of any major 

defense equipment sold under a contract in the amount of 

$50,000,000 or more or of defense articles or defense services 

sold under a contract in the amount of $100,000,000 or more, 

(or, in the case of a defense article that is a firearm controlled 

under category I of the United States Munitions List, 

$1,000,000 or more), shall not be issued until at least 30 calendar days after the Congress receives such certification, and 

shall not be issued then if the Congress, within that 30-day period, enacts a joint resolution prohibiting the proposed export. 

* * * * * * * 

(4) The provisions of øsubsection (b)(5)¿ subsection (b)(6) shall 

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

certification has been transmitted to Congress pursuant to paragraph (1) in the same manner and to the same extent as that subsection applies to any equipment, article, or service for which a 

numbered certification has been transmitted to Congress pursuant 

to subsection (b)(1). For purposes of such application, any reference 

in øsubsection (b)(5)¿ subsection (b)(6) to ‘‘a letter of offer’’ or ‘‘an 

offer’’ shall be deemed to be a reference to ‘‘a contract’’. 

ø(5) In the case of an application by a person (other than with 

regard to a sale under section 21 or 22 of this Act) for a license 

for the export to a member country of the North Atlantic Treaty 

Organization (NATO) or Australia, Japan, or New Zealand that 

does not authorize a new sales territory that includes any country 

other than such countries, the limitations on the issuance of the license set forth in paragraph (1) shall apply only if the license is 

for export of—


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53 

ø(A) major defense equipment sold under a contract in the amount of $25,000,000 or more; or 

ø(B) defense articles or defense services sold under a contract in the amount of $100,000,000 or more.¿ 

(d)(1) * * * 

(2) A certification under this subsection shall be submitted— (A) at least 15 days before approval is given in the case of 

an agreement for or in a country which is a member of the 

North Atlantic Treaty Organization or Australia, Japan, the 

Republic of Korea, Israel, or New Zealand; and 

* * * * * * * 

(f) The President shall cause to be published in a timely manner 

in the Federal Register, upon transmittal to the øSpeaker of the 

House of Representatives and to the chairman of the Committee on 

Foreign Relations¿ Chairman of the Committee on Foreign Affairs 

of the House of Representatives and to the Chairman of the Committee on Foreign Relations of the Senate, the full unclassified text 

of— (1) * * * 

* * * * * * * 

(h) CERTIFICATION REQUIREMENT RELATING ISRAEL’S QUALI- TATIVE MILITARY EDGE.— (1) IN GENERAL.—Any certification relating to a proposed sale 

or export of defense articles or defense services under this section to any country in the Middle East other than Israel shall 

include a determination that the sale or export of the defense 

articles or defense services will not adversely affect Israel’s 

qualitative military edge over military threats to Israel. 

(2) DEFINITION.—In this subsection, the term ‘‘qualitative 

military edge’’ has the meaning given the term in section 205 

of the Security Assistance and Arms Export Control Reform Act 

of 2008. 

* * * * * * * 

SEC. 38. CONTROL OF ARMS EXPORTS AND IMPORTS.—(a) * * * 

(b)(1) * * * 

* * * * * * * 

ø(3)(A) For each of the fiscal years 1988 and 1989, $250,000 of 

registration fees collected pursuant to paragraph (1) shall be credited to a Department of State account, to be available without fiscal 

year limitation. Fees credited to that account shall be available 

only for the payment of expenses incurred for—

ø(i) contract personnel to assist in the evaluation of munitions control license applications, reduce processing time for license applications, and improve monitoring of compliance with 

the terms of licenses; and 

ø(ii) the automation of munitions control functions and the 

processing of munitions control license applications, including 

the development, procurement, and utilization of computer 

equipment and related software.¿ 

(3)(A) For each fiscal year, 100 percent of registration fees collected pursuant to paragraph (1) shall be credited to a Department 

of State account, to be available without fiscal year limitation. Fees 


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54 

credited to that account shall be available only for the payment of 

expenses incurred for— (i) management, 

(ii) licensing (in order to meet the requirements of section 105 

of the Defense Trade Controls Performance Improvement Act of 

2008 (relating to adequate staff and resources of the Directorate 

of Defense Trade Controls)), 

(iii) compliance, 

(iv) policy activities, and 

(v) facilities, 

of defense trade controls functions. 

* * * * * * * 

(k) SPECIAL LICENSING AUTHORIZATION FOR CERTAIN EXPORTS TO

NATO MEMBER STATES, AUSTRALIA, JAPAN, NEW ZEALAND, ISRAEL, AND SOUTH KOREA.— (1) AUTHORIZATION.—(A) The President may provide for special licensing authorization for exports of United States-manufactured spare and replacement parts or components listed in 

an application for such special licensing authorization in connection with defense items previously exported to NATO member states, Australia, Japan, New Zealand, Israel, and South 

Korea. A special licensing authorization issued pursuant to this 

clause shall be effective for a period not to exceed 5 years. 

(B) An authorization may be issued under subparagraph (A) 

only if the applicable government of the country described in 

subparagraph (A), acting through the applicant for the authorization, certifies that— (i) the export of spare and replacement parts or components supports a defense item previously lawfully exported; 

(ii) the spare and replacement parts or components will 

be transferred to a defense agency of a country described in 

subparagraph (A) that is a previously approved end-user of 

the defense items and not to a distributor or a foreign consignee of such defense items; 

(iii) the spare and replacement parts or components will 

not to be used to materially enhance, optimize, or otherwise 

modify or upgrade the capability of the defense items; 

(iv) the spare and replacement parts or components relate 

to a defense item that is owned, operated, and in the inventory of the armed forces a country described in subparagraph (A); 

(v) the export of spare and replacement parts or components will be effected using the freight forwarder designated by the purchasing country’s diplomatic mission as 

responsible for handling transfers under chapter 2 of this 

Act as required under regulations; and 

(vi) the spare and replacement parts or components to be 

exported under the special licensing authorization are specifically identified in the application. 

(C) An authorization may not be issued under subparagraph 

(A) for purposes of establishing offshore procurement arrangements or producing defense articles offshore. 

(D)(i) For purposes of this subsection, the term ‘‘United 

States-manufactured spare and replacement parts or components’’ means Aˆ μspare and replacement parts or components—


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(I) with respect to which—

(aa) United States-origin content costs constitute at 

least 85 percent of the total content costs; 

(bb) United States manufacturing costs constitute at 

least 85 percent of the total manufacturing costs; and 

(cc) foreign content, if any, is limited to content from 

countries eligible to receive exports of items on the 

United States Munitions List under the International 

Traffic in Arms Regulations (other than de minimis 

foreign content); and 

(II) that were last substantially transformed in the 

United States. 

(ii) For purposes of clause (i)(I)(aa) and (bb), the costs of nonUnited States-origin content shall be determined using the final 

price or final cost associated with the non-United States-origin 

content. 

(2) INAPPLICABILITY PROVISIONS.—(A) The provisions of this 

subsection shall not apply with respect to re-exports or re-transfers of spare and replacement parts or components and related 

services of defense items described in paragraph (1). 

(B) The congressional notification requirements contained in 

section 36(c) of this Act shall not apply with respect to an authorization issued under paragraph (1). 

(l) REPORT.—

(1) IN GENERAL.—The President shall transmit to the appropriate congressional committees a report that contains a detailed listing, by country and by international organization, of 

the total dollar value of major defense equipment and defense 

articles exported pursuant to licenses authorized under this section for the previous fiscal year. 

(2) INCLUSION IN ANNUAL BUDGET.—The report required by 

this subsection shall be included in the supporting information 

of the annual budget of the United States Government required 

to be submitted to Congress under section 1105 of title 31, 

United States Code. 

(3) APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.—In 

this subsection, the term ‘‘appropriate congressional committees’’

means the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate. 

SEC. 38A. AVAILABILITY OF INFORMATION ON THE STATUS OF LICENSE APPLICATIONS UNDER THIS CHAPTER. 

(a) AVAILABILITY OF INFORMATION.—Not later than one year after 

the date of the enactment of the Defense Trade Controls Performance Improvement Act of 2008, the President shall make available 

to persons who have pending license applications under this chapter 

and the committees of jurisdiction the ability to access electronically 

current information on the status of each license application required to be submitted under this chapter. 

(b) MATTERS TO BE INCLUDED.—The information referred to in 

subsection (a) shall be limited to the following: 

(1) The case number of the license application. 

(2) The date on which the license application is received by 

the Department of State and becomes an ‘‘open application’’. 


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(3) The date on which the Directorate of Defense Trade Controls makes a determination with respect to the license application or transmits it for interagency review, if required. 

(4) The date on which the interagency review process for the 

license application is completed, if such a review process is required. 

(5) The date on which the Department of State begins consultations with the congressional committees of jurisdiction 

with respect to the license application. 

(6) The date on which the license application is sent to the 

congressional committees of jurisdiction. 

* * * * * * * 

SEC. 40. TRANSACTIONS WITH COUNTRIES SUPPORTING ACTS OF

INTERNATIONAL TERRORISM. 

(a) * * * 

* * * * * * * 

(f) RESCISSION.—(1) A determination made by the Secretary of 

State under subsection (d) may not be rescinded unless the President submits to the øSpeaker of the House of Representatives and 

the chairman of the Committee on Foreign Relations of the Senate¿ 

Chairman of the Committee on Foreign Affairs of the House of Representatives and the Chairman of the Committee on Foreign Relations of the Senate—

(A) * * * 

* * * * * * * 

(g) WAIVER.—The President may waive the prohibitions contained in this section with respect to a specific transaction if—

(1) * * * 

(2) not less than 15 days prior to the proposed transaction, 

the President—

(A) * * * 

(B) submits to the øSpeaker of the House of Representatives and the chairman of the Committee on Foreign Relations of the Senate¿ Chairman of the Committee on Foreign Affairs of the House of Representatives and the Chairman of the Committee on Foreign Relations of the Senate 

a report containing—

(i) * * * 

* * * * * * * 

CHAPTER 5—øSPECIAL DEFENSE ACQUISITION FUND¿ 

FOREIGN MILITARY SALES STOCKPILE FUND 

SEC. 51. øSPECIAL DEFENSE ACQUISITION FUND¿ FOREIGN MILITARY SALES STOCKPILE FUND.—(a)(1) Under the direction of the 

President and in consultation with the Secretary of State, the Secretary of Defense shall establish a øSpecial Defense Acquisition 

Fund¿ Foreign Military Sales Stockpile Fund (hereafter in this 

chapter referred to as the ‘‘Fund’’), to be used as a revolving fund 

separate from other accounts, under the control of the Department 

of Defense, to finance the acquisition of defense articles and defense service in anticipation of their transfer pursuant to this Act, 

the Foreign Assistance Act of 1961, or as otherwise authorized by 


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law, to eligible foreign countries and international organizations, 

and may acquire such articles and services with the funds in the 

Fund as he may determine. Acquisition under this chapter of items 

for which the initial issue quantity requirements for United States 

Armed Forces have not been fulfilled and are not under current 

procurement contract shall be emphasized when compatible with 

security assistance requirements for the transfer of such items. 

* * * * * * * 

(4) The Fund shall also be used to acquire defense articles that 

are particularly suited for use for building the capacity of recipient 

countries and narcotics control purposes and are appropriate to the 

needs of recipient countries, such as small boats, planes (including 

helicopters), and communications equipment. 

(b) The Fund shall consist of— (1) * * * 

(2) collections from sales representing the value of asset use 

charges (including contractor rental payments for United 

States Government-owned plant and production equipment) 

and charges for the proportionate recoupment of nonrecurring 

research, development, and production costs, øand¿ 

(3) collections from sales made under letters of offer (or 

transfers made under the Foreign Assistance Act of 1961) of 

defense articles and defense services acquired under this chapter, representing the value of such items calculated in accordance with subparagraph (B) or (C) of section 21(a)(1) or section 

22 of this Act or section 644(m) of the Foreign Assistance Act 

of 1961, as appropriate, and 

(4) collections from leases made pursuant to section 61 of this 

Act, 

together with such funds as may be authorized and appropriated 

or otherwise made available for the purposes of the Fund. 

(c)(1) * * * 

ø(2) Amounts in the Fund shall be available for obligation in any 

fiscal year only to such extent or in such amounts as are provided 

in advance in appropriation Acts.¿ 

(2) Amounts credited to the Fund under subsection (b) shall remain available until expended. 

* * * * * * * 

CHAPTER 6—LEASES OF DEFENSE ARTICLES AND LOAN 

AUTHORITY FOR COOPERATIVE RESEARCH AND DEVELOPMENT PURPOSES

* * * * * * * 

SEC. 62. REPORTS TO THE CONGRESS.—(a) Before entering into or 

renewing any agreement with a foreign country or international organization to lease any defense article under this chapter, or to 

loan any defense article under chapter 2 of part II of the Foreign 

Assistance Act of 1961, for a period of one year or longer, the President shall transmit to the øSpeaker of the House of Representatives, and to the chairman of the Committee on Foreign Relations¿ 

Chairman of the Committee on Foreign Affairs of the House of Representatives and to the Chairman of the Committee on Foreign Relations of the Senate and the chairman of the Committee on Armed 

Services of the Senate, a written certification which specifies—


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(1) * * * 

* * * * * * * 

(c) The certification required by subsection (a) shall be transmitted—

(1) not less than 15 calendar days before the agreement is 

entered into or renewed in the case of an agreement with the 

North Atlantic Treaty Organization, any member country of 

that Organization or Australia, Japan, the Republic of Korea, 

Israel, or New Zealand; and 

* * * * * * * 

SEC. 63. LEGISLATIVE REVIEW.—(a)(1) * * * 

(2) In the case of an agreement described in paragraph (1) that 

is entered into with a member country of the North Atlantic Treaty 

Organization (NATO) or Australia, Japan, the Republic of Korea, 

Israel, or New Zealand, the limitations in paragraph (1) shall apply 

only if the agreement involves a lease or loan of— (A) * * * 

* * * * * * * 

CHAPTER 10—NUCLEAR NONPROLIFERATION 

CONTROLS 

SEC. 101. NUCLEAR ENRICHMENT TRANSFERS. 

(a) * * * 

* * * * * * * 

(b) CERTIFICATION BY PRESIDENT OF NECESSITY OF CONTINUED

ASSISTANCE; DISAPPROVAL BY CONGRESS.—(1) Notwithstanding subsection (a) of this section, the President may furnish assistance 

which would otherwise be prohibited under such subsection if he 

determines and certifies in writing to the øSpeaker of the House 

of Representatives and the Committee on Foreign Relations of the 

Senate¿ Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate that— (A) * * * 

* * * * * * * 

SEC. 102. NUCLEAR REPROCESSING TRANSFERS, ILLEGAL EXPORTS 

FOR NUCLEAR EXPLOSIVE DEVICES, TRANSFERS OF NUCLEAR EXPLOSIVE DEVICES, AND NUCLEAR DETONATIONS. 

(a) PROHIBITIONS ON ASSISTANCE TO COUNTRIES INVOLVED IN

TRANSFER OF NUCLEAR REPROCESSING EQUIPMENT, MATERIALS, OR

TECHNOLOGY; EXCEPTIONS; PROCEDURES APPLICABLE.—(1) * * * 

* * * * * * * 

(2) Notwithstanding paragraph (1) of this subsection, the President in any fiscal year may furnish assistance which would otherwise be prohibited under that paragraph if he determines and certifies in writing during that fiscal year to the øSpeaker of the 

House of Representatives and the Committee on Foreign Relations 

of the Senate¿ Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate 

that the termination of such assistance would be seriously prejudicial to the achievement of United States nonproliferation objectives or otherwise jeopardize the common defense and security. The 


erowe on PRODPC61 with HOUSE
59 

President shall transmit with such certification a statement setting 

forth the specific reasons therefor. 

* * * * * * * 

(b) PROHIBITIONS ON ASSISTANCE TO COUNTRIES INVOLVED IN

TRANSFER OR USE OF NUCLEAR EXPLOSIVE DEVICES; EXCEPTIONS; 

PROCEDURES APPLICABLE.—(1) * * * 

* * * * * * * 

(4)(A) Notwithstanding paragraph (1) of this subsection, the 

President may, for a period of not more than 30 days of continuous 

session, delay the imposition of sanctions which would otherwise be 

required under paragraph (1)(A) or (1)(B) of this subsection if the 

President first transmits to the øSpeaker of the House of Representatives, and to the chairman of the Committee on Foreign Relations¿ Chairman of the Committee on Foreign Affairs of the House 

of Representatives and to the Chairman of the Committee on Foreign Relations of the Senate, a certification that he has determined 

that an immediate imposition of sanctions on that country would 

be detrimental to the national security of the United States. Not 

more than one such certification may be transmitted for a country 

with respect to the same detonation, transfer, or receipt of a nuclear explosive device. 

* * * * * * * 

(5) Notwithstanding paragraph (1) of this subsection, if the Congress enacts a joint resolution under paragraph (4) of this subsection, the President may waive any sanction which would otherwise be required under paragraph (1)(A) or (1)(B) if he determines 

and certifies in writing to the øSpeaker of the House of Representatives and the Committee on Foreign Relations of the Senate¿ Committee on Foreign Affairs of the House of Representatives and the 

Committee on Foreign Relations of the Senate that the imposition 

of such sanction would be seriously prejudicial to the achievement 

of United States nonproliferation objectives or otherwise jeopardize 

the common defense and security. The President shall transmit 

with such certification a statement setting forth the specific reasons therefor. 

* * * * * * * 

FOREIGN ASSISTANCE ACT OF 1961 

* * * * * * * 

TITLE XII—FAMINE PREVENTION AND FREEDOM FROM 

HUNGER 

* * * * * * * 

PART II 

* * * * * * * 

CHAPTER 2—MILITARY ASSISTANCE

* * * * * * * 


erowe on PRODPC61 with HOUSE
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SEC. 514. STOCKPILING OF DEFENSE ARTICLES FOR FOREIGN

COUNTRIES.—(a) * * * 

(b)(1) * * * 

(2)(A) The value of such additions to stockpiles of defense articles in foreign countries shall not exceed $200,000,000 for each of fiscal 

years ø2007 and 2008¿ 2009 and 2010. 

* * * * * * * 

PART III 

* * * * * * * 

CHAPTER 2—ADMINISTRATIVE PROVISIONS

* * * * * * * 

SEC. 632. ALLOCATION AND REIMBURSEMENT AMONG AGENCIES.—

(a) * * * 

* * * * * * * 

(d)(1) Except as otherwise provided in section 506, reimbursement shall be made to any United States Government agency, from 

funds available for use under part II, for any assistance furnished 

under part II from, by, or through such agency. Such reimbursement shall be in an amount equal to the value (as defined in section 644(m)) of the defense articles or of the defense services (other 

than salaries of members of the Armed Forces of the United 

States), or other assistance furnished, plus expenses arising from 

or incident to operations under part II (other than salaries of the 

Armed Forces of the United States and unfunded estimated costs 

of civilian retirement and other benefits). The amount of such reimbursement shall be credited to the current applicable appropriations, funds, or accounts of such agency. 

(2) Notwithstanding provisions concerning the exclusion of the 

costs of salaries of members of the Armed Forces in section 503(a) 

of this Act and paragraph (1) of this subsection, the full cost of salaries of members of the reserve components of the Armed Forces 

(specified in section 10101 of title 10, United States Code) may, during each of fiscal years 2009 and 2010, be included in calculating 

pricing or value for reimbursement charged under section 503(a) of 

this Act and paragraph (1) of this subsection, respectively. 

* * * * * * * 

CHAPTER 3—MISCELLANEOUS PROVISIONS

* * * * * * * 

SEC. 655. ANNUAL MILITARY ASSISTANCE REPORT. 

(a) * * * 

(b) INFORMATION RELATING TO MILITARY ASSISTANCE AND MILITARY EXPORTS.—Each such report shall show the aggregate dollar 

value and quantity of defense articles (including excess defense articles), defense services, and international military education and 

training activities authorized by the United States and of such articles, services, and activities provided by the United States, excluding any activity that is reportable under title V of the National Security Act of 1947, to each foreign country and international orgaVerDate Aug 31 2005 00:57 May 13, 2008 Jkt 069006 PO 00000 Frm 00060 Fmt 6659 Sfmt 6601 E:\HR\OC\HR626.XXX HR626

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61 

nization. The report shall specify, by category, whether such defense articles— (1) * * * 

(2) were furnished with the financial assistance of the 

United States Government, including through loans and guarantees; øor¿ 

(3) were licensed for export under section 38 of the Arms Export Control Act and, if so, a specification of those defense articles that were exported during the fiscal year covered by the 

report, including, in the case of defense articles that are firearms controlled under category I of the United States Munitions List, a statement of the aggregate dollar value and quantity of semiautomatic assault weapons, or spare parts for such 

weapons, the manufacture, transfer, or possession of which is 

unlawful under section 922 of title 18, United States Code, 

that were licensed for export during the period covered by the 

reportø.¿; or 

(4) were exported without a license under section 38 of the 

Arms Export Control Act (22 U.S.C. 2778) pursuant to an exemption established under the International Traffic in Arms 

Regulations, other than defense articles exported in furtherance 

of a letter of offer and acceptance under the Foreign Military 

Sales program or a technical assistance or manufacturing license agreement, including the specific exemption provision in 

the regulation under which the export was made. 

* * * * * * * 

SECTION 12001 OF THE DEPARTMENT OF DEFENSE 

APPROPRIATIONS ACT, 2005 

GENERAL PROVISIONS, THIS CHAPTER

SEC. 12001. (a) * * * 

* * * * * * * 

(d) No transfer may be made under the authority of this section 

more than ø4¿ 6 years after the date of the enactment of this Act. 

* * * * * * * 


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EXCHANGE OF LETTERS—ARMED SERVICES COMMITTEE AND

FOREIGN AFFAIRS COMMITTEE

COMMITTEE ON ARMED SERVICES, 

Washington, DC, May 12, 2008. 

The Honorable HOWARD L. BERMAN, Chairman, 

Committee on Foreign Affairs, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: I write to confirm our mutual understanding regarding H.R. 5916, ‘‘To reform the administration of the 

Arms Export Control Act, and for other purposes.’’ This legislation 

contains subject matter within the jurisdiction of the House Committee on Armed Services. 

Our Committee recognizes the importance of H.R. 5916 and the 

need for the legislation to move expeditiously. Therefore, while we 

have a valid claim to jurisdiction over this legislation, the Committee on Armed Services will waive further consideration of H.R. 

5916. I do so with the understanding that by waiving further consideration of the bill, the Committee does not waive any future jurisdictional claims over similar measures. In the event of a conference with the Senate on this bill, the Committee on Armed Services reserves the right to seek the appointment of conferees. 

I would appreciate the inclusion of this letter and a copy of the 

response in your Committee’s report on H.R. 5916 and in the Congressional Record during consideration of the measure on the 

House floor. 

Very truly yours, 

IKE SKELTON, Chairman. 

IS:jfh 

cc: Honorable Nancy Pelosi 

Honorable Duncan Hunter 

Honorable Ileana Ros-Lehtinen 

Honorable John V. Sullivan 

COMMITTEE ON FOREIGN AFFAIRS, Washington, DC, May 12, 2008. 

The Honorable IKE SKELTON, Chairman, 

Committee on Armed Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: Thank you for your letter regarding H.R. 

5916, the Security Assistance and Arms Export Control Reform Act 

of 2008. 

I appreciate your willingness to work cooperatively on this legislation. I recognize that the bill contains provisions that fall within 

the jurisdiction of the Committee on Armed Services. I agree that 

the inaction of your Committee with respect to the bill does not in 

any way prejudice the Armed Services Committee’s jurisdictional 

interests and prerogatives regarding this bill or similar legislation. 


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Further, as to any House-Senate conference on the bill, I understand that your Committee reserves the right to seek the appointment of conferees for consideration of portions of the bill that are 

within the Committee’s jurisdiction. 

I will ensure that our exchange of letters is included in my Committee’s report on the bill and in the Congressional Record during 

consideration on the House floor. I look forward to working with 

you on this important legislation. If you wish to discuss this matter 

further, please contact me or have your staff contact my staff. 

Cordially, 

HOWARD L. BERMAN, Chairman. 

HLB:da/mco 

Æ 


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