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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3515 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3515

   To make improvements in the electronic filing of export data, to 
     strengthen enforcement authorities with respect to the Export 
          Administration Regulations, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 2009

 Mr. Sherman (for himself, Mr. Manzullo, and Mr. Smith of Washington) 
 introduced the following bill; which was referred to the Committee on 
                            Foreign Affairs

_______________________________________________________________________

                                 A BILL

 
   To make improvements in the electronic filing of export data, to 
     strengthen enforcement authorities with respect to the Export 
          Administration Regulations, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Export Control 
Improvements Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
       TITLE I--IMPROVEMENTS IN ELECTRONIC FILING OF EXPORT DATA

Sec. 101. Short title.
Sec. 102. Conferences; registration for filers; notifications; fees.
Sec. 103. Definitions.
Sec. 104. Conforming amendments.
Sec. 105. Authorization of appropriations.
                TITLE II--EXPORT ENFORCEMENT ENHANCEMENT

Sec. 201. Short title.
      Subtitle A--Enforcement of Export Administration Regulations

Sec. 211. Declaration of policy.
Sec. 212. Enforcement.
Sec. 213. Authorization of appropriations.
Sec. 214. Definitions.
 Subtitle B--Prevention of Transfer of Sensitive Items to Countries of 
                                Concern

Sec. 221. Identification of locations of concern with respect to 
                            transshipment, reexportation, or diversion 
                            of certain items to Iran.
Sec. 222. Destinations of Possible Diversion Concern and Destinations 
                            of Diversion Concern.
Sec. 223. Report on expanding diversion concern system to countries 
                            other than Iran.
Sec. 224. Annual report on transfers of militarily sensitive technology 
                            to countries and entities of concern.
Sec. 225. Definitions.

       TITLE I--IMPROVEMENTS IN ELECTRONIC FILING OF EXPORT DATA

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Securing Exports Through 
Coordination and Technology Act''.

SEC. 102. CONFERENCES; REGISTRATION FOR FILERS; NOTIFICATIONS; FEES.

    Chapter 9 of title 13, United States Code, is amended--
            (1) by redesignating sections 302 through 307 as sections 
        306 through 311, respectively; and
            (2) by inserting after section 301 the following new 
        sections:
``Sec. 302. Conferences and seminars
    ``(a) Mandatory Conference Participation.--The Secretary shall work 
with the Secretary of State, the Secretary of Defense, the Secretary of 
Homeland Security, and the Secretary of the Treasury to ensure that 
appropriate personnel of each of their respective departments and 
agencies that are involved in the regulation of exports or the 
enforcement of such regulation are made available, subject to the 
availability of such personnel, to participate in fora the purpose of 
which is to educate exporters about laws and regulations of the United 
States governing exports and about the Automated Export System in 
particular, including through seminars, educational or training 
meetings, exhibitions, symposiums, and other similar meetings.
    ``(b) Authority To Collect Fees.--The Secretary may collect fees 
from any individual or other person attending or participating in any 
forum described in subsection (a) that is conducted by, or jointly 
with, the Department of Commerce. The Secretary may use contractors to 
collect such fees. Fees under this subsection may be collected in 
advance of the forum.
    ``(c) Disposition of Collected Fees.--Amounts collected under 
subsection (b) shall be used to pay all or part of the cost of fora 
described in subsection (a), and shall be credited to the account from 
which the costs of such fora have been paid or will be paid.
    ``(d) Budget for Participating Agencies.--In the case of any agency 
that does not have the available funds to participate in a forum under 
subsection (a), the Secretary shall make such sums available, from fees 
collected under subsection (b), as are necessary to allow such 
participation by the agency.
    ``(e) Availability of Materials to the Public.--The Secretary shall 
make available to the public, including through its public website, 
relevant materials provided for the fora held under subsection (a).
``Sec. 303. Automated Export System registrations for filers
    ``(a) Registrations.--
            ``(1) In general.--The Secretary may establish a 
        registration program for agents to file information in the 
        Automated Export System on behalf of the United States 
        principal party in interest or the foreign principal party in 
        interest. Such registration program may include authorization 
        for individuals to file as well as any corporation, 
        association, or partnership that is organized under the laws of 
        the United States or of any State, the District of Columbia, or 
        any commonwealth, territory, or possession of the United 
        States.
            ``(2) Qualifications for individuals.--The Secretary may 
        establish qualification requirements for an individual seeking 
        to register under the program, except that an individual may be 
        so registered only if the individual is a United States 
        citizen, an alien lawfully admitted for permanent residence to 
        the United States, or a national of the United States (in the 
        case of a resident of a territory or possession of the United 
        States). In assessing the qualification of an applicant for 
        registration, the Secretary may conduct an examination to 
        determine the applicant's knowledge of the Automated Export 
        System and laws, regulations, and procedures related to the 
        export of goods from the United States, and may require 
        participation in a continuing education program on a periodic 
        basis. The Secretary may also obtain information to determine 
        an applicant's fitness and character to act as an Automated 
        Export System filer. An individual who meets the requirements 
        for registration under this paragraph shall be issued an 
        Automated Export System registration.
            ``(3) Qualifications for corporations and other business 
        entities.--
                    ``(A) Requirements.--A corporation, association, or 
                partnership may be registered under this subsection 
                only if at least one official of the corporation or 
                association who is designated by the corporation or 
                association, or one member of the partnership, who is 
                authorized to act on behalf of the corporation, 
                association, or partnership, as the case may be--
                            ``(i) holds a valid Automated Export System 
                        registration under paragraph (2);
                            ``(ii) is responsible for the supervision 
                        and control of filing Shipper's Export 
                        Declaration information in the Automated Export 
                        System; and
                            ``(iii) is a United States citizen, an 
                        alien lawfully admitted for permanent residence 
                        to the United States, or a national of the 
                        United States (in the case of a resident of a 
                        territory or possession of the United States).
                    ``(B) Additional registration requirements.--The 
                Secretary may establish such other registration 
                requirements for corporations, associations, and 
                partnerships as the Secretary considers appropriate. A 
                corporation, association, or partnership that meets the 
                requirements for registration under this paragraph 
                shall be issued an Automated Export System 
                registration.
            ``(4) Federal maritime commission licenses.--An ocean 
        transportation intermediary (OTI) license issued by the Federal 
        Maritime Commission may be used to satisfy the initial 
        qualification requirements of the registration program under 
        this subsection, if the Federal Maritime Commission maintains 
        sufficient requirements with respect to such license, as 
        determined by the Secretary.
            ``(5) Lapse of registration.--Registrations under this 
        subsection shall be granted for a period of not less than 3 
        years, and may be renewed in such manner and under such 
        conditions as are established by the Secretary.
    ``(b) Denial, Suspension, or Revocation of Registration.--
            ``(1) General rule.--The Secretary may revoke or suspend a 
        registration or deny an application for registration under 
        subsection (a), which may take effect immediately, if the 
        Secretary has reason to believe that the registrant or 
        applicant has violated or will violate any regulations issued 
        under this section or any law or regulation of the United 
        States controlling exports. The Secretary may provide rules for 
        notifying registrants and registration applicants of the 
        process for revoking or suspending a registration or denying an 
        application, consistent with the need to protect national 
        security.
            ``(2) Procedures for denial, revocation, or suspension.--
                    ``(A) In general.--If a registration is revoked or 
                suspended or an application is denied under paragraph 
                (1), the Secretary shall send the registrant or 
                applicant notice in writing specifically setting forth 
                the grounds for suspension, revocation, or denial, 
                shall allow the registrant or applicant a period of 30 
                calendar days beginning on the date on which the notice 
                is received to respond in writing, and shall advise the 
                registrant or applicant of the right to a hearing. A 
                registrant or applicant may request an extension of 
                time for such response, and the Secretary shall grant 
                such extension for good cause shown. If no response is 
                filed within that 30-day period, or any extension 
                thereof, and the Secretary determines that the 
                revocation, suspension, or denial is still warranted, 
                the revocation, suspension, or denial shall become 
                final.
                    ``(B) Hearing.--If a timely response is received 
                under subparagraph (A) and the registrant or applicant 
                requests a hearing, a hearing shall be held within 30 
                calendar days after the date on which the request is 
                received, or at a later date if the registrant or 
                applicant requests an extension and shows good cause 
                therefor. An administrative law judge appointed under 
                section 3105 of title 5 shall preside at the hearing, 
                which shall be conducted in accordance with regulations 
                issued by the Secretary. The administrative law judge 
                shall issue a written decision either upholding, 
                reversing, or modifying the decision of the Secretary, 
                based solely on the record, setting forth the findings 
                of fact, and the reasons for the decision.
                    ``(C) Suspension of registration pending appeal.--
                In a case in which a person appeals a decision revoking 
                or suspending a registration under this subsection, 
                including an appeal under subsection (c), the Secretary 
                may order that the registration continue to be 
                suspended while the appeal is pending.
            ``(3) Settlement and compromise.--The Secretary may settle 
        and compromise any proceeding that has been instituted under 
        this subsection according to the terms and conditions agreed to 
        by the parties, including the reduction of any proposed 
        suspension or revocation.
            ``(4) Limitation of actions.--The Secretary may revoke or 
        suspend a registration or deny an application for registration 
        under this subsection only if the appropriate service of 
        written notice is made under paragraph (2)(A) within 5 years 
        after the date on which the alleged act described in paragraph 
        (1) was committed, except that if the alleged act consists of 
        fraud, the 5-year period shall begin on the date on which the 
        alleged act was discovered.
    ``(c) Judicial Appeal.--
            ``(1) In general.--A registrant under this section, or an 
        applicant for a registration under this section, may appeal any 
        decision of the administrative law judge under subsection (b) 
        suspending or revoking the registration or denying the 
        application by filing in the appropriate United States district 
        court, within 60 days after the date on which the decision is 
        issued, a written petition requesting that the decision be 
        modified or set aside in whole or in part. A copy of the 
        petition shall be served upon the Secretary. In cases involving 
        revocation or suspension of a registration, the Secretary, 
        after receiving the petition, shall file in the court the 
        record upon which the decision complained of was entered.
            ``(2) Failure to appeal.--If an appeal is not filed within 
        the time limits specified in paragraph (1), the decision of the 
        administrative law judge under subsection (b) shall be final 
        and conclusive.
    ``(d) Regulations.--The Secretary shall provide a period of at 
least 90 days for the submission of public comments on any regulations 
issued to carry out this section, before such regulations may become 
effective.
``Sec. 304. Notification of relevant export requirements
    ``(a) In General.--The Secretary, with the concurrence of the heads 
of the relevant departments and agencies, shall ensure that the 
Automated Export System will identify the filing of data in connection 
with an export from the United States if the country of destination of 
intended export or the export control information, or lack thereof, 
would result in a violation of any prohibition or restriction on 
exports under the laws and regulations of the United States.
    ``(b) Sufficiency and Timeliness of Export Control Information in 
the Automated Export System.--Not later than 1 year after the date of 
the enactment of the Securing Exports Through Coordination and 
Technology Act, the Secretary, with the concurrence of the heads of the 
relevant departments and agencies and in consultation with 
representatives of affected industries and nongovernmental 
organizations with relevant expertise, shall--
            ``(1) ensure on an ongoing basis that changes in laws and 
        regulations controlling exports from the United States are 
        reflected in the Automated Export System upon implementation of 
        those changes;
            ``(2) enable on an ongoing basis the classification of 
        products to be exported in a manner sufficient to carry out the 
        purposes of this section; and
            ``(3) ensure on an ongoing basis that all lists maintained 
        by the United States and comprised of persons or entities to 
        whom exports are restricted are available in a standardized 
        format and contain sufficient descriptive information to enable 
        their effective use by exporters (through the Automated Export 
        System or otherwise) to screen transactions and prevent 
        diversions of exported items for unauthorized destinations, 
        parties, or uses.
    ``(c) Minimum Requirements.--The Secretary, with the concurrence of 
the heads of the relevant departments and agencies and in consultation 
with representatives of affected industries and nongovernmental 
organizations with relevant expertise, shall ensure that the Automated 
Export System contains at least the following operational features:
            ``(1) The Automated Export System will process data filed 
        in connection with an export and will alert the filer to export 
        license requirements under the laws and regulations of the 
        United States.
            ``(2) If the data filed that is associated with the export 
        does not satisfy requirements under the export control laws and 
        regulations of the United States, the Automated Export System 
        will issue notices, compliance alerts, and other warnings, as 
        appropriate, that the transaction may not satisfy export 
        requirements, accompanied by references to the applicable 
        authorities.
            ``(3) The Automated Export System will retain records of 
        actions of users while filing export data.
    ``(d) Construction.--Nothing in this section shall be construed to 
authorize an export solely because the Automated Export System accepts 
the filing of data.
``Sec. 305. Fees and charges
    ``The Secretary may issue regulations prescribing reasonable fees 
and charges, with particular sensitivity to small businesses, to defray 
the costs of the Secretary in carrying out this chapter.''.

SEC. 103. DEFINITIONS.

    Chapter 9 of title 13, United States Code, is amended by adding at 
the end the following new section:
``Sec. 312. Definitions
    ``In this chapter:
            ``(1) Automated export system.--The term `Automated Export 
        System' means the automated and electronic system for filing 
        export information established under this chapter.
            ``(2) Relevant departments and agencies.--The term 
        `relevant departments and agencies' means the Department of 
        State, the Department of Defense, the Department of Homeland 
        Security, and the Department of the Treasury.
            ``(3) Shipper's export declaration.--The term `Shipper's 
        Export Declaration' means the export information filed under 
        this chapter.''.

SEC. 104. CONFORMING AMENDMENTS.

    (a) Regulations, Orders, etc.--Section 306 of title 13, United 
States Code, as redesignated by section 102(1) of this Act, is amended 
by striking the last sentence and inserting ``The Secretary shall make 
rules, regulations, and orders, and amendments thereto, with the 
concurrence of the Secretary of Homeland Security.''.
    (b) Cross References.--Section 309 of title 13, United States Code, 
as redesignated by section 102(1) of this Act, is amended--
            (1) in subsection (b), by striking ``304'' and inserting 
        ``308''; and
            (2) in subsection (c)--
                    (A) in paragraph (1), by striking ``304'' and 
                inserting ``308'';
                    (B) in paragraph (4), by striking ``306'' and 
                inserting ``310''; and
                    (C) in paragraph (5), by striking ``304'' and 
                inserting ``308''.
    (c) Table of Contents.--The table of contents for chapter 9 of 
title 13, United States Code, is amended to read as follows:

``301. Collection and publication.
``302. Conferences and seminars.
``303. Automated Export System registrations for filers.
``304. Notification of reelvant export requirements.
``305. Fees and charges.
``306. Rules, regulations, and orders.
``307. Secretary of Treasury functions.
``308. Filing export information, delayed filings, penalties for 
                            failure to file.
``309. Penalties for unlawful export information activities.
``310. Delegation of functions.
``311. Relationship to general census law.
``312. Definitions.''.

SEC. 105. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as may be 
necessary to carry out the amendments made by this title.

                TITLE II--EXPORT ENFORCEMENT ENHANCEMENT

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Export Enforcement Act of 2009''.

      Subtitle A--Enforcement of Export Administration Regulations

SEC. 211. DECLARATION OF POLICY.

    The Congress declares that, at a time of evolving threats and 
changing relationships with other countries, as well as rapid 
technological change and an increasingly globalized economy, United 
States strategic export controls are in urgent need of a comprehensive 
review in order to assure those controls are achieving their intended 
purposes of protecting the national security of the United States in 
the Global War on Terrorism and of promoting the economic and foreign 
policy interests of the United States, in particular by assuring that--
            (1) export authorization procedures are properly designed 
        to prioritize which exports may be approved quickly for trusted 
        partners of the United States and which require greater 
        scrutiny in order to safeguard national interests;
            (2) strategic export controls appropriately and effectively 
        identify and protect technologies critical to United States 
        national security interests; and
            (3) coordination among the responsible departments and 
        agencies of the Government of the United States is improved in 
        order to enhance efficiency, information sharing, and the 
        consistent execution of United States policy.

SEC. 212. ENFORCEMENT.

    (a) General Authority.--
            (1) In general.--To the extent necessary or appropriate for 
        the enforcement of the Export Administration Regulations, or 
        for the imposition of any penalty, forfeiture, or liability 
        arising under the Export Administration Regulations--
                    (A) the head of any department or agency exercising 
                any function under the Export Administration 
                Regulations and officers or employees of such 
                department or agency specifically designated by the 
                head thereof) may conduct investigations within the 
                United States;
                    (B) the Secretary of Commerce (and officers and 
                employees of the Office of Export Enforcement of the 
                Department of Commerce specifically designated by the 
                Secretary of Commerce), and the head of any department 
                or agency with responsibility for enforcing the Export 
                Administration Regulations (and officers and employees 
                of such department or agency specifically designated by 
                the head of such department or agency), may conduct 
                investigations outside of the United States;
                    (C) the head of any department or agency with the 
                responsibility for enforcing the Export Administration 
                Regulations (and the officers or employees of such 
                department or agency) may obtain information from, 
                require reports or the keeping of records by, inspect 
                the books, records, and other writings, premises, or 
                property of, and take the sworn testimony of, any 
                person;
                    (D)(i) the officers or employees of such department 
                or agency may administer oaths or affirmations, and may 
                by subpoena require any person to appear and testify or 
                to appear and produce books, records, and other 
                writings, or both; and
                    (ii) in the case of contumacy by, or refusal to 
                obey a subpoena issued to, any such person, a district 
                court of the United States, after notice to any such 
                person and hearing, shall have jurisdiction to issue an 
                order requiring such person to appear and give 
                testimony or to appear and produce books, records, and 
                other writings, or both, and any failure to obey such 
                order of the court may be punished by such court as a 
                contempt thereof; and
                    (E) the Secretary of Commerce (and officers or 
                employees of the Department of Commerce designated by 
                the Secretary) may conduct, outside the United States, 
                pre-license investigations and post-shipment 
                verifications of items licensed for export.
            (2) Enforcement.--
                    (A) In general.--Subject to subparagraph (B)--
                            (i) the Secretary of Commerce shall have 
                        the responsibility for the enforcement of the 
                        restrictive trade practices and boycott 
                        provisions of the Export Administration 
                        Regulations;
                            (ii) to the extent necessary or appropriate 
                        for the enforcement of the Export 
                        Administration Regulations, or for the 
                        imposition of any penalty, forfeiture, or 
                        liability arising under the Export 
                        Administration Regulations, the Secretary of 
                        Commerce may search, detain (after search), and 
                        seize goods or technology--
                                    (I) at places within the United 
                                States other than those ports of entry 
                                or exit from the United States where 
                                officers of U.S. Immigration and 
                                Customs Enforcement and U.S. Customs 
                                and Border Protection are authorized by 
                                law to conduct such activities; and
                                    (II) at places outside the United 
                                States where the Office of Export 
                                Enforcement of the Department of 
                                Commerce, pursuant to agreements or 
                                other arrangements with other 
                                countries, is authorized to perform 
                                enforcement activities;
                            (iii) the search, detention (after search), 
                        or seizure of goods or technology at ports and 
                        places authorized under clause (ii) may be 
                        conducted by officers or employees of the 
                        Department of Commerce designated by the 
                        Secretary of Commerce, with the concurrence of 
                        the Secretary of Homeland Security; and
                            (iv) enforcement activities under this 
                        section that are conducted outside the United 
                        States, except for prelicense investigations 
                        and post-shipment verifications, shall be 
                        conducted with the concurrence of the Secretary 
                        of Homeland Security.
                    (B) Authority of office of export enforcement.--The 
                Secretary of Commerce may designate any employee of the 
                Office of Export Enforcement of the Department of 
                Commerce to do the following in carrying out 
                enforcement authority under this section:
                            (i) Execute any warrant or other process 
                        issued by a court or officer of competent 
                        jurisdiction.
                            (ii) Make arrests without warrant for any 
                        offense against the United States committed in 
                        such officer's presence or view or any felony 
                        offense against the United States if such 
                        officer has probable cause to believe that the 
                        person to be arrested has committed or is 
                        committing that felony offense.
                            (iii) Carry firearms.
            (3) Attorney general guidelines.--The authority conferred 
        by paragraph (2) shall be exercised consistent with guidelines 
        approved by the Attorney General.
            (4) Best practices guidelines.--
                    (A) In general.--The Secretary of Commerce, in 
                consultation with the technical advisory committees 
                established pursuant to section 5(h) of the Export 
                Administration Act of 1979, and representative 
                exporters, shippers, trade facilitators, freight 
                forwarders, and reexporters, shall continue to publish 
                and update ``best practices'' guidelines to help 
                industries develop and implement, on a voluntary basis, 
                effective export control programs in compliance with 
                the Export Administration Regulations.
                    (B) Export compliance program.--The existence of an 
                effective export compliance program and high quality 
                overall export compliance effort is one of the factors 
                that ordinarily should be given weight as a mitigating 
                factor in a civil penalty action under the Export 
                Administration Regulations.
            (5) Reference to enforcement.--For purposes of this 
        section, a reference to the enforcement of, or a violation of, 
        the Export Administration Regulations includes a reference to 
        the enforcement or a violation of any order or license issued 
        pursuant to the Export Administration Regulations.
    (b) Immunity.--A person shall not be excused from complying with 
any requirements under this section because of the person's privilege 
against self-incrimination, but the immunity provisions of section 6002 
of title 18, United States Code, shall apply with respect to any 
individual who specifically claims such privilege.
    (c) Confidentiality of Information.--
            (1) Exemptions from disclosure.--
                    (A) Information obtained on or before june 30, 
                1980.--Except as otherwise provided by the third 
                sentence of section 8(b)(2) and by section 11(c)(2)(C) 
                of the Export Administration Act of 1979, information 
                obtained under the Export Administration Act of 1979, 
                or any predecessor statute, on or before June 30, 1980, 
                that is deemed confidential, including Shipper's Export 
                Declarations, or with respect to which a request for 
                confidential treatment is made by the person furnishing 
                such information, shall not be subject to disclosure 
                under section 552 of title 5, United States Code, and 
                such information shall not be published or disclosed, 
                unless the Secretary of Commerce determines that 
                withholding such information is contrary to the 
                national interest.
                    (B) Information obtained after june 30, 1980.--
                Except as otherwise provided by the third sentence of 
                section 8(b)(2) and by section 11(c)(2)(C) of the 
                Export Administration Act of 1979, information obtained 
                under the Export Administration Act of 1979 after June 
                30, 1980, or under the Export Administration 
                Regulations may be withheld from disclosure only to the 
                extent permitted by statute, except that information 
                obtained for the purpose of consideration of, or 
                concerning, license applications under the Export 
                Administration Act of 1979 or the Export Administration 
                Regulations shall be withheld from public disclosure 
                unless the release of such information is determined by 
                the Secretary of Commerce to be in the national 
                interest.
            (2) Withholding of information from federal agencies 
        barred.--Nothing in this section or the Export Administration 
        Regulations shall be construed as authorizing the withholding 
        of information from other Federal agencies for purposes of the 
        enforcement of the Export Administration Regulations, any 
        regulation, rule, order, or license issued under the 
        International Emergency Economic Powers Act, or any other 
        provision of law.
            (3) Information to the congress and gao.--
                    (A) In general.--Nothing in this section shall be 
                construed as authorizing the withholding of information 
                from the Congress or from the Government Accountability 
                Office.
                    (B) Availability to the congress.--
                            (i) In general.--Any information obtained 
                        at any time under the Export Administration Act 
                        of 1979, under previous Acts regarding the 
                        control of exports, or under the Export 
                        Administration Regulations, including any 
                        report or license application required under 
                        any such Act or the Export Administration 
                        Regulations, shall be made available to a 
                        committee or subcommittee of Congress of 
                        appropriate jurisdiction, upon the request of 
                        the chairman or ranking minority member of such 
                        committee or subcommittee.
                            (ii) Prohibition on further disclosure.--No 
                        such committee or subcommittee, or member 
                        thereof, may disclose any information obtained 
                        under the Export Administration Act of 1979, 
                        under previous Acts regarding the control of 
                        exports, or under the Export Administration 
                        Regulations, that is submitted on a 
                        confidential basis unless the full committee 
                        determines that the withholding of that 
                        information is contrary to the national 
                        interest.
                    (C) Availability to gao.--
                            (i) In general.--Notwithstanding paragraph 
                        (1), information described in clause (i) of 
                        subparagraph (B) shall, consistent with the 
                        protection of intelligence, 
                        counterintelligence, and law enforcement 
                        sources, methods, and activities, as determined 
                        by the agency that originally obtained the 
                        information, and consistent with section 716 of 
                        title 31, United States Code, be made available 
                        only by that agency, upon request, to the 
                        Comptroller General of the United States or to 
                        any officer or employee of the Government 
                        Accountability Office authorized by the 
                        Comptroller General to have access to such 
                        information.
                            (ii) Prohibition on further disclosure.--No 
                        officer or employee of the Government 
                        Accountability Office may disclose, except to 
                        the Congress in accordance with this paragraph, 
                        any such information that is submitted on a 
                        confidential basis or from which any individual 
                        can be identified.
            (4) Information sharing.--
                    (A) In general.--Any department or agency that 
                obtains information that is relevant to the enforcement 
                of the Export Administration Regulations, including 
                information pertaining to any investigation, shall 
                furnish such information to each department or agency 
                with enforcement responsibilities under this section to 
                the extent consistent with the protection of 
                intelligence, counterintelligence, and law enforcement 
                sources, methods, and activities.
                    (B) Exceptions.--The provisions of this paragraph 
                shall not apply to information subject to the 
                restrictions set forth in section 9 of title 13, United 
                States Code, and return information, as defined in 
                subsection (b) of section 6103 of the Internal Revenue 
                Code of 1986 (26 U.S.C. 6103(b)), may be disclosed only 
                as authorized by that section.
                    (C) Exchange of information.--The Secretary of 
                Commerce and the Secretary of Homeland Security, upon 
                request, shall exchange any licensing and enforcement 
                information with each other that is necessary to 
                facilitate enforcement efforts under this section.
                    (D) Interagency consultations.--The Secretary of 
                Commerce, the Attorney General, and the Secretary of 
                Homeland Security shall consult on a continuing basis 
                with one another and with the head of other departments 
                and agencies that obtain information subject to this 
                paragraph, in order to facilitate the exchange of such 
                information.
    (d) Reporting Requirements.--In the administration of this section 
and the Export Administration Regulations, reporting requirements shall 
be so designed as to reduce the cost of reporting, recordkeeping, and 
export documentation required under this section and the Export 
Administration Regulations to the extent feasible consistent with 
effective enforcement and compilation of useful trade statistics. 
Reporting, recordkeeping, and export documentation requirements shall 
be periodically reviewed and revised in the light of developments in 
the field of information technology.
    (e) Simplification of Regulations.--The Secretary of Commerce, in 
consultation with appropriate departments and agencies of the United 
States and with appropriate technical advisory committees established 
pursuant to section 5(h) of the Export Administration Act of 1979, 
shall review the Export Administration Regulations, including the 
commodity control list, in order to determine how compliance with the 
provisions of the Export Administration Regulations can be facilitated 
by simplifying the Export Administration Regulations, by simplifying or 
clarifying the commodity control list, or by any other means.
    (f) Forfeiture.--
            (1) In general.--Any tangible items lawfully seized under 
        subsection (a) by designated officers or employees shall be 
        subject to forfeiture to the United States.
            (2) Procedures.--Any seizure or forfeiture under this 
        subsection shall be made in accordance with the procedures set 
        forth in section 981 of title 18, United States Code.
    (g) Undercover Investigation Operations.--
            (1) Use of funds.--In the case of any undercover 
        investigative operation conducted by the Office of Export 
        Enforcement of the Department of Commerce that is necessary for 
        the detection and prosecution of a violation of the Export 
        Administration Regulations--
                    (A) funds made available for export enforcement 
                under this section may be used to purchase property, 
                buildings, and other facilities, and to lease 
                equipment, conveyances, and space within the United 
                States, without regard to sections 1341 and 3324 of 
                title 31, United States Code, section 8141 of title 40, 
                United States Code, sections 3732(a) and 3741 of the 
                Revised Statutes of the United States (41 U.S.C. 11(a) 
                and 22), and sections 304(a), 304A, 304B, 304C, and 305 
                of the Federal Property and Administrative Services Act 
                of 1949 (41 U.S.C. 254(a), 254b, 254c, 254d, and 255);
                    (B) funds made available for export enforcement 
                under this section may be used to establish or to 
                acquire proprietary corporations or business entities 
                as part of an undercover operation, and to operate such 
                corporations or business entities on a commercial 
                basis, without regard to sections 1341, 3324, and 9102 
                of title 31, United States Code;
                    (C) funds made available for export enforcement 
                under this section and the proceeds from undercover 
                operations may be deposited in banks or other financial 
                institutions without regard to section 648 of title 18, 
                United States Code, and section 3302 of title 31, 
                United States Code; and
                    (D) the proceeds from undercover operations may be 
                used to offset necessary and reasonable expenses 
                incurred in such operations without regard to section 
                3302 of title 31, United States Code, if the Secretary 
                of Commerce certifies in writing that the action 
                authorized by subparagraph (A), (B), (C), or (D) for 
                which the funds would be used is necessary for the 
                conduct of the undercover operation.
            (2) Disposition of business entities.--If a corporation or 
        business entity established or acquired as part of an 
        undercover operation has a net value of more than $250,000 and 
        is to be liquidated, sold, or otherwise disposed of, the 
        Secretary of Commerce shall report the circumstances to the 
        Comptroller General of the United States as much in advance of 
        such disposition as the Secretary of Commerce determines is 
        practicable. The proceeds of the liquidation, sale, or other 
        disposition, after obligations incurred by the corporation or 
        business enterprise are met, shall be deposited in the Treasury 
        of the United States as miscellaneous receipts. Any property or 
        equipment purchased pursuant to paragraph (1) may be retained 
        for subsequent use in undercover operations under this section. 
        When such property or equipment is no longer needed, it shall 
        be considered surplus and disposed of as surplus government 
        property.
            (3) Deposit of proceeds.--As soon as the proceeds from an 
        undercover investigative operation of the Office of Export 
        Enforcement of the Department of Commerce with respect to which 
        an action is authorized and carried out under this subsection 
        are no longer needed for the conduct of such operation, the 
        proceeds or the balance of the proceeds remaining at the time 
        shall be deposited into the Treasury of the United States as 
        miscellaneous receipts.
            (4) Audit and report.--
                    (A) Audit.--The Secretary of Commerce shall conduct 
                a detailed financial audit of each closed undercover 
                investigative operation of the Office of Export 
                Enforcement of the Department of Commerce. Not later 
                than 180 days after an undercover operation is closed, 
                the Secretary of Commerce shall submit to the Congress 
                a report on the results of the audit.
                    (B) Report.--The Secretary of Commerce shall submit 
                to the appropriate congressional committees, in the 
                Secretary's annual report to the Congress on the 
                administration of export controls and the Export 
                Administration Regulations, the following additional 
                information:
                            (i) The number of undercover investigative 
                        operations pending as of the end of the period 
                        for which the report is submitted.
                            (ii) The number of undercover investigative 
                        operations commenced in the 1-year period 
                        preceding the period for which the report is 
                        submitted.
                            (iii) The number of undercover 
                        investigative operations closed in the 1-year 
                        period preceding the period for which such 
                        report is submitted and, with respect to each 
                        such closed undercover operation, the results 
                        obtained and any civil claims made with respect 
                        to the operation.
            (5) Definitions.--In this subsection:
                    (A) Closed.--The term ``closed'', with respect to 
                an undercover investigative operation, refers to the 
                earliest point in time at which all criminal 
                proceedings (other than appeals) pursuant to the 
                investigative operation are concluded, or covert 
                activities pursuant to such operation are concluded, 
                whichever occurs later.
                    (B) Undercover investigative operation and 
                undercover operation.--
                            (i) In general.--The terms ``undercover 
                        investigative operation'' and ``undercover 
                        operation'' mean any undercover investigative 
                        operation conducted by the Office of Export 
                        Enforcement of the Department of Commerce--
                                    (I) in which the gross receipts 
                                (excluding interest earned) exceed 
                                $25,000, or expenditures (other than 
                                expenditures for salaries of employees) 
                                exceed $75,000; and
                                    (II) which is exempt from section 
                                3302 or 9102 of title 31, United States 
                                Code.
                            (ii) Exception.--Subclauses (I) and (II) of 
                        clause (i) shall not apply with respect to the 
                        report to the Congress required by paragraph 
                        (4)(B).
    (h) Authorization for Bureau of Industry and Security.--The 
Secretary of Commerce may authorize, without fiscal year limitation, 
the expenditure of funds transferred to, paid to, received by, or made 
available to the Bureau of Industry and Security of the Department of 
Commerce as a reimbursement in accordance with section 9703 of title 
31, United States Code (as added by Public Law 102-393).

SEC. 213. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as may be 
necessary to carry out this subtitle for each fiscal year.

SEC. 214. DEFINITIONS.

    In this subtitle:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means the Committee on 
        Foreign Affairs of the House of Representatives and the 
        Committee on Foreign Relations of the Senate.
            (2) Export administration regulations.--The term ``Export 
        Administration Regulations'' means the Export Administration 
        Regulations as maintained and amended under the authority of 
        the International Emergency Economic Powers Act and codified, 
        as of the date of the enactment of this Act, in subchapter C of 
        chapter VII of title 15, Code of Federal Regulations.

 Subtitle B--Prevention of Transfer of Sensitive Items to Countries of 
                                Concern

SEC. 221. IDENTIFICATION OF LOCATIONS OF CONCERN WITH RESPECT TO 
              TRANSSHIPMENT, REEXPORTATION, OR DIVERSION OF CERTAIN 
              ITEMS TO IRAN.

    Not later than 180 days after the date of the enactment of this 
Act, and annually thereafter, the President shall submit to the 
appropriate congressional committees a report that identifies all 
countries that the President determines are of concern with respect to 
transshipment, reexportation, or diversion of items subject to the 
provisions of the Export Administration Regulations to an entity owned 
or controlled by the Government of Iran.

SEC. 222. DESTINATIONS OF POSSIBLE DIVERSION CONCERN AND DESTINATIONS 
              OF DIVERSION CONCERN.

    (a) Destinations of Possible Diversion Concern.--
            (1) Designation.--The Secretary of Commerce shall designate 
        a country as a Destination of Possible Diversion Concern if the 
        Secretary, in consultation with the Secretary of State and the 
        Secretary of the Treasury, determines that such designation is 
        appropriate to carry out activities to strengthen the export 
        control systems of that country based on criteria that 
        include--
                    (A) the volume of items that originated in the 
                United States that are transported through the country 
                to end-users whose identities cannot be verified;
                    (B) the inadequacy of the export and reexport 
                controls of the country;
                    (C) the unwillingness or demonstrated inability of 
                the government of the country to control diversion 
                activities; and
                    (D) the unwillingness or inability of the 
                government of the country to cooperate with the United 
                States in interdiction efforts.
            (2) Strengthening export control systems of destinations of 
        possible diversion concern.--If the Secretary of Commerce 
        designates a country as a Destination of Possible Diversion 
        Concern under paragraph (1), the United States shall initiate 
        government-to-government activities described in paragraph (3) 
        to strengthen the export control systems of the country.
            (3) Government-to-government activities described.--The 
        government-to-government activities described in this paragraph 
        include--
                    (A) cooperation by agencies and departments of the 
                United States with counterpart agencies and departments 
                in a country designated as a Destination of Possible 
                Diversion Concern under paragraph (1) to--
                            (i) develop or strengthen export control 
                        systems in the country;
                            (ii) strengthen cooperation and facilitate 
                        enforcement of export control systems in the 
                        country; and
                            (iii) promote information and data 
                        exchanges among agencies of the country and 
                        with the United States; and
                    (B) efforts by the Office of International Programs 
                of the Department of Commerce to strengthen the export 
                control systems of the country to--
                            (i) facilitate legitimate trade in high-
                        technology goods; and
                            (ii) prevent terrorists and state sponsors 
                        of terrorism, including Iran, from obtaining 
                        nuclear, biological, and chemical weapons, 
                        defense technologies, components for improvised 
                        explosive devices, and other defense items.
    (b) Destinations of Diversion Concern.--
            (1) Designation.--The Secretary of Commerce shall designate 
        a country as a Destination of Diversion Concern if the 
        Secretary, in consultation with the Secretary of State and the 
        Secretary of the Treasury, determines--
                    (A) that the government of the country is directly 
                involved in transshipment, reexportation, or diversion 
                of items that originated in the United States to end-
                users whose identities cannot be verified or to 
                entities owned or controlled by the Government of Iran; 
                or
                    (B) in the case of a country that has been 
                designated as a Destination of Possible Diversion 
                Concern under subsection (a)(1), that the country has, 
                upon the expiration of the 12-month period beginning on 
                the date of such designation--
                            (i) failed to cooperate with the 
                        government-to-government activities initiated 
                        by the United States under subsection (a)(2); 
                        or
                            (ii) based on the criteria described in 
                        subsection (a)(1), failed to adequately 
                        strengthen the export control systems of the 
                        country.
            (2) Licensing controls with respect to destinations of 
        diversion concern.--
                    (A) Report on suspect items.--
                            (i) In general.--Not later than 45 days 
                        after the date of the enactment of this Act, 
                        the Secretary of Commerce, in consultation with 
                        appropriate representatives of the United 
                        States intelligence community, the Secretary of 
                        State, and the Secretary of the Treasury, shall 
                        submit to the appropriate congressional 
                        committees a report containing a list of items 
                        that, if the items were transshipped, 
                        reexported, or diverted to Iran, could 
                        contribute to--
                                    (I) Iran obtaining nuclear, 
                                biological, or chemical weapons, 
                                defense technologies, components for 
                                improvised explosive devices, or other 
                                defense items; or
                                    (II) support by Iran for acts of 
                                international terrorism.
                            (ii) Considerations for list.--In 
                        developing the list required under clause (i), 
                        the Secretary of Commerce shall consider--
                                    (I) the items subject to licensing 
                                requirements under section 742.8 of 
                                title 15, Code of Federal Regulations 
                                (or any corresponding similar 
                                regulation or ruling) and other 
                                existing licensing requirements; and
                                    (II) the items added to the list of 
                                items for which a license is required 
                                for exportation to North Korea by the 
                                final rule of the Bureau of Export 
                                Administration of the Department of 
                                Commerce issued on June 19, 2000 (65 
                                Fed. Reg. 38148; relating to export 
                                restrictions on North Korea).
                    (B) Licensing requirement.--Not later than 180 days 
                after the date of the enactment of this Act, the 
                Secretary of Commerce shall require a license to export 
                an item on the list required under subparagraph (A)(i) 
                to a country designated as a Destination of Diversion 
                Concern.
            (3) Waiver.--The President may waive the imposition of the 
        licensing requirement under paragraph (2)(B) with respect to a 
        country designated as a Destination of Diversion Concern if the 
        President--
                    (A) determines that such a waiver is in the 
                national interest of the United States; and
                    (B) submits to the appropriate congressional 
                committees a report describing the reasons for the 
                determination.
    (c) Termination of Designation.--The designation of a country as a 
Destination of Possible Diversion Concern or a Destination of Diversion 
Concern shall terminate on the date on which the Secretary of Commerce 
determines, based on the criteria described in subparagraphs (A) 
through (D) of subsection (a)(1), and certifies to the appropriate 
congressional committees and the President that the country has 
adequately strengthened the export control systems of the country to 
prevent transshipment, reexportation, and diversion of items through 
the country to end-users whose identities cannot be verified or to 
entities owned or controlled by the Government of Iran.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 223. REPORT ON EXPANDING DIVERSION CONCERN SYSTEM TO COUNTRIES 
              OTHER THAN IRAN.

    Not later than 180 days after the date of the enactment of this 
Act, the President shall submit to the appropriate congressional 
committees a report that--
            (1) identifies any country that the President determines 
        may be transshipping, reexporting, or diverting items subject 
        to the provisions of the Export Administration Regulations to 
        another country if such other country--
                    (A) is seeking to obtain nuclear, biological, or 
                chemical weapons, defense technologies, components for 
                improvised explosive devices, or other defense items; 
                or
                    (B) provides support for acts of international 
                terrorism; and
            (2) assesses the feasability and advisability of expanding 
        the system established under section 222 for designating 
        countries as Destinations of Possible Diversion Concern and 
        Destinations of Diversion Concern to include countries 
        identified under paragraph (1).

SEC. 224. ANNUAL REPORT ON TRANSFERS OF MILITARILY SENSITIVE TECHNOLOGY 
              TO COUNTRIES AND ENTITIES OF CONCERN.

    (a) Annual Report.--Not later than March 30 of each year beginning 
in 2010, the President shall transmit to the Congress a report on 
transfers to countries and entities of concern during the preceding 
calendar year of the most significant categories of United States 
technologies and technical information with potential military 
applications.
    (b) Contents of Report.--The report required by subsection (a) 
shall include, at a minimum, the following:
            (1) An assessment by the President of efforts by countries 
        and entities of concern to acquire technologies and technical 
        information referred to in subsection (a) during the preceding 
        calendar year.
            (2) An assessment by the President of the cumulative impact 
        of licenses granted by the United States for exports of 
        technologies and technical information referred to in 
        subsection (a) to countries and entities of concern during the 
        preceding 5-calendar year period on--
                    (A) the military capabilities of such countries and 
                entities; and
                    (B) countermeasures that may be necessary to 
                overcome the use of such technologies and technical 
                information.
            (3) An audit by the Inspectors General of the Departments 
        of Defense, State, Commerce, Homeland Security, Energy, and the 
        Treasury, in consultation with appropriate representatives of 
        the United States intelligence community, of the policies and 
        procedures of the United States Government with respect to the 
        export of technologies and technical information referred to in 
        subsection (a) to countries and entities of concern.
    (c) Additional Requirement for First Report.--The first annual 
report required by subsection (a) shall include an assessment by the 
Inspectors General of the Departments of Defense, State, Commerce, 
Homeland Security, Energy, and the Treasury of the adequacy of current 
export controls and counterintelligence measures to protect against the 
acquisition by countries and entities of concern of United States 
technology and technical information referred to in subsection (a).
    (d) Support of Other Agencies.--Upon the request of any of the 
officials responsible for preparing an assessment or audit required by 
subsection (b) or (c), the heads of other departments and agencies 
shall make available to those officials all information necessary to 
carry to prepare such assessment or audit.
    (e) Classified and Unclassified Reports.--Each report required by 
this section shall be submitted in classified form and unclassified 
form.
    (f) Definition.--In this section, the term ``countries and entities 
of concern'' means--
            (1) any country that is a state sponsor of terrorism;
            (2) any country that--
                    (A) has detonated a nuclear explosive device (as 
                defined in section 830(4) of the Nuclear Proliferation 
                Prevention Act of 1994 (22 U.S.C. 6305(4))); and
                    (B) is not a member of the North Atlantic Treaty 
                Organization; and
            (3) any entity that--
                    (A) is engaged in international terrorism or 
                activities in preparation thereof; or
                    (B) is directed or controlled by the government of 
                a country described in paragraph (1) or (2).

SEC. 225. DEFINITIONS.

    In this subtitle:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs, the Committee on Foreign Relations, and the 
                Select Committee on Intelligence of the Senate; and
                    (B) the Committee on Financial Services, the 
                Committee on Foreign Affairs, and the Permanent Select 
                Committee on Intelligence of the House of 
                Representatives.
            (2) End-user.--The term ``end-user'' means an end-user as 
        that term is used in the Export Administration Regulations.
            (3) Entity owned or controlled by the government of iran.--
        The term ``entity owned or controlled by the Government of 
        Iran'' includes--
                    (A) any corporation, partnership, association, or 
                other entity in which the Government of Iran owns a 
                majority or controlling interest; and
                    (B) any entity that is otherwise controlled by the 
                Government of Iran.
            (4) Export administration regulations.--The term ``Export 
        Administration Regulations'' means the Export Administration 
        Regulations as maintained and amended under the authority of 
        the International Emergency Economic Powers Act and codified, 
        as of the date of the enactment of this Act, in subchapter C of 
        chapter VII of title 15, Code of Federal Regulations.
            (5) Government.--The term ``government'' includes any 
        agency or instrumentality of a government.
            (6) Iran.--The term ``Iran'' includes any agency or 
        instrumentality of Iran.
            (7) State sponsor of terrorism.--The term ``state sponsor 
        of terrorism'' means any country the government of which the 
        Secretary of State has determined has repeatedly provided 
        support for acts of international terrorism pursuant to--
                    (A) section 6(j)(1)(A) of the Export Administration 
                Act of 1979 (50 U.S.C. App. 2405(j)(1)(A)) (or any 
                successor thereto);
                    (B) section 40(d) of the Arms Export Control Act 
                (22 U.S.C. 2780(d)); or
                    (C) section 620A(a) of the Foreign Assistance Act 
                of 1961 (22 U.S.C. 2371(a)).
            (8) Transshipment, reexportation, or diversion.--The term 
        ``transshipment, reexportation, or diversion'' means the 
        exportation, directly or indirectly, of items that originated 
        in the United States to an end-user whose identity cannot be 
        verified or to an entity owned or controlled by the Government 
        of Iran in violation of the laws or regulations of the United 
        States by any means, including by--
                    (A) shipping such items through one or more foreign 
                countries; or
                    (B) using false information regarding the country 
                of origin of such items.
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