regulations issued pursuant to this subsection. The
regulations issued pursuant to this section shall ex-
pressly provide that the exceptions set forth in para-
graph (2) do not permit activities or agreements (ex-
pressed or implied by a course of conduct, including
a pattern of responses) that are otherwise prohib-
ited, pursuant to the intent of such exceptions.
(c) ADDITIONAL REGULATIONS AND REPORTS.—
(1) REGULATIONS.—In addition to the regula-
tions issued pursuant to subsection (b), regulations
issued pursuant to title III shall implement the pur-
poses set forth in subsection (a).
(2) REPORTS BY UNITED STATES PERSONS.—
The regulations shall require that any United States
person receiving a request to furnish information,
enter into or implement an agreement, or take any
other action referred to in subsection (a) shall report
that request to the Secretary, together with any
other information concerning the request that the
Secretary determines appropriate. The person shall
also submit to the Secretary a statement regarding
whether the person intends to comply, and whether
the person has complied, with the request. Any re-
port filed pursuant to this paragraph shall be made
available promptly for public inspection and copying,
except that information regarding the quantity, de-
scription, and value of any item to which such report
relates may be treated as confidential if the Sec-
retary determines that disclosure of that information
would place the United States person involved at a
competitive disadvantage. The Secretary shall peri-
odically transmit summaries of the information con-
tained in the reports to the Secretary of State for
such action as the Secretary of State, in consultation
with the Secretary, considers appropriate to carry
out the purposes set forth in subsection (a).
(d) PREEMPTION.—The provisions of this section and
the regulations issued under this section shall preempt any
law, rule, or regulation that—
(1) is a law, rule, or regulation of any of the
several States or the District of Columbia, or any of
the territories or possessions of the United States,
or of any governmental subdivision thereof; and
(2) pertains to participation in, compliance
with, implementation of, or the furnishing of infor-
mation regarding restrictive trade practices or boy-
cotts fostered or imposed by foreign countries
against other countries.
SEC. 503. PENALTIES.
(a) CRIMINAL PENALTIES.—
(1) VIOLATIONS BY AN INDIVIDUAL.—Any indi-
vidual who willfully violates, conspires to violate, or
attempts to violate any provision of this Act or any
regulation, license, or order issued under this Act
shall be fined up to 10 times the value of the exports
involved or $1,000,000, whichever is greater, impris-
oned for not more than 10 years, or both, for each
violation.
(2) VIOLATIONS BY A PERSON OTHER THAN AN
INDIVIDUAL.—Any person other than an individual
who willfully violates, conspires to violate, or at-
tempts to violate any provision of this Act or any
regulation, license, or order issued under this Act
shall be fined up to 10 times the value of the exports
involved or $5,000,000, whichever is greater, for
each violation.
(b) FORFEITURE OF PROPERTY INTEREST AND PRO-
CEEDS.—
(1) FORFEITURE.—Any person who is convicted
under paragraph (1) or (2) of subsection (a) shall,
in addition to any other penalty, forfeit to the
United States—
(A) any of that person’s security or other
interest in, claim against, or property or con-
tractual rights of any kind in the tangible items
that were the subject of the violation;
(B) any of that person’s security or other
interest in, claim against, or property or con-
tractual rights of any kind in the tangible prop-
erty that was used in the export or attempt to
export that was the subject of the violation; and
(C) any of that person’s property consti-
tuting, or derived from, any proceeds obtained
directly or indirectly as a result of the violation.
(2) PROCEDURES.—The procedures in any for-
feiture under this subsection, and the duties and au-
thority of the courts of the United States and the
Attorney General with respect to any forfeiture ac-
tion under this subsection, or with respect to any
property that may be subject to forfeiture under this
subsection, shall be governed by the provisions of
chapter 46 of title 18, United States Code (relating
to criminal forfeiture), to the same extent as prop-
erty subject to forfeiture under that chapter.
(c) CIVIL
PENALTIES; ADMINISTRATIVE
SANC-
TIONS.—
(1) CIVIL PENALTIES.—The Secretary may im-
pose a civil penalty of up to $500,000 for each viola-
tion of a provision of this Act or any regulation, li-
cense, or order issued under this Act. A civil penalty
under this paragraph may be in addition to, or in
lieu of, any other liability or penalty which may be
imposed for such a violation.
(2) DENIAL OF EXPORT PRIVILEGES.—The Sec-
retary may deny the export privileges of any person,
including the suspension or revocation of the author-
ity of such person to export or receive United
States-origin items subject to this Act, for a viola-
tion of a provision of this Act or any regulation, li-
cense, or order issued under this Act.
(3) EXCLUSION
FROM
PRACTICE.—The Sec-
retary may exclude any person acting as an attor-
ney, accountant, consultant, freight forwarder, or in
any other representative capacity from participating
before the Department with respect to a license ap-
plication or any other matter under this Act.
(d) PAYMENT OF CIVIL PENALTIES.—
(1) PAYMENT AS CONDITION OF FURTHER EX-
PORT PRIVILEGES.—The payment of a civil penalty
imposed under subsection (c) may be made a condi-
tion for the granting, restoration, or continuing va-
lidity of any export license, permission, or privilege
granted or to be granted to the person upon whom
such penalty is imposed. The period for which the
payment of a penalty may be made such a condition
may not exceed 1 year after the date on which the
payment is due.
(2) DEFERRAL OR SUSPENSION.—
(A) IN GENERAL.—The payment of a civil
penalty imposed under subsection (c) may be
deferred or suspended in whole or in part for a
period no longer than any probation period
(which may exceed 1 year) that may be imposed
upon the person on whom the penalty is im-
posed.
(B) NO
BAR
TO
COLLECTION
OF
PEN-
ALTY.—A deferral or suspension under sub-
paragraph (A) shall not operate as a bar to the
collection of the penalty concerned in the event
that the conditions of the suspension, deferral,
or probation are not fulfilled.
(3) TREATMENT OF PAYMENTS.—Any amount
paid in satisfaction of a civil penalty imposed under
subsection (c) shall be covered into the Treasury as
miscellaneous receipts.
(e) REFUNDS.—
(1) AUTHORITY.—
(A) IN GENERAL.—The Secretary may, in
the Secretary’s discretion, refund any civil pen-
alty imposed under subsection (c) on the
ground of a material error of fact or law in im-
position of the penalty.
(B) LIMITATION.—A civil penalty may not
be refunded under subparagraph (A) later than
2 years after payment of the penalty.
(2) PROHIBITION ON ACTIONS FOR REFUND.—
Notwithstanding section 1346(a) of title 28, United
States Code, no action for the refund of any civil
penalty referred to in paragraph (1) may be main-
tained in any court.
(f) EFFECT OF OTHER CONVICTIONS.—
(1) DENIAL OF EXPORT PRIVILEGES.—Any per-
son convicted of a violation of—
(A) a provision of this Act or the Export
Administration Act of 1979,
(B) a provision of the International Emer-
gency Economic Powers Act (50 U.S.C. 1701 et
seq.),
(C) section 793, 794, or 798 of title 18,
United States Code,
(D) section 4(b) of the Internal Security
Act of 1950 (50 U.S.C. 783(b)),
(E) section 38 of the Arms Export Control
Act (22 U.S.C. 2778),
(F) section 16 of the Trading with the
Enemy Act (50 U.S.C. App. 16),
(G) any regulation, license, or order issued
under any provision of law listed in subpara-
graph (A), (B), (C), (D), (E), or (F),
(H) section 371 or 1001 of title 18, United
States Code, if in connection with the export of
controlled items under this Act or any regula-
tion, license, or order issued under the Inter-
national Emergency Economic Powers Act, or
the export of items controlled under the Arms
Export Control Act,
(I) section 175 of title 18, United States
Code,
(J) a provision of the Atomic Energy Act
(42 U.S.C. 201 et seq.),
(K) section 831 of title 18, United States
Code, or
(L) section 2332a of title 18, United
States Code,
may, at the discretion of the Secretary, be denied ex-
port privileges under this Act for a period not to ex-
ceed 10 years from the date of the conviction. The
Secretary may also revoke any export license under
this Act in which such person had an interest at the
time of the conviction.
(2) RELATED
PERSONS.—The Secretary may
exercise the authority under paragraph (1) with re-
spect to any person related through affiliation, own-
ership, control, or position of responsibility to a per-
son convicted of any violation of a law set forth in
paragraph (1) upon a showing of such relationship
with the convicted person. The Secretary shall make
such showing only after providing notice and oppor-
tunity for a hearing.
(g) STATUTE OF LIMITATIONS.—
(1) IN GENERAL.—Except as provided in para-
graph (2), a proceeding in which a civil penalty or
other administrative sanction (other than a tem-
porary denial order) is sought under subsection (c)
may not be instituted more than 5 years after the
later of the date of the alleged violation or the date
of discovery of the alleged violation.
(2) EXCEPTION.—
(A) TOLLING.—In any case in which a
criminal indictment alleging a violation under
subsection (a) is returned within the time limits
prescribed by law for the institution of such ac-
tion, the limitation under paragraph (1) for
bringing a proceeding to impose a civil penalty
or other administrative sanction under this sec-
tion shall, upon the return of the criminal in-
dictment, be tolled against all persons named as
a defendant.
(B) DURATION.—The tolling of the limita-
tion with respect to a defendant under subpara-
graph (A) as a result of a criminal indictment
shall continue for a period of 6 months from
the date on which the conviction of the defend-
ant becomes final, the indictment against the
defendant is dismissed, or the criminal action
has concluded.
(h) VIOLATIONS DEFINED BY REGULATION.—Noth-
ing in this section shall limit the authority of the Secretary
to define by regulation violations under this Act.
(i) CONSTRUCTION.—Nothing in subsection (c), (d),
(e), (f), or (g) limits—
(1) the availability of other administrative or
judicial remedies with respect to a violation of a pro-
vision of this Act, or any regulation, order, or license
issued under this Act;
(2) the authority to compromise and settle ad-
ministrative proceedings brought with respect to any
such violation; or
(3) the authority to compromise, remit, or miti-
gate seizures and forfeitures pursuant to section
1(b) of title VI of the Act of June 15, 1917 (22
U.S.C. 401(b)).
SEC. 504. MISSILE PROLIFERATION CONTROL VIOLATIONS.
(a) VIOLATIONS BY UNITED STATES PERSONS.—
(1) SANCTIONS.—
(A) IN GENERAL.—If the President deter-
mines that a United States person knowingly—
(i) exports, transfers, or otherwise en-
gages in the trade of any item on the
MTCR Annex, in violation of the provi-
sions of section 38 (22 U.S.C. 2778) or
chapter 7 of the Arms Export Control Act,
title II or III of this Act, or any regula-
tions or orders issued under any such pro-
visions,
(ii) conspires to or attempts to engage
in such export, transfer, or trade, or
(iii) facilitates such export, transfer,
or trade by any other person,
then the President shall impose the applicable
sanctions described in subparagraph (B).
100
(B) SANCTIONS
DESCRIBED.—The sanc-
tions which apply to a United States person
under subparagraph (A) are the following:
(i) If the item on the MTCR Annex
involved in the export, transfer, or trade is
missile equipment or technology within cat-
egory II of the MTCR Annex, then the
President shall deny to such United States
person, for a period of 2 years, licenses for
the transfer of missile equipment or tech-
nology controlled under this Act.
(ii) If the item on the MTCR Annex
involved in the export, transfer, or trade is
missile equipment or technology within cat-
egory I of the MTCR Annex, then the
President shall deny to such United States
person, for a period of not less than 2
years, all licenses for items the export of
which is controlled under this Act.
(2) DISCRETIONARY SANCTIONS.—In the case
of any determination referred to in paragraph (1),
the Secretary may pursue any other appropriate
penalties under section 503.
(3) WAIVER.—The President may waive the im-
position of sanctions under paragraph (1) on a per-
101
son with respect to an item if the President certifies
to Congress that—
(A) the item is essential to the national se-
curity of the United States; and
(B) such person is a sole source supplier of
the item, the item is not available from any al-
ternative reliable supplier, and the need for the
item cannot be met in a timely manner by im-
proved manufacturing processes or technological
developments.
(b) TRANSFERS OF MISSILE EQUIPMENT OR TECH-
NOLOGY BY FOREIGN PERSONS.—
(1) SANCTIONS.—
(A) IN GENERAL.—Subject to paragraphs
(3) through (7), if the President determines
that a foreign person, after the date of enact-
ment of this section, knowingly—
(i) exports, transfers, or otherwise en-
gages in the trade of any MTCR equip-
ment or technology that contributes to the
design, development, or production of mis-
siles in a country that is not an MTCR ad-
herent and would be, if it were United
States-origin equipment or technology,
102
subject to the jurisdiction of the United
States under this Act,
(ii) conspires to or attempts to engage
in such export, transfer, or trade, or
(iii) facilitates such export, transfer,
or trade by any other person,
or if the President has made a determination
with respect to a foreign person under section
73(a) of the Arms Export Control Act, then the
President shall impose on that foreign person
the applicable sanctions under subparagraph
(B).
(B) SANCTIONS
DESCRIBED.—The sanc-
tions which apply to a foreign person under
subparagraph (A) are the following:
(i) If the item involved in the export,
transfer, or trade is within category II of
the MTCR Annex, then the President shall
deny, for a period of 2 years, licenses for
the transfer to such foreign person of mis-
sile equipment or technology the export of
which is controlled under this Act.
(ii) If the item involved in the export,
transfer, or trade is within category I of
the MTCR Annex, then the President shall
103
deny, for a period of not less than 2 years,
licenses for the transfer to such foreign
person of items the export of which is con-
trolled under this Act.
(iii) If, in addition to actions taken
under clauses (i) and (ii), the President de-
termines that the export, transfer, or trade
has substantially contributed to the design,
development, or production of missiles in a
country that is not an MTCR adherent,
then the President shall prohibit, for a pe-
riod of not less than 2 years, the importa-
tion into the United States of products
produced by that foreign person.
(2) INAPPLICABILITY WITH RESPECT TO MTCR
ADHERENTS.—Paragraph (1) does not apply with
respect to—
(A) any export, transfer, or trading activ-
ity that is authorized by the laws of an MTCR
adherent, if such authorization is not obtained
by misrepresentation or fraud; or
(B) any export, transfer, or trade of an
item to an end user in a country that is an
MTCR adherent.
104
(3) EFFECT
OF
ENFORCEMENT
ACTIONS
BY
MTCR
ADHERENTS.—Sanctions set forth in para-
graph (1) may not be imposed under this subsection
on a person with respect to acts described in such
paragraph or, if such sanctions are in effect against
a person on account of such acts, such sanctions
shall be terminated, if an MTCR adherent is taking
judicial or other enforcement action against that
person with respect to such acts, or that person has
been found by the government of an MTCR adher-
ent to be innocent of wrongdoing with respect to
such acts.
(4) ADVISORY
OPINIONS.—The Secretary, in
consultation with the Secretary of State and the
Secretary of Defense, may, upon the request of any
person, issue an advisory opinion to that person as
to whether a proposed activity by that person would
subject that person to sanctions under this sub-
section. Any person who relies in good faith on such
an advisory opinion which states that the proposed
activity would not subject a person to such sanc-
tions, and any person who thereafter engages in
such activity, may not be made subject to such sanc-
tions on account of such activity.
(5) WAIVER AND REPORT TO CONGRESS.—
105
(A) WAIVER.—In any case other than one
in which an advisory opinion has been issued
under paragraph (4) stating that a proposed ac-
tivity would not subject a person to sanctions
under this subsection, the President may waive
the application of paragraph (1) to a foreign
person if the President determines that such
waiver is essential to the national security of
the United States.
(B) REPORT TO CONGRESS.—In the event
that the President decides to apply the waiver
described in subparagraph (A), the President
shall so notify Congress not less than 20 work-
ing days before issuing the waiver. Such notifi-
cation shall include a report fully articulating
the rationale and circumstances which led the
President to apply the waiver.
(6) ADDITIONAL WAIVER.—The President may
waive the imposition of sanctions under paragraph
(1) on a person with respect to a product or service
if the President certifies to the Congress that—
(A) the product or service is essential to
the national security of the United States; and
(B) such person is a sole source supplier of
the product or service, the product or service is
106
not available from any alternative reliable sup-
plier, and the need for the product or service
cannot be met in a timely manner by improved
manufacturing processes or technological devel-
opments.
(7) EXCEPTIONS.—The President shall not
apply the sanction under this subsection prohibiting
the importation of the products of a foreign
person—
(A) in the case of procurement of defense
articles or defense services—
(i) under existing contracts or sub-
contracts, including the exercise of options
for production quantities to satisfy require-
ments essential to the national security of
the United States;
(ii) if the President determines that
the person to which the sanctions would be
applied is a sole source supplier of the de-
fense articles and services, that the defense
articles or services are essential to the na-
tional security of the United States, and
that alternative sources are not readily or
reasonably available; or
107
(iii) if the President determines that
such articles or services are essential to the
national security of the United States
under defense coproduction agreements or
NATO Programs of Cooperation;
(B) to products or services provided under
contracts entered into before the date on which
the President publishes his intention to impose
the sanctions; or
(C) to—
(i) spare parts,
(ii) component parts, but not finished
products, essential to United States prod-
ucts or production,
(iii) routine services and maintenance
of products, to the extent that alternative
sources are not readily or reasonably avail-
able, or
(iv) information and technology essen-
tial to United States products or produc-
tion.
(c) DEFINITIONS.—In this section:
(1) MISSILE.—The term ‘‘missile’’ means a cat-
egory I system as defined in the MTCR Annex, and
any other unmanned delivery system of similar capa-
108
bility, as well as the specially designed production
facilities for these systems.
(2) MISSILE TECHNOLOGY CONTROL REGIME;
MTCR.—The term ‘‘Missile Technology Control Re-
gime’’ or ‘‘MTCR’’ means the policy statement, be-
tween the United States, the United Kingdom, the
Federal Republic of Germany, France, Italy, Can-
ada, and Japan, announced on April 16, 1987, to re-
strict sensitive missile-relevant transfers based on
the MTCR Annex, and any amendments thereto.
(3) MTCR ADHERENT.—The term ‘‘MTCR ad-
herent’’ means a country that participates in the
MTCR or that, pursuant to an international under-
standing to which the United States is a party, con-
trols MTCR equipment or technology in accordance
with the criteria and standards set forth in the
MTCR.
(4) MTCR ANNEX.—The term ‘‘MTCR Annex’’
means the Guidelines and Equipment and Tech-
nology Annex of the MTCR, and any amendments
thereto.
(5) MISSILE
EQUIPMENT
OR
TECHNOLOGY;
MTCR
EQUIPMENT
OR
TECHNOLOGY.—The terms
‘‘missile equipment or technology’’ and ‘‘MTCR
109
equipment or technology’’ mean those items listed in
category I or category II of the MTCR Annex.
(6) FOREIGN PERSON.—The term ‘‘foreign per-
son’’ means any person other than a United States
person.
(7) PERSON.—
(A) IN
GENERAL.—The term ‘‘person’’
means a natural person as well as a corpora-
tion, business association, partnership, society,
trust, any other nongovernmental entity, orga-
nization, or group, and any governmental entity
operating as a business enterprise, and any suc-
cessor of any such entity.
(B) IDENTIFICATION IN CERTAIN CASES.—
In the case of countries where it may be impos-
sible to identify a specific governmental entity
referred to in subparagraph (A), the term ‘‘per-
son’’ means—
(i) all activities of that government re-
lating to the development or production of
any missile equipment or technology; and
(ii) all activities of that government
affecting the development or production of
aircraft, electronics, and space systems or
equipment.
110
(8) OTHERWISE ENGAGED IN THE TRADE OF.—
The term ‘‘otherwise engaged in the trade of’’
means, with respect to a particular export or trans-
fer, to be a freight forwarder or designated export-
ing agent, or a consignee or end user of the item to
be exported or transferred.
SEC. 505. CHEMICAL AND BIOLOGICAL WEAPONS PRO-
LIFERATION SANCTIONS.
(a) IMPOSITION OF SANCTIONS.—
(1) DETERMINATION BY THE PRESIDENT.—Ex-
cept as provided in subsection (b)(2), the President
shall impose both of the sanctions described in sub-
section (c) if the President determines that a foreign
person, on or after the date of enactment of this sec-
tion, has knowingly and materially contributed—
(A) through the export from the United
States of any item that is subject to the juris-
diction of the United States under this Act, or
(B) through the export from any other
country of any item that would be, if it were a
United States item, subject to the jurisdiction
of the United States under this Act,
to the efforts by any foreign country, project, or en-
tity described in paragraph (2) to use, develop,
111
produce, stockpile, or otherwise acquire chemical or
biological weapons.
(2) COUNTRIES, PROJECTS, OR ENTITIES RE-
CEIVING ASSISTANCE.—Paragraph (1) applies in the
case of—
(A) any foreign country that the President
determines has, at any time after the date of
enactment of this Act—
(i) used chemical or biological weap-
ons in violation of international law;
(ii) used lethal chemical or biological
weapons against its own nationals; or
(iii) made substantial preparations to
engage in the activities described in clause
(i) or (ii);
(B) any foreign country whose government
is determined for purposes of section 310 to be
a government that has repeatedly provided sup-
port for acts of international terrorism; or
(C) any other foreign country, project, or
entity designated by the President for purposes
of this section.
(3) PERSONS AGAINST WHICH SANCTIONS ARE
TO BE IMPOSED.—Sanctions shall be imposed pursu-
ant to paragraph (1) on—
112
(A) the foreign person with respect to
which the President makes the determination
described in that paragraph;
(B) any successor entity to that foreign
person;
(C) any foreign person that is a parent or
subsidiary of that foreign person if that parent
or subsidiary knowingly assisted in the activities
which were the basis of that determination; and
(D) any foreign person that is an affiliate
of that foreign person if that affiliate knowingly
assisted in the activities which were the basis of
that determination and if that affiliate is con-
trolled in fact by that foreign person.
(b) CONSULTATIONS WITH AND ACTIONS BY FOR-
EIGN GOVERNMENT OF JURISDICTION.—
(1) CONSULTATIONS.—If the President makes
the determinations described in subsection (a)(1)
with respect to a foreign person, Congress urges the
President to initiate consultations immediately with
the government with primary jurisdiction over that
foreign person with respect to the imposition of
sanctions pursuant to this section.
(2) ACTIONS
BY
GOVERNMENT
OF
JURISDIC-
TION.—In order to pursue such consultations with
114
are, except as provided in paragraph (2) of this sub-
section, the following:
(A) 
PROCUREMENT
SANCTION.—The
United States Government shall not procure, or
enter into any contract for the procurement of,
any goods or services from any person described
in subsection (a)(3).
(B) IMPORT SANCTIONS.—The importation
into the United States of products produced by
any person described in subsection (a)(3) shall
be prohibited.
(2) EXCEPTIONS.—The President shall not be
required to apply or maintain sanctions under this
section—
(A) in the case of procurement of defense
articles or defense services—
(i) under existing contracts or sub-
contracts, including the exercise of options
for production quantities to satisfy United
States operational military requirements;
(ii) if the President determines that
the person or other entity to which the
sanctions would otherwise be applied is a
sole source supplier of the defense articles
or services, that the defense articles or
115
services are essential, and that alternative
sources are not readily or reasonably avail-
able; or
(iii) if the President determines that
such articles or services are essential to the
national security under defense coproduc-
tion agreements;
(B) to products or services provided under
contracts entered into before the date on which
the President publishes his intention to impose
sanctions;
(C) to—
(i) spare parts,
(ii) component parts, but not finished
products, essential to United States prod-
ucts or production, or
(iii) routine servicing and mainte-
nance of products, to the extent that alter-
native sources are not readily or reason-
ably available;
(D) to information and technology essen-
tial to United States products or production; or
(E) to medical or other humanitarian
items.
116
(d) TERMINATION
OF SANCTIONS.—The sanctions
imposed pursuant to this section shall apply for a period
of at least 12 months following the imposition of sanctions
and shall cease to apply thereafter only if the President
determines and certifies to the Congress that reliable in-
formation indicates that the foreign person with respect
to which the determination was made under subsection
(a)(1) has ceased to aid or abet any foreign government,
project, or entity in its efforts to acquire chemical or bio-
logical weapons capability as described in that subsection.
(e) WAIVER.—
(1) CRITERION
FOR
WAIVER.—The President
may waive the application of any sanction imposed
on any person pursuant to this section, after the end
of the 12-month period beginning on the date on
which that sanction was imposed on that person, if
the President determines and certifies to Congress
that such waiver is important to the national secu-
rity interests of the United States.
(2) NOTIFICATION OF AND REPORT TO CON-
GRESS.—If the President decides to exercise the
waiver authority provided in paragraph (1), the
President shall so notify the Congress not less than
20 days before the waiver takes effect. Such notifica-
tion shall include a report fully articulating the ra-
117
tionale and circumstances which led the President to
exercise the waiver authority.
(f) DEFINITION OF FOREIGN PERSON.—For the pur-
poses of this section, the term ‘‘foreign person’’ means—
(1) an individual who is not a citizen of the
United States or an alien admitted for permanent
residence to the United States; or
(2) a corporation, partnership, or other entity
which is created or organized under the laws of a
foreign country or which has its principal place of
business outside the United States.
SEC. 506. ENFORCEMENT.
(a) GENERAL AUTHORITY AND DESIGNATION.—
(1) POLICY
GUIDANCE
ON
ENFORCEMENT.—
The Secretary, in consultation with the Secretary of
the Treasury and the heads of other departments
and agencies that the Secretary considers appro-
priate, shall be responsible for providing policy guid-
ance on the enforcement of this Act.
(2) GENERAL AUTHORITIES.—
(A) EXERCISE OF AUTHORITY.—To the ex-
tent necessary or appropriate to the enforce-
ment of this Act, officers and employees of the
Department designated by the Secretary, offi-
cers and employees of the United States Cus-
118
toms Service designated by the Commissioner of
Customs, and officers and employees of any
other department or agency designated by the
head of a department or agency exercising func-
tions under this Act, may exercise the enforce-
ment authority under paragraph (3).
(B) CUSTOMS SERVICE.—In carrying out
enforcement authority under paragraph (3), the
Commissioner of Customs and employees of the
United States Customs Service designated by
the Commissioner may make investigations
within or outside the United States and at
ports of entry into or exit from the United
States where officers of the United States Cus-
toms Service are authorized by law to carry out
law enforcement responsibilities. Subject to
paragraph (3), the United States Customs
Service is authorized, in the enforcement of this
Act, to search, detain (after search), and seize
items at the ports of entry into or exit from
the United States where officers of the United
States Customs Service are authorized by law
to conduct searches, detentions, and seizures,
and at the places outside the United States
where the United States Customs Service, pur-
119
suant to agreement or other arrangement with
other countries, is authorized to perform en-
forcement activities.
(C) OTHER EMPLOYEES.—In carrying out
enforcement authority under paragraph (3), the
Secretary and officers and employees of the De-
partment designated by the Secretary may
make investigations within the United States,
and may conduct, outside the United States,
pre-license and post-shipment verifications of
controlled items and investigations in the en-
forcement of section 502. The Secretary and of-
ficers and employees of the Department des-
ignated by the Secretary are authorized to
search, detain (after search), and seize items at
places within the United States other than
ports referred to in subparagraph (B). The
search, detention (after search), or seizure of
items at the ports and places referred to in sub-
paragraph (B) may be conducted by officers
and employees of the Department only with the
concurrence of the Commissioner of Customs or
a person designated by the Commissioner.
(D) AGREEMENTS AND ARRANGEMENTS.—
The Secretary and the Commissioner of Cus-
120
toms may enter into agreements and arrange-
ments for the enforcement of this Act, including
foreign investigations and information ex-
change.
(3) SPECIFIC AUTHORITIES.—
(A) ACTIONS BY ANY DESIGNATED PER-
SONNEL.—Any officer or employee designated
under paragraph (2), in carrying out the en-
forcement authority under this Act, may do the
following:
(i) Make investigations of, obtain in-
formation from, make inspection of any
books, records, or reports (including any
writings required to be kept by the Sec-
retary), premises, or property of, and take
the sworn testimony of, any person.
(ii) Administer oaths or affirmations,
and by subpoena require any person to ap-
pear and testify or to appear and produce
books, records, and other writings, or both.
In the case of contumacy by, or refusal to
obey a subpoena issued to, any such per-
son, a district court of the United States,
on request of the Attorney General and
after notice to any such person and a hear-
121
ing, 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.
Any failure to obey such order of the court
may be punished by such court as a con-
tempt thereof. The attendance of witnesses
and the production of documents provided
for in this clause may be required from
any State, the District of Columbia, or in
any territory of the United States at any
designated place. Witnesses subpoenaed
under this subsection shall be paid the
same fees and mileage allowance as paid
witnesses in the district courts of the
United States.
(B) ACTIONS BY OFFICE OF EXPORT EN-
FORCEMENT
AND
CUSTOMS
SERVICE
PER-
SONNEL.—
(i) OFFICE
OF
EXPORT
ENFORCE-
MENT
AND
CUSTOMS
SERVICE
PER-
SONNEL.—Any officer or employee of the
Office of Export Enforcement of the De-
partment of Commerce (in this Act re-
ferred to as ‘‘OEE’’) who is designated by
122
the Secretary under paragraph (2), and
any officer or employee of the United
States Customs Service who is designated
by the Commissioner of Customs under
paragraph (2), may do the following in
carrying out the enforcement authority
under this Act:
(I) Execute any warrant or other
process issued by a court or officer of
competent jurisdiction with respect to
the enforcement of this Act.
(II) Make arrests without war-
rant for any violation of this Act com-
mitted in his or her presence or view,
or if the officer or employee has prob-
able cause to believe that the person
to be arrested has committed, is com-
mitting, or is about to commit such a
violation.
(III) Carry firearms.
(ii) OEE PERSONNEL.—Any officer or
employee of the OEE designated by the
Secretary under paragraph (2) shall exer-
cise the authority set forth in clause (i)
123
pursuant to guidelines approved by the At-
torney General.
(C) OTHER ACTIONS BY CUSTOMS SERVICE
PERSONNEL.—Any officer or employee of the
United States Customs Service designated by
the Commissioner of Customs under paragraph
(2) may do the following in carrying out the en-
forcement authority under this Act:
(i) Stop, search, and examine a vehi-
cle, vessel, aircraft, or person on which or
whom the officer or employee has reason-
able cause to suspect there is any item
that has been, is being, or is about to be
exported from or transited through the
United States in violation of this Act.
(ii) Detain and search any package or
container in which the officer or employee
has reasonable cause to suspect there is
any item that has been, is being, or is
about to be exported from or transited
through the United States in violation of
this Act.
(iii) Detain (after search) or seize any
item, for purposes of securing for trial or
forfeiture to the United States, on or
124
about such vehicle, vessel, aircraft, or per-
son or in such package or container, if the
officer or employee has probable cause to
believe the item has been, is being, or is
about to be exported from or transited
through the United States in violation of
this Act.
(4) OTHER AUTHORITIES NOT AFFECTED.—The
authorities conferred by this section are in addition
to any authorities conferred under other laws.
(b) 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) APPLICABLE
LAWS.—Those provisions of
law relating to—
(A) the seizure, summary and judicial for-
feiture, and condemnation of property for viola-
tions of the customs laws;
(B) the disposition of such property or the
proceeds from the sale thereof;
(C) the remission or mitigation of such for-
feitures; and
(D) the compromise of claims,
125
shall apply to seizures and forfeitures incurred, or
alleged to have been incurred, under the provisions
of this subsection, insofar as applicable and not in-
consistent with this Act.
(3) FORFEITURES
UNDER
CUSTOMS
LAWS.—
Duties that are imposed upon a customs officer or
any other person with respect to the seizure and for-
feiture of property under the customs laws may be
performed with respect to seizures and forfeitures of
property under this subsection by the Secretary or
any officer or employee of the Department that may
be authorized or designated for that purpose by the
Secretary (or by the Commissioner of Customs or
any officer or employee of the United States Cus-
toms Service designated by the Commissioner), or,
upon the request of the Secretary, by any other
agency that has authority to manage and dispose of
seized property.
(c) REFERRAL OF CASES.—All cases involving viola-
tions of this Act shall be referred to the Secretary for pur-
poses of determining civil penalties and administrative
sanctions under section 503 or to the Attorney General
for criminal action in accordance with this Act or to both
the Secretary and the Attorney General.
(d) UNDERCOVER INVESTIGATION OPERATIONS.—
126
(1) USE OF FUNDS.—With respect to any un-
dercover investigative operation conducted by the
OEE that is necessary for the detection and pros-
ecution of violations of this Act—
(A) funds made available for export en-
forcement under this Act may be used to pur-
chase property, buildings, and other facilities,
and to lease equipment, conveyances, and space
within the United States, without regard to sec-
tions 1341 and 3324 of title 31, United States
Code, the third undesignated paragraph under
the heading of ‘‘miscellaneous’’ of the Act of
March 3, 1877, (40 U.S.C. 34), sections
3732(a) and 3741 of the Revised Statutes of
the United States (41 U.S.C. 11(a) and 22),
subsections (a) and (c) of section 304 of the
Federal Property and Administrative Services
Act of 1949 (41 U.S.C. 254 (a) and (c)), and
section 305 of the Federal Property and Ad-
ministrative Services Act of 1949 (41 U.S.C.
255);
(B) funds made available for export en-
forcement under this Act may be used to estab-
lish or to acquire proprietary corporations or
business entities as part of an undercover oper-
127
ation, and to operate such corporations or busi-
ness entities on a commercial basis, without re-
gard to sections 1341, 3324, and 9102 of title
31, United States Code;
(C) funds made available for export en-
forcement under this Act and the proceeds from
undercover operations may be deposited in
banks or other financial institutions without re-
gard to the provisions of section 648 of title 18,
United States Code, and section 3302 of title
31, United States Code; and
(D) the proceeds from undercover oper-
ations may be used to offset necessary and rea-
sonable expenses incurred in such operations
without regard to the provisions of section 3302
of title 31, United States Code,
if the Director of OEE (or an officer or employee
designated by the Director) certifies, in writing, that
the action authorized by subparagraph (A), (B), (C),
or (D) for which the funds would be used is nec-
essary for the conduct of the undercover operation.
(2) DISPOSITION OF BUSINESS ENTITIES.—If a
corporation or business entity established or ac-
quired as part of an undercover operation has a net
value of more than $250,000 and is to be liquidated,
128
sold, or otherwise disposed of, the Director of OEE
shall report the circumstances to the Secretary and
the Comptroller General of the United States as
much in advance of such disposition as the Director
of the OEE (or the Director’s designee) 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 re-
tained for subsequent use in undercover operations
under this section. When such property or equip-
ment is no longer needed, it shall be considered sur-
plus and disposed of as surplus government prop-
erty.
(3) DEPOSIT OF PROCEEDS.—As soon as the
proceeds from an OEE undercover investigative op-
eration 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 pro-
ceeds 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.—
129
(A) AUDIT.—The Director of OEE shall
conduct a detailed financial audit of each closed
OEE undercover investigative operation and
shall submit the results of the audit in writing
to the Secretary. Not later than 180 days after
an undercover operation is closed, the Secretary
shall submit to Congress a report on the results
of the audit.
(B) REPORT.—The Secretary shall submit
annually to Congress a report, which may be in-
cluded in the annual report under section 701,
specifying the following information:
(i) The number of undercover inves-
tigative operations pending as of the end of
the period for which such report is sub-
mitted.
(ii) The number of undercover inves-
tigative operations commenced in the 1-
year period preceding the period for which
such report is submitted.
(iii) The number of undercover inves-
tigative operations closed in the 1-year pe-
riod preceding the period for which such
report is submitted and, with respect to
each such closed undercover operation, the
130
results obtained and any civil claims made
with respect to the operation.
(5) DEFINITIONS.—For purposes of paragraph
(4)—
(A) the term ‘‘closed’’, with respect to an
undercover investigative operation, refers to the
earliest point in time at which all criminal pro-
ceedings (other than appeals) pursuant to the
investigative operation are concluded, or covert
activities pursuant to such operation are con-
cluded, whichever occurs later; and
(B) the terms ‘‘undercover investigative
operation’’ and ‘‘undercover operation’’ mean
any undercover investigative operation con-
ducted by the OEE—
(i) in which the gross receipts (exclud-
ing interest earned) exceed $25,000, or ex-
penditures (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,
except that clauses (i) and (ii) shall not
apply with respect to the report to Con-
gress required by paragraph (4)(B).
(e) WIRETAPS.—
131
(1) AUTHORITY.—Interceptions of communica-
tions in accordance with section 2516 of title 18,
United States Code, are authorized to further the
enforcement of this Act.
(2) 
CONFORMING
AMENDMENT.—Section
2516(1) of title 18, United States Code, is amended
by adding at the end the following:
‘‘(q)(i) any violation of, or conspiracy to
violate, the Export Administration Act of 2001
or the Export Administration Act of 1979.’’.
(f) POST-SHIPMENT VERIFICATION.—The Secretary
shall target post-shipment verifications to exports involv-
ing the greatest risk to national security.
(g) 
REFUSAL
TO
ALLOW
POST-SHIPMENT
VERIFICATION.—
(1) IN
GENERAL.—If an end-user refuses to
allow post-shipment verification of a controlled item,
the Secretary shall deny a license for the export of
any controlled item to such end-user until such post-
shipment verification occurs.
(2) RELATED
PERSONS.—The Secretary may
exercise the authority under paragraph (1) with re-
spect to any person related through affiliation, own-
ership, control, or position of responsibility, to any
132
end-user refusing to allow post-shipment verification
of a controlled item.
(3) REFUSAL BY COUNTRY.—If the country in
which the end-user is located refuses to allow post-
shipment verification of a controlled item, the Sec-
retary may deny a license for the export of that item
or any substantially identical or directly competitive
item or class of items to all end-users in that coun-
try until such post-shipment verification is allowed.
(h) FREIGHT FORWARDERS BEST PRACTICES PRO-
GRAM AUTHORIZATION.—There is authorized to be appro-
priated for the Department of Commerce $3,500,000 and
such sums as may be necessary to hire 20 additional em-
ployees to assist United States freight forwarders and
other interested parties in developing and implementing,
on a voluntary basis, a ‘‘best practices’’ program to ensure
that exports of controlled items are undertaken in compli-
ance with this Act.
(i) END-USE VERIFICATION AUTHORIZATION.—
(1) IN GENERAL.—There is authorized to be
appropriated for the Department of Commerce
$4,500,000 and such sums as may be necessary to
hire 10 additional overseas investigators to be posted
in the People’s Republic of China, the Russian Fed-
eration, the Hong Kong Special Administrative Re-
133
gion, the Republic of India, Singapore, Egypt, and
Taiwan, or any other place the Secretary deems ap-
propriate, for the purpose of verifying the end use
of high-risk, dual-use technology.
(2) REPORT.—Not later than 2 years after the
date of enactment of this Act and annually there-
after, the Department shall, in its annual report to
Congress on export controls, include a report on the
effectiveness of the end-use verification activities au-
thorized under subsection (a). The report shall in-
clude the following information:
(A) The activities of the overseas investiga-
tors of the Department.
(B) The types of goods and technologies
that were subject to end-use verification.
(C) The ability of the Department’s inves-
tigators to detect the illegal transfer of high
risk, dual-use goods and technologies.
(3) ENHANCEMENTS.—In addition to the au-
thorization provided in paragraph (1), there is au-
thorized to be appropriated for the Department of
Commerce $5,000,000 to enhance its program for
verifying the end use of items subject to controls
under this Act.
134
(j) ENHANCED COOPERATION WITH UNITED STATES
CUSTOMS SERVICE.—Consistent with the purposes of this
Act, the Secretary is authorized to undertake, in coopera-
tion with the United States Customs Service, such meas-
ures as may be necessary or required to enhance the abil-
ity of the United States to detect unlawful exports and
to enforce violations of this Act.
(k) REFERENCE TO ENFORCEMENT.—For purposes
of this section, a reference to the enforcement of this Act
or to a violation of this Act includes a reference to the
enforcement or a violation of any regulation, license, or
order issued under this Act.
(l) AUTHORIZATION FOR EXPORT LICENSING AND
ENFORCEMENT COMPUTER SYSTEM.—There is author-
ized to be appropriated for the Department $5,000,000
and such other sums as may be necessary for planning,
design, and procurement of a computer system to replace
the Department’s primary export licensing and computer
enforcement system.
(m) AUTHORIZATION FOR BUREAU OF EXPORT AD-
MINISTRATION.—The Secretary may authorize, without
fiscal year limitation, the expenditure of funds transferred
to, paid to, received by, or made available to the Bureau
of Export Administration as a reimbursement in accord-
ance with section 9703 of title 31, United States Code
135
(as added by Public Law 102–393). The Secretary may
also authorize, without fiscal year limitation, the expendi-
ture of funds transferred to, paid to, received by, or made
available to the Bureau of Export Administration as a re-
imbursement from the Department of Justice Assets For-
feiture Fund in accordance with section 524 of title 28,
United States Code. Such funds shall be deposited in an
account and shall remain available until expended.
(n) AMENDMENTS TO TITLE 31.—
(1) Section 9703(a) of title 31, United States
Code (as added by Public Law 102–393) is amended
by striking ‘‘or the United States Coast Guard’’ and
inserting ‘‘, the United States Coast Guard, or the
Bureau of Export Administration of the Department
of Commerce’’.
(2) Section 9703(a)(2)(B)(i) of title 31, United
States Code is amended (as added by Public Law
102–393)—
(A) by striking ‘‘or’’ at the end of sub-
clause (I);
(B) by inserting ‘‘or’’ at the end of sub-
clause (II); and
(C) by inserting at the end, the following
new subclause:
136
‘‘(III) a violation of the Export
Administration Act of 1979, the Ex-
port Administration Act of 2001, or
any regulation, license, or order issued
under those Acts;’’.
(3) Section 9703(p)(1) of title 31, United
States Code (as added by Public Law 102–393) is
amended by adding at the end the following: ‘‘In ad-
dition, for purposes of this section, the Bureau of
Export Administration of the Department of Com-
merce shall be considered to be a Department of the
Treasury law enforcement organization.’’.
(o) AUTHORIZATION FOR LICENSE REVIEW OFFI-
CERS.—
(1) IN GENERAL.—There is authorized to be
appropriated to the Department of Commerce
$2,000,000 to hire additional license review officers.
(2) TRAINING.—There is authorized to be ap-
propriated 
to 
the 
Department 
of 
Commerce
$2,000,000 to conduct professional training of li-
cense review officers, auditors, and investigators
conducting post-shipment verification checks. These
funds shall be used to—
137
(A) train and certify, through a formal
program, new employees entering these posi-
tions for the first time; and
(B) the ongoing professional training of ex-
perienced employees on an as needed basis.
(p) AUTHORIZATION.—
(1) IN GENERAL.—There are authorized to be
appropriated to the Department of Commerce to
carry out the purposes of this Act—
(A) $72,000,000 for the fiscal year 2002,
of which no less than $27,701,000 shall be used
for compliance and enforcement activities;
(B) $73,000,000 for the fiscal year 2003,
of which no less than $28,312,000 shall be used
for compliance and enforcement activities;
(C) $74,000,000 for the fiscal year 2004,
of which no less than $28,939,000 shall be used
for compliance and enforcement activities;
(D) $76,000,000 for the fiscal year 2005,
of which no less than $29,582,000 shall be used
for compliance and enforcement activities; and
(E) such additional amounts, for each such
fiscal year, as may be necessary for increases in
salary, pay, retirement, other employee benefits
138
authorized by law, and other nondiscretionary
costs.
(2) LIMITATION.—The authority granted by
this Act shall terminate on September 30, 2004, un-
less the President carries out the following duties:
(A) Provides to Congress a detailed report
on—
(i) the implementation and operation
of this Act; and
(ii) the operation of United States ex-
port controls in general.
(B)(i) Provides to Congress legislative re-
form proposals in connection with the report
described in subparagraph (A); or
(ii) certifies to Congress that no legislative
reforms are necessary in connection with such
report.
SEC. 507. ADMINISTRATIVE PROCEDURE.
(a) EXEMPTIONS FROM ADMINISTRATIVE PROCE-
DURE.—Except as provided in this section, the functions
exercised under this Act are excluded from the operation
of sections 551, 553 through 559, and 701 through 706
of title 5, United States Code.
(b) PROCEDURES RELATING TO CIVIL PENALTIES
AND SANCTIONS.—
139
(1) ADMINISTRATIVE
PROCEDURES.—Any ad-
ministrative sanction imposed under section 503
may be imposed only after notice and opportunity
for an agency hearing on the record in accordance
with sections 554 through 557 of title 5, United
States Code. The imposition of any such administra-
tive sanction shall be subject to judicial review in ac-
cordance with sections 701 through 706 of title 5,
United States Code, except that the review shall be
initiated in the United States Court of Appeals for
the District of Columbia Circuit, which shall have
jurisdiction of the review.
(2) AVAILABILITY OF CHARGING LETTER.—Any
charging letter or other document initiating adminis-
trative proceedings for the imposition of sanctions
for violations of the regulations issued under section
502 shall be made available for public inspection and
copying.
(c) COLLECTION.—If any person fails to pay a civil
penalty imposed under section 503, the Secretary may ask
the Attorney General to commence a civil action in an ap-
propriate district court of the United States to recover the
amount imposed (plus interest at currently prevailing
rates from the date of the final order). No such action
may be commenced more than 5 years after the order im-
140
posing the civil penalty becomes final. In such an action,
the validity, amount, and appropriateness of such penalty
shall not be subject to review.
(d) IMPOSITION OF TEMPORARY DENIAL ORDERS.—
(1) GROUNDS FOR IMPOSITION.—In any case in
which there is reasonable cause to believe that a per-
son is engaged in or is about to engage in any act
or practice which constitutes or would constitute a
violation of this Act, or any regulation, order, or li-
cense issued under this Act, including any diversion
of goods or technology from an authorized end use
or end user, and in any case in which a criminal in-
dictment has been returned against a person alleging
a violation of this Act or any of the statutes listed
in section 503, the Secretary may, without a hear-
ing, issue an order temporarily denying that person’s
United States export privileges (hereafter in this
subsection referred to as a ‘‘temporary denial
order’’). A temporary denial order shall be effective
for such period (not in excess of 180 days) as the
Secretary specifies in the order, but may be renewed
by the Secretary, following notice and an oppor-
tunity for a hearing, for additional periods of not
more than 180 days each.
141
(2) ADMINISTRATIVE APPEALS.—The person or
persons subject to the issuance or renewal of a tem-
porary denial order may appeal the issuance or re-
newal of the temporary denial order, supported by
briefs and other material, to an administrative law
judge who shall, within 15 working days after the
appeal is filed, issue a decision affirming, modifying,
or vacating the temporary denial order. The tem-
porary denial order shall be affirmed if it is shown
that—
(A) there is reasonable cause to believe
that the person subject to the order is engaged
in or is about to engage in any act or practice
that constitutes or would constitute a violation
of this Act, or any regulation, order, or license
issued under this Act; or
(B) a criminal indictment has been re-
turned against the person subject to the order
alleging a violation of this Act or any of the
statutes listed in section 503.
The decision of the administrative law judge shall be
final unless, within 10 working days after the date
of the administrative law judge’s decision, an appeal
is filed with the Secretary. On appeal, the Secretary
shall either affirm, modify, reverse, or vacate the de-
142
cision of the administrative law judge by written
order within 10 working days after receiving the ap-
peal. The written order of the Secretary shall be
final and is not subject to judicial review, except as
provided in paragraph (3). The materials submitted
to the administrative law judge and the Secretary
shall constitute the administrative record for pur-
poses of review by the court.
(3) COURT
APPEALS.—An order of the Sec-
retary affirming, in whole or in part, the issuance or
renewal of a temporary denial order may, within 15
days after the order is issued, be appealed by a per-
son subject to the order to the United States Court
of Appeals for the District of Columbia Circuit,
which shall have jurisdiction of the appeal. The
court may review only those issues necessary to de-
termine whether the issuance of the temporary de-
nial order was based on reasonable cause to believe
that the person subject to the order was engaged
in or was about to engage in any act or practice
that constitutes or would constitute a violation of
this title, or any regulation, order, or license issued
under this Act, or whether a criminal indictment has
been returned against the person subject to the
order alleging a violation of this Act or of any of
143
the statutes listed in section 503. The court shall
vacate the Secretary’s order if the court finds that
the Secretary’s order is arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance
with law.
(e) LIMITATIONS ON REVIEW OF CLASSIFIED INFOR-
MATION.—Any classified information that is included in
the administrative record that is subject to review pursu-
ant to subsection (b)(1) or (d)(3) may be reviewed by the
court only on an ex parte basis and in camera.
TITLE VI—EXPORT CONTROL
AUTHORITY AND REGULATIONS
SEC. 601. EXPORT CONTROL AUTHORITY AND REGULA-
TIONS.
(a) EXPORT CONTROL AUTHORITY.—
(1) IN GENERAL.—Unless otherwise reserved to
the President or a department (other than the De-
partment) or agency of the United States, all power,
authority, and discretion conferred by this Act shall
be exercised by the Secretary.
(2) DELEGATION OF FUNCTIONS OF THE SEC-
RETARY.—The Secretary may delegate any function
under this Act, unless otherwise provided, to the
Under Secretary of Commerce for Export Adminis-
tration or to any other officer of the Department.
144
(b) UNDER SECRETARY OF COMMERCE; ASSISTANT
SECRETARIES.—
(1) UNDER SECRETARY OF COMMERCE.—There
shall be within the Department an Under Secretary
of Commerce for Export Administration (in this sec-
tion referred to as the ‘‘Under Secretary’’) who shall
be appointed by the President, by and with the ad-
vice and consent of the Senate. The Under Secretary
shall carry out all functions of the Secretary under
this Act and other provisions of law relating to na-
tional security, as the Secretary may delegate.
(2) ADDITIONAL ASSISTANT SECRETARIES.—In
addition to the number of Assistant Secretaries oth-
erwise authorized for the Department of Commerce,
there shall be within the Department of Commerce
the following Assistant Secretaries of Commerce:
(A) An Assistant Secretary for Export Ad-
ministration who shall be appointed by the
President, by and with the advice and consent
of the Senate, and who shall assist the Sec-
retary and the Under Secretary in carrying out
functions relating to export listing and licens-
ing.
(B) An Assistant Secretary for Export En-
forcement who shall be appointed by the Presi-
145
dent, by and with the advice and consent of the
Senate, and who shall assist the Secretary and
the Under Secretary in carrying out functions
relating to export enforcement.
(c) ISSUANCE OF REGULATIONS.—
(1) IN GENERAL.—The President and the Sec-
retary may issue such regulations as are necessary
to carry out this Act. Any such regulations the pur-
pose of which is to carry out title II or title III may
be issued only after the regulations are submitted
for review to such departments or agencies as the
President considers appropriate. The Secretary shall
consult with the appropriate export control advisory
committee appointed under section 105(a) in formu-
lating regulations under this title. The second sen-
tence of this subsection does not require the concur-
rence or approval of any official, department, or
agency to which such regulations are submitted.
(2) AMENDMENTS
TO
REGULATIONS.—If the
Secretary proposes to amend regulations issued
under this Act, the Secretary shall report to the
Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on International
Relations of the House of Representatives on the in-
tent and rationale of such amendments. Such report
146
shall evaluate the cost and burden to the United
States exporters of the proposed amendments in re-
lation to any enhancement of licensing objectives.
The Secretary shall consult with the appropriate ex-
port control advisory committees appointed under
section 105(a) in amending regulations issued under
this Act.
SEC. 602. CONFIDENTIALITY OF INFORMATION.
(a) EXEMPTIONS FROM DISCLOSURE.—
(1) INFORMATION
OBTAINED
ON
OR
BEFORE
JUNE 30, 1980.—Except as otherwise provided by the
third sentence of section 502(c)(2) and by section
507(b)(2), information obtained under the Export
Administration Act of 1979, or any predecessor stat-
ute, on or before June 30, 1980, which is deemed
confidential, including Shipper’s Export Declara-
tions, or with respect to which a request for con-
fidential 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 dis-
closed, unless the Secretary determines that the
withholding thereof is contrary to the national inter-
est.
147
(2) INFORMATION OBTAINED AFTER JUNE 30,
1980.—Except as otherwise provided by the third
sentence of section 502(c)(2) and by section
507(b)(2), information obtained under this Act,
under the Export Administration Act of 1979 after
June 30, 1980, or under the Export Administration
regulations as maintained and amended under the
authority of the International Emergency Economic
Powers Act (50 U.S.C. 1706), may be withheld from
disclosure only to the extent permitted by statute,
except that information submitted, obtained, or con-
sidered in connection with an application for an ex-
port license or other export authorization (or record-
keeping or reporting requirement) under the Export
Administration Act of 1979, under this Act, or
under the Export Administration regulations as
maintained and amended under the authority of the
International Emergency Economic Powers Act (50
U.S.C. 1706), including—
(A) the export license or other export au-
thorization itself,
(B) classification requests described in sec-
tion 401(h),
(C) information or evidence obtained in the
course of any investigation,
148
(D) information obtained or furnished
under title V in connection with any inter-
national agreement, treaty, or other obligation,
and
(E) information obtained in making the
determinations set forth in section 211 of this
Act,
and information obtained in any investigation of an
alleged violation of section 502 of this Act except for
information required to be disclosed by section
502(c)(2) or 507(b)(2) of this Act, shall be withheld
from public disclosure and shall not be subject to
disclosure under section 552 of title 5, United States
Code, unless the release of such information is deter-
mined by the Secretary to be in the national inter-
est.
(b) INFORMATION TO CONGRESS AND GAO.—
(1) IN GENERAL.—Nothing in this title shall be
construed as authorizing the withholding of informa-
tion from Congress or from the General Accounting
Office.
(2) AVAILABILITY TO THE CONGRESS.—
(A) IN
GENERAL.—Any information ob-
tained at any time under this title or under any
predecessor Act regarding the control of ex-
149
ports, including any report or license applica-
tion required under this title, shall be made
available to any committee or subcommittee of
Congress of appropriate jurisdiction upon the
request of the chairman or ranking minority
member of such committee or subcommittee.
(B) PROHIBITION
ON
FURTHER
DISCLO-
SURE.—No committee, subcommittee, or Mem-
ber of Congress shall disclose any information
obtained under this Act or any predecessor Act
regarding the control of exports which is sub-
mitted on a confidential basis to the Congress
under subparagraph (A) unless the full com-
mittee to which the information is made avail-
able determines that the withholding of the in-
formation is contrary to the national interest.
(3) AVAILABILITY TO THE GAO.—
(A) IN
GENERAL.—Notwithstanding sub-
section (a), information described in paragraph
(2) shall, consistent with the protection of intel-
ligence, counterintelligence, and law enforce-
ment sources, methods, and activities, as deter-
mined by the agency that originally obtained
the information, and consistent with the provi-
sions of section 716 of title 31, United States
150
Code, be made available only by the agency,
upon request, to the Comptroller General of the
United States or to any officer or employee of
the General Accounting Office authorized by
the Comptroller General to have access to such
information.
(B) PROHIBITION
ON
FURTHER
DISCLO-
SURES.—No officer or employee of the General
Accounting Office shall disclose, except to Con-
gress in accordance with this paragraph, any
such information which is submitted on a con-
fidential basis and from which any individual
can be identified.
(c) 
INFORMATION
EXCHANGE.—Notwithstanding
subsection (a), the Secretary and the Commissioner of
Customs shall exchange licensing and enforcement infor-
mation with each other as necessary to facilitate enforce-
ment efforts and effective license decisions.
(d) PENALTIES FOR DISCLOSURE OF CONFIDENTIAL
INFORMATION.—
(1) DISCLOSURE PROHIBITED.—No officer or
employee of the United States, or any department or
agency thereof, may publish, divulge, disclose, or
make known in any manner or to any extent not au-
thorized by law any information that—
151
(A) the officer or employee obtains in the
course of his or her employment or official du-
ties or by reason of any examination or inves-
tigation made by, or report or record made to
or filed with, such department or agency, or of-
ficer or employee thereof; and
(B) is exempt from disclosure under this
section.
(2) CRIMINAL PENALTIES.—Any such officer or
employee who knowingly violates paragraph (1) shall
be fined not more than $50,000, imprisoned not
more than 1 year, or both, for each violation of
paragraph (1). Any such officer or employee may
also be removed from office or employment.
(3) CIVIL PENALTIES; ADMINISTRATIVE SANC-
TIONS.—The Secretary may impose a civil penalty of
not more than $5,000 for each violation of para-
graph (1). Any officer or employee who commits
such violation may also be removed from office or
employment for the violation of paragraph (1). Sec-
tions 503 (e), (g), (h), and (i) and 507 (a), (b), and
(c) shall apply to violations described in this para-
graph.
152
TITLE VII—MISCELLANEOUS
PROVISIONS
SEC. 701. ANNUAL REPORT.
(a) ANNUAL REPORT.—Not later than February 1 of
each year, the Secretary shall submit to Congress a report
on the administration of this Act during the fiscal year
ending September 30 of the preceding calendar year. All
Federal agencies shall cooperate fully with the Secretary
in providing information for each such report.
(b) REPORT ELEMENTS.—Each such report shall in-
clude in detail—
(1) a description of the implementation of the
export control policies established by this Act, in-
cluding any delegations of authority by the President
and any other changes in the exercise of delegated
authority;
(2) a description of the changes to and the
year-end status of country tiering and the Control
List;
(3) a description of the petitions filed and the
determinations made with respect to foreign avail-
ability and mass-market status, the set-asides of for-
eign availability and mass-market status determina-
tions, and negotiations to eliminate foreign avail-
ability;
153
(4) a description of any enhanced control im-
posed on an item pursuant to section 201(d);
(5) a description of the regulations issued under
this Act;
(6) a description of organizational and proce-
dural changes undertaken in furtherance of this Act;
(7) a description of the enforcement activities,
violations, and sanctions imposed under this Act;
(8) a statistical summary of all applications and
notifications, including—
(A) the number of applications and notifi-
cations pending review at the beginning of the
fiscal year;
(B) the number of notifications returned
and subject to full license procedure;
(C) the number of notifications with no ac-
tion required;
(D) the number of applications that were
approved, denied, or withdrawn, and the num-
ber of applications where final action was
taken; and
(E) the number of applications and notifi-
cations pending review at the end of the fiscal
year;
154
(9) summary of export license data by export
identification code and dollar value by country;
(10) an identification of processing time by—
(A) overall average, and
(B) top 25 export identification codes;
(11) an assessment of the effectiveness of mul-
tilateral regimes, and a description of negotiations
regarding export controls;
(12) a description of the significant differences
between the export control requirements of the
United States and those of other multilateral control
regime members, and the specific differences be-
tween United States requirements and those of other
significant supplier countries;
(13) an assessment of the costs of export con-
trols;
(14) a description of the progress made toward
achieving the goals established for the Department
dealing with export controls under the Government
Performance Results Act; and
(15) any other reports required by this Act to
be submitted to the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate and the Com-
mittee on International Relations of the House of
Representatives.
155
(c) FEDERAL REGISTER PUBLICATION REQUIRE-
MENTS.—Whenever information under this Act is required
to be published in the Federal Register, such information
shall, in addition, be posted on the Department of Com-
merce or other appropriate government website.
SEC. 702. TECHNICAL AND CONFORMING AMENDMENTS.
(a) REPEAL.—The Export Administration Act of
1979 (50 U.S.C. App. 2401 et seq.) is repealed.
(b) ENERGY POLICY AND CONSERVATION ACT.—
(1) Section 103 of the Energy Policy and Con-
servation Act (42 U.S.C. 6212) is repealed.
(2) Section 251(d) of the Energy Policy and
Conservation Act (42 U.S.C. 6271(d)) is repealed.
(c) ALASKA NATURAL GAS TRANSPORTATION ACT.—
Section 12 of the Alaska Natural Gas Transportation Act
of 1976 (15 U.S.C. 719j) is repealed.
(d) MINERAL LEASING ACT.—Section 28(u) of the
Mineral Leasing Act (30 U.S.C. 185(u)) is repealed.
(e) EXPORTS OF ALASKAN NORTH SLOPE OIL.—Sec-
tion 28(s) of the Mineral Leasing Act (30 U.S.C. 185(s))
is repealed.
(f) DISPOSITION OF CERTAIN NAVAL PETROLEUM
RESERVE PRODUCTS.—Section 7430(e) of title 10, United
States Code, is repealed.
156
(g) OUTER CONTINENTAL SHELF LANDS ACT.—Sec-
tion 28 of the Outer Continental Shelf Lands Act (43
U.S.C. 1354) is repealed.
(h) ARMS EXPORT CONTROL ACT.—
(1) Section 38 of the Arms Export Control Act
(22 U.S.C. 2778) is amended—
(A) in subsection (e)—
(i) in the first sentence, by striking
‘‘subsections (c)’’ and all that follows
through ‘‘12 of such Act,’’ and inserting
‘‘subsections (b), (c), (d) and (e) of section
503 of the Export Administration Act of
2001, by subsections (a) and (b) of section
506 of such Act, and by section 602 of
such Act,’’; and
(ii) in the third sentence, by striking
‘‘11(c) of the Export Administration Act of
1979’’ and inserting ‘‘503(c) of the Export
Administration Act of 2001’’; and
(B) in subsection (g)(1)(A)(ii), by inserting
‘‘or section 503 of the Export Administration
Act of 2001’’ after ‘‘1979’’.
(2) Section 39A(c) of the Arms Export Control
Act (22 U.S.C. 2779a(c)) is amended—
157
(A) by striking ‘‘subsections (c),’’ and all
that follows through ‘‘12(a) of such Act’’ and
inserting ‘‘subsections (c), (d), and (e) of sec-
tion 503, section 507(c), and subsections (a)
and (b) of section 506, of the Export Adminis-
tration Act of 2001’’; and
(B) by striking ‘‘11(c)’’ and inserting
‘‘503(c)’’.
(3) Section 40(k) of the Arms Export Control
Act (22 U.S.C. 2780(k)) is amended—
(A) by striking ‘‘11(c), 11(e), 11(g), and
12(a) of the Export Administration Act of
1979’’ and inserting ‘‘503(b), 503(c), 503(e),
506(a), and 506(b) of the Export Administra-
tion Act of 2001’’; and
(B) by striking ‘‘11(c)’’ and inserting
‘‘503(c)’’.
(i) OTHER PROVISIONS OF LAW.—
(1) Section 5(b)(4) of the Trading with the
Enemy Act (50 U.S.C. App. 5(b)(4)) is amended by
striking ‘‘section 5 of the Export Administration Act
of 1979, or under section 6 of that Act to the extent
that such controls promote the nonproliferation or
antiterrorism policies of the United States’’ and in-
158
serting ‘‘titles II and III of the Export Administra-
tion Act of 2001’’.
(2) Section 502B(a)(2) of the Foreign Assist-
ance Act of 1961 (22 U.S.C. 2304(a)(2)) is amend-
ed in the second sentence—
(A) by striking ‘‘Export Administration
Act of 1979’’ the first place it appears and in-
serting ‘‘Export Administration Act of 2001’’;
and
(B) by striking ‘‘Act of 1979)’’ and insert-
ing ‘‘Act of 2001)’’.
(3) Section 140(a) of the Foreign Relations Au-
thorization Act, Fiscal Years 1988 and 1989 (22
U.S.C. 2656f(a)) is amended—
(A) in paragraph (1)(B), by inserting ‘‘or
section 310 of the Export Administration Act of
2001’’ after ‘‘Act of 1979’’; and
(B) in paragraph (2), by inserting ‘‘or 310
of the Export Administration Act of 2001’’
after ‘‘6(j) of the Export Administration Act of
1979’’.
(4) Section 40(e)(1) of the State Department
Basic 
Authorities 
Act 
of 
1956 
(22 
U.S.C.
2712(e)(1)) is amended by striking ‘‘section 6(j)(1)
of the Export Administration Act of 1979’’ and in-