Calendar No. 311

106TH CONGRESS

1ST SESSION S. 1712

[Report No. 106–180]

A BILL

To provide authority to control exports, and for

other purposes.

OCTOBER 8, 1999

Read twice and placed on the calendar
II

Calendar No. 311

106TH CONGRESS

1ST SESSION S. 1712

[Report No. 106–180]

To provide authority to control exports, and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 8, 1999

Mr. GRAMM, from the Committee on Banking, Housing, and Urban Affairs,

reported the following original bill; which was read twice and placed on

the calendar

A BILL

To provide authority to control exports, and for other

purposes.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Export Administration Act of 1999’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.
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TITLE I—GENERAL AUTHORITY

Sec. 101. Commerce Control List.

Sec. 102. Delegation of authority.

Sec. 103. Public information; consultation requirements.

Sec. 104. Right of export.

Sec. 105. Export control advisory committees.

Sec. 106. Prohibition on charging fees.

TITLE II—NATIONAL SECURITY EXPORT CONTROLS

Subtitle A—Authority and Procedures

Sec. 201. Authority for national security export controls.

Sec. 202. National Security Control List.

Sec. 203. Country tiers.

Sec. 204. Incorporated parts and components.

Sec. 205. Petition process for modifying export status.

Subtitle B—Foreign Availability and Mass-Market Status

Sec. 211. Determination of foreign availability and mass-market status.

Sec. 212. Presidential set-aside of foreign availability determination.

Sec. 213. Presidential set-aside of mass-market status determination.

Sec. 214. Office of Technology Evaluation.

TITLE III—FOREIGN POLICY EXPORT CONTROLS

Sec. 301. Authority for foreign policy export controls.

Sec. 302. Procedures for imposing controls.

Sec. 303. Criteria for foreign policy export controls.

Sec. 304. Presidential report before imposition of control.

Sec. 305. Imposition of controls.

Sec. 306. Deferral authority.

Sec. 307. Review, renewal, and termination.

Sec. 308. Termination of controls under this title.

Sec. 309. Compliance with international obligations.

Sec. 310. Designation of countries supporting international terrorism.

TITLE IV—EXEMPTION FOR AGRICULTURAL COMMODITIES,

MEDICINE, AND MEDICAL SUPPLIES

Sec. 401. Exemption for agricultural commodities, medicine, and medical supplies.

Sec. 402. Termination of export controls required by law.

Sec. 403. Exclusions.

TITLE V—PROCEDURES FOR EXPORT LICENSES AND

INTERAGENCY DISPUTE RESOLUTION

Sec. 501. Export license procedures.

Sec. 502. Interagency dispute resolution process.

TITLE VI—INTERNATIONAL ARRANGEMENTS; FOREIGN

BOYCOTTS; SANCTIONS; AND ENFORCEMENT

Sec. 601. International arrangements.

Sec. 602. Foreign boycotts.
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Sec. 603. Penalties.

Sec. 604. Multilateral export control regime violation sanctions.

Sec. 605. Missile proliferation control violations.

Sec. 606. Chemical and biological weapons proliferation sanctions.

Sec. 607. Enforcement.

Sec. 608. Administrative procedure.

TITLE VII—EXPORT CONTROL AUTHORITY AND REGULATIONS

Sec. 701. Export control authority and regulations.

Sec. 702. Confidentiality of information.

TITLE VIII—MISCELLANEOUS PROVISIONS

Sec. 801. Annual and periodic reports.

Sec. 802. Technical and conforming amendments.

Sec. 803. Savings provisions.

1 SEC. 2. DEFINITIONS.

2 In this Act:

3 (1) AFFILIATE.—The term ‘‘affiliate’’ includes

4 both governmental entities and commercial entities

5 that are controlled in fact by the government of a

6 country.

7 (2) AGRICULTURE COMMODITY.—The term ‘‘ag8 riculture commodity’’ means any agricultural com9 modity, food, fiber, or livestock (including livestock,

10 as defined in section 602(2) of the Emergency Live11 stock Feed Assistance Act of 1988 (title VI of the

12 Agricultural Act of 1949 (7 U.S.C. 1471(2))), and

13 including insects), and any product thereof.

14 (3) CONTROL OR CONTROLLED.—The terms

15 ‘‘control’’ and ‘‘controlled’’ mean any requirement,

16 condition, authorization, or prohibition on the export

17 or reexport of an item.
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1 (4) CONTROL LIST.—The term ‘‘Control List’’

2 means the Commerce Control List established under

3 section 101.

4 (5) CONTROLLED COUNTRY.—The term ‘‘con5 trolled country’’ means a country with respect to

6 which exports are controlled under section 201 or

7 301.

8 (6) CONTROLLED ITEM.—The term ‘‘controlled

9 item’’ means an item the export of which is con10 trolled under this Act.

11 (7) COUNTRY.—The term ‘‘country’’ means a

12 sovereign country or an autonomous customs terri13 tory.

14 (8) COUNTRY SUPPORTING INTERNATIONAL

15 TERRORISM.—The term ‘‘country supporting inter16 national terrorism’’ means a country designated by

17 the Secretary of State pursuant to section 310.

18 (9) DEPARTMENT.—The term ‘‘Department’’

19 means the Department of Commerce.

20 (10) EXPORT.—

21 (A) The term ‘‘export’’ means—

22 (i) an actual shipment, transfer, or

23 transmission of an item out of the United

24 States;
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1 (ii) a transfer to any person of an

2 item either within the United States or

3 outside of the United States with the

4 knowledge or intent that the item will be

5 shipped, transferred, or transmitted to an

6 unauthorized recipient outside the United

7 States; and

8 (iii) a transfer of an item in the

9 United States to an embassy or affiliate of

10 a country, which shall be considered an ex11 port to that country.

12 (B) The term includes a reexport.

13 (11) FOREIGN AVAILABILITY STATUS.—The

14 term ‘‘foreign availability status’’ means the status

15 described in section 211(d)(1).

16 (12) FOREIGN PERSON.—The term ‘‘foreign

17 person’’ means—

18 (A) an individual who is not—

19 (i) a United States citizen;

20 (ii) an alien lawfully admitted for per21 manent residence to the United States; or

22 (iii) a protected individual as defined

23 in section 274B(a)(3) of the Immigration

24 and Nationality Act. (8 U.S.C.

25 1324b(a)(3));
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1 (B) any corporation, partnership, business

2 association, society, trust, organization, or other

3 nongovernmental entity created or organized

4 under the laws of a foreign country or that has

5 its principal place of business outside the

6 United States; and

7 (C) any governmental entity of a foreign

8 country.

9 (13) ITEM.—

10 (A) IN GENERAL.—The term ‘‘item’’

11 means any good, service, or technology.

12 (B) OTHER DEFINITIONS.—In this para13 graph:

14 (i) GOOD.—The term ‘‘good’’ means

15 any article, natural or manmade substance,

16 material, supply or manufactured product,

17 including inspection and test equipment,

18 including source code, and excluding tech19 nical data.

20 (ii) TECHNOLOGY.—The term ‘‘tech21 nology’’ means specific information that is

22 necessary for the development, production,

23 or use of an item, and takes the form of

24 technical data or technical assistance.
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1 (iii) SERVICE.—The term ‘‘service’’

2 means any act of assistance, help or aid.

3 (14) MASS-MARKET STATUS.—The term ‘‘mass4 market status’’ means the status described in section

5 211(d)(2).

6 (15) MULTILATERAL EXPORT CONTROL RE7 GIME.—The term ‘‘multilateral export control re8 gime’’ means an international agreement or arrange9 ment among two or more countries, including the

10 United States, a purpose of which is to coordinate

11 national export control policies of its members re12 garding certain items. The term includes regimes

13 such as the Australia Group, the Wassenaar Ar14 rangement, the Missile Technology Control Regime

15 (MTCR), and the Nuclear Suppliers’ Group Dual

16 Use Arrangement.

17 (16) NATIONAL SECURITY CONTROL LIST.—The

18 term ‘‘National Security Control List’’ means the

19 list established under section 202(a).

20 (17) PERSON.—The term ‘‘person’’ includes—

21 (A) any individual, or partnership, corpora22 tion, business association, society, trust, organi23 zation, or any other group created or organized

24 under the laws of a country; and
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1 (B) any government, or any governmental

2 entity.

3 (18) REEXPORT.—The term ‘‘reexport’’ means

4 the shipment, transfer, transshipment, or diversion

5 of items from one foreign country to another.

6 (19) SECRETARY.—The term ‘‘Secretary’’

7 means the Secretary of Commerce.

8 (20) UNITED STATES.—The term ‘‘United

9 States’’ means the States of the United States, the

10 District of Columbia, and any commonwealth, terri11 tory, dependency, or possession of the United States,

12 and includes the outer Continental Shelf, as defined

13 in section 2(a) of the Outer Continental Shelf Lands

14 Act (42 U.S.C. 1331(a)).

15 (21) UNITED STATES PERSON.—The term

16 ‘‘United States person’’ means—

17 (A) any United States citizen, resident, or

18 national (other than an individual resident out19 side the United States who is employed by a

20 person other than a United States person);

21 (B) any domestic concern (including any

22 permanent domestic establishment of any for23 eign concern); and

24 (C) any foreign subsidiary or affiliate (in25 cluding any permanent foreign establishment)
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1 of any domestic concern which is controlled in

2 fact by such domestic concern, as determined

3 under regulations prescribed by the President.

4 TITLE I—GENERAL AUTHORITY

5 SEC. 101. COMMERCE CONTROL LIST.

6 (a) IN GENERAL.—Under such conditions as the Sec7 retary may impose, consistent with the provisions of this

8 Act, the Secretary—

9 (1) shall establish and maintain a Commerce

10 Control List (in this Act referred to as the ‘‘Control

11 List’’) consisting of items the export of which are

12 subject to licensing or other authorization or re13 quirement; and

14 (2) may require any type of license, or other

15 authorization, including recordkeeping and report16 ing, appropriate to the effective and efficient imple17 mentation of this Act with respect to the export of

18 an item on the Control List.

19 (b) TYPES OF LICENSE OR OTHER AUTHORIZA20 TION.—The types of license or other authorization re21 ferred to in subsection (a)(2) include the following:

22 (1) SPECIFIC EXPORTS.—A license that author23 izes a specific export.
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1 (2) MULTIPLE EXPORTS.—A license that au2 thorizes multiple exports in lieu of a license for each

3 such export.

4 (3) NOTIFICATION IN LIEU OF LICENSE.— A

5 notification in lieu of a license that authorizes a spe6 cific export or multiple exports subject to the condi7 tion that the exporter file with the Department ad8 vance notification of the intent to export in accord9 ance with regulations prescribed by the Secretary.

10 (4) LICENSE EXCEPTION.—Authority to export

11 an item on the Control List without prior license or

12 notification in lieu of a license.

13 (c) AFTER-MARKET SERVICE AND REPLACEMENT

14 PARTS.—A license or other authorization to export an

15 item under this Act shall not be required for an exporter

16 to provide after-market service or replacement parts, to

17 replace on a one-for-one basis parts that were in an item

18 that was lawfully exported from the United States,

19 unless—

20 (1) the Secretary determines that such license

21 or other authorization is required to export such

22 parts; or

23 (2) the after-market service or replacement

24 parts materially enhance the capability of an item

25 which was the basis for the item being controlled.
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1 (d) INCIDENTAL TECHNOLOGY.—A license or other

2 authorization to export an item under this Act includes

3 authorization to export technology related to the item, if

4 the level of the technology does not exceed the minimum

5 necessary to install, repair, maintain, inspect, operate, or

6 use the item.

7 (e) REGULATIONS.—The Secretary may prescribe

8 such regulations as are necessary to carry out the provi9 sions of this Act.

10 SEC. 102. DELEGATION OF AUTHORITY.

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

12 (b) and subject to the provisions of this Act, the President

13 may delegate the power, authority, and discretion con14 ferred upon the President by this Act to such depart15 ments, agencies, and officials of the Government as the

16 President considers appropriate.

17 (b) EXCEPTIONS.—

18 (1) DELEGATION TO APPOINTEES CONFIRMED

19 BY SENATE.—No authority delegated to the Presi20 dent under this Act may be delegated by the Presi21 dent to, or exercised by, any official of any depart22 ment or agency the head of which is not appointed

23 by the President, by and with the advice and consent

24 of the Senate.
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1 (2) OTHER LIMITATIONS.—The President may

2 not delegate or transfer the President’s power, au3 thority, or discretion to overrule or modify any rec4 ommendation or decision made by the Secretary, the

5 Secretary of Defense, or the Secretary of State

6 under this Act.

7 SEC. 103. PUBLIC INFORMATION; CONSULTATION REQUIRE8 MENTS.

9 (a) PUBLIC INFORMATION.—The Secretary shall

10 keep the public fully informed of changes in export control

11 policy and procedures instituted in conformity with this

12 Act.

13 (b) CONSULTATION WITH PERSONS AFFECTED.—

14 The Secretary shall consult regularly with representatives

15 of a broad spectrum of enterprises, labor organizations,

16 and citizens interested in or affected by export controls

17 in order to obtain their views on United States export con18 trol policy and the foreign availability or mass-market sta19 tus of controlled items.

20 SEC. 104. RIGHT OF EXPORT.

21 No license or other authorization to export may be

22 required under this Act, or under regulations issued under

23 this Act, except to carry out the provisions of this Act.
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1 SEC. 105. EXPORT CONTROL ADVISORY COMMITTEES.

2 (a) APPOINTMENT.—Upon the Secretary’s own initia3 tive or upon the written request of representatives of a

4 substantial segment of any industry which produces any

5 items subject to export controls under this Act or under

6 the International Emergency Economic Powers Act, or

7 being considered for such controls, the Secretary may ap8 point export control advisory committees with respect to

9 any such items. Each such committee shall consist of rep10 resentatives of United States industry and Government,

11 including the Department of Commerce and other appro12 priate departments and agencies of the Government. The

13 Secretary shall permit the widest possible participation by

14 the business community on the export control advisory

15 committees.

16 (b) FUNCTIONS.—

17 (1) IN GENERAL.—Export control advisory

18 committees appointed under subsection (a) shall ad19 vise and assist the Secretary, and any other depart20 ment, agency, or official of the Government carrying

21 out functions under this Act, on actions (including

22 all aspects of controls imposed or proposed) designed

23 to carry out the provisions of this Act concerning the

24 items with respect to which such export control advi25 sory committees were appointed.
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1 (2) OTHER CONSULTATIONS.—Nothing in para2 graph (1) shall prevent the United States Govern3 ment from consulting, at any time, with any person

4 representing an industry or the general public, re5 gardless of whether such person is a member of an

6 export control advisory committee. Members of the

7 public shall be given a reasonable opportunity, pur8 suant to regulations prescribed by the Secretary, to

9 present evidence to such committees.

10 (c) REIMBURSEMENT OF EXPENSES.—Upon the re11 quest of any member of any export control advisory com12 mittee appointed under subsection (a), the Secretary may,

13 if the Secretary determines it to be appropriate, reimburse

14 such member for travel, subsistence, and other necessary

15 expenses incurred by such member in connection with the

16 duties of such member.

17 (d) CHAIRPERSON.—Each export control advisory

18 committee appointed under subsection (a) shall elect a

19 chairperson, and shall meet at least every 3 months at

20 the call of the chairperson, unless the chairperson deter21 mines, in consultation with the other members of the com22 mittee, that such a meeting is not necessary to achieve

23 the purposes of this section. Each such committee shall

24 be terminated after a period of 2 years, unless extended

25 by the Secretary for additional periods of 2 years each.
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1 The Secretary shall consult with each such committee on

2 such termination or extension of that committee.

3 (e) ACCESS TO INFORMATION.—To facilitate the

4 work of the export control advisory committees appointed

5 under subsection (a), the Secretary, in conjunction with

6 other departments and agencies participating in the ad7 ministration of this Act, shall disclose to each such com8 mittee adequate information, consistent with national se9 curity, pertaining to the reasons for the export controls

10 which are in effect or contemplated for the items or poli11 cies for which that committee furnishes advice. Informa12 tion provided by the export control advisory committees

13 shall not be subject to disclosure under section 552 of title

14 5, United States Code, and such information shall not be

15 published or disclosed unless the Secretary determines

16 that the withholding thereof is contrary to the national

17 interest.

18 SEC. 106. PROHIBITION ON CHARGING FEES.

19 No fee may be charged in connection with the submis20 sion or processing of an application for an export license

21 under this Act.
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1 TITLE II—NATIONAL SECURITY

2 EXPORT CONTROLS

3 Subtitle A—Authority and

4 Procedures

5 SEC. 201. AUTHORITY FOR NATIONAL SECURITY EXPORT

6 CONTROLS.

7 (a) AUTHORITY.—

8 (1) IN GENERAL.—In order to carry out the

9 purposes set forth in subsection (b), the President

10 may, in accordance with the provisions of this Act,

11 prohibit, curtail, or require a license, or other au12 thorization for the export of any item subject to the

13 jurisdiction of the United States or exported by any

14 person subject to the jurisdiction of the United

15 States. The President may also require record16 keeping and reporting with respect to the export of

17 such item.

18 (2) EXERCISE OF AUTHORITY.—The authority

19 contained in this subsection shall be exercised by the

20 Secretary, in consultation with the Secretary of De21 fense, the intelligence agencies, and such other de22 partments and agencies as the Secretary considers

23 appropriate.

24 (b) PURPOSES.—The purposes of national security

25 export controls are the following:
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1 (1) To restrict the export of items that would

2 contribute to the military potential of countries so as

3 to prove detrimental to the national security of the

4 United States or its allies.

5 (2) To stem the proliferation of weapons of

6 mass destruction, and the means to deliver them,

7 and other significant military capabilities by—

8 (A) leading international efforts to control

9 the proliferation of chemical and biological

10 weapons, nuclear explosive devices, missile deliv11 ery systems, key-enabling technologies, and

12 other significant military capabilities;

13 (B) controlling involvement of United

14 States persons in, and contributions by United

15 States persons to, foreign programs intended to

16 develop weapons of mass destruction, missiles,

17 and other significant military capabilities, and

18 the means to design, test, develop, produce,

19 stockpile, or use them; and

20 (C) implementing international treaties or

21 other agreements or arrangements concerning

22 controls on exports of designated items, reports

23 on the production, processing, consumption,

24 and exports and imports of such items, and

25 compliance with verification programs.
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1 (3) To deter acts of international terrorism.

2 (c) END USE AND END USER CONTROLS.—Notwith3 standing any other provision of this title, controls may be

4 imposed, based on the end use or end user, on the export

5 of any item, that could materially contribute to the pro6 liferation of weapons of mass destruction or the means

7 to deliver them.

8 SEC. 202. NATIONAL SECURITY CONTROL LIST.

9 (a) ESTABLISHMENT OF LIST.—

10 (1) ESTABLISHMENT.—The Secretary shall es11 tablish and maintain a National Security Control

12 List as part of the Control List.

13 (2) CONTENTS.—The National Security Control

14 List shall be composed of a list of items the export

15 of which is controlled for national security purposes

16 under this title.

17 (3) IDENTIFICATION OF ITEMS FOR NATIONAL

18 SECURITY CONTROL LIST.—The Secretary, with the

19 concurrence of the Secretary of Defense and in con20 sultation with the head of any other department or

21 agency of the United States that the Secretary con22 siders appropriate, shall identify the items to be in23 cluded on the National Security Control List.

24 (b) RISK ASSESSMENT.—
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1 (1) REQUIREMENT.—The Secretary shall, in es2 tablishing and maintaining the National Security

3 Control List, balance the national security risks of

4 not controlling the export of an item against the eco5 nomic costs of controlling the item, taking into con6 sideration the risk factors set forth in paragraph

7 (2).

8 (2) RISK FACTORS.—The risk factors referred

9 to in paragraph (1), with respect to each item, are

10 as follows:

11 (A) The characteristics of the item.

12 (B) The threat, if any, to the United

13 States or the national security interest of the

14 United States from the misuse or diversion of

15 such item.

16 (C) The controllability of the item.

17 (D) Any other risk factor the Secretary

18 deems appropriate to consider.

19 SEC. 203. COUNTRY TIERS.

20 (a) IN GENERAL.—

21 (1) ESTABLISHMENT AND ASSIGNMENT.—In

22 administering export controls for national security

23 purposes under this title, the President shall, not

24 later than 120 days after the date of enactment of

25 this Act—
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1 (A) establish and maintain a country

2 tiering system in accordance with subsection

3 (b); and

4 (B) based on the assessments required

5 under subsection (c), assign each country to a

6 tier for each item or group of items the export

7 of which is controlled for national security pur8 poses under this title.

9 (2) CONSULTATION.—The establishment and

10 assignment of country tiers under this section shall

11 be made after consultation with the Secretary, the

12 Secretary of Defense, the Secretary of State, the in13 telligence agencies, and such other departments and

14 agencies as the President considers appropriate.

15 (3) REDETERMINATION AND REVIEW OF AS16 SIGNMENTS.—The President may redetermine the

17 assignment of a country to a particular tier at any

18 time and shall review and, as the President con19 siders appropriate, reassign country tiers on an on20 going basis.

21 (4) EFFECTIVE DATE OF TIER ASSIGNMENT.—

22 An assignment of a country to a particular tier shall

23 take effect on the date on which notice of the assign24 ment is published in the Federal Register.

25 (b) TIERS.—
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1 (1) IN GENERAL.—The President shall establish

2 a country tiering system consisting of 5 tiers for

3 purposes of this section, ranging from tier 1 through

4 tier 5.

5 (2) RANGE.—Countries that represent the low6 est risk of diversion or misuse of an item on the Na7 tional Security Control List shall be assigned to tier

8 1. Countries that represent the highest risk of diver9 sion or misuse of an item on the National Security

10 Control List shall be assigned to tier 5.

11 (3) OTHER COUNTRIES.—Countries that fall be12 tween the lowest and highest risk to the national se13 curity interest of the United States with respect to

14 the risk of diversion or misuse of an item on the Na15 tional Security Control List shall be assigned to tier

16 2, 3, or 4, respectively, based on the assessments re17 quired under subsection (c).

18 (c) ASSESSMENTS.—The President shall make an as19 sessment of each country in assigning a country tier tak20 ing into consideration the following risk factors:

21 (1) The present and potential relationship of

22 the country with the United States.

23 (2) The present and potential relationship of

24 the country with countries friendly to the United
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1 States and with countries hostile to the United

2 States.

3 (3) The country’s capabilities regarding chem4 ical, biological, and nuclear weapons and the coun5 try’s membership in, and level of compliance with,

6 relevant multilateral export control regimes.

7 (4) The country’s position regarding missile

8 systems and the country’s membership in, and level

9 of compliance with, relevant multilateral export con10 trol regimes.

11 (5) The country’s other military capabilities

12 and the potential threat posed by the country to the

13 United States or its allies.

14 (6) The effectiveness of the country’s export

15 control system.

16 (7) The level of the country’s cooperation with

17 United States export control enforcement and other

18 efforts.

19 (8) The risk of export diversion by the country

20 to a higher tier country.

21 (9) The designation of the country as a country

22 supporting international terrorism under section

23 310.
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1 SEC. 204. INCORPORATED PARTS AND COMPONENTS.

2 (a) EXPORT OF ITEMS CONTAINING CONTROLLED

3 PARTS AND COMPONENTS.—Controls may not be imposed

4 under this title or any other provision of law on an item

5 solely because the item contains parts or components sub6 ject to export controls under this title, if the parts or

7 components—

8 (1) are essential to the functioning of the item,

9 (2) are customarily included in sales of the item

10 in countries other than controlled countries, and

11 (3) comprise 25 percent or less of the total

12 value of the item,

13 unless the item itself, if exported, would by virtue of

14 the functional characteristics of the item as a whole

15 make a significant contribution to the military or

16 proliferation potential of a controlled country or end

17 user which would prove detrimental to the national

18 security of the United States.

19 (b) REEXPORTS OF FOREIGN-MADE ITEMS INCOR20 PORATING UNITED STATES CONTROLLED CONTENT.—

21 (1) IN GENERAL.—No authority or permission

22 may be required under this title to reexport to a

23 country (other than a country designated as a coun24 try supporting international terrorism pursuant to

25 section 310) an item that is produced in a country

26 other than the United States and incorporates parts
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1 or components that are subject to the jurisdiction of

2 the United States, if the value of the controlled

3 United States content of the item produced in such

4 other country is 25 percent or less of the total value

5 of the item.

6 (2) REEXPORT TO CERTAIN TERRORIST COUN7 TRIES.—No authority or permission may be required

8 under this title to reexport to a country designated

9 as a country supporting international terrorism pur10 suant to section 310 an item that is produced in a

11 country other than the United States and incor12 porates parts or components that are subject to the

13 jurisdiction of the United States, if the value of the

14 controlled United States content of the item pro15 duced in such other country is 10 percent or less of

16 the total value of the item.

17 (3) DEFINITION OF CONTROLLED UNITED

18 STATES CONTENT.—For purposes of this paragraph,

19 the term ‘‘controlled United States content’’ of an

20 item means those parts or components that—

21 (A) are subject to the jurisdiction of the

22 United States;

23 (B) are incorporated into the item; and

24 (C) would, at the time of the reexport, re25 quire a license under this title if exported from
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1 the United States to a country to which the

2 item is to be reexported.

3 SEC. 205. PETITION PROCESS FOR MODIFYING EXPORT

4 STATUS.

5 (a) ESTABLISHMENT.—The Secretary shall establish

6 a process for interested persons to petition the Secretary

7 to change the status of an item on the National Security

8 Control List.

9 (b) EVALUATIONS AND DETERMINATIONS.—Evalua10 tions and determinations with respect to a petition filed

11 pursuant to this section shall be made in accordance with

12 the procedures set forth in section 202.

13 Subtitle B—Foreign Availability

14 and Mass-Market Status

15 SEC. 211. DETERMINATION OF FOREIGN AVAILABILITY AND

16 MASS-MARKET STATUS.

17 (a) IN GENERAL.—The Secretary shall—

18 (1) on a continuing basis,

19 (2) upon a request from the Office of Tech20 nology Evaluation, or

21 (3) upon receipt of a petition filed by an inter22 ested party,

23 review and determine the foreign availability and the

24 mass-market status of any item the export of which is con25 trolled under this title.
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1 (b) PETITION AND CONSULTATION.—The Secretary

2 shall establish a process for an interested party to petition

3 the Secretary for a determination that an item has a for4 eign availability or mass-market status. In evaluating and

5 making a determination with respect to a petition filed

6 under this section, the Secretary shall consult with the

7 Secretary of Defense and other appropriate Government

8 agencies and with the Office of Technology Evaluation (es9 tablished pursuant to section 214).

10 (c) RESULT OF DETERMINATION.—

11 (1) IN GENERAL.—In any case in which the

12 Secretary determines, in accordance with procedures

13 and criteria which the Secretary shall by regulation

14 establish, that an item described in subsection (a)

15 has—

16 (A) a foreign availability status, or

17 (B) a mass-market status,

18 the Secretary shall notify the President (and other

19 appropriate departments and agencies) and publish

20 the notice of the determination in the Federal Reg21 ister. The Secretary’s determination shall become

22 final 30 days after the date the notice is published,

23 the item shall be removed from the National Secu24 rity Control List, and a license or other authoriza25 tion shall not be required under this title or under
27

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1 section 1211 of the National Defense Authorization

2 Act of Fiscal Year 1998 with respect to the item,

3 unless the President makes a determination de4 scribed in section 212 or 213 with respect to the

5 item in that 30-day period.

6 (2) CONFORMING AMENDMENT.—Section

7 1211(d) of the National Defense Authorization Act

8 for Fiscal Year 1998 is amended in the second sen9 tence by striking ‘‘180’’ and inserting ‘‘60’’.

10 (d) CRITERIA FOR DETERMINING FOREIGN AVAIL11 ABILITY AND MASS-MARKET STATUS.—

12 (1) FOREIGN AVAILABILITY STATUS.—The Sec13 retary shall determine that an item has foreign

14 availability status under this subtitle, if the item (or

15 a substantially identical or directly competitive

16 item)—

17 (A) is available to controlled countries

18 from sources outside the United States, includ19 ing countries that participate with the United

20 States in multilateral export controls;

21 (B) can be acquired at a price that is not

22 excessive when compared to the price at which

23 a controlled country could acquire such item

24 from sources within the United States in the

25 absence of export controls; and
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1 (C) is available in sufficient quantity so

2 that the requirement of a license or other au3 thorization with respect to the export of such

4 item is or would be ineffective.

5 (2) MASS-MARKET STATUS.—The Secretary

6 shall determine that an item has mass-market status

7 under this subtitle, if the item (or a substantially

8 identical or directly competitive item)—

9 (A) is produced and is available for sale in

10 a large volume to multiple potential purchasers;

11 (B) is widely distributed through normal

12 commercial channels, such as retail stores, di13 rect marketing catalogues, electronic commerce,

14 and other channels;

15 (C) is conducive to shipment and delivery

16 by generally accepted commercial means of

17 transport; and

18 (D) may be used for its normal intended

19 purpose without substantial and specialized

20 service provided by the manufacturer, dis21 tributor, or other third party.

22 (3) SPECIAL RULES.—For purposes of this

23 subtitle—

24 (A) SUBSTANTIALLY IDENTICAL ITEM.—

25 The determination of whether an item in rela-
29

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1 tion to another item is a substantially identical

2 item shall include a fair assessment of end-uses,

3 the properties, nature, and quality of the item.

4 (B) DIRECTLY COMPETITIVE ITEM.—

5 (i) IN GENERAL.—The determination

6 of whether an item in relation to another

7 item is a directly competitive item shall in8 clude a fair assessment of whether the

9 item, although not substantially identical

10 in its intrinsic or inherent characteristics,

11 is substantially equivalent for commercial

12 purposes and may be adapted for substan13 tially the same uses.

14 (ii) EXCEPTION.—An item is not di15 rectly competitive with a controlled item if

16 the item is substantially inferior to the

17 controlled item with respect to characteris18 tics that resulted in the export of the item

19 being controlled.

20 SEC. 212. PRESIDENTIAL SET-ASIDE OF FOREIGN AVAIL21 ABILITY DETERMINATION.

22 (a) CRITERIA FOR PRESIDENTIAL SET-ASIDE.—

23 (1) POTENTIAL FOR ELIMINATION.—If the

24 President determines that—
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1 (A) the absence of export controls with re2 spect to an item would prove detrimental to the

3 national security of the United States, and

4 (B) there is a high probability that the for5 eign availability status of an item will be elimi6 nated through multilateral negotiations within a

7 reasonable period of time taking into account

8 the characteristics of the item,

9 the President may set aside the Secretary’s deter10 mination of foreign availability status with respect to

11 the item.

12 (2) REPORT TO CONGRESS.—The President

13 shall promptly—

14 (A) report any set-aside determination de15 scribed in paragraph (1) to the Committee on

16 Banking, Housing, and Urban Affairs of the

17 Senate and the Committee on International Re18 lations of the House of Representatives; and

19 (B) publish the determination in the Fed20 eral Register.

21 (b) PRESIDENTIAL ACTION IN CASE OF SET22 ASIDE.—

23 (1) IN GENERAL.—

24 (A) NEGOTIATIONS.—In any case in which

25 export controls are maintained on an item be-
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1 cause the President has made a determination

2 under subsection (a), the President shall ac3 tively pursue negotiations with the governments

4 of the appropriate foreign countries for the pur5 pose of eliminating such availability.

6 (B) REPORT TO CONGRESS.—Not later

7 than the date the President begins negotiations,

8 the President shall notify in writing the Com9 mittee on Banking, Housing, and Urban Affairs

10 of the Senate and the Committee on Inter11 national Relations of the House of Representa12 tives that the President has begun such nego13 tiations and why the President believes it is im14 portant to the national security that export con15 trols on the item involved be maintained.

16 (2) PERIODIC REVIEW OF DETERMINATION.—

17 The President shall review a determination described

18 in subsection (a) at least every 6 months. Promptly

19 after each review is completed, the Secretary shall

20 submit to the committees of Congress referred to in

21 paragraph (1)(B) a report on the results of the re22 view, together with the status of multilateral nego23 tiations to eliminate the foreign availability of the

24 item.
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1 (3) EXPIRATION OF PRESIDENTIAL SET2 ASIDE.—A determination by the President described

3 in subsection (a) shall cease to apply with respect to

4 an item on the earlier of—

5 (A) the date that is 6 months after the date

6 on which the determination is made under sub7 section (a), if the President has not commenced

8 multilateral negotiations to eliminate the for9 eign availability of the item within that 6-month

10 period;

11 (B) the date on which the negotiations de12 scribed in paragraph (1) have terminated with13 out achieving an agreement to eliminate foreign

14 availability;

15 (C) the date on which the President deter16 mines that there is not a high probability of

17 eliminating foreign availability of the item

18 through negotiation; or

19 (D) the date that is 18 months after the

20 date on which the determination described in

21 subsection (a) is made if the President has been

22 unable to achieve an agreement to eliminate

23 foreign availability within that 18-month period.

24 (4) ACTION ON EXPIRATION OF PRESIDENTIAL

25 SET-ASIDE.—Upon the expiration of a Presidential
33

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1 set-aside under paragraph (3) with respect to an

2 item, the Secretary shall not require a license or

3 other authorization to export the item.

4 SEC. 213. PRESIDENTIAL SET-ASIDE OF MASS-MARKET STA5 TUS DETERMINATION.

6 (a) CRITERIA FOR SET-ASIDE.—If the President de7 termines that—

8 (1) decontrolling or failing to control an item

9 constitutes a serious threat to the national security

10 of the United States, and

11 (2) export controls on the item would be likely

12 to diminish the threat to, and advance the national

13 security interests of, the United States,

14 the President may set aside the Secretary’s determination

15 of mass-market status with respect to the item.

16 (b) PRESIDENTIAL ACTION IN CASE OF SET17 ASIDE.—

18 (1) IN GENERAL.—In any case in which export

19 controls are maintained on an item because the

20 President has made a determination under sub21 section (a), the President shall publish notice of the

22 determination in the Federal Register not later than

23 30 days after the Secretary publishes notice of the

24 Secretary’s determination that an item has mass25 market status.
34

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1 (2) PERIODIC REVIEW OF DETERMINATION.—

2 The President shall review a determination made

3 under subsection (a) at least every 6 months.

4 Promptly after each review is completed, the Sec5 retary shall submit a report on the results of the re6 view to the Committee on Banking, Housing, and

7 Urban Affairs of the Senate and the Committee on

8 International Relations of the House of Representa9 tives.

10 SEC. 214. OFFICE OF TECHNOLOGY EVALUATION.

11 (a) IN GENERAL.—The Secretary shall establish in

12 the Department of Commerce an Office of Technology

13 Evaluation (in this subtitle referred to as the ‘‘Office’’),

14 which shall be under the direction of the Secretary. The

15 Office shall be responsible for gathering and analyzing all

16 the necessary information in order for the Secretary to

17 make determinations of foreign availability and mass-mar18 ket status under this Act.

19 (b) RESPONSIBILITIES.—The Office shall be respon20 sible for—

21 (1) conducting foreign availability assessments

22 to determine whether a controlled item is available

23 to controlled countries and whether requiring a li24 cense, or denial of a license for the export of such

25 item, is or would be ineffective;
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1 (2) conducting mass-market assessments to de2 termine whether a controlled item is available to

3 controlled countries because of the mass-market sta4 tus of the item;

5 (3) monitoring and evaluating worldwide tech6 nological developments in industry sectors critical to

7 the national security interests of the United States

8 to determine foreign availability and mass-market

9 status of controlled items;

10 (4) monitoring and evaluating multilateral ex11 port control regimes and foreign government export

12 control policies and practices that affect the national

13 security interests of the United States;

14 (5) conducting assessments of United States in15 dustrial sectors critical to the United States defense

16 industrial base and how the sectors are affected by

17 technological developments, technology transfers,

18 and foreign competition; and

19 (6) conducting assessments of the impact of

20 United States export control policies on—

21 (A) United States industrial sectors critical

22 to the national security interests of the United

23 States; and

24 (B) the United States economy in general.
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1 (c) REPORTS TO CONGRESS.—The Secretary shall

2 make available to the Committee on International Rela3 tions of the House of Representatives and the Committee

4 on Banking, Housing, and Urban Affairs of the Senate

5 as part of the Secretary’s annual report required under

6 section 801 information on the operations of the Office,

7 and on improvements in the Government’s ability to assess

8 foreign availability and mass-market status, during the

9 fiscal year preceding the report, including information on

10 the training of personnel, and the use of Commercial Serv11 ice Officers of the United States and Foreign Commercial

12 Service to assist in making determinations. The informa13 tion shall also include a description of representative de14 terminations made under this Act during the preceding

15 fiscal year that foreign availability or mass-market status

16 did or did not exist (as the case may be), together with

17 an explanation of the determinations.

18 (d) SHARING OF INFORMATION.—Each department

19 or agency of the United States, including any intelligence

20 agency, and all contractors with any such department or

21 agency, shall, consistent with the protection of intelligence

22 sources and methods, furnish information to the Office

23 concerning foreign availability and the mass-market status

24 of items subject to export controls under this Act.
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1 TITLE III—FOREIGN POLICY

2 EXPORT CONTROLS

3 SEC. 301. AUTHORITY FOR FOREIGN POLICY EXPORT CON4 TROLS.

5 (a) AUTHORITY.—

6 (1) IN GENERAL.—In order to carry out the

7 purposes set forth in subsection (b), the President

8 may, in accordance with the provisions of this Act,

9 prohibit, curtail, or require a license, other author10 ization, recordkeeping, or reporting for the export of

11 any item subject to the jurisdiction of the United

12 States or exported by any person subject to the ju13 risdiction of the United States.

14 (2) EXERCISE OF AUTHORITY.—The authority

15 contained in this subsection shall be exercised by the

16 Secretary, in consultation with the Secretary of

17 State and such other departments and agencies as

18 the Secretary considers appropriate.

19 (b) PURPOSES.—The purposes of foreign policy ex20 port controls are the following:

21 (1) To promote the foreign policy objectives of

22 the United States, consistent with the purposes of

23 this section and the provisions of this Act.

24 (2) To promote international peace, stability,

25 and respect for fundamental human rights.
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1 (3) To use export controls to deter and punish

2 acts of international terrorism and to encourage

3 other countries to take immediate steps to prevent

4 the use of their territories or resources to aid, en5 courage, or give sanctuary to those persons involved

6 in directing, supporting, or participating in acts of

7 international terrorism.

8 (c) EXCEPTION.—The President may not control

9 under this title the export from a foreign country (whether

10 or not by a United States person) of any item produced

11 or originating in a foreign country that contains parts or

12 components produced or originating in the United States.

13 (d) CONTRACT SANCTITY.—

14 (1) IN GENERAL.—The President may not pro15 hibit the export of any item under this title if that

16 item is to be exported—

17 (A) in performance of a binding contract,

18 agreement, or other contractual commitment

19 entered into before the date on which the Presi20 dent reports to Congress the President’s inten21 tion to impose controls on that item under this

22 title; or

23 (B) under a license or other authorization

24 issued under this Act before the earlier of the

25 date on which the control is initially imposed or
39

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1 the date on which the President reports to Con2 gress the President’s intention to impose con3 trols under this title.

4 (2) EXCEPTION.—The prohibition contained in

5 paragraph (1) shall not apply in any case in which

6 the President determines and certifies to the Com7 mittee on Banking, Housing, and Urban Affairs of

8 the Senate and the Committee on International Re9 lations of the House of Representatives that—

10 (A) there is a serious threat to a foreign

11 policy interest of the United States;

12 (B) the prohibition of exports under each

13 binding contract, agreement, commitment, li14 cense, or authorization will be directly instru15 mental in remedying the situation posing the

16 serious threat; and

17 (C) the export controls will be in effect

18 only as long as the serious threat exists.

19 SEC. 302. PROCEDURES FOR IMPOSING CONTROLS.

20 (a) NOTICE.—

21 (1) INTENT TO IMPOSE FOREIGN POLICY EX22 PORT CONTROL.—Except as provided in section 306,

23 not later than 45 days before imposing or imple24 menting an export control under this title, the Presi25 dent shall publish in the Federal Register—
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1 (A) a notice of intent to do so; and

2 (B) provide for a period of not less than

3 30 days for any interested person to submit

4 comments on the export control proposed under

5 this title.

6 (2) PURPOSES OF NOTICE.—The purposes of

7 the notice are—

8 (A) to provide an opportunity for the for9 mulation of an effective export control policy

10 under this title that advances United States

11 economic and foreign policy interests; and

12 (B) to provide an opportunity for negotia13 tions to achieve the purposes set forth in sec14 tion 301(b).

15 (b) NEGOTIATIONS.—During the 45-day period that

16 begins on the date of notice described in subsection (a),

17 the President may negotiate with the government of the

18 foreign country against which the export control is pro19 posed in order to resolve the reasons underlying the pro20 posed export control.

21 (c) CONSULTATION.—

22 (1) REQUIREMENT.—The President shall con23 sult with the Committee on Banking, Housing, and

24 Urban Affairs of the Senate and the Committee on

25 International Relations of the House of Representa-
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1 tives regarding any export control proposed under

2 this title and the efforts to achieve or increase multi3 lateral cooperation on the issues or problems under4 lying the proposed export control.

5 (2) CLASSIFIED CONSULTATION.—The con6 sultations described in paragraph (1) may be con7 ducted on a classified basis if the Secretary con8 siders it necessary.

9 SEC. 303. CRITERIA FOR FOREIGN POLICY EXPORT CON10 TROLS.

11 Each export control imposed by the President under

12 this title shall—

13 (1) have clearly stated, specific, and compelling

14 United States foreign policy objectives;

15 (2) have objective standards for evaluating the

16 success or failure of the export control;

17 (3) include an assessment by the President

18 that—

19 (A) the export control is likely to achieve

20 such objectives and the expected time for

21 achieving the objectives; and

22 (B) the achievement of the objectives of

23 the export control outweighs any potential costs

24 of the export control to other United States
42

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1 economic, foreign policy, humanitarian, or na2 tional security interests;

3 (4) be targeted narrowly; and

4 (5) seek to minimize any adverse impact on the

5 humanitarian activities of United States and foreign

6 nongovernmental organizations in the country sub7 ject to the export control.

8 SEC. 304. PRESIDENTIAL REPORT BEFORE IMPOSITION OF

9 CONTROL.

10 (a) REQUIREMENT.—Before imposing an export con11 trol under this title, the President shall submit to the

12 Committee on Banking, Housing, and Urban Affairs of

13 the Senate and the Committee on International Relations

14 of the House of Representatives a report on the proposed

15 export control. The report may be provided on a classified

16 basis if the Secretary considers it necessary.

17 (b) CONTENT.—The report shall contain a descrip18 tion and assessment of each of the criteria described in

19 section 303. In addition, the report shall contain a descrip20 tion and assessment of—

21 (1) any diplomatic and other steps that the

22 United States has taken to accomplish the intended

23 objective of the proposed export control;

24 (2) unilateral export controls imposed, and

25 other measures taken, by other countries to achieve
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1 the intended objective of the proposed export con2 trol;

3 (3) the likelihood of multilateral adoption of

4 comparable export controls;

5 (4) alternative measures to promote the same

6 objectives and the likelihood of their potential suc7 cess;

8 (5) any United States obligations under inter9 national trade agreements, treaties, or other inter10 national arrangements, with which the proposed ex11 port control may conflict;

12 (6) the likelihood that the proposed export con13 trol could lead to retaliation against United States

14 interests;

15 (7) the likely economic impact of the proposed

16 export control on the United States economy, United

17 States international trade and investment, and

18 United States agricultural interests, commercial in19 terests, and employment; and

20 (8) a conclusion that the probable achievement

21 of the objectives of the proposed export control out22 weighs any likely costs to United States economic,

23 foreign policy, humanitarian, or national security in24 terests, including any potential harm to the United

25 States agricultural and business firms and to the
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1 international reputation of the United States as a

2 reliable supplier of goods, services, or technology.

3 SEC. 305. IMPOSITION OF CONTROLS.

4 The President may impose an export control under

5 this title after the submission of the report required under

6 section 304 and publication in the Federal Register of a

7 notice of the imposition of the export control .

8 SEC. 306. DEFERRAL AUTHORITY.

9 (a) AUTHORITY.—The President may defer compli10 ance with any requirement contained in section 302(a),

11 304, or 305 in the case of a proposed export control if—

12 (1) the President determines that a deferral of

13 compliance with the requirement is in the national

14 interest of the United States; and

15 (2) the requirement is satisfied not later than

16 60 days after the date on which the export control

17 is imposed under this title.

18 (b) TERMINATION OF CONTROL.—An export control

19 with respect to which a deferral has been made under sub20 section (a) shall terminate 60 days after the date the ex21 port control is imposed unless all requirements have been

22 satisfied before the expiration of the 60-day period.

23 SEC. 307. REVIEW, RENEWAL, AND TERMINATION.

24 (a) RENEWAL AND TERMINATION.—
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1 (1) IN GENERAL.—Any export control imposed

2 under this title shall terminate on March 31 of each

3 renewal year unless the President renews the export

4 control on or before such date. For purposes of this

5 section, the term ‘‘renewal year’’ means 2002 and

6 every 2 years thereafter.

7 (2) EXCEPTION.—This section shall not apply

8 to an export control imposed under this title that—

9 (A) is required by law;

10 (B) is targeted against any country des11 ignated as a country supporting international

12 terrorism pursuant to section 310; or

13 (C) has been in effect for less than 1 year

14 as of February 1 of a renewal year.

15 (b) REVIEW.—

16 (1) IN GENERAL.—Not later than February 1

17 of each renewal year, the President shall review all

18 export controls in effect under this title.

19 (2) CONSULTATION.—

20 (A) REQUIREMENT.—Before completing a

21 review under paragraph (1), the President shall

22 consult with the Committee on Banking, Hous23 ing, and Urban Affairs of the Senate and the

24 Committee on International Relations of the
46

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1 House of Representative regarding each export

2 control that is being reviewed.

3 (B) CLASSIFIED CONSULTATION.—The

4 consultations may be conducted on a classified

5 basis if the Secretary considers it necessary.

6 (3) PUBLIC COMMENT.—In conducting the re7 view of each export control under paragraph (1), the

8 President shall provide a period of not less than 30

9 days for any interested person to submit comments

10 on renewal of the export control. The President shall

11 publish notice of the opportunity for public comment

12 in the Federal Register not less than 45 days before

13 the review is required to be completed.

14 (c) REPORT TO CONGRESS.—

15 (1) REQUIREMENT.—Before renewing an export

16 control imposed under this title, the President shall

17 submit to the committees of Congress referred to in

18 subsection (b)(2)(A) a report on each export control

19 that the President intends to renew.

20 (2) FORM AND CONTENT OF REPORT.—The re21 port may be provided on a classified basis if the Sec22 retary considers it necessary. Each report shall con23 tain the following:

24 (A) A clearly stated explanation of the spe25 cific and compelling United States foreign pol-
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1 icy objective that the existing export control

2 was intended to achieve.

3 (B) An assessment of—

4 (i) the extent to the which the existing

5 export control achieved its objectives before

6 renewal based on the objective criteria es7 tablished for evaluating the export control;

8 and

9 (ii) the reasons why the existing ex10 port control has failed to fully achieve its

11 objectives and, if renewed, how the export

12 control will achieve that objective before

13 the next renewal year.

14 (C) An updated description and assess15 ment of—

16 (i) each of the criteria described in

17 section 303, and

18 (ii) each matter required to be re19 ported under section 304(b)(1) through

20 (8).

21 (3) RENEWAL OF EXPORT CONTROL.—The

22 President may renew an export control under this

23 title after submission of the report described in

24 paragraph (2) and publication of notice of renewal

25 in the Federal Register.
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1 SEC. 308. TERMINATION OF CONTROLS UNDER THIS TITLE.

2 (a) IN GENERAL.—Notwithstanding any other provi3 sion of law, the President—

4 (1) shall terminate any export control imposed

5 under this title if the President determines that the

6 control has substantially achieved the objective for

7 which it was imposed; and

8 (2) may terminate any export control imposed

9 under this title that is not required by law at any

10 time.

11 (b) EXCEPTION.—Paragraphs (1) and (2) of sub12 section (a) do not apply to any export control imposed

13 under this title that is targeted against any country des14 ignated as a country supporting international terrorism

15 pursuant to section 310.

16 (c) EFFECTIVE DATE OF TERMINATION.—The termi17 nation of an export control pursuant to this section shall

18 take effect on the date notice of the termination is pub19 lished in the Federal Register.

20 SEC. 309. COMPLIANCE WITH INTERNATIONAL OBLIGA21 TIONS.

22 Notwithstanding any other provision of this Act set23 ting forth limitations on authority to control exports and

24 except as provided in section 304, the President may im25 pose controls on exports to a particular country or coun26 tries in order to fulfill obligations of the United States
49

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1 under resolutions of the United Nations and under trea2 ties, or other international agreements and arrangements,

3 to which the United States is a party.

4 SEC. 310. DESIGNATION OF COUNTRIES SUPPORTING

5 INTERNATIONAL TERRORISM.

6 (a) LICENSE REQUIRED.—A license shall be required

7 for the export of an item to a country if the Secretary

8 of State has determined that—

9 (1) the government of such country has repeat10 edly provided support for acts of international ter11 rorism; and

12 (2) the export of the item could make a signifi13 cant contribution to the military potential of such

14 country, including its military logistics capability, or

15 could enhance the ability of such country to support

16 acts of international terrorism.

17 (b) NOTIFICATION.—The Secretary and the Sec18 retary of State shall notify the Committee on International

19 Relations of the House of Representatives and the Com20 mittee on Banking, Housing, and Urban Affairs and the

21 Committee on Foreign Relations of the Senate at least 30

22 days before issuing any license required by subsection (a).

23 (c) DETERMINATIONS REGARDING REPEATED SUP24 PORT.—Each determination of the Secretary of State

25 under subsection (a)(1), including each determination in
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1 effect on the date of the enactment of the Antiterrorism

2 and Arms Export Amendments Act of 1989, shall be pub3 lished in the Federal Register.

4 (d) LIMITATIONS ON RESCINDING DETERMINA5 TION.—A determination made by the Secretary of State

6 under subsection (a)(1) may not be rescinded unless the

7 President submits to the Speaker of the House of Rep8 resentatives and the Chairman of the Committee on Bank9 ing, Housing, and Urban Affairs and the Chairman of the

10 Committee on Foreign Relations of the Senate—

11 (1) before the proposed rescission would take

12 effect, a report certifying that—

13 (A) there has been a fundamental change

14 in the leadership and policies of the government

15 of the country concerned;

16 (B) that government is not supporting acts

17 of international terrorism; and

18 (C) that government has provided assur19 ances that it will not support acts of inter20 national terrorism in the future; or

21 (2) at least 45 days before the proposed rescis22 sion would take effect, a report justifying the rescis23 sion and certifying that—
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1 (A) the government concerned has not pro2 vided any support for international terrorism

3 during the preceding 6-month period; and

4 (B) the government concerned has pro5 vided assurances that it will not support acts of

6 international terrorism in the future.

7 (e) INFORMATION TO BE INCLUDED IN NOTIFICA8 TION.—The Secretary and the Secretary of State shall in9 clude in the notification required by subsection (b)—

10 (1) a detailed description of the item to be of11 fered, including a brief description of the capabilities

12 of any item for which a license to export is sought;

13 (2) the reasons why the foreign country or

14 international organization to which the export or

15 transfer is proposed to be made needs the item

16 which is the subject of such export or transfer and

17 a description of the manner in which such country

18 or organization intends to use the item;

19 (3) the reasons why the proposed export or

20 transfer is in the national interest of the United

21 States;

22 (4) an analysis of the impact of the proposed

23 export or transfer on the military capabilities of the

24 foreign country or international organization to

25 which such export or transfer would be made;
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1 (5) an analysis of the manner in which the pro2 posed export would affect the relative military

3 strengths of countries in the region to which the

4 item which is the subject of such export would be de5 livered and whether other countries in the region

6 have comparable kinds and amounts of the item; and

7 (6) an analysis of the impact of the proposed

8 export or transfer on the United States relations

9 with the countries in the region to which the item

10 which is the subject of such export would be deliv11 ered.

12 TITLE IV—EXEMPTION FOR AG13 RICULTURAL COMMODITIES,

14 MEDICINE, AND MEDICAL

15 SUPPLIES

16 SEC. 401. EXEMPTION FOR AGRICULTURAL COMMODITIES,

17 MEDICINE, AND MEDICAL SUPPLIES.

18 Notwithstanding any other provision of law, the ex19 port controls imposed on items under title III shall not

20 apply to agricultural commodities, medicine, and medical

21 supplies.

22 SEC. 402. TERMINATION OF EXPORT CONTROLS REQUIRED

23 BY LAW.

24 Notwithstanding any other provision of law, the

25 President shall terminate any export control mandated by
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1 law on agricultural commodities, medicine, and medical

2 supplies upon the date of enactment of this Act except

3 for a control that is specifically reimposed by law.

4 SEC. 403. EXCLUSIONS.

5 Sections 401 and 402 do not apply to the following:

6 (1) The export of agricultural commodities,

7 medicine, and medical supplies that are subject to

8 national security export controls under title II.

9 (2) The export of agricultural commodities,

10 medicine, and medical supplies to a country against

11 which an embargo is in effect under the Trading

12 With the Enemy Act.

13 TITLE V—PROCEDURES FOR EX14 PORT LICENSES AND INTER15 AGENCY DISPUTE RESOLU16 TION

17 SEC. 501. EXPORT LICENSE PROCEDURES.

18 (a) RESPONSIBILITY OF THE SECRETARY.—

19 (1) IN GENERAL.—All applications for a license

20 or other authorization to export a controlled item

21 shall be filed in such manner and include such infor22 mation as the Secretary may, by regulation, pre23 scribe.

24 (2) PROCEDURES.—In guidance and regulations

25 that implement this section, the Secretary shall de-
54

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1 scribe the procedures required by this section, the

2 responsibilities of the Secretary and of other depart3 ments and agencies in reviewing applications, the

4 rights of the applicant, and other relevant matters

5 affecting the review of license applications.

6 (3) CALCULATION OF PROCESSING TIMES.—In

7 calculating the processing times set forth in this

8 title, the Secretary shall use calendar days, except

9 that if the final day for a required action falls on a

10 weekend or holiday, that action shall be taken no

11 later than the following business day.

12 (4) CRITERIA FOR EVALUATING APPLICA13 TIONS.—In determining whether to grant an appli14 cation to export a controlled item under this Act, the

15 following criteria shall be considered:

16 (A) The characteristics of the controlled

17 item.

18 (B) The threat to the United States or the

19 national security interests of the United States

20 from the misuse of the item.

21 (C) The risk of export diversion or misuse

22 by—

23 (i) the exporter;

24 (ii) the method of export;

25 (iii) the end-user;
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1 (iv) the country where the end-user is

2 located; and

3 (v) the end-use.

4 (D) Risk mitigating factors including, but

5 not limited to—

6 (i) changing the characteristics of the

7 controlled item;

8 (ii) after-market monitoring by the ex9 porter; and

10 (iii) post-shipment verification.

11 (b) INITIAL SCREENING.—

12 (1) UPON RECEIPT OF APPLICATION.—Upon re13 ceipt of an export license application, the Secretary

14 shall enter and maintain in the records of the De15 partment information regarding the receipt and sta16 tus of the application.

17 (2) INITIAL PROCEDURES.—

18 (A) IN GENERAL.—Not later than 9 days

19 after receiving any license application, the Sec20 retary shall—

21 (i) contact the applicant if the appli22 cation is improperly completed or if addi23 tional information is required, and hold the

24 application for a reasonable time while the

25 applicant provides the necessary correc-
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1 tions or information, and such time shall

2 not be included in calculating the time pe3 riods prescribed in this title;

4 (ii) refer the application, through the

5 use of a common data base or other

6 means, and all information submitted by

7 the applicant, and all necessary rec8 ommendations and analyses by the Sec9 retary to the Department of Defense and

10 other departments and agencies as the

11 Secretary considers appropriate;

12 (iii) ensure that the classification stat13 ed on the application for the export items

14 is correct; and

15 (iv) return the application if a license

16 is not required.

17 (B) REFERRAL NOT REQUIRED.—In the

18 event that the head of a department or agency

19 determines that certain types of applications

20 need not be referred to the department or agen21 cy, such department or agency head shall notify

22 the Secretary of the specific types of such appli23 cations that the department or agency does not

24 wish to review.
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1 (3) WITHDRAWAL OF APPLICATION.—An appli2 cant may, by written notice to the Secretary, with3 draw an application at any time before final action.

4 (c) ACTION BY OTHER DEPARTMENTS AND AGEN5 CIES.—

6 (1) REFERRAL TO OTHER AGENCIES.—The Sec7 retary shall promptly refer a license application to

8 the departments and agencies under subsection (b)

9 to make recommendations and provide information

10 to the Secretary.

11 (2) RESPONSIBILITY OF REFERRAL DEPART12 MENTS AND AGENCIES.—The Department of De13 fense and other reviewing departments and agencies

14 shall take all necessary actions in a prompt and re15 sponsible manner on an application. Each depart16 ment or agency reviewing an application under this

17 section shall establish and maintain records properly

18 identifying and monitoring the status of the matter

19 referred to the department or agency.

20 (3) ADDITIONAL INFORMATION REQUESTS.—

21 Each department or agency to which a license appli22 cation is referred shall specify to the Secretary any

23 information that is not in the application that would

24 be required for the department or agency to make

25 a determination with respect to the application, and
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1 the Secretary shall promptly request such informa2 tion from the applicant. The time that may elapse

3 between the date the information is requested by

4 that department or agency and the date the infor5 mation is received by that department or agency

6 shall not be included in calculating the time periods

7 prescribed in this title.

8 (4) TIME PERIOD FOR ACTION BY REFERRAL

9 DEPARTMENTS AND AGENCIES.—Within 25 days

10 after the Secretary refers an application under this

11 section, each department or agency to which an ap12 plication has been referred shall provide the Sec13 retary with a recommendation either to approve the

14 license or to deny the license. A recommendation

15 that the Secretary deny a license shall include a

16 statement of reasons for the recommendation that

17 are consistent with the provisions of this title, and

18 shall cite both the specific statutory and regulatory

19 basis for the recommendation. A department or

20 agency that fails to provide a recommendation in ac21 cordance with this paragraph within that 25-day pe22 riod shall be deemed to have no objection to the de23 cision of the Secretary on the application.
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1 (d) ACTION BY THE SECRETARY.—Not later than 25

2 days after the date the application is referred, the Sec3 retary shall—

4 (1) if there is agreement among the referral de5 partments and agencies to issue or deny the

6 license—

7 (A) issue the license and ensure all appro8 priate personnel in the Department (including

9 the Office of Export Enforcement) are notified

10 of all approved license applications; or

11 (B) notify the applicant of the intention to

12 deny the license; or

13 (2) if there is no agreement among the referral

14 departments and agencies, notify the applicant that

15 the application is subject to the interagency dispute

16 resolution process.

17 (e) CONSEQUENCES OF APPLICATION DENIAL.—

18 (1) IN GENERAL.—If a determination is made

19 to deny a license, the applicant shall be informed in

20 writing by the Secretary of—

21 (A) the determination;

22 (B) the specific statutory and regulatory

23 bases for the proposed denial;

24 (C) what, if any, modifications to, or re25 strictions on, the items for which the license
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•S 1712 PCS

1 was sought would allow such export to be com2 patible with export controls imposed under this

3 Act, and which officer or employee of the De4 partment would be in a position to discuss

5 modifications or restrictions with the applicant

6 and the specific statutory and regulatory bases

7 for imposing such modifications or restrictions;

8 (D) to the extent consistent with the na9 tional security and foreign policy interests of

10 the United States, the specific considerations

11 that led to the determination to deny the appli12 cation; and

13 (E) the availability of appeal procedures.

14 (2) PERIOD FOR APPLICANT TO RESPOND.—

15 The applicant shall have 20 days from the date of

16 the notice of intent to deny the application to re17 spond in a manner that addresses and corrects the

18 reasons for the denial. If the applicant does not ade19 quately address or correct the reasons for denial or

20 does not respond, the license shall be denied. If the

21 applicant does address or correct the reasons for de22 nial, the application shall receive consideration in a

23 timely manner.

24 (f) APPEALS AND OTHER ACTIONS BY APPLICANT.—
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1 (1) IN GENERAL.—The Secretary shall establish

2 appropriate procedures for an applicant to appeal to

3 the Secretary the denial of an application or other

4 administrative action under this Act. In any case in

5 which the Secretary intends to reverse the decision

6 with respect to the application, the appeal under this

7 subsection shall be handled in accordance with the

8 interagency dispute resolution process.

9 (2) ENFORCEMENT OF TIME LIMITS.—

10 (A) IN GENERAL.—In any case in which

11 an action prescribed in this section is not taken

12 on an application within the time period estab13 lished by this section (except in the case of a

14 time period extended under subsection (g) of

15 which the applicant is notified), the applicant

16 may file a petition with the Secretary request17 ing compliance with the requirements of this

18 section. When such petition is filed, the Sec19 retary shall take immediate steps to correct the

20 situation giving rise to the petition and shall

21 immediately notify the applicant of such steps.

22 (B) BRINGING COURT ACTION.—If, within

23 20 days after a petition is filed under subpara24 graph (A), the processing of the application has

25 not been brought into conformity with the re-
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•S 1712 PCS

1 quirements of this section, or the processing of

2 the application has been brought into con3 formity with such requirements but the Sec4 retary has not so notified the applicant, the ap5 plicant may bring an action in an appropriate

6 United States district court for an order requir7 ing compliance with the time periods required

8 by this section.

9 (g) EXCEPTIONS FROM REQUIRED TIME PERIODS.—

10 The following actions related to processing an application

11 shall not be included in calculating the time periods pre12 scribed in this section:

13 (1) AGREEMENT OF THE APPLICANT.—Delays

14 upon which the Secretary and the applicant mutu15 ally agree.

16 (2) PRELICENSE CHECKS.—A prelicense check

17 (for a period not to exceed 60 days) that may be re18 quired to establish the identity and reliability of the

19 recipient of items controlled under this Act, if—

20 (A) the need for the prelicense check is de21 termined by the Secretary or by another depart22 ment or agency in any case in which the re23 quest for the prelicense check is made by such

24 department or agency;
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1 (B) the request for the prelicense check is

2 initiated by the Secretary within 5 days after

3 the determination that the prelicense check is

4 required; and

5 (C) the analysis of the result of the

6 prelicense check is completed by the Secretary

7 within 5 days.

8 (3) REQUESTS FOR GOVERNMENT-TO-GOVERN9 MENT ASSURANCES.—Any request by the Secretary

10 or another department or agency for government-to11 government assurances of suitable end-uses of items

12 approved for export, when failure to obtain such as13 surances would result in rejection of the application,

14 if—

15 (A) the request for such assurances is sent

16 to the Secretary of State within 5 days after

17 the determination that the assurances are re18 quired;

19 (B) the Secretary of State initiates the re20 quest of the relevant government within 10

21 days thereafter; and

22 (C) the license is issued within 5 days

23 after the Secretary receives the requested assur24 ances.
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1 (4) EXCEPTION.—Whenever a prelicense check

2 described in paragraph (2) or assurances described

3 in paragraph (3) are not requested within the time

4 periods set forth therein, then the time expended for

5 such prelicense check or assurances shall be included

6 in calculating the time periods established by this

7 section.

8 (5) MULTILATERAL REVIEW.—Multilateral re9 view of a license application to the extent that such

10 multilateral review is required by a relevant multilat11 eral regime.

12 (6) CONGRESSIONAL NOTIFICATION.—Such

13 time as is required for mandatory congressional noti14 fications under this Act.

15 (7) CONSULTATIONS.—Consultation with other

16 governments, if such consultation is provided for by

17 a relevant multilateral regime as a precondition for

18 approving a license.

19 (h) CLASSIFICATION REQUESTS AND OTHER INQUIR20 IES.—

21 (1) CLASSIFICATION REQUESTS.—In any case

22 in which the Secretary receives a written request

23 asking for the proper classification of an item on the

24 Control List or the applicability of licensing require25 ments under this title, the Secretary shall promptly
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•S 1712 PCS

1 notify the Secretary of Defense and other depart2 ments and agencies the Secretary considers appro3 priate. The Secretary shall, within 14 days after re4 ceiving the request, inform the person making the

5 request of the proper classification.

6 (2) OTHER INQUIRIES.—In any case in which

7 the Secretary receives a written request for informa8 tion under this Act, the Secretary shall, within 30

9 days after receiving the request, reply with that in10 formation to the person making the request.

11 SEC. 502. INTERAGENCY DISPUTE RESOLUTION PROCESS.

12 (a) IN GENERAL.—All license applications on which

13 agreement cannot be reached shall be referred to the inter14 agency dispute resolution process for decision.

15 (b) INTERAGENCY DISPUTE RESOLUTION PROC16 ESS.—

17 (1) INITIAL RESOLUTION.—The Secretary shall

18 establish, select the chairperson of, and determine

19 procedures for an interagency committee to review

20 initially all license applications described in sub21 section (a) with respect to which the Secretary and

22 any of the referral departments and agencies are not

23 in agreement. The chairperson shall consider the po24 sitions of all the referral departments and agencies

25 (which shall be included in the minutes described
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•S 1712 PCS

1 subsection (c)(2)) and make a decision on the license

2 application, including appropriate revisions or condi3 tions thereto.

4 (2) FURTHER RESOLUTION.—The President

5 shall establish additional levels for review or appeal

6 of any matter that cannot be resolved pursuant to

7 the process described in paragraph (1). Each such

8 review shall—

9 (A) provide for decision-making based on

10 the majority vote of the participating depart11 ments and agencies;

12 (B) provide that a department or agency

13 that fails to take a timely position, citing the

14 specific statutory and regulatory bases for a de15 nial, shall be deemed to have no objection to the

16 pending decision;

17 (C) provide that any decision of an inter18 agency committee established under paragraph

19 (1) or interagency dispute resolution process es20 tablished under this paragraph may be esca21 lated to the next higher level of review at the

22 request of any representative of a department

23 or agency that participated in the interagency

24 committee or dispute resolution process that

25 made the decision; and
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1 (D) ensure that matters are resolved or re2 ferred to the President not later than 90 days

3 after the date the completed license application

4 is referred by the Secretary.

5 (c) FINAL ACTION.—

6 (1) IN GENERAL.—Once a final decision is

7 made under subsection (b), the Secretary shall

8 promptly—

9 (A) issue the license and ensure that all

10 appropriate personnel in the Department (in11 cluding the Office of Export Enforcement) are

12 notified of all approved license applications; or

13 (B) notify the applicant of the intention to

14 deny the application.

15 (2) MINUTES.—The interagency committee and

16 each level of the interagency dispute resolution proc17 ess shall keep reasonably detailed minutes of all

18 meetings. On each matter before the interagency

19 committee or before any other level of the inter20 agency dispute resolution process in which members

21 disagree, each member shall clearly state the reasons

22 for the member’s position and the reasons shall be

23 entered in the minutes.
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1 TITLE VI—INTERNATIONAL AR2 RANGEMENTS; FOREIGN BOY3 COTTS; SANCTIONS; AND EN4 FORCEMENT

5 SEC. 601. INTERNATIONAL ARRANGEMENTS.

6 (a) MULTILATERAL EXPORT CONTROL REGIMES.—

7 (1) POLICY.—It is the policy of the United

8 States to seek multilateral arrangements that sup9 port the national security objectives of the United

10 States (as described in title II) and that establish

11 fairer and more predictable competitive opportunities

12 for United States exporters.

13 (2) PARTICIPATION IN EXISTING REGIMES.—

14 Congress encourages the United States to continue

15 its active participation in and to strengthen existing

16 multilateral export control regimes.

17 (3) PARTICIPATION IN NEW REGIMES.—It is the

18 policy of the United States to participate in addi19 tional multilateral export control regimes if such

20 participation would serve the national security inter21 ests of the United States.

22 (b) ANNUAL REPORT ON MULTILATERAL EXPORT

23 CONTROL REGIMES.—Not later than February 1 of each

24 year, the President shall submit to the Committee on

25 Banking, Housing, and Urban Affairs of the Senate and
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•S 1712 PCS

1 the Committee on International Relations of the House

2 of Representatives a report evaluating the effectiveness of

3 each multilateral export control regime, including an as4 sessment of the steps undertaken pursuant to subsections

5 (c) and (d). The report, or any part of this report, may

6 be submitted in classified form to the extent the Secretary

7 considers necessary.

8 (c) STANDARDS FOR MULTILATERAL EXPORT CON9 TROL REGIMES.—The President shall take steps to estab10 lish the following features in any multilateral export con11 trol regime in which the United States is participating or

12 may participate:

13 (1) FULL MEMBERSHIP.—All supplier countries

14 are members of the regime, and the policies and ac15 tivities of the members are consistent with the objec16 tives and membership criteria of the multilateral ex17 port control regime.

18 (2) EFFECTIVE ENFORCEMENT AND COMPLI19 ANCE.—The regime promotes enforcement and com20 pliance with the regime’s rules and guidelines.

21 (3) PUBLIC UNDERSTANDING.—The regime

22 makes an effort to enhance public understanding of

23 the purpose and procedures of the multilateral ex24 port control regime.
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1 (4) EFFECTIVE IMPLEMENTATION PROCE2 DURES.—The multilateral export control regime has

3 procedures for the implementation of its rules and

4 guidelines through uniform and consistent interpre5 tations of its export controls.

6 (5) ENHANCED COOPERATION WITH REGIME

7 NONMEMBERS.—There is agreement among the

8 members of the multilateral export control regime

9 to—

10 (A) cooperate with governments outside

11 the regime to restrict the export of items con12 trolled by such regime; and

13 (B) establish an ongoing mechanism in the

14 regime to coordinate planning and implementa15 tion of export control measures related to such

16 cooperation.

17 (6) PERIODIC HIGH-LEVEL MEETINGS.—There

18 are regular periodic meetings of high-level represent19 atives of the governments of members of the multi20 lateral export control regime for the purpose of co21 ordinating export control policies and issuing policy

22 guidance to members of the regime.

23 (7) COMMON LIST OF CONTROLLED ITEMS.—

24 There is agreement on a common list of items con25 trolled by the multilateral export control regime.
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1 (8) REGULAR UPDATES OF COMMON LIST.—

2 There is a procedure for removing items from the

3 list of controlled items when the control of such

4 items no longer serves the objectives of the members

5 of the multilateral export control regime.

6 (9) TREATMENT OF CERTAIN COUNTRIES.—

7 There is agreement to prevent the export or diver8 sion of the most sensitive items to countries whose

9 activities are threatening to the national security of

10 the United States or its allies.

11 (10) HARMONIZATION OF LICENSE APPROVAL

12 PROCEDURES.—There is harmonization among the

13 members of the regime of their national export li14 cense approval procedures and practices.

15 (11) UNDERCUTTING.—There is a limit with re16 spect to when members of a multilateral export con17 trol regime—

18 (A) grant export licenses for any item that

19 is substantially identical to or directly competi20 tive with an item controlled pursuant to the re21 gime, where the United States has denied an

22 export license for such item, or

23 (B) approve exports to a particular end

24 user to which the United States has denied ex25 port license for a similar item.
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1 (d) STANDARDS FOR NATIONAL EXPORT CONTROL

2 SYSTEMS.—The President shall take steps to attain the

3 cooperation of members of each regime in implementing

4 effective national export control systems containing the

5 following features:

6 (1) EXPORT CONTROL LAW.—Enforcement au7 thority, civil and criminal penalties, and statutes of

8 limitations are sufficient to deter potential violations

9 and punish violators under the member’s export con10 trol law.

11 (2) LICENSE APPROVAL PROCESS.—The system

12 for evaluating export license applications includes

13 sufficient technical expertise to assess the licensing

14 status of exports and ensure the reliability of end

15 users.

16 (3) ENFORCEMENT.—The enforcement mecha17 nism provides authority for trained enforcement offi18 cers to investigate and prevent illegal exports.

19 (4) DOCUMENTATION.—There is a system of

20 export control documentation and verification with

21 respect to controlled items.

22 (5) INFORMATION.—There are procedures for

23 the coordination and exchange of information con24 cerning licensing, end users, and enforcement with
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1 other members of the multilateral export control re2 gime.

3 (6) RESOURCES.—The member has devoted

4 adequate resources to administer effectively the au5 thorities, systems, mechanisms, and procedures de6 scribed in paragraphs (1) through (5).

7 (e) OBJECTIVES REGARDING MULTILATERAL EX8 PORT CONTROL REGIMES.—The President shall seek to

9 achieve the following objectives with regard to multilateral

10 export control regimes:

11 (1) STRENGTHEN EXISTING REGIMES.—

12 Strengthen existing multilateral export control

13 regimes—

14 (A) by creating a requirement to share in15 formation about export license applications

16 among members before a member approves an

17 export license; and

18 (B) harmonizing national export license

19 approval procedures and practices, including

20 the elimination of undercutting.

21 (2) REVIEW AND UPDATE.—Review and update

22 multilateral regime export control lists with other

23 members, taking into account—

24 (A) national security concerns;

25 (B) the controllability of items; and
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1 (C) the costs and benefits of controls.

2 (3) ENCOURAGE COMPLIANCE BY NONMEM3 BERS.—Encourage nonmembers of the multilateral

4 export control regime—

5 (A) to strengthen their national export

6 control regimes and improve enforcement;

7 (B) to adhere to the appropriate multilat8 eral export control regime; and

9 (C) not to undermine an existing multilat10 eral export control regime by exporting con11 trolled items in a manner inconsistent with the

12 guidelines of the regime.

13 (f) TRANSPARENCY OF MULTILATERAL EXPORT

14 CONTROL REGIMES.—

15 (1) PUBLICATION OF INFORMATION ON EACH

16 EXISTING REGIME.—Not later than 120 days after

17 the date of enactment of this Act, the Secretary

18 shall, for each multilateral export control regime (to

19 the extent that it is not inconsistent with the ar20 rangements of that regime or with the national in21 terest), publish in the Federal Register the following

22 information with respect to the regime:

23 (A) The purposes of the regime.

24 (B) The members of the regime.
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1 (C) The export licensing policy of the re2 gime.

3 (D) The items that are subject to export

4 controls under the regime, together with all

5 public notes, understandings, and other aspects

6 of the agreement of the regime, and all changes

7 thereto.

8 (E) Any countries, end uses, or end users

9 that are subject to the export controls of the re10 gime.

11 (F) Rules of interpretation.

12 (G) Major policy actions.

13 (H) The rules and procedures of the re14 gime for establishing and modifying any matter

15 described in subparagraphs (A) through (G)

16 and for reviewing export license applications.

17 (2) NEW REGIMES.—Not later than 60 days

18 after the United States joins or organizes a new

19 multilateral export control regime, the Secretary

20 shall, to the extent not inconsistent with arrange21 ments under the regime or with the national inter22 est, publish in the Federal Register the information

23 described in subparagraphs (A) through (H) of

24 paragraph (1) with respect to the regime.
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1 (3) PUBLICATION OF CHANGES.—Not later

2 than 60 days after a multilateral export control re3 gime adopts any change in the information published

4 under this subsection, the Secretary shall, to the ex5 tent not inconsistent with the arrangements under

6 the regime or the national interest, publish such

7 changes in the Federal Register.

8 (g) SUPPORT OF OTHER COUNTRIES’ EXPORT CON9 TROL SYSTEMS.—The Secretary is encouraged to continue

10 to—

11 (1) participate in training of, and provide train12 ing to, officials of other countries on the principles

13 and procedures for implementing effective export

14 controls; and

15 (2) participate in any such training provided by

16 other departments and agencies of the United

17 States.

18 SEC. 602. FOREIGN BOYCOTTS.

19 (a) PURPOSES.—The purposes of this section are as

20 follows:

21 (1) To counteract restrictive trade practices or

22 boycotts fostered or imposed by foreign countries

23 against other countries friendly to the United States

24 or against any United States person.
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1 (2) To encourage and, in specified cases, re2 quire United States persons engaged in the export of

3 items to refuse to take actions, including furnishing

4 information or entering into or implementing agree5 ments, which have the effect of furthering or sup6 porting the restrictive trade practices or boycotts

7 fostered or imposed by any foreign country against

8 a country friendly to the United States or against

9 any United States person.

10 (b) PROHIBITIONS AND EXCEPTIONS.—

11 (1) PROHIBITIONS.—In order to carry out the

12 purposes set forth in subsection (a), the President

13 shall issue regulations prohibiting any United States

14 person, with respect to that person’s activities in the

15 interstate or foreign commerce of the United States,

16 from taking or knowingly agreeing to take any of

17 the following actions with intent to comply with, fur18 ther, or support any boycott fostered or imposed by

19 a foreign country against a country that is friendly

20 to the United States and is not itself the object of

21 any form of boycott pursuant to United States law

22 or regulation:

23 (A) Refusing, or requiring any other per24 son to refuse, to do business with or in the boy25 cotted country, with any business concern orga-
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1 nized under the laws of the boycotted country,

2 with any national or resident of the boycotted

3 country, or with any other person, pursuant to

4 an agreement with, or requirement of, or a re5 quest from or on behalf of the boycotting coun6 try (subject to the condition that the intent re7 quired to be associated with such an act in

8 order to constitute a violation of the prohibition

9 is not indicated solely by the mere absence of

10 a business relationship with or in the boycotted

11 country, with any business concern organized

12 under the laws of the boycotted country, with

13 any national or resident of the boycotted coun14 try, or with any other person).

15 (B) Refusing, or requiring any other per16 son to refuse, to employ or otherwise discrimi17 nate against any United States person on the

18 basis of the race, religion, sex, or national ori19 gin of that person or of any owner, officer, di20 rector, or employee of such person.

21 (C) Furnishing information with respect to

22 the race, religion, sex, or national origin of any

23 United States person or of any owner, officer,

24 director, or employee of such person.
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1 (D) Furnishing information (other than

2 furnishing normal business information in a

3 commercial context, as defined by the Sec4 retary) about whether any person has, has had,

5 or proposes to have any business relationship

6 (including a relationship by way of sale, pur7 chase, legal or commercial representation, ship8 ping or other transport, insurance, investment,

9 or supply) with or in the boycotted country,

10 with any business concern organized under the

11 laws of the boycotted country, with any national

12 or resident of the boycotted country, or with

13 any other person that is known or believed to

14 be restricted from having any business relation15 ship with or in the boycotting country.

16 (E) Furnishing information about whether

17 any person is a member of, has made a con18 tribution to, or is otherwise associated with or

19 involved in the activities of any charitable or

20 fraternal organization which supports the boy21 cotted country.

22 (F) Paying, honoring, confirming, or other23 wise implementing a letter of credit which con24 tains any condition or requirement the compli25 ance with which is prohibited by regulations
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1 issued pursuant to this paragraph, and no

2 United States person shall, as a result of the

3 application of this paragraph, be obligated to

4 pay or otherwise honor or implement such letter

5 of credit.

6 (2) EXCEPTIONS.—Regulations issued pursuant

7 to paragraph (1) shall provide exceptions for—

8 (A) compliance, or agreement to comply,

9 with requirements—

10 (i) prohibiting the import of items

11 from the boycotted country or items pro12 duced or provided, by any business concern

13 organized under the laws of the boycotted

14 country or by nationals or residents of the

15 boycotted country; or

16 (ii) prohibiting the shipment of items

17 to the boycotting country on a carrier of

18 the boycotted country or by a route other

19 than that prescribed by the boycotting

20 country or the recipient of the shipment;

21 (B) compliance, or agreement to comply,

22 with import and shipping document require23 ments with respect to the country of origin, the

24 name of the carrier and route of shipment, the

25 name of the supplier of the shipment, or the
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1 name of the provider of other services, except

2 that, for purposes of applying any exception

3 under this subparagraph, no information know4 ingly furnished or conveyed in response to such

5 requirements may be stated in negative, black6 listing, or similar exclusionary terms, other

7 than with respect to carriers or route of ship8 ment as may be permitted by such regulations

9 in order to comply with precautionary require10 ments protecting against war risks and confis11 cation;

12 (C) compliance, or agreement to comply, in

13 the normal course of business with the unilat14 eral and specific selection by a boycotting coun15 try, or a national or resident thereof, or car16 riers, insurers, suppliers of services to be per17 formed within the boycotting country, or spe18 cific items which, in the normal course of busi19 ness, are identifiable by source when imported

20 into the boycotting country;

21 (D) compliance, or agreement to comply,

22 with export requirements of the boycotting

23 country relating to shipment or transshipment

24 of exports to the boycotted country, to any busi25 ness concern of or organized under the laws of
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1 the boycotted country, or to any national or

2 resident of the boycotted country;

3 (E) compliance by an individual, or agree4 ment by an individual to comply, with the immi5 gration or passport requirements of any country

6 with respect to such individual or any member

7 of such individual’s family or with requests for

8 information regarding requirements of employ9 ment of such individual within the boycotting

10 country; and

11 (F) compliance by a United States person

12 resident in a foreign country, or agreement by

13 such a person to comply, with the laws of the

14 country with respect to the person’s activities

15 exclusively therein, and such regulations may

16 contain exceptions for such resident complying

17 with the laws or regulations of the foreign coun18 try governing imports into such country of

19 trademarked, trade-named, or similarly specifi20 cally identifiable products, or components of

21 products for such person’s own use, including

22 the performance of contractual services within

23 that country.

24 (3) LIMITATION ON EXCEPTIONS.—Regulations

25 issued pursuant to paragraphs (2)(C) and (2)(F)
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1 shall not provide exceptions from paragraphs (1)(B)

2 and (1)(C).

3 (4) ANTITRUST AND CIVIL RIGHTS LAWS NOT

4 AFFECTED.—Nothing in this subsection may be con5 strued to supersede or limit the operation of the

6 antitrust or civil rights laws of the United States.

7 (5) EVASION.—This section applies to any

8 transaction or activity undertaken by or through a

9 United States person or any other person with in10 tent to evade the provisions of this section or the

11 regulations issued pursuant to this subsection. The

12 regulations issued pursuant to this section shall ex13 pressly provide that the exceptions set forth in para14 graph (2) do not permit activities or agreements (ex15 pressed or implied by a course of conduct, including

16 a pattern of responses) that are otherwise prohib17 ited, pursuant to the intent of such exceptions.

18 (c) ADDITIONAL REGULATIONS AND REPORTS.—

19 (1) REGULATIONS.—In addition to the regula20 tions issued pursuant to subsection (b), regulations

21 issued pursuant to title III shall implement the pur22 poses set forth in subsection (a).

23 (2) REPORTS BY UNITED STATES PERSONS.—

24 The regulations shall require that any United States

25 person receiving a request to furnish information,
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1 enter into or implement an agreement, or take any

2 other action referred to in subsection (a) shall report

3 that request to the Secretary, together with any

4 other information concerning the request that the

5 Secretary determines appropriate. The person shall

6 also submit to the Secretary a statement regarding

7 whether the person intends to comply, and whether

8 the person has complied, with the request. Any re9 port filed pursuant to this paragraph shall be made

10 available promptly for public inspection and copying,

11 except that information regarding the quantity, de12 scription, and value of any item to which such report

13 relates may be treated as confidential if the Sec14 retary determines that disclosure of that information

15 would place the United States person involved at a

16 competitive disadvantage. The Secretary shall peri17 odically transmit summaries of the information con18 tained in the reports to the Secretary of State for

19 such action as the Secretary of State, in consultation

20 with the Secretary, considers appropriate to carry

21 out the purposes set forth in subsection (a).

22 (d) PREEMPTION.—The provisions of this section and

23 the regulations issued under this section shall preempt any

24 law, rule, or regulation that—
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1 (1) is a law, rule, or regulation of any of the

2 several States or the District of Columbia, or any of

3 the territories or possessions of the United States,

4 or of any governmental subdivision thereof; and

5 (2) pertains to participation in, compliance

6 with, implementation of, or the furnishing of infor7 mation regarding restrictive trade practices or boy8 cotts fostered or imposed by foreign countries

9 against other countries.

10 SEC. 603. PENALTIES.

11 (a) CRIMINAL PENALTIES.—

12 (1) VIOLATIONS BY AN INDIVIDUAL.—Any indi13 vidual who knowingly violates, conspires to violate,

14 or attempts to violate any provision of this Act or

15 any regulation, license, or order issued under this

16 Act shall be fined up to 10 times the value of the

17 exports involved or $1,000,000, whichever is greater,

18 imprisoned for not more than 10 years, or both, for

19 each violation, except that the term of imprisonment

20 may be increased to life for multiple violations or ag21 gravated circumstances.

22 (2) VIOLATIONS BY A PERSON OTHER THAN AN

23 INDIVIDUAL.—Any person other than an individual

24 who knowingly violates, conspires to violate, or at25 tempts to violate any provision of this Act or any
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1 regulation, license, or order issued under this Act

2 shall be fined up to 10 times the value of the exports

3 involved or $10,000,000, whichever is greater, for

4 each violation.

5 (b) FORFEITURE OF PROPERTY INTEREST AND PRO6 CEEDS.—

7 (1) FORFEITURE.—Any person who is convicted

8 under paragraph (1) or (2) of subsection (a) shall,

9 in addition to any other penalty, forfeit to the

10 United States—

11 (A) any of that person’s security or other

12 interest in, claim against, or property or con13 tractual rights of any kind in the tangible items

14 that were the subject of the violation;

15 (B) any of that person’s security or other

16 interest in, claim against, or property or con17 tractual rights of any kind in the tangible prop18 erty that was used in the export or attempt to

19 export that was the subject of the violation; and

20 (C) any of that person’s property consti21 tuting, or derived from, any proceeds obtained

22 directly or indirectly as a result of the violation.

23 (2) PROCEDURES.—The procedures in any for24 feiture under this subsection, and the duties and au25 thority of the courts of the United States and the
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1 Attorney General with respect to any forfeiture ac2 tion under this subsection, or with respect to any

3 property that may be subject to forfeiture under this

4 subsection, shall be governed by the provisions of

5 chapter 46 of title 18, United States Code, to the

6 same extent as property subject to forfeiture under

7 that chapter.

8 (c) CIVIL PENALTIES; ADMINISTRATIVE SANC9 TIONS.—

10 (1) CIVIL PENALTIES.—The Secretary may im11 pose a civil penalty of up to $1,000,000 for each vio12 lation of a provision of this Act or any regulation,

13 license, or order issued under this Act. A civil pen14 alty under this paragraph may be in addition to, or

15 in lieu of, any other liability or penalty which may

16 be imposed for such a violation.

17 (2) DENIAL OF EXPORT PRIVILEGES.—The Sec18 retary may deny the export privileges of any person,

19 including the suspension or revocation of the author20 ity of such person to export or receive United

21 States-origin items subject to this Act, for a viola22 tion of a provision of this Act or any regulation, li23 cense, or order issued under this Act.

24 (3) EXCLUSION FROM PRACTICE.—The Sec25 retary may exclude any person acting as an attor-
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1 ney, accountant, consultant, freight forwarder, or in

2 any other representative capacity from participating

3 before the Department with respect to a license ap4 plication or any other matter under this Act.

5 (d) PAYMENT OF CIVIL PENALTIES.—

6 (1) PAYMENT AS CONDITION OF FURTHER EX7 PORT PRIVILEGES.—The payment of a civil penalty

8 imposed under subsection (c) may be made a condi9 tion for the granting, restoration, or continuing va10 lidity of any export license, permission, or privilege

11 granted or to be granted to the person upon whom

12 such penalty is imposed. The period for which the

13 payment of a penalty may be made such a condition

14 may not exceed 1 year after the date on which the

15 payment is due.

16 (2) DEFERRAL OR SUSPENSION.—

17 (A) IN GENERAL.—The payment of a civil

18 penalty imposed under subsection (c) may be

19 deferred or suspended in whole or in part for a

20 period no longer than any probation period

21 (which may exceed 1 year) that may be imposed

22 upon the person on whom the penalty is im23 posed.

24 (B) NO BAR TO COLLECTION OF PEN25 ALTY.—A deferral or suspension under sub-
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1 paragraph (A) shall not operate as a bar to the

2 collection of the penalty concerned in the event

3 that the conditions of the suspension, deferral,

4 or probation are not fulfilled.

5 (3) TREATMENT OF PAYMENTS.—Any amount

6 paid in satisfaction of a civil penalty imposed under

7 subsection (c) shall be covered into the Treasury as

8 miscellaneous receipts except as set forth in section

9 607(h).

10 (e) REFUNDS.—

11 (1) AUTHORITY.—

12 (A) IN GENERAL.—The Secretary may, in

13 the Secretary’s discretion, refund any civil pen14 alty imposed under subsection (c) on the

15 ground of a material error of fact or law in im16 position of the penalty.

17 (B) LIMITATION.—A civil penalty may not

18 be refunded under subparagraph (A) later than

19 2 years after payment of the penalty.

20 (2) PROHIBITION ON ACTIONS FOR REFUND.—

21 Notwithstanding section 1346(a) of title 28, United

22 States Code, no action for the refund of any civil

23 penalty referred to in paragraph (1) may be main24 tained in any court.

25 (f) EFFECT OF OTHER CONVICTIONS.—
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1 (1) DENIAL OF EXPORT PRIVILEGES.—Any per2 son convicted of a violation of—

3 (A) a provision of this Act or the Export

4 Administration Act of 1979,

5 (B) a provision of the International Emer6 gency Economic Powers Act (50 U.S.C. 1701 et

7 seq.),

8 (C) section 793, 794, or 798 of title 18,

9 United States Code,

10 (D) section 4(b) of the Internal Security

11 Act of 1950 (50 U.S.C. 783(b)),

12 (E) section 38 of the Arms Export Control

13 Act (22 U.S.C. 2778),

14 (F) section 16 of the Trading with the

15 Enemy Act (50 U.S.C. App. 16),

16 (G) any regulation, license, or order issued

17 under any provision of law listed in subpara18 graph (A), (B), (C), (D), (E), or (F),

19 (H) section 371 or 1001 of title 18, United

20 States Code, if in connection with the export of

21 controlled items under this Act or any regula22 tion, license, or order issued under the Inter23 national Emergency Economic Powers Act, or

24 the export of items controlled under the Arms

25 Export Control Act,
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1 (I) section 175 of title 18, United States

2 Code,

3 (J) section 229, of title 18, United States

4 Code,

5 (K) a provision of the Atomic Energy Act

6 (42 U.S.C. 201 et seq.),

7 (L) section 831 of title 18, United States

8 Code, or

9 (M) section 2332a of title 18, United

10 States Code,

11 may, at the discretion of the Secretary, be denied ex12 port privileges under this Act for a period not to ex13 ceed 10 years from the date of the conviction. The

14 Secretary may also revoke any export license under

15 this Act in which such person had an interest at the

16 time of the conviction.

17 (2) RELATED PERSONS.—The Secretary may

18 exercise the authority under paragraph (1) with re19 spect to any person related through affiliation, own20 ership, control, or position of responsibility to a per21 son convicted of any violation of a law set forth in

22 paragraph (1) upon a showing of such relationship

23 with the convicted person. The Secretary shall make

24 such showing only after providing notice and oppor25 tunity for a hearing.
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1 (g) STATUTE OF LIMITATIONS.—

2 (1) IN GENERAL.—Except as provided in para3 graph (2), a proceeding in which a civil penalty or

4 other administrative sanction (other than a tem5 porary denial order) is sought under subsection (c)

6 may not be instituted more than 5 years after the

7 later of the date of the alleged violation or the date

8 of discovery of the alleged violation.

9 (2) EXCEPTION.—

10 (A) TOLLING.—In any case in which a

11 criminal indictment alleging a violation under

12 subsection (a) is returned within the time limits

13 prescribed by law for the institution of such ac14 tion, the limitation under paragraph (1) for

15 bringing a proceeding to impose a civil penalty

16 or other administrative sanction under this sec17 tion shall, upon the return of the criminal in18 dictment, be tolled against all persons named as

19 a defendant.

20 (B) DURATION.—The tolling of the limita21 tion with respect to a defendant under subpara22 graph (A) as a result of a criminal indictment

23 shall continue for a period of 6 months from

24 the date on which the conviction of the defend25 ant becomes final, the indictment against the
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1 defendant is dismissed, or the criminal action

2 has concluded.

3 (h) VIOLATIONS DEFINED BY REGULATION.—Noth4 ing in this section shall limit the authority of the Secretary

5 to define by regulation violations under this Act.

6 (i) CONSTRUCTION.—Nothing in subsection (c), (d),

7 (e), (f), or (g) limits—

8 (1) the availability of other administrative or

9 judicial remedies with respect to a violation of a pro10 vision of this Act, or any regulation, order, or license

11 issued under this Act;

12 (2) the authority to compromise and settle ad13 ministrative proceedings brought with respect to any

14 such violation; or

15 (3) the authority to compromise, remit, or miti16 gate seizures and forfeitures pursuant to section

17 1(b) of title VI of the Act of June 15, 1917 (22

18 U.S.C. 401(b)).

19 SEC. 604. MULTILATERAL EXPORT CONTROL REGIME VIO20 LATION SANCTIONS.

21 (a) IMPOSITION OF SANCTIONS.—

22 (1) IN GENERAL.—The President, subject to

23 subsection (c), shall apply sanctions under sub24 section (b) for a period of not less than 2 years and
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1 not more than 5 years, if the President determines

2 that—

3 (A) a foreign person has violated any regu4 lation issued by a country to control exports for

5 national security purposes pursuant to a multi6 lateral export control regime; and

7 (B) such violation has substantially aided a

8 country in—

9 (i) acquiring military significant capa10 bilities or weapons, if the country is an ac11 tual or potential adversary of the United

12 States;

13 (ii) acquiring nuclear weapons pro14 vided such country is other than the de15 clared nuclear states of the People’s Re16 public China, the Republic of France, the

17 Russian Federation, the United Kingdom,

18 and the United States;

19 (iii) acquiring biological or chemical

20 weapons; or

21 (iv) acquiring missiles.

22 (2) NOTIFICATION OF CONGRESS.—The Presi23 dent shall notify Congress of each action taken

24 under this section.
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1 (b) APPLICABILITY AND FORMS OF SANCTIONS.—

2 The sanctions referred to in subsection (a) shall apply to

3 the foreign person committing the violation, as well as to

4 any parent, affiliate, subsidiary, and successor entity of

5 the foreign person, and, except as provided in subsection

6 (c), are as follows:

7 (1) A prohibition on contracting with, and the

8 procurement of products and services from, a sanc9 tioned person, by any department, agency, or instru10 mentality of the United States Government.

11 (2) A prohibition on the importation into the

12 United States of all items produced by a sanctioned

13 person.

14 (c) EXCEPTIONS.—The President shall not apply

15 sanctions under this section—

16 (1) in the case of procurement of defense

17 items—

18 (A) under existing contracts or sub19 contracts, including the exercise of options for

20 production quantities to satisfy United States

21 operational military requirements;

22 (B) if the President determines that the

23 foreign person or other entity to which the

24 sanctions would otherwise be applied is a sole
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1 source supplier of essential defense items and

2 no alternative supplier can be identified; or

3 (C) if the President determines that such

4 items are essential to the national security

5 under defense coproduction agreements;

6 (2) in any case in which such sanctions would

7 violate United States international obligations in8 cluding treaties, agreements, or understandings; or

9 (3) to—

10 (A) items provided under contracts or

11 other binding agreements (as such terms are

12 defined by the President in regulations) entered

13 into before the date on which the President no14 tifies Congress of the intention to impose the

15 sanctions;

16 (B) after-market service and replacement

17 parts including upgrades;

18 (C) component parts, but not finished

19 products, essential to United States products or

20 productions; or

21 (D) information and technology.

22 (d) EXCLUSION.—The President shall not apply

23 sanctions under this section to a parent, affiliate, sub24 sidiary, and successor entity of a foreign person if the

25 President determines that—
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1 (1) the parent, affiliate, subsidiary, or successor

2 entity (as the case may be) has not knowingly vio3 lated the export control regulation violated by the

4 foreign person; and

5 (2) the government of the country with jurisdic6 tion over the parent, affiliate, subsidiary, or suc7 cessor entity had in effect, at the time of the viola8 tion by the foreign person, an effective export con9 trol system consistent with principles set forth in

10 section 601(b)(2).

11 (e) SUBSEQUENT MODIFICATIONS OF SANCTIONS.—

12 The President may, after consultation with the Committee

13 on Banking, Housing, and Urban Affairs of the Senate

14 and the Committee on International Relations of the

15 House of Representatives, limit the scope of sanctions ap16 plied to a parent, affiliate, subsidiary, or successor entity

17 of the foreign person determined to have committed the

18 violation on account of which the sanctions were imposed,

19 if the President determines that—

20 (1) the parent, affiliate, subsidiary, or successor

21 entity (as the case may be) has not, on the basis of

22 evidence available to the United States, itself vio23 lated the export control regulation involved, either

24 directly or through a course of conduct;
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1 (2) the government with jurisdiction over the

2 parent, affiliate, subsidiary, or successor entity has

3 improved its export control system as measured by

4 the criteria set forth in section 601(b)(2); and

5 (3) the parent, affiliate, subsidiary, or successor

6 entity, has instituted improvements in internal con7 trols sufficient to detect and prevent violations of

8 the multilateral export control regime.

9 SEC. 605. MISSILE PROLIFERATION CONTROL VIOLATIONS.

10 (a) VIOLATIONS BY UNITED STATES PERSONS.—

11 (1) SANCTIONS.—

12 (A) IN GENERAL.—If the President deter13 mines that a United States person knowingly—

14 (i) exports, transfers, or otherwise en15 gages in the trade of any item on the

16 MTCR Annex, in violation of the provi17 sions of section 38 (22 U.S.C. 2778) or

18 chapter 7 of the Arms Export Control Act,

19 title II or III of this Act, or any regula20 tions or orders issued under any such pro21 visions,

22 (ii) conspires to or attempts to engage

23 in such export, transfer, or trade, or

24 (iii) facilitates such export, transfer,

25 or trade by any other person,
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1 then the President shall impose the applicable

2 sanctions described in subparagraph (B).

3 (B) SANCTIONS DESCRIBED.—The sanc4 tions which apply to a United States person

5 under subparagraph (A) are the following:

6 (i) If the item on the MTCR Annex

7 involved in the export, transfer, or trade is

8 missile equipment or technology within cat9 egory II of the MTCR Annex, then the

10 President shall deny to such United States

11 person, for a period of 2 years, licenses for

12 the transfer of missile equipment or tech13 nology controlled under this Act.

14 (ii) If the item on the MTCR Annex

15 involved in the export, transfer, or trade is

16 missile equipment or technology within cat17 egory I of the MTCR Annex, then the

18 President shall deny to such United States

19 person, for a period of not less than 2

20 years, all licenses for items the export of

21 which is controlled under this Act.

22 (2) DISCRETIONARY SANCTIONS.—In the case

23 of any determination referred to in paragraph (1),

24 the Secretary may pursue any other appropriate

25 penalties under section 603.
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1 (3) WAIVER.—The President may waive the im2 position of sanctions under paragraph (1) on a per3 son with respect to an item if the President certifies

4 to Congress that—

5 (A) the item is essential to the national se6 curity of the United States; and

7 (B) such person is a sole source supplier of

8 the item, the item is not available from any al9 ternative reliable supplier, and the need for the

10 item cannot be met in a timely manner by im11 proved manufacturing processes or technological

12 developments.

13 (b) TRANSFERS OF MISSILE EQUIPMENT OR TECH14 NOLOGY BY FOREIGN PERSONS.—

15 (1) SANCTIONS.—

16 (A) IN GENERAL.—Subject to paragraphs

17 (3) through (7), if the President determines

18 that a foreign person, after the date of enact19 ment of this section, knowingly—

20 (i) exports, transfers, or otherwise en21 gages in the trade of any MTCR equip22 ment or technology that contributes to the

23 design, development, or production of mis24 siles in a country that is not an MTCR ad25 herent and would be, if it were United
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1 States-origin equipment or technology,

2 subject to the jurisdiction of the United

3 States under this Act,

4 (ii) conspires to or attempts to engage

5 in such export, transfer, or trade, or

6 (iii) facilitates such export, transfer,

7 or trade by any other person,

8 or if the President has made a determination

9 with respect to a foreign person under section

10 73(a) of the Arms Export Control Act, then the

11 President shall impose on that foreign person

12 the applicable sanctions under subparagraph

13 (B).

14 (B) SANCTIONS DESCRIBED.—The sanc15 tions which apply to a foreign person under

16 subparagraph (A) are the following:

17 (i) If the item involved in the export,

18 transfer, or trade is within category II of

19 the MTCR Annex, then the President shall

20 deny, for a period of 2 years, licenses for

21 the transfer to such foreign person of mis22 sile equipment or technology the export of

23 which is controlled under this Act.

24 (ii) If the item involved in the export,

25 transfer, or trade is within category I of
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1 the MTCR Annex, then the President shall

2 deny, for a period of not less than 2 years,

3 licenses for the transfer to such foreign

4 person of items the export of which is con5 trolled under this Act.

6 (iii) If, in addition to actions taken

7 under clauses (i) and (ii), the President de8 termines that the export, transfer, or trade

9 has substantially contributed to the design,

10 development, or production of missiles in a

11 country that is not an MTCR adherent,

12 then the President shall prohibit, for a pe13 riod of not less than 2 years, the importa14 tion into the United States of products

15 produced by that foreign person.

16 (2) INAPPLICABILITY WITH RESPECT TO MTCR

17 ADHERENTS.—Paragraph (1) does not apply with

18 respect to—

19 (A) any export, transfer, or trading activ20 ity that is authorized by the laws of an MTCR

21 adherent, if such authorization is not obtained

22 by misrepresentation or fraud; or

23 (B) any export, transfer, or trade of an

24 item to an end user in a country that is an

25 MTCR adherent.
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1 (3) EFFECT OF ENFORCEMENT ACTIONS BY

2 MTCR ADHERENTS.—Sanctions set forth in para3 graph (1) may not be imposed under this subsection

4 on a person with respect to acts described in such

5 paragraph or, if such sanctions are in effect against

6 a person on account of such acts, such sanctions

7 shall be terminated, if an MTCR adherent is taking

8 judicial or other enforcement action against that

9 person with respect to such acts, or that person has

10 been found by the government of an MTCR adher11 ent to be innocent of wrongdoing with respect to

12 such acts.

13 (4) ADVISORY OPINIONS.—The Secretary, in

14 consultation with the Secretary of State and the

15 Secretary of Defense, may, upon the request of any

16 person, issue an advisory opinion to that person as

17 to whether a proposed activity by that person would

18 subject that person to sanctions under this sub19 section. Any person who relies in good faith on such

20 an advisory opinion which states that the proposed

21 activity would not subject a person to such sanc22 tions, and any person who thereafter engages in

23 such activity, may not be made subject to such sanc24 tions on account of such activity.

25 (5) WAIVER AND REPORT TO CONGRESS.—
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1 (A) WAIVER.—In any case other than one

2 in which an advisory opinion has been issued

3 under paragraph (4) stating that a proposed ac4 tivity would not subject a person to sanctions

5 under this subsection, the President may waive

6 the application of paragraph (1) to a foreign

7 person if the President determines that such

8 waiver is essential to the national security of

9 the United States.

10 (B) REPORT TO CONGRESS.—In the event

11 that the President decides to apply the waiver

12 described in subparagraph (A), the President

13 shall so notify Congress not less than 20 work14 ing days before issuing the waiver. Such notifi15 cation shall include a report fully articulating

16 the rationale and circumstances which led the

17 President to apply the waiver.

18 (6) ADDITIONAL WAIVER.—The President may

19 waive the imposition of sanctions under paragraph

20 (1) on a person with respect to a product or service

21 if the President certifies to the Congress that—

22 (A) the product or service is essential to

23 the national security of the United States; and

24 (B) such person is a sole source supplier of

25 the product or service, the product or service is
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1 not available from any alternative reliable sup2 plier, and the need for the product or service

3 cannot be met in a timely manner by improved

4 manufacturing processes or technological devel5 opments.

6 (7) EXCEPTIONS.—The President shall not

7 apply the sanction under this subsection prohibiting

8 the importation of the products of a foreign

9 person—

10 (A) in the case of procurement of defense

11 articles or defense services—

12 (i) under existing contracts or sub13 contracts, including the exercise of options

14 for production quantities to satisfy require15 ments essential to the national security of

16 the United States;

17 (ii) if the President determines that

18 the person to which the sanctions would be

19 applied is a sole source supplier of the de20 fense articles and services, that the defense

21 articles or services are essential to the na22 tional security of the United States, and

23 that alternative sources are not readily or

24 reasonably available; or
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1 (iii) if the President determines that

2 such articles or services are essential to the

3 national security of the United States

4 under defense coproduction agreements or

5 NATO Programs of Cooperation;

6 (B) to products or services provided under

7 contracts entered into before the date on which

8 the President publishes his intention to impose

9 the sanctions; or

10 (C) to—

11 (i) spare parts,

12 (ii) component parts, but not finished

13 products, essential to United States prod14 ucts or production,

15 (iii) routine services and maintenance

16 of products, to the extent that alternative

17 sources are not readily or reasonably avail18 able, or

19 (iv) information and technology essen20 tial to United States products or produc21 tion.

22 (c) DEFINITIONS.—In this section:

23 (1) MISSILE.—The term ‘‘missile’’ means a cat24 egory I system as defined in the MTCR Annex, and

25 any other unmanned delivery system of similar capa-
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1 bility, as well as the specially designed production

2 facilities for these systems.

3 (2) MISSILE TECHNOLOGY CONTROL REGIME;

4 MTCR.—The term ‘‘Missile Technology Control Re5 gime’’ or ‘‘MTCR’’ means the policy statement, be6 tween the United States, the United Kingdom, the

7 Federal Republic of Germany, France, Italy, Can8 ada, and Japan, announced on April 16, 1987, to re9 strict sensitive missile-relevant transfers based on

10 the MTCR Annex, and any amendments thereto.

11 (3) MTCR ADHERENT.—The term ‘‘MTCR ad12 herent’’ means a country that participates in the

13 MTCR or that, pursuant to an international under14 standing to which the United States is a party, con15 trols MTCR equipment or technology in accordance

16 with the criteria and standards set forth in the

17 MTCR.

18 (4) MTCR ANNEX.—The term ‘‘MTCR Annex’’

19 means the Guidelines and Equipment and Tech20 nology Annex of the MTCR, and any amendments

21 thereto.

22 (5) MISSILE EQUIPMENT OR TECHNOLOGY;

23 MTCR EQUIPMENT OR TECHNOLOGY.—The terms

24 ‘‘missile equipment or technology’’ and ‘‘MTCR
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1 equipment or technology’’ mean those items listed in

2 category I or category II of the MTCR Annex.

3 (6) FOREIGN PERSON.—The term ‘‘foreign per4 son’’ means any person other than a United States

5 person.

6 (7) PERSON.—

7 (A) IN GENERAL.—The term ‘‘person’’

8 means a natural person as well as a corpora9 tion, business association, partnership, society,

10 trust, any other nongovernmental entity, orga11 nization, or group, and any governmental entity

12 operating as a business enterprise, and any suc13 cessor of any such entity.

14 (B) IDENTIFICATION IN CERTAIN CASES.—

15 In the case of countries where it may be impos16 sible to identify a specific governmental entity

17 referred to in subparagraph (A), the term ‘‘per18 son’’ means—

19 (i) all activities of that government re20 lating to the development or production of

21 any missile equipment or technology; and

22 (ii) all activities of that government

23 affecting the development or production of

24 aircraft, electronics, and space systems or

25 equipment.
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1 (8) OTHERWISE ENGAGED IN THE TRADE OF.—

2 The term ‘‘otherwise engaged in the trade of’’

3 means, with respect to a particular export or trans4 fer, to be a freight forwarder or designated export5 ing agent, or a consignee or end user of the item to

6 be exported or transferred.

7 SEC. 606. CHEMICAL AND BIOLOGICAL WEAPONS PRO8 LIFERATION SANCTIONS.

9 (a) IMPOSITION OF SANCTIONS.—

10 (1) DETERMINATION BY THE PRESIDENT.—Ex11 cept as provided in subsection (b)(2), the President

12 shall impose both of the sanctions described in sub13 section (c) if the President determines that a foreign

14 person, on or after the date of enactment of this sec15 tion, has knowingly and materially contributed—

16 (A) through the export from the United

17 States of any item that is subject to the juris18 diction of the United States under this Act, or

19 (B) through the export from any other

20 country of any item that would be, if it were a

21 United States item, subject to the jurisdiction

22 of the United States under this Act,

23 to the efforts by any foreign country, project, or en24 tity described in paragraph (2) to use, develop,
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1 produce, stockpile, or otherwise acquire chemical or

2 biological weapons.

3 (2) COUNTRIES, PROJECTS, OR ENTITIES RE4 CEIVING ASSISTANCE.—Paragraph (1) applies in the

5 case of—

6 (A) any foreign country that the President

7 determines has, at any time after the date of

8 enactment of this Act—

9 (i) used chemical or biological weap10 ons in violation of international law;

11 (ii) used lethal chemical or biological

12 weapons against its own nationals; or

13 (iii) made substantial preparations to

14 engage in the activities described in clause

15 (i) or (ii);

16 (B) any foreign country whose government

17 is determined for purposes of section 310 to be

18 a government that has repeatedly provided sup19 port for acts of international terrorism; or

20 (C) any other foreign country, project, or

21 entity designated by the President for purposes

22 of this section.

23 (3) PERSONS AGAINST WHICH SANCTIONS ARE

24 TO BE IMPOSED.—Sanctions shall be imposed pursu25 ant to paragraph (1) on—
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1 (A) the foreign person with respect to

2 which the President makes the determination

3 described in that paragraph;

4 (B) any successor entity to that foreign

5 person;

6 (C) any foreign person that is a parent or

7 subsidiary of that foreign person if that parent

8 or subsidiary knowingly assisted in the activities

9 which were the basis of that determination; and

10 (D) any foreign person that is an affiliate

11 of that foreign person if that affiliate knowingly

12 assisted in the activities which were the basis of

13 that determination and if that affiliate is con14 trolled in fact by that foreign person.

15 (b) CONSULTATIONS WITH AND ACTIONS BY FOR16 EIGN GOVERNMENT OF JURISDICTION.—

17 (1) CONSULTATIONS.—If the President makes

18 the determinations described in subsection (a)(1)

19 with respect to a foreign person, Congress urges the

20 President to initiate consultations immediately with

21 the government with primary jurisdiction over that

22 foreign person with respect to the imposition of

23 sanctions pursuant to this section.

24 (2) ACTIONS BY GOVERNMENT OF JURISDIC25 TION.—In order to pursue such consultations with
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1 that government, the President may delay imposition

2 of sanctions pursuant to this section for a period of

3 up to 90 days. Following the consultations, the

4 President shall impose sanctions unless the Presi5 dent determines and certifies to Congress that gov6 ernment has taken specific and effective actions, in7 cluding appropriate penalties, to terminate the in8 volvement of the foreign person in the activities de9 scribed in subsection (a)(1). The President may

10 delay imposition of sanctions for an additional pe11 riod of up to 90 days if the President determines

12 and certifies to Congress that government is in the

13 process of taking the actions described in the pre14 ceding sentence.

15 (3) REPORT TO CONGRESS.—The President

16 shall report to Congress, not later than 90 days

17 after making a determination under subsection

18 (a)(1), on the status of consultations with the appro19 priate government under this subsection, and the

20 basis for any determination under paragraph (2) of

21 this subsection that such government has taken spe22 cific corrective actions.

23 (c) SANCTIONS.—

24 (1) DESCRIPTION OF SANCTIONS.—The sanc25 tions to be imposed pursuant to subsection (a)(1)
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1 are, except as provided in paragraph (2) of this sub2 section, the following:

3 (A) PROCUREMENT SANCTION.—The

4 United States Government shall not procure, or

5 enter into any contract for the procurement of,

6 any goods or services from any person described

7 in subsection (a)(3).

8 (B) IMPORT SANCTIONS.—The importation

9 into the United States of products produced by

10 any person described in subsection (a)(3) shall

11 be prohibited.

12 (2) EXCEPTIONS.—The President shall not be

13 required to apply or maintain sanctions under this

14 section—

15 (A) in the case of procurement of defense

16 articles or defense services—

17 (i) under existing contracts or sub18 contracts, including the exercise of options

19 for production quantities to satisfy United

20 States operational military requirements;

21 (ii) if the President determines that

22 the person or other entity to which the

23 sanctions would otherwise be applied is a

24 sole source supplier of the defense articles

25 or services, that the defense articles or
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1 services are essential, and that alternative

2 sources are not readily or reasonably avail3 able; or

4 (iii) if the President determines that

5 such articles or services are essential to the

6 national security under defense coproduc7 tion agreements;

8 (B) to products or services provided under

9 contracts entered into before the date on which

10 the President publishes his intention to impose

11 sanctions;

12 (C) to—

13 (i) spare parts,

14 (ii) component parts, but not finished

15 products, essential to United States prod16 ucts or production, or

17 (iii) routine servicing and mainte18 nance of products, to the extent that alter19 native sources are not readily or reason20 ably available;

21 (D) to information and technology essen22 tial to United States products or production; or

23 (E) to medical or other humanitarian

24 items.
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1 (d) TERMINATION OF SANCTIONS.—The sanctions

2 imposed pursuant to this section shall apply for a period

3 of at least 12 months following the imposition of sanctions

4 and shall cease to apply thereafter only if the President

5 determines and certifies to the Congress that reliable in6 formation indicates that the foreign person with respect

7 to which the determination was made under subsection

8 (a)(1) has ceased to aid or abet any foreign government,

9 project, or entity in its efforts to acquire chemical or bio10 logical weapons capability as described in that subsection.

11 (e) WAIVER.—

12 (1) CRITERION FOR WAIVER.—The President

13 may waive the application of any sanction imposed

14 on any person pursuant to this section, after the end

15 of the 12-month period beginning on the date on

16 which that sanction was imposed on that person, if

17 the President determines and certifies to Congress

18 that such waiver is important to the national secu19 rity interests of the United States.

20 (2) NOTIFICATION OF AND REPORT TO CON21 GRESS.—If the President decides to exercise the

22 waiver authority provided in paragraph (1), the

23 President shall so notify the Congress not less than

24 20 days before the waiver takes effect. Such notifica25 tion shall include a report fully articulating the ra-
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1 tionale and circumstances which led the President to

2 exercise the waiver authority.

3 (f) DEFINITION OF FOREIGN PERSON.—For the pur4 poses of this section, the term ‘‘foreign person’’ means—

5 (1) an individual who is not a citizen of the

6 United States or an alien admitted for permanent

7 residence to the United States; or

8 (2) a corporation, partnership, or other entity

9 which is created or organized under the laws of a

10 foreign country or which has its principal place of

11 business outside the United States.

12 SEC. 607. ENFORCEMENT.

13 (a) GENERAL AUTHORITY AND DESIGNATION.—

14 (1) POLICY GUIDANCE ON ENFORCEMENT.—

15 The Secretary, in consultation with the Secretary of

16 the Treasury and the heads of other departments

17 and agencies that the Secretary considers appro18 priate, shall be responsible for providing policy guid19 ance on the enforcement of this Act.

20 (2) GENERAL AUTHORITIES.—

21 (A) EXERCISE OF AUTHORITY.—To the ex22 tent necessary or appropriate to the enforce23 ment of this Act, officers or employees of the

24 Department designated by the Secretary, offi25 cers and employees of the United States Cus-
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1 toms Service designated by the Commissioner of

2 Customs, and officers and employees of any

3 other department or agency designated by the

4 head of the department or agency, may exercise

5 the enforcement authority under paragraph (3).

6 (B) CUSTOMS SERVICE.—In carrying out

7 enforcement authority under paragraph (3), the

8 Commissioner of Customs and employees of the

9 United States Customs Services designated by

10 the Commissioner may make investigations

11 within or outside the United States and at

12 ports of entry into or exit from the United

13 States where officers of the United States Cus14 toms Service are authorized by law to carry out

15 law enforcement responsibilities. Subject to

16 paragraph (3), the United States Customs

17 Service is authorized, in the enforcement of this

18 Act, to search, detain (after search), and seize

19 commodities or technology at the ports of entry

20 into or exit from the United States where offi21 cers of the United States Customs Service are

22 authorized by law to conduct searches, deten23 tions, and seizures, and at the places outside

24 the United States where the United States Cus25 toms Service, pursuant to agreement or other
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1 arrangement with other countries, is authorized

2 to perform enforcement activities.

3 (C) OTHER EMPLOYEES.—In carrying out

4 enforcement authority under paragraph (3), the

5 Secretary and officers and employees of the De6 partment designated by the Secretary may

7 make investigations within the United States,

8 and may conduct, outside the United States,

9 pre-license and post-shipment verifications of

10 controlled items and investigations in the en11 forcement of section 602. The Secretary and of12 ficers and employees of the Department des13 ignated by the Secretary are authorized to

14 search, detain (after search), and seize items at

15 places within the United States other than

16 ports referred to in subparagraph (B). The

17 search, detention (after search), or seizure of

18 items at the ports and places referred to in sub19 paragraph (B) may be conducted by officers

20 and employees of the Department only with the

21 concurrence of the Commissioner of Customs or

22 a person designated by the Commissioner.

23 (D) AGREEMENTS AND ARRANGEMENTS.—

24 The Secretary and the Commissioner of Cus25 toms may enter into agreements and arrange-
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1 ments for the enforcement of this Act, including

2 foreign investigations and information ex3 change.

4 (3) SPECIFIC AUTHORITIES.—

5 (A) ACTIONS BY ANY DESIGNATED PER6 SONNEL.—Any officer or employee designated

7 under paragraph (2), in carrying out the en8 forcement authority under this Act, may do the

9 following:

10 (i) Make investigations of, obtain in11 formation from, make inspection of any

12 books, records, or reports (including any

13 writings required to be kept by the Sec14 retary), premises, or property of, and take

15 the sworn testimony of, any person.

16 (ii) Administer oaths or affirmations,

17 and by subpoena require any person to ap18 pear and testify or to appear and produce

19 books, records, and other writings, or both.

20 In the case of contumacy by, or refusal to

21 obey a subpoena issued to, any such per22 son, a district court of the United States,

23 on request of the Attorney General and

24 after notice to any such person and a hear25 ing, shall have jurisdiction to issue an
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1 order requiring such person to appear and

2 give testimony or to appear and produce

3 books, records, and other writings, or both.

4 Any failure to obey such order of the court

5 may be punished by such court as a con6 tempt thereof. The attendance of witnesses

7 and the production of documents provided

8 for in this clause may be required from

9 any State, the District of Columbia, or in

10 any territory of the United States at any

11 designated place. Witnesses subpoenaed

12 under this subsection shall be paid the

13 same fees and mileage allowance as paid

14 witnesses in the district courts of the

15 United States.

16 (B) ACTIONS BY OFFICE OF EXPORT EN17 FORCEMENT AND CUSTOMS SERVICE PER18 SONNEL.—

19 (i) OFFICE OF EXPORT ENFORCE20 MENT AND CUSTOMS SERVICE PER21 SONNEL.—Any officer or employee of the

22 Office of Export Enforcement of the De23 partment of Commerce (in this Act re24 ferred to as ‘‘OEE’’) who is designated by

25 the Secretary under paragraph (2), and
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1 any officer or employee of the United

2 States Customs Service who is designated

3 by the Commissioner of Customs under

4 paragraph (2), may do the following in

5 carrying out the enforcement authority

6 under this Act:

7 (I) Execute any warrant or other

8 process issued by a court or officer of

9 competent jurisdiction with respect to

10 the enforcement of this Act.

11 (II) Make arrests without war12 rant for any violation of this Act com13 mitted in his or her presence or view,

14 or if the officer or employee has prob15 able cause to believe that the person

16 to be arrested has committed, is com17 mitting, or is about to commit such a

18 violation.

19 (III) Carry firearms.

20 (ii) OEE PERSONNEL.—Any officer

21 and employee of the OEE designated by

22 the Secretary under paragraph (2) shall

23 exercise the authority set forth in clause (i)

24 pursuant to guidelines approved by the At25 torney General.
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1 (C) OTHER ACTIONS BY CUSTOMS SERVICE

2 PERSONNEL.—Any officer or employee of the

3 United States Customs Service designated by

4 the Commissioner of Customs under paragraph

5 (2) may do the following in carrying out the en6 forcement authority under this Act:

7 (i) Stop, search, and examine a vehi8 cle, vessel, aircraft, or person on which or

9 whom the officer or employee has reason10 able cause to suspect there is any item

11 that has been, is being, or is about to be

12 exported from or transited through the

13 United States in violation of this Act.

14 (ii) Detain and search any package or

15 container in which the officer or employee

16 has reasonable cause to suspect there is

17 any item that has been, is being, or is

18 about to be exported from or transited

19 through the United States in violation of

20 this Act.

21 (iii) Detain (after search) or seize any

22 item, for purposes of securing for trial or

23 forfeiture to the United States, on or

24 about such vehicle, vessel, aircraft, or per25 son or in such package or container, if the
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1 officer or employee has probable cause to

2 believe the item has been, is being, or is

3 about to be exported from or transited

4 through the United States in violation of

5 this Act.

6 (4) OTHER AUTHORITIES NOT AFFECTED.—The

7 authorities conferred by this section are in addition

8 to any authorities conferred under other laws.

9 (b) FORFEITURE.—

10 (1) IN GENERAL.—Any tangible items lawfully

11 seized under subsection (a) by designated officers or

12 employees shall be subject to forfeiture to the United

13 States.

14 (2) APPLICABLE LAWS.—Those provisions of

15 law relating to—

16 (A) the seizure, summary and judicial for17 feiture, and condemnation of property for viola18 tions of the customs laws;

19 (B) the disposition of such property or the

20 proceeds from the sale thereof;

21 (C) the remission or mitigation of such for22 feitures; and

23 (D) the compromise of claims,

24 shall apply to seizures and forfeitures incurred, or

25 alleged to have been incurred, under the provisions
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1 of this subsection, insofar as applicable and not in2 consistent with this Act.

3 (3) FORFEITURES UNDER CUSTOMS LAWS.—

4 Duties that are imposed upon the customs officer or

5 any other person with respect to the seizure and for6 feiture of property under the customs laws may be

7 performed with respect to seizures and forfeitures of

8 property under this subsection by the Secretary or

9 any officer or employee of the Department that may

10 be authorized or designated for that purpose by the

11 Secretary, or, upon the request of the Secretary, by

12 any other agency that has authority to manage and

13 dispose of seized property.

14 (c) REFERRAL OF CASES.—All cases involving viola15 tions of this Act shall be referred to the Secretary for pur16 poses of determining civil penalties and administrative

17 sanctions under section 603 or to the Attorney General

18 for criminal action in accordance with this Act or to both

19 the Secretary and the Attorney General.

20 (d) UNDERCOVER INVESTIGATION OPERATIONS.—

21 (1) USE OF FUNDS.—With respect to any un22 dercover investigative operation conducted by the

23 OEE that is necessary for the detection and pros24 ecution of violations of this Act—
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1 (A) funds made available for export en2 forcement under this Act may be used to pur3 chase property, buildings, and other facilities,

4 and to lease equipment, conveyances, and space

5 within the United States, without regard to sec6 tions 1341 and 3324 of title 31, United States

7 Code, the third undesignated paragraph under

8 the heading of ‘‘miscellaneous’’ of the Act of

9 March 3, 1877, (40 U.S.C. 34), sections

10 3732(a) and 3741 of the Revised Statutes of

11 the United States (41 U.S.C. 11(a) and 22),

12 and subsections (a) and (c) of section 304, and

13 section 305 of the Federal Property and Ad14 ministrative Services Act of 1949 (41 U.S.C.

15 254 (a) and (c) and 255);

16 (B) funds made available for export en17 forcement under this Act may be used to estab18 lish or to acquire proprietary corporations or

19 business entities as part of an undercover oper20 ation, and to operate such corporations or busi21 ness entities on a commercial basis, without re22 gard to sections 1341, 3324, and 9102 of title

23 31, United States Code;

24 (C) funds made available for export en25 forcement under this Act and the proceeds from
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1 undercover operations may be deposited in

2 banks or other financial institutions without re3 gard to the provisions of section 648 of title 18,

4 United States Code, and section 3302 of title

5 31, United States Code; and

6 (D) the proceeds from undercover oper7 ations may be used to offset necessary and rea8 sonable expenses incurred in such operations

9 without regard to the provisions of section 3302

10 of title 31, United States Code,

11 if the Director of OEE (or an officer or employee

12 designated by the Director) certifies, in writing, that

13 the action authorized by subparagraph (A), (B), (C),

14 or (D) for which the funds would be used is nec15 essary for the conduct of the undercover operation.

16 (2) DISPOSITION OF BUSINESS ENTITIES.—If a

17 corporation or business entity established or ac18 quired as part of an undercover operation has a net

19 value of more than $250,000 and is to be liquidated,

20 sold, or otherwise disposed of, the Director of OEE

21 shall report the circumstances to the Secretary and

22 the Comptroller General of the United States as

23 much in advance of such disposition as the Director

24 of the OEE (or the Director’s designee) determines

25 is practicable. The proceeds of the liquidation, sale,
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1 or other disposition, after obligations incurred by the

2 corporation or business enterprise are met, shall be

3 deposited in the Treasury of the United States as

4 miscellaneous receipts. Any property or equipment

5 purchased pursuant to paragraph (1) may be re6 tained for subsequent use in undercover operations

7 under this section. When such property or equip8 ment is no longer needed, it shall be considered sur9 plus and disposed of as surplus government prop10 erty.

11 (3) DEPOSIT OF PROCEEDS.—As soon as the

12 proceeds from an OEE undercover investigative op13 eration with respect to which an action is authorized

14 and carried out under this subsection are no longer

15 needed for the conduct of such operation, the pro16 ceeds or the balance of the proceeds remaining at

17 the time shall be deposited into the Treasury of the

18 United States as miscellaneous receipts.

19 (4) AUDIT AND REPORT.—

20 (A) AUDIT.—The Director of OEE shall

21 conduct a detailed financial audit of each closed

22 OEE undercover investigative operation and

23 shall submit the results of the audit in writing

24 to the Secretary. Not later than 180 days after

25 an undercover operation is closed, the Secretary
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1 shall submit to Congress a report on the results

2 of the audit.

3 (B) REPORT.—The Secretary shall submit

4 annually to Congress a report, which may be in5 cluded in the annual report under section 801,

6 specifying the following information:

7 (i) The number of undercover inves8 tigative operations pending as of the end of

9 the period for which such report is sub10 mitted.

11 (ii) The number of undercover inves12 tigative operations commenced in the 1-

13 year period preceding the period for which

14 such report is submitted.

15 (iii) The number of undercover inves16 tigative operations closed in the 1-year pe17 riod preceding the period for which such

18 report is submitted and, with respect to

19 each such closed undercover operation, the

20 results obtained and any civil claims made

21 with respect to the operation.

22 (5) DEFINITIONS.—For purposes of paragraph

23 (4)—

24 (A) the term ‘‘closed’’, with respect to an

25 undercover investigative operation, refers to the
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1 earliest point in time at which all criminal pro2 ceedings (other than appeals) pursuant to the

3 investigative operation are concluded, or covert

4 activities pursuant to such operation are con5 cluded, whichever occurs later; and

6 (B) the terms ‘‘undercover investigative

7 operation’’ and ‘‘undercover operation’’ mean

8 any undercover investigative operation con9 ducted by the OEE—

10 (i) in which the gross receipts (exclud11 ing interest earned) exceed $25,000, or ex12 penditures (other than expenditures for

13 salaries of employees) exceed $75,000, and

14 (ii) which is exempt from section 3302

15 or 9102 of title 31, United States Code,

16 except that clauses (i) and (ii) shall not

17 apply with respect to the report to Con18 gress required by paragraph (4)(B).

19 (e) WIRETAPS.—

20 (1) AUTHORITY.—Interceptions of communica21 tions in accordance with section 2516 of title 18,

22 United States Code, are authorized to further the

23 enforcement of this Act.
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1 (2) CONFORMING AMENDMENT.—Section

2 2516(1) of title 18, United States Code, is amended

3 by adding at the end the following:

4 ‘‘(q)(i) any violation of, or conspiracy to

5 violate, the Export Administration Act of 1999

6 or the Export Administration Act of 1979.’’.

7 (f) POST-SHIPMENT VERIFICATION.—

8 (1) IN GENERAL.—The Secretary shall target

9 post-shipment verifications to exports involving the

10 greatest risk to national security including, but not

11 limited to, exports of high performance computers.

12 (2) REPEAL.—Section 1213 of the National

13 Defense Authorization Act for Fiscal Year 1998 is

14 repealed.

15 (g) REFUSAL TO ALLOW POST-SHIPMENT

16 VERIFICATION.—

17 (1) IN GENERAL.—If an end-user refuses to

18 allow post-shipment verification of a controlled item,

19 the Secretary shall deny a license for the export of

20 any controlled item to such end-user until such post21 shipment verification occurs.

22 (2) RELATED PERSONS.—The Secretary may

23 exercise the authority under paragraph (1) with re24 spect to any person related through affiliation, own25 ership, control, or position of responsibility, to any
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1 end-user refusing to allow post-shipment verification

2 of a controlled item.

3 (3) REFUSAL BY COUNTRY.—If the country in

4 which the end-user is located refuses to allow post5 shipment verification of a controlled item, the Sec6 retary may deny a license for the export of that item

7 or any substantially identical or directly competitive

8 item or class of items to all end-users in that coun9 try until such post-shipment verification is allowed.

10 (h) AWARD OF COMPENSATION; PATRIOT PROVI11 SION.—

12 (1) IN GENERAL.—If—

13 (A) any person, who is not an employee or

14 officer of the United States, furnishes to a

15 United States attorney, to the Secretary of the

16 Treasury or the Secretary, or to appropriate of17 ficials in the Department of the Treasury or the

18 Department of Commerce, original information

19 concerning a violation of this Act or any regula20 tion, order, or license issued under this Act,

21 which is being, or has been, perpetrated or con22 templated by any other person, and

23 (B) such information leads to the recovery

24 of any criminal fine, civil penalty, or forfeiture,
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1 the Secretary may award and pay such person an

2 amount that does not exceed 25 percent of the net

3 amount of the criminal fine or civil penalty recovered

4 or the amount forfeited.

5 (2) DOLLAR LIMITATION.—The amount award6 ed and paid to any person under this section may

7 not exceed $250,000 for any case.

8 (3) SOURCE OF PAYMENT.—The amount paid

9 under this section shall be paid out of any penalties,

10 forfeitures, or appropriated funds.

11 (i) FREIGHT FORWARDERS BEST PRACTICES PRO12 GRAM AUTHORIZATION.—There is authorized to be appro13 priated for the Department of Commerce $3,500,000 and

14 such sums as may be necessary to hire 20 additional em15 ployees to assist United States freight forwarders and

16 other interested parties in developing and implementing,

17 on a voluntary basis, a ‘‘best practices’’ program to ensure

18 that exports of controlled items are undertaken in compli19 ance with this Act.

20 (j) END-USE VERIFICATION AUTHORIZATION.—

21 (1) IN GENERAL.—There is authorized to be

22 appropriated for the Department of Commerce

23 $4,500,000 and such sums as may be necessary to

24 hire 10 additional overseas investigators to be posted

25 in the People’s Republic of China, the Russian Fed-
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1 eration, the Hong Kong Special Administrative Re2 gion, the Republic of India, Singapore, Egypt, and

3 Taiwan, or any other place the Secretary deems ap4 propriate, for the purpose of verifying the end use

5 of high-risk, dual-use technology.

6 (2) REPORT.—Not later than 2 years after the

7 date of enactment of this Act and annually there8 after, the Department shall, in its annual report to

9 Congress on export controls, include a report on the

10 effectiveness of the end-use verification activities au11 thorized under subsection (a). The report shall in12 clude the following information:

13 (A) The activities of the overseas investiga14 tors of the Department.

15 (B) The types of goods and technologies

16 that were subject to end-use verification.

17 (C) The ability of the Department’s inves18 tigators to detect the illegal transfer of high

19 risk, dual-use goods and technologies.

20 (k) ENHANCED COOPERATION WITH UNITED

21 STATES CUSTOMS SERVICE.—Consistent with the pur22 poses of this Act, the Secretary is authorized to undertake,

23 in cooperation with the United States Customs Service,

24 such measures as may be necessary or required to enhance
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1 the ability of the United States to detect unlawful exports

2 and to enforce violations of this Act.

3 (l) REFERENCE TO ENFORCEMENT.—For purposes

4 of this section, a reference to the enforcement of this Act

5 or to a violation of this Act includes a reference to the

6 enforcement or a violation of any regulation, license, or

7 order issued under this Act.

8 (m) AUTHORIZATION FOR EXPORT LICENSING AND

9 ENFORCEMENT COMPUTER SYSTEM.—There is author10 ized to be appropriated for the Department $5,000,000

11 and such other sums as may be necessary for planning,

12 design, and procurement of a computer system to replace

13 the Department’s primary export licensing and computer

14 enforcement system.

15 SEC. 608. ADMINISTRATIVE PROCEDURE.

16 (a) EXEMPTIONS FROM ADMINISTRATIVE PROCE17 DURE.—Except as provided in this section, the functions

18 exercised under this Act are excluded from the operation

19 of sections 551, 553 through 559, and 701 through 706

20 of title 5, United States Code.

21 (b) PROCEDURES RELATING TO CIVIL PENALTIES

22 AND SANCTIONS.—

23 (1) ADMINISTRATIVE PROCEDURES.—Any ad24 ministrative sanction imposed under section 603

25 may be imposed only after notice and opportunity
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1 for an agency hearing on the record in accordance

2 with sections 554 through 557 of title 5, United

3 States Code. The imposition of any such administra4 tive sanction shall be subject to judicial review in ac5 cordance with sections 701 through 706 of title 5,

6 United States Code.

7 (2) AVAILABILITY OF CHARGING LETTER.—Any

8 charging letter or other document initiating adminis9 trative proceedings for the imposition of sanctions

10 for violations of the regulations issued under section

11 602 shall be made available for public inspection and

12 copying.

13 (c) COLLECTION.—If any person fails to pay a civil

14 penalty imposed under section 603, the Secretary may ask

15 the Attorney General to commence a civil action in an ap16 propriate district court of the United States to recover the

17 amount imposed (plus interest at currently prevailing

18 rates from the date of the final order). No such action

19 may be commenced more than 5 years after the order im20 posing the civil penalty becomes final. In such an action,

21 the validity, amount, and appropriateness of such penalty

22 shall not be subject to review.

23 (d) IMPOSITION OF TEMPORARY DENIAL ORDERS.—

24 (1) GROUNDS FOR IMPOSITION.—In any case in

25 which there is reasonable cause to believe that a per-
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1 son is engaged in or is about to engage in any act

2 or practice which constitutes or would constitute a

3 violation of this Act, or any regulation, order, or li4 cense issued under this Act, including any diversion

5 of goods or technology from an authorized end use

6 or end user, and in any case in which a criminal in7 dictment has been returned against a person alleging

8 a violation of this Act or any of the statutes listed

9 in section 603, the Secretary may, without a hear10 ing, issue an order temporarily denying that person’s

11 United States export privileges (hereafter in this

12 subsection referred to as a ‘‘temporary denial

13 order’’). A temporary denial order shall be effective

14 for such period (not in excess of 180 days) as the

15 Secretary specifies in the order, but may be renewed

16 by the Secretary, following notice and an oppor17 tunity for a hearing, for additional periods of not

18 more than 180 days each.

19 (2) ADMINISTRATIVE APPEALS.—The person or

20 persons subject to the issuance or renewal of a tem21 porary denial order may appeal the issuance or re22 newal of the temporary denial order, supported by

23 briefs and other material, to an administrative law

24 judge who shall, within 15 working days after the

25 appeal is filed, issue a decision affirming, modifying,
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1 or vacating the temporary denial order. The tem2 porary denial order shall be affirmed if it is shown

3 that—

4 (A) there is reasonable cause to believe

5 that the person subject to the order is engaged

6 in or is about to engage in any act or practice

7 that constitutes or would constitute a violation

8 of this Act, or any regulation, order, or license

9 issued under this Act; or

10 (B) a criminal indictment has been re11 turned against the person subject to the order

12 alleging a violation of this Act or any of the

13 statutes listed in section 603.

14 The decision of the administrative law judge shall be

15 final unless, within 10 working days after the date

16 of the administrative law judge’s decision, an appeal

17 is filed with the Secretary. On appeal, the Secretary

18 shall either affirm, modify, reverse, or vacate the de19 cision of the administrative law judge by written

20 order within 10 working days after receiving the ap21 peal. The written order of the Secretary shall be

22 final and is not subject to judicial review, except as

23 provided in paragraph (3). The materials submitted

24 to the administrative law judge and the Secretary
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1 shall constitute the administrative record for pur2 poses of review by the court.

3 (3) COURT APPEALS.—An order of the Sec4 retary affirming, in whole or in part, the issuance or

5 renewal of a temporary denial order may, within 15

6 days after the order is issued, be appealed by a per7 son subject to the order to the United States Court

8 of Appeals for the District of Columbia Circuit,

9 which shall have the jurisdiction of the appeal. The

10 court may review only those issues necessary to de11 termine whether the issuance of the temporary de12 nial order was based on reasonable cause to believe

13 that the person subject to the order was engaged in

14 or was about to engage in any act or practice that

15 constitutes or would constitute a violation of this

16 title, or any regulation, order, or license issued

17 under this Act, or whether a criminal indictment has

18 been returned against the person subject to the

19 order alleging a violation of this Act or of any of the

20 statutes listed in section 603. The court shall vacate

21 the Secretary’s order if the court finds that the Sec22 retary’s order is arbitrary, capricious, an abuse of

23 discretion, or otherwise not in accordance with law.
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1 TITLE VII—EXPORT CONTROL

2 AUTHORITY AND REGULATIONS

3 SEC. 701. EXPORT CONTROL AUTHORITY AND REGULA4 TIONS.

5 (a) EXPORT CONTROL AUTHORITY.—

6 (1) IN GENERAL.—Unless otherwise reserved to

7 the President or a department (other than the De8 partment) or agency of the United States, all power,

9 authority, and discretion conferred by this Act shall

10 be exercised by the Secretary.

11 (2) DELEGATION OF FUNCTIONS OF THE SEC12 RETARY.—The Secretary may delegate any function

13 under this Act, unless otherwise provided, to the

14 Under Secretary of Commerce for Export Adminis15 tration or to any other officer of the Department.

16 (b) UNDER SECRETARY OF COMMERCE; ASSISTANT

17 SECRETARIES.—

18 (1) UNDER SECRETARY OF COMMERCE.—There

19 shall be within the Department an Under Secretary

20 of Commerce for Export Administration (in this sec21 tion referred to as the ‘‘Under Secretary’’) who shall

22 be appointed by the President, by and with the ad23 vice and consent of the Senate. The Under Secretary

24 shall carry out all functions of the Secretary under
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1 this Act and other provisions of law relating to na2 tional security, as the Secretary may delegate.

3 (2) ADDITIONAL ASSISTANT SECRETARIES.—In

4 addition to the number of Assistant Secretaries oth5 erwise authorized for the Department of Commerce,

6 there shall be within the Department of Commerce

7 the following Assistant Secretaries of Commerce:

8 (A) An Assistant Secretary for Export Ad9 ministration who shall be appointed by the

10 President, by and with the advice and consent

11 of the Senate, and who shall assist the Sec12 retary and the Under Secretary in carrying out

13 functions relating to export listing and licens14 ing.

15 (B) An Assistant Secretary for Export En16 forcement who shall be appointed by the Presi17 dent, by and with the advice and consent of the

18 Senate, and who shall assist the Secretary and

19 the Under Secretary in carrying out functions

20 relating to export enforcement.

21 (c) ISSUANCE OF REGULATIONS.—

22 (1) IN GENERAL.—The President and the Sec23 retary may issue such regulations as are necessary

24 to carry out this Act. Any such regulations the pur25 pose of which is to carry out title II or title III may
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1 be issued only after the regulations are submitted

2 for review to such departments or agencies as the

3 President considers appropriate. The Secretary shall

4 consult with the appropriate export control advisory

5 committee appointed under section 105(f) in formu6 lating regulations under this title. The second sen7 tence of this subsection does not require the concur8 rence or approval of any official, department, or

9 agency to which such regulations are submitted.

10 (2) AMENDMENTS TO REGULATIONS.—If the

11 Secretary proposes to amend regulations issued

12 under this Act, the Secretary shall report to the

13 Committee on Banking, Housing, and Urban Affairs

14 of the Senate and the Committee on International

15 Relations of the House of Representatives on the in16 tent and rationale of such amendments. Such report

17 shall evaluate the cost and burden to the United

18 States exporters of the proposed amendments in re19 lation to any enhancement of licensing objectives.

20 The Secretary shall consult with the appropriate ex21 port control advisory committees appointed under

22 section 105(f) in amending regulations issued under

23 this Act.

24 SEC. 702. CONFIDENTIALITY OF INFORMATION.

25 (a) EXEMPTIONS FROM DISCLOSURE.—
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1 (1) INFORMATION OBTAINED ON OR BEFORE

2 JUNE 30, 1980.—Except as otherwise provided by the

3 third sentence of section 602(c)(2), information ob4 tained under the Export Administration Act of

5 1979, or any predecessor statute, on or before June

6 30, 1980, which is deemed confidential, including

7 Shipper’s Export Declarations, or with respect to

8 which a request for confidential treatment is made

9 by the person furnishing such information, shall not

10 be subject to disclosure under section 552 of title 5,

11 United States Code, and such information shall not

12 be published or disclosed, unless the Secretary deter13 mines that the withholding thereof is contrary to the

14 national interest.

15 (2) INFORMATION OBTAINED AFTER JUNE 30,

16 1980.—Except as otherwise provided by the third

17 sentence of section 13(b)(2) of the Export Adminis18 tration Act of 1979, information obtained under this

19 Act, under the Export Administration Act of 1979

20 after June 30, 1980, or under the Export Adminis21 tration regulations as maintained and amended

22 under the authority of the International Emergency

23 Economic Powers Act (50 U.S.C. 1706), may be

24 withheld from disclosure only to the extent permitted

25 by statute, except that information submitted, ob-
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1 tained, or considered in connection with an applica2 tion for an export license or other export authoriza3 tion (or recordkeeping or reporting requirement)

4 under the Export Administration Act of 1979, under

5 this Act, or under the Export Administration regula6 tions as maintained and amended under the author7 ity of the International Emergency Economic Pow8 ers Act (50 U.S.C. 1706), including—

9 (A) the export license or other export au10 thorization itself,

11 (B) classification requests described in sec12 tion 501(h),

13 (C) information or evidence obtained in the

14 course of any investigation,

15 (D) information obtained or furnished

16 under title VII in connection with any inter17 national agreement, treaty, or other obligation,

18 and

19 (E) information obtained in making the

20 determinations set forth in section 211 of this

21 Act,

22 and information obtained in any investigation of an

23 alleged violation of section 602 of this Act except for

24 information required to be disclosed by section

25 602(c)(2) or 606(b)(2) of this Act, shall be withheld
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1 from public disclosure and shall not be subject to

2 disclosure under section 552 of title 5, United States

3 Code, unless the release of such information is deter4 mined by the Secretary to be in the national inter5 est.

6 (b) INFORMATION TO CONGRESS AND GAO.—

7 (1) IN GENERAL.—Nothing in this title shall be

8 construed as authorizing the withholding of informa9 tion from Congress or from the General Accounting

10 Office.

11 (2) AVAILABILITY TO THE CONGRESS—

12 (A) IN GENERAL.—Any information ob13 tained at any time under this title or under any

14 predecessor Act regarding the control of ex15 ports, including any report or license applica16 tion required under this title, shall be made

17 available to any committee or subcommittee of

18 Congress of appropriate jurisdiction upon the

19 request of the chairman or ranking minority

20 member of such committee or subcommittee.

21 (B) PROHIBITION ON FURTHER DISCLO22 SURE.—No committee, subcommittee, or Mem23 ber of Congress shall disclose any information

24 obtained under this Act or any predecessor Act

25 regarding the control of exports which is sub-
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1 mitted on a confidential basis to the Congress

2 under subparagraph (A) unless the full com3 mittee to which the information is made avail4 able determines that the withholding of the in5 formation is contrary to the national interest.

6 (3) AVAILABILITY TO THE GAO.—

7 (A) IN GENERAL.—Notwithstanding sub8 section (a), information described in paragraph

9 (2) shall, consistent with the protection of intel10 ligence, counterintelligence, and law enforce11 ment sources, methods, and activities, as deter12 mined by the agency that originally obtained

13 the information, and consistent with the provi14 sions of section 716 of title 31, United States

15 Code, be made available only by the agency,

16 upon request, to the Comptroller General of the

17 United States or to any officer or employee of

18 the General Accounting Office authorized by

19 the Comptroller General to have access to such

20 information.

21 (B) PROHIBITION ON FURTHER DISCLO22 SURES.—No officer or employee of the General

23 Accounting Office shall disclose, except to Con24 gress in accordance with this paragraph, any

25 such information which is submitted on a con-
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1 fidential basis and from which any individual

2 can be identified.

3 (c) INFORMATION EXCHANGE.—Notwithstanding

4 subsection (a), the Secretary and the Commissioner of

5 Customs shall exchange licensing and enforcement infor6 mation with each other as necessary to facilitate enforce7 ment efforts and effective license decisions.

8 (d) PENALTIES FOR DISCLOSURE OF CONFIDENTIAL

9 INFORMATION.—

10 (1) DISCLOSURE PROHIBITED.—No officer or

11 employee of the United States, or any department or

12 agency thereof, may publish, divulge, disclose, or

13 make known in any manner or to any extent not au14 thorized by law any information that—

15 (A) the officer or employee obtains in the

16 course of his or her employment or official du17 ties or by reason of any examination or inves18 tigation made by, or report or record made to

19 or filed with, such department or agency, or of20 ficer or employee thereof; and

21 (B) is exempt from disclosure under this

22 section.

23 (2) CRIMINAL PENALTIES.—Any such officer or

24 employee who knowingly violates paragraph (1) shall

25 be fined not more than $50,000, imprisoned not
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1 more than 1 year, or both, for each violation of

2 paragraph (1). Any such officer or employee may

3 also be removed from office or employment.

4 (3) CIVIL PENALTIES; ADMINISTRATIVE SANC5 TIONS.—The Secretary may impose a civil penalty of

6 not more than $5,000 for each violation of para7 graph (1). Any officer or employee who commits

8 such violation may also be removed from office or

9 employment for the violation of paragraph (1). Sub10 sections 603 (e), (g), (h), and (i) and 606 (a), (b),

11 and (c) shall apply to violations described in this

12 paragraph.

13 TITLE VIII—MISCELLANEOUS

14 PROVISIONS

15 SEC. 801. ANNUAL AND PERIODIC REPORTS.

16 (a) ANNUAL REPORT.—Not later than February 1 of

17 each year, the Secretary shall submit to Congress a report

18 on the administration of this Act during the fiscal year

19 ending September 30 of the preceding calendar year. All

20 Federal agencies shall cooperate fully with the Secretary

21 in providing information for each such report.

22 (b) REPORT ELEMENTS.—Each such report shall in23 clude in detail—

24 (1) a description of the implementation of the

25 export control policies established by this Act, in-
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1 cluding any delegations of authority by the President

2 and any other changes in the exercise of delegated

3 authority;

4 (2) a description of the changes to and the

5 year-end status of country tiering and the Control

6 List;

7 (3) a description of the determinations made

8 with respect to foreign availability and mass-market

9 status, the set-asides of foreign availability and

10 mass-market status determinations, and negotiations

11 to eliminate foreign availability;

12 (4) a description of the regulations issued under

13 this Act;

14 (5) a description of organizational and proce15 dural changes undertaken in furtherance of this Act;

16 (6) a description of the enforcement activities,

17 violations, and sanctions imposed under section 604;

18 (7) a statistical summary of all applications and

19 notifications, including—

20 (A) the number of applications and notifi21 cations pending review at the beginning of the

22 fiscal year;

23 (B) the number of notifications returned

24 and subject to full license procedure;
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1 (C) the number of notifications with no ac2 tion required;

3 (D) the number of applications that were

4 approved, denied, or withdrawn, and the num5 ber of applications where final action was

6 taken; and

7 (E) the number of applications and notifi8 cations pending review at the end of the fiscal

9 year;

10 (8) summary of export license data by export

11 identification code and dollar value by country;

12 (9) an identification of processing time by—

13 (A) overall average, and

14 (B) top 25 export identification codes;

15 (10) an assessment of the effectiveness of mul16 tilateral regimes, and a description of negotiations

17 regarding export controls;

18 (11) a description of the significant differences

19 between the export control requirements of the

20 United States and those of other multilateral control

21 regime members, the specific differences between

22 United States requirements and those of other sig23 nificant supplier countries, and a description of the

24 extent to which the executive branch intends to ad25 dress the differences;
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1 (12) an assessment of the costs of export con2 trols;

3 (13) a description of the progress made toward

4 achieving the goals established for the Department

5 dealing with export controls under the Government

6 Performance Results Act; and

7 (14) any other reports required by this Act to

8 be submitted to the Committee on Banking, Hous9 ing, and Urban Affairs of the Senate and the Com10 mittee on International Relations of the House of

11 Representatives.

12 (c) CONGRESSIONAL NOTIFICATION.—Whenever the

13 Secretary determines, in consultation with other appro14 priate departments and agencies, that a significant viola15 tion of this Act poses a direct and imminent threat to

16 United States national security interests, the Secretary,

17 in consultation with other appropriate departments and

18 agencies, shall advise the Committee on Banking, Hous19 ing, and Urban Affairs of the Senate and the Committee

20 on International Relations of the House of Representa21 tives of such violation consistent with the protection of law

22 enforcement sources, methods, and activities.

23 (d) FEDERAL REGISTER PUBLICATION REQUIRE24 MENTS.—Whenever information under this Act is required

25 to be published in the Federal Register, such information
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1 shall, in addition, be made available on the appropriate

2 Internet website of the Department.

3 SEC. 802. TECHNICAL AND CONFORMING AMENDMENTS.

4 (a) REPEAL.—The Export Administration Act of

5 1979 (50 U.S.C. App. 2401 et seq.) is repealed.

6 (b) ENERGY POLICY AND CONSERVATION ACT.—(1)

7 Section 103 of the Energy Policy and Conservation Act

8 (42 U.S.C. 6212) is repealed.

9 (2) Section 251(d) of the Energy Policy and Con10 servation Act (42 U.S.C. 6271(d)) is repealed.

11 (c) ALASKA NATURAL GAS TRANSPORTATION ACT.—

12 Section 12 of the Alaska Natural Gas Transportation Act

13 of 1976 (15 U.S.C. 719j) is repealed.

14 (d) MINERAL LEASING ACT.—Section 28(u) of the

15 Mineral Leasing Act (30 U.S.C. 185(u)) is repealed.

16 (e) EXPORTS OF ALASKAN NORTH SLOPE OIL.—Sec17 tion 28(s) of the Mineral Leasing Act (30 U.S.C. 185(s))

18 is repealed.

19 (f) DISPOSITION OF CERTAIN NAVAL PETROLEUM

20 RESERVE PRODUCTS.—Section 7430(e) of title 10, United

21 States Code, is repealed.

22 (g) OUTER CONTINENTAL SHELF LANDS ACT.—Sec23 tion 28 of the Outer Continental Shelf Lands Act (43

24 U.S.C. 1354) is repealed.
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1 (h) FOREST RESOURCES CONSERVATION AND

2 SHORTAGE ACT.—Section 491 of the Forest Resource

3 Conservation and Shortage Relief Act of 1990 (16 U.S.C.

4 620c) is repealed.

5 (i) ARMS EXPORT CONTROL ACT.—

6 (1) Section 38 of the Arms Export Control Act

7 (22 U.S.C. 2778) is amended—

8 (A) in subsection (e)—

9 (i) in the first sentence, by striking

10 ‘‘subsections (c)’’ and all that follows

11 through ‘‘12 of such Act,’’ and inserting

12 ‘‘subsections (b), (c), (d) and (e) of section

13 603 of the Export Administration Act of

14 1999, by subsections (a) and (b) of section

15 607 of such Act, and by section 702 of

16 such Act,’’; and

17 (ii) in the third sentence, by striking

18 ‘‘11(c) of the Export Administration Act of

19 1979’’ and inserting ‘‘603(c) of the Export

20 Administration Act of 1999’’; and

21 (B) in subsection (g)(1)(A)(ii), by inserting

22 ‘‘or section 603 of the Export Administration

23 Act of 1999’’ after ‘‘1979’’.

24 (2) Section 39A(c) of the Arms Export Control

25 Act is amended—
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1 (A) by striking ‘‘subsections (c),’’ and all

2 that follows through ‘‘12(a) of such Act’’ and

3 inserting ‘‘subsections (c), (d), and (e) of sec4 tion 603, section 608(c), and subsections (a)

5 and (b) of section 607, of the Export Adminis6 tration Act of 1999’’; and

7 (B) by striking ‘‘11(c)’’ and inserting

8 ‘‘603(c)’’.

9 (3) Section 40(k) of the Arms Export Control

10 Act (22 U.S.C. 2780(k)) is amended—

11 (A) by striking ‘‘11(c), 11(e), 11(g), and

12 12(a) of the Export Administration Act of

13 1979’’ and inserting ‘‘603(b), 603(c), 603(e),

14 607(a), and 607(b) of the Export Administra15 tion Act of 1999’’; and

16 (B) by striking ‘‘11(c)’’ and inserting

17 ‘‘603(c)’’.

18 (j) OTHER PROVISIONS OF LAW.—

19 (1) Section 5(b)(4) of the Trading with the

20 Enemy Act (50 U.S.C. App. 5(b)(4)) is amended by

21 striking ‘‘section 5 of the Export Administration Act

22 of 1979, or under section 6 of that Act to the extent

23 that such controls promote the nonproliferation or

24 antiterrorism policies of the United States’’ and in-
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1 serting ‘‘titles II and III of the Export Administra2 tion Act of 1999’’.

3 (2) Section 502B(a)(2) of the Foreign Assist4 ance Act of 1961 (22 U.S.C. 2304(a)(2)) is amend5 ed in the second sentence—

6 (A) by striking ‘‘Export Administration

7 Act of 1979’’ the first place it appears and in8 serting ‘‘Export Administration Act of 1999’’;

9 and

10 (B) by striking ‘‘Act of 1979)’’ and insert11 ing ‘‘Act of 1999)’’.

12 (3) Section 140(a) of the Foreign Relations Au13 thorization Act, Fiscal Years 1988 and 1989 (22

14 U.S.C. 2656f(a)) is amended—

15 (A) in paragraph (1)(B), by inserting ‘‘or

16 section 310 of the Export Administration Act of

17 1999’’ after ‘‘Act of 1979’’; and

18 (B) in paragraph (2), by inserting ‘‘or 310

19 of the Export Administration Act of 1999’’

20 after ‘‘6(j) of the Export Administration Act of

21 1979’’.

22 (4) Section 40(e)(1) of the State Department

23 Basic Authorities Act of 1956 (22 U.S.C.

24 2712(e)(1)) is amended by striking ‘‘section 6(j)(1)

25 of the Export Administration Act of 1979’’ and in-
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1 serting ‘‘section 310 of the Export Administration

2 Act of 1999’’.

3 (5) Section 205(d)(4)(B) of the State Depart4 ment Basic Authorities Act of 1956 (22 U.S.C.

5 4305(d)(4)(B)) is amended by striking ‘‘section 6(j)

6 of the Export Administration Act of 1979’’ and in7 serting ‘‘section 310 of the Export Administration

8 Act of 1999’’.

9 (6) Section 110 of the International Security

10 and Development Cooperation Act of 1980 (22

11 U.S.C. 2778a) is amended by striking ‘‘Act of

12 1979’’ and inserting ‘‘Act of 1999’’.

13 (7) Section 203(b)(3) of the International

14 Emergency Economic Powers Act (50 U.S.C.

15 1702(b)(3)) is amended by striking ‘‘section 5 of the

16 Export Administration Act of 1979, or under section

17 6 of such Act to the extent that such controls pro18 mote the nonproliferation or antiterrorism policies of

19 the United States’’ and inserting ‘‘the Export Ad20 ministration Act of 1999’’.

21 (8) Section 1605(a)(7)(A) of title 28, United

22 States Code, is amended by striking ‘‘section 6(j) of

23 the Export Administration Act of 1979 (50 U.S.C.

24 App. 2405(j))’’ and inserting ‘‘section 310 of the

25 Export Administration Act of 1999’’.
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1 (9) Section 2332d(a) of title 18, United States

2 Code, is amended by striking ‘‘section 6(j) of the

3 Export Administration Act of 1979 (50 U.S.C. App.

4 2405)’’ and inserting ‘‘section 310 of the Export Ad5 ministration Act of 1999’’.

6 (10) Section 620H(a)(1) of the Foreign Assist7 ance Act of 1961 (22 U.S.C. 2378(a)(1)) is amend8 ed by striking ‘‘section 6(j) of the Export Adminis9 tration Act of 1979 (50 U.S.C. App. 2405(j))’’ and

10 inserting ‘‘section 310 of the Export Administration

11 Act of 1999’’.

12 (11) Section 1621(a) of the International Fi13 nancial Institutions Act (22 U.S.C. 262p–4q(a)) is

14 amended by striking ‘‘section 6(j) of the Export Ad15 ministration Act of 1979 (50 U.S.C. App. 2405(j))’’

16 and inserting ‘‘section 310 of the Export Adminis17 tration Act of 1999’’.

18 (12) Section 1956(c)(7)(D) of title 18, United

19 States Code, is amended by striking ‘‘section 11 (re20 lating to violations) of the Export Administration of

21 1979’’ and inserting ‘‘section 603 (relating to pen22 alties) of the Export Administration Act of 1999’’.

23 SEC. 803. SAVINGS PROVISIONS.

24 (a) IN GENERAL.—All delegations, rules, regulations,

25 orders, determinations, licenses, or other forms of admin-
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1 istrative action which have been made, issued, conducted,

2 or allowed to become effective under—

3 (1) the Export Control Act of 1949, the Export

4 Administration Act of 1969, the Export Administra5 tion Act of 1979, or the International Emergency

6 Economic Powers Act when invoked to maintain and

7 continue the Export Administration regulations, or

8 (2) those provisions of the Arms Export Control

9 Act which are amended by section 802,

10 and are in effect on the date of enactment of this Act,

11 shall continue in effect according to their terms until

12 modified, superseded, set aside, or revoked under this Act

13 or the Arms Export Control Act.

14 (b) ADMINISTRATIVE AND JUDICIAL PRO15 CEEDINGS.—

16 (1) EXPORT ADMINISTRATION ACT.—This Act

17 shall not affect any administrative or judicial pro18 ceedings commenced or any application for a license

19 made, under the Export Administration Act of 1979

20 or pursuant to Executive Order 12924, which is

21 pending at the time this Act takes effect. Any such

22 proceedings, and any action on such application,

23 shall continue under the Export Administration Act

24 of 1979 as if that Act had not been repealed.
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1 (2) OTHER PROVISIONS OF LAW.—This Act

2 shall not affect any administrative or judicial pro3 ceeding commenced or any application for a license

4 made, under those provisions of the Arms Export

5 Control Act which are amended by section 802, if

6 such proceeding or application is pending at the time

7 this Act takes effect. Any such proceeding, and any

8 action on such application, shall continue under

9 those provisions as if those provisions had not been

10 amended by section 802.

11 (c) TREATMENT OF CERTAIN DETERMINATIONS.—

12 Any determination with respect to the government of a

13 foreign country under section 6(j) of the Export Adminis14 tration Act of 1979, or Executive Order 12924, that is

15 in effect on the day before the date of enactment of this

16 Act, shall, for purposes of this title or any other provision

17 of law, be deemed to be made under section 310 of this

18 Act until superseded by a determination under such sec19 tion 310.

20 (d) IMPLEMENTATION.—The Secretary shall make

21 any revisions to the Export Administration regulations re22 quired by this Act no later than 180 days after the date

23 of enactment of this Act.