191
which shall include an identification of the items to 
be transferred and the concessions to be received. 
(5) TERMINATION OF AUTHORITY.—No transfer 
may be made under the authority of this subsection 
more than three years after the date of the enact-
ment of this Act. 
(b) REMOVAL OR DISPOSAL OF REMAINING ITEMS IN 
KOREAN STOCKPILE.—The President shall provide for the 
removal or disposal of all items described in subsection 
(a)(2) that are not transferred pursuant to the authority 
of subsection (a) by not later than four years after the 
date of the enactment of this Act. 
SEC. 753. EXTENSION OF PAKISTAN WAIVERS. 
The Act entitled ‘‘An Act to authorize the President 
to exercise waivers of foreign assistance restrictions with 
respect to Pakistan through September 30, 2003, and for 
other purposes’’, approved October 27, 2001 (Public Law 
107–57; 115 Stat. 403), is amended—
(1) in section 1(b)—
(A) in the heading, by striking ‘‘FISCAL 
YEARS 2005 AND 2006’’ and inserting ‘‘FISCAL 
YEARS 2006 AND 2007’’; and 
(B) in paragraph (1), by striking ‘‘2005 or 
2006’’ and inserting ‘‘2006 or 2007’’;
192
(2) in section 3(2), by striking ‘‘and 2006’’ and 
inserting ‘‘2006, and 2007’’; and 
(3) in section 6, by striking ‘‘2006’’ and insert-
ing ‘‘2007’’. 
SEC. 754. REPORTING REQUIREMENT FOR FOREIGN MILI-
TARY TRAINING. 
Subsection (a)(1) of section 656 of the Foreign As-
sistance Act of 1961 (22 U.S.C. 2416) is amended—
(1) by striking ‘‘January 31’’ and inserting 
‘‘March 1’’; and 
(2) by striking ‘‘and all such training proposed 
for the current fiscal year’’. 
SEC. 755. CERTAIN SERVICES PROVIDED BY THE UNITED 
STATES 
IN 
CONNECTION 
WITH 
FOREIGN 
MILITARY SALES. 
(a) QUALITY ASSURANCE, INSPECTION, CONTRACT 
ADMINISTRATION, 
AND
CONTRACT
AUDIT
DEFENSE 
SERVICES.—Section 21(h)(1)(A) of the Arms Export Con-
trol Act (22 U.S.C. 2761(h)(1)(A)) is amended by insert-
ing after ‘‘North Atlantic Treaty Organization’’ the fol-
lowing: ‘‘or the Governments of Australia, New Zealand, 
Japan, or Israel’’. 
(b) CATALOGING DATA
AND SERVICES.—Section 
21(h)(2) of the Arms Export Control Act (22 U.S.C. 
2761(h)(2)) is amended by striking ‘‘or to any member
193
government of that Organization if that Organization or 
member government’’ and inserting ‘‘, to any member of 
that Organization, or to the Governments of Australia, 
New Zealand, Japan, or Israel if that Organization, mem-
ber government, or the Governments of Australia, New 
Zealand, Japan, or Israel’’. 
SEC. 756. MARITIME INTERDICTION PATROL BOATS FOR 
MOZAMBIQUE. 
(a) IN GENERAL.—Of the amounts made available to 
carry out section 23 of the Arms Export Control Act for 
fiscal year 2006, there is authorized to be appropriated 
$1,000,000 for refurbishment, delivery, operational train-
ing, and related costs associated with the provision of not 
more than four excess coastal patrol boats to the Govern-
ment of Mozambique for maritime patrol and interdiction 
activities. 
(b) AVAILABILITY.—Amounts appropriated pursuant 
to the authorization of appropriations under subsection (a) 
are authorized to remain available until September 30, 
2007. 
SEC. 757. REIMBURSEMENT FOR INTERNATIONAL MILI-
TARY EDUCATION AND TRAINING. 
Section 541 of the Foreign Assistance Act of 1961 
(22 U.S.C. 2347) is amended—
194
(1) in the first sentence, by striking ‘‘The 
President’’ and inserting ‘‘(a) The President’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(b) The President shall seek reimbursement for mili-
tary education and training furnished under this chapter 
from countries using assistance under section 23 of the 
Arms Export Control Act (22 U.S.C. 2763; relating to the 
Foreign Military Financing Program) to purchase such 
military education and training at a rate comparable to 
the rate charged to countries receiving grant assistance 
for military education and training under this chapter.’’. 
TITLE VIII—NUCLEAR BLACK 
MARKET ELIMINATION ACT 
SEC. 801. SHORT TITLE. 
This title may be cited as the ‘‘Nuclear Black Market 
Elimination Act of 2005’’.
195
Subtitle A—Sanctions for Transfers 
of Nuclear Enrichment, Reproc-
essing, 
and 
Weapons 
Tech-
nology, Equipment and Mate-
rials Involving Foreign Persons 
and Terrorists 
SEC. 811. AUTHORITY TO IMPOSE SANCTIONS ON FOREIGN 
PERSONS. 
(a) DETERMINATION OF NUCLEAR ACTIVITIES BY 
FOREIGN PERSONS.—Notwithstanding any other provi-
sion of law, the President is authorized to impose any or 
all of the sanctions described in subsection (b) whenever 
the President determines that a foreign person partici-
pated, on or after the date of the enactment of this Act, 
in the export, transfer or trade of—
(1) nuclear enrichment or reprocessing equip-
ment, materials, or technology to any nonnuclear-
weapon state (as defined in section 102(c) of the 
Arms Export Control Act) that—
(A) does not possess functioning nuclear 
enrichment or reprocessing plants as of Janu-
ary 1, 2004; and 
(B)(i) does not have in force an additional 
protocol with the International Atomic Energy 
Agency for the application of safeguards (as de-
196
rived from IAEA document INFCIRC/540 and 
related corrections and additions); or 
(ii) is developing, manufacturing, or ac-
quiring a nuclear explosive device; or 
(2) any nuclear explosive device, or design in-
formation or component, equipment, materials, or 
other items or technology that—
(A) is designated for national export con-
trols under the Nuclear Supplier Group Guide-
lines for the Export of Nuclear Material, Equip-
ment and Technology (published by the Inter-
national Atomic Energy Agency as IAEA docu-
ment INFICRC/254/Rev. 6/Part 1 and subse-
quent revisions) and the Guidelines for Trans-
fers of Nuclear-Related Dual-Use Equipment, 
Material, and Related Technology (published as 
IAEA document INFCIRC/254/Rev. 5/ Part 2 
and subsequent revisions); and 
(B) contributes to the development, manu-
facture, or acquisition of a nuclear explosive de-
vice by—
(i) a nonnuclear weapon state; or 
(ii) a foreign person.
197
(b) SANCTIONS.—The sanctions referred to in sub-
section (a) that are to be imposed on a foreign person are 
the following: 
(1) No assistance may be provided to the for-
eign person under the Foreign Assistance Act of 
1961, and the foreign person may not participate in 
any assistance program of the United States Gov-
ernment. Any such assistance being provided to the 
foreign person, and any participation in such assist-
ance program by the foreign person, on the date on 
which the sanction under this paragraph is imposed, 
shall be terminated as of such date. 
(2) The United States Government may not sell 
any defense articles, defense services, or design or 
construction services to the foreign person under the 
Foreign Assistance Act of 1961 or the Arms Export 
Control Act, and any contract to sell such articles or 
services, under either such Act, that is in effect on 
the date on which the sanction under this paragraph 
is imposed, shall be terminated as of such date. 
(3) Licenses or any other approval may not be 
issued for the export or import to the foreign person 
of any defense articles or defense services under the 
Arms Export Control Act or its implementing regu-
lations. Any such license or approval that is in effect
198
on the on the date on which the sanction under this 
paragraph is imposed, shall be terminated as of such 
date. 
(4) Licenses or any other approval may not be 
issued for the export to the foreign person of any 
goods or technology subject to the jurisdiction of the 
Export Administration Regulations under chapter 
VII of title 15, Code of Federal Regulations (or suc-
cessor regulations), other than food and other agri-
cultural commodities, medicines and medical equip-
ment. Any such license or approval that is in effect 
on the on the date on which the sanction under this 
paragraph is imposed, shall be terminated as of such 
date. 
(c) PERIOD SANCTIONS IN EFFECT.—The sanctions 
referred to in subsection (b) should be imposed for not 
less than two years, but may be imposed for longer peri-
ods. The President may suspend after one year any sanc-
tion imposed pursuant to this section 15 days after sub-
mitting to the appropriate congressional committees a re-
port explaining—
(1) the reasons for modifying or terminating 
the sanction;
199
(2) how the purposes of this Act and United 
States national security are furthered by such modi-
fication or termination; and 
(3) what measures the United States will take 
or is taking to ensure that the foreign person will 
not engage in similar activities in the future. 
SEC. 812. PRESIDENTIAL NOTIFICATION ON ACTIVITIES OF 
FOREIGN PERSONS. 
(a) REPORTS TO CONGRESS.—Not later than 180 
days after enactment of this Act and no later than Janu-
ary 31 of each year thereafter, the President shall submit 
to the appropriate congressional committees a report de-
tailing any activity by any foreign person described in sec-
tion 811. This report shall also include a description of 
any sanctions that have been imposed and their duration. 
(b) PUBLICATION.—When the President imposes 
sanctions under section 811, the President shall, to the 
maximum extent unclassified, publish in the Federal Reg-
ister, not later than 15 days after reporting such sanctions 
to the appropriate congressional committees under sub-
section (a), the identity of each sanctioned foreign person, 
the period for which sanctions will be in effect, and the 
reasons for the sanctions.
200
Subtitle 
B—Further 
Actions 
Against Corporations Associated 
With Sanctioned Foreign Per-
sons 
SEC. 821. FINDINGS. 
The Congress finds the following: 
(1) Foreign persons and corporations engaging 
in nuclear black-market activities are motivated by 
reasons of commercial gain and profit. 
(2) Sanctions targeted solely against the busi-
ness interests of the sanctioned person or business 
concern may be unsuccessful in halting these pro-
liferation activities, as the sanctions may be seen 
merely as the cost of doing business, especially if the 
business interests of the parent or subsidiary cor-
porate entities are unaffected by the sanctions. 
(3) Such narrow targeting of sanctions creates 
the incentive to create shell and ‘‘carve-out’’ cor-
porate entities to perform the proliferation activities 
and attract sanctions, leaving all other aspects of the 
larger corporation unaffected. 
(4) To dissuade corporations from allowing 
their associated commercial entities or persons from 
engaging in proliferation black-market activities, 
they must also be made to suffer financial loss and
201
commercial disadvantage, and parent and subsidiary 
commercial enterprises must be held responsible for 
the proliferation activities of their associated enti-
ties. 
(5) If a corporation perceives that the United 
States Government will do everything possible to 
make its commercial activity difficult around the 
world, then that corporation has a powerful commer-
cial incentive to prevent any further proliferation ac-
tivity by its associated entities. 
(6) Therefore, the United States Government 
should seek to increase the risk of commercial loss 
for associated corporate entities for the proliferation 
actions of their subsidiaries. 
SEC. 822. CAMPAIGN BY UNITED STATES GOVERNMENT OF-
FICIALS. 
The President shall instruct all agencies of the 
United States Government to make every effort in their 
interactions with foreign government and business officials 
to persuade foreign governments and relevant corporations 
not to engage in any business transaction with a foreign 
person sanctioned under section 811, including any parent 
or subsidiary of the sanctioned foreign person, for the du-
ration of the sanctions.
202
SEC. 823. COORDINATION. 
The Secretary of State shall coordinate the actions 
of the United States Government under section 822. 
SEC. 824. REPORT. 
Not later than one year after the date of the enact-
ment of this Act and annually thereafter, the Secretary 
of State shall report to the appropriate congressional com-
mittees on the actions taken by the United States to carry 
out section 822. 
Subtitle 
C—Incentives 
for 
Pro-
liferation Interdiction Coopera-
tion 
SEC. 831. AUTHORITY TO PROVIDE ASSISTANCE TO COOP-
ERATIVE COUNTRIES. 
The President is authorized to provide, on such terms 
as the President considers appropriate, assistance under 
section 832 to any country that cooperates with the 
United States and with other countries allied with the 
United States to prevent the transport and transshipment 
of items of proliferation concern in its national territory 
or airspace or in vessels under its control or registry. 
SEC. 832. TYPES OF ASSISTANCE. 
The assistance authorized under section 831 is the 
following: 
(1) Assistance under section 23 of the Arms 
Export Control Act.
203
(2) Assistance under chapters 4 and 5 of part 
II of the Foreign Assistance Act of 1961. 
(3) Drawdown of defense equipment and serv-
ices under section 516 of the Foreign Assistance Act 
of 1961. 
SEC. 833. CONGRESSIONAL NOTIFICATION. 
Assistance authorized under this subtitle may not be 
provided until at least 30 days after the date on which 
the President has provided notice thereof to the appro-
priate congressional committees, in accordance with the 
procedures applicable to reprogramming notifications 
under section 634A(a) of the Foreign Assistance Act of 
1961. 
SEC. 834. LIMITATION. 
Assistance may be provided to a country under sec-
tion 831 in no more than three fiscal years. 
SEC. 835. USE OF ASSISTANCE. 
To the extent practicable, assistance provided under 
this subtitle shall be used to enhance the capability of the 
recipient country to prevent the transport and trans-
shipment of items of proliferation concern in its national 
territory or airspace, or in vessels under its control or reg-
istry, including through the development of a legal frame-
work in that country to enhance such capability by crim-
204
inalizing proliferation, enacting strict export controls, and 
securing sensitive materials within its borders. 
SEC. 836. LIMITATION ON SHIP OR AIRCRAFT TRANSFERS 
TO UNCOOPERATIVE COUNTRIES. 
Notwithstanding any other provision of law, the 
United States may not transfer any excess defense article 
that is a vessel or an aircraft to a country that has not 
agreed that it will support and assist efforts by the United 
States to interdict items of proliferation concern until thir-
ty days after the date on which the President has provided 
notice of the proposed transfer to the appropriate congres-
sional committees in accordance with the procedures appli-
cable to reprogramming notifications under section 
634A(a) of the Foreign Assistance Act of 1961, in addi-
tion to any other requirement of law. 
Subtitle D—Rollback of Nuclear 
Proliferation Networks 
SEC. 841. NONPROLIFERATION AS A CONDITION OF UNITED 
STATES ASSISTANCE. 
United States foreign assistance should only be pro-
vided to countries that—
(1) are not cooperating with any non-nuclear 
weapon state or any foreign group or individual who 
may be engaged in, planning, or assisting inter-
national terrorism in the development of a nuclear
205
explosive device or its means of delivery and are tak-
ing all necessary measures to prevent their nationals 
and other persons and entities subject to their juris-
diction from participating in such cooperation; and 
(2) are fully and completely cooperating with 
the United States in its efforts to eliminate nuclear 
black-market networks or activities. 
SEC. 842. REPORT ON IDENTIFICATION OF NUCLEAR PRO-
LIFERATION NETWORK HOST COUNTRIES. 
(a) REPORT.—
(1) IN GENERAL.—Not later than 90 days after 
the date of the enactment of this Act and annually 
thereafter, the President shall submit a report to the 
appropriate congressional committees that—
(A) identifies any country in which manu-
facturing, brokering, shipment, transshipment, 
or other activity occurred in connection with the 
transactions of the nuclear proliferation net-
work that supplied Libya, Iran, North Korea, 
and possibly other countries or entities, and 
(B) includes any additional information 
with respect to any country and any other nu-
clear proliferation networks or activities and the 
foreign persons believed to be participating 
therein, including any information relating to
206
the participation of any foreign person in the 
export, transfer, or trade described in section 
811. 
(2) ADDITIONAL
INFORMATION.—The report 
under paragraph (1) shall also include a description 
of the extent to which each country described in the 
report is, in the opinion of the President, fully co-
operating with the United States in its efforts to 
eliminate the nuclear proliferation network described 
in paragraph (1)(A) and any other nuclear prolifera-
tion networks or activities. The President shall base 
the determination regarding a country’s cooperation 
with the United States in part on the degree to 
which the country has satisfied United States re-
quests for assistance and information, including 
whether the United States has asked and been 
granted direct investigatory access to key persons in-
volved in a nuclear proliferation network. 
(b) CLASSIFICATION.—Reports under this section 
shall be unclassified to the maximum extent possible. 
SEC. 843. SUSPENSION OF ARMS SALES LICENSES AND DE-
LIVERIES TO NUCLEAR PROLIFERATION NET-
WORK HOST COUNTRIES. 
(a) SUSPENSION.—Upon submission of the report 
and any additional information under section 842 to the
207
appropriate congressional committees, the President shall 
suspend all licenses issued under the Arms Export Control 
Act, and shall prohibit any licenses to be issued under that 
Act, to any country described in the report or additional 
information, until such time as the President certifies to 
the appropriate congressional committees that such coun-
try—
(1)(A) has fully investigated or is fully inves-
tigating the activities of any person or entity within 
its territory that has participated in the nuclear pro-
liferation network or activities; and 
(B) has taken or is taking effective steps to 
permanently halt similar illicit nuclear proliferation 
or acquisition activities; 
(2) has been or is fully cooperating with the 
United States and other appropriate international 
organizations in investigating and eliminating the 
nuclear proliferation network, any successor net-
works operating within its territory, or other illicit 
proliferation and acquisition activities; and 
(3) has enacted or is enacting new laws, pro-
mulgated decrees or regulations, or established prac-
tices designed to prevent future such activities from 
occurring within its territory.
208
(b) WAIVER.—The President may waive the require-
ments of subsection (a) in a fiscal year if—
(1) the President has certified to the appro-
priate congressional committees that the waiver is 
important to the national security of the United 
States; and 
(2) five days have elapsed since making the cer-
tification under paragraph (1). 
Subtitle E—General Provisions 
SEC. 851. DEFINITIONS. 
In this title: 
(1) PARTICIPATED.—The term ‘‘participated’’ 
means to have sold, transferred, brokered, financed, 
assisted, delivered or otherwise provided or received, 
and includes any conspiracy or attempt to partici-
pate in any of the preceding activities, as well as fa-
cilitating such activities by any other person. 
(2) FOREIGN PERSON.—The term ‘‘foreign per-
son’’ 
has 
the 
meaning 
provided 
in 
section 
38(g)(9)(C) of the Arms Export Control Act (22 
U.S.C. 2778(g)(9)(C)) and includes, for purposes of 
subsections (a) and (b) of section 811, successors, 
assigns, subsidiaries, and subunits and other busi-
ness organizations or associations in which that per-
son may be deemed to have a controlling interest.
209
(3) EXCESS
DEFENSE
ARTICLE.—The term 
‘‘excess defense article’’ has the meaning given that 
term in section 644(g) of the Foreign Assistance Act 
of 1961 (22 U.S.C. 2403(g)). 
(4) ITEMS OF PROLIFERATION CONCERN.—The 
term ‘‘items of proliferation concern’’ means any 
equipment, materials, or technology that could mate-
rially support the research, development, manufac-
turing, or acquisition by any means of a nuclear ex-
plosive device, a chemical or biological weapon, or 
missile with a payload of 500 kilograms or greater 
and with a range of 300 kilometers or greater. 
(5) PERSON.—The term ‘‘person’’—
(A) means a natural person as well as a 
corporation, business association, partnership, 
society, trust, any other nongovernmental enti-
ty, organization, or group, and any govern-
mental entity, or subsidiary, subunit, or parent 
entity thereof, and any successor of any such 
entity; and 
(B) in the case of a country where it may 
be impossible to identify a specific governmental 
entity referred to in subparagraph (A), means 
all activities of that government relating to the
210
development or production of any nuclear 
equipment or technology. 
(6) UNITED STATES FOREIGN ASSISTANCE.—
The term ‘‘United States foreign assistance’’ means 
assistance under the foreign operations, export fi-
nancing, and related programs appropriations Act 
for a fiscal year, and assistance under the Foreign 
Assistance Act of 1961. 
TITLE IX—EAST ASIA SECURITY 
ACT OF 2005
SEC. 901. SHORT TITLE. 
This title may be cited as the ‘‘East Asia Security 
Act of 2005’’. 
SEC. 902. STATEMENTS OF POLICY. 
Congress—
(1) previously expressed its strong concerns in 
House Resolution 57 of February 2, 2005, and Sen-
ate Resolution 91 of March 17, 2005, with the 
transfer of armaments and related technology to the 
People’s Republic of China by member states of the 
European Union, which increased eightfold from 
2001 to 2003, and with plans to terminate in the 
near future the arms embargo they imposed in 1989 
following the Tiananmen Square massacre;
211
(2) welcomes deferral of a decision by the Euro-
pean Council to terminate its arms embargo fol-
lowing adoption of those Resolutions, the President’s 
visit to Europe, and growing concern among coun-
tries in the regions and the general public on both 
sides of the Atlantic; 
(3) welcomes the decision by the European Par-
liament on April 14, 2005, by a vote of 421 to 85, 
to oppose the lifting of the European Union’s arms 
embargo on the People’s Republic of China, and res-
olutions issued by a number of elected parliamentary 
bodies in Europe also opposing the lifting of the 
arms embargo; 
(4) also welcomes the onset of a strategic dia-
logue between the European Commission and the 
Government of the United States on the security sit-
uation in East Asia, through which it is hoped a 
greater understanding will emerge of the con-
sequences of European assistance to the military 
buildup of the People’s Republic of China for peace 
and stability in that region, to the security interests 
of the United States and its friends and allies in the 
region, and, in particular, to the safety of United 
States Armed Forces whose presence in the region
212
has been a decisive factor in ensuring peace and 
prosperity since the end of World War II; 
(5) hopes that a more intensive dialogue with 
Europe on this matter will clarify for United States 
friends and allies in Europe how their ‘‘non-lethal’’ 
arms transfers improve the force projection of the 
People’s Republic of China, are far from benign, and 
enhance the prospects for the threat or use of force 
in resolving the status of Taiwan, a troubling pros-
pect made more ominous by recent adoption of a 
new law by the Chinese National People’s Congress 
expressly authorizing the use of force; 
(6) also hopes that this dialogue will result in 
an important new consensus between the United 
States and its European partners on the need for co-
ordinated policies which encourage the development 
of democracy in the People’s Republic of China and 
which discourage, not assist, China’s unjustified 
military buildup and pursuit of weapons that threat-
en its neighbors; 
(7) however, deeply regrets that none of the 
European friends and allies of the United States 
who have been transferring arms to the People’s Re-
public of China has announced a cessation or even 
a temporary halt to those transfers while this new
213
dialogue with the United States ensues, and notes 
with concern that such European friends and allies 
have provided little, if any, transparency to the 
United States Government into the full range and 
capabilities of all of the armaments and related tech-
nology that they have transferred to date and con-
tinue even now to do so; 
(8) is further troubled by public reports describ-
ing well known European companies as suppliers to 
weapons programs of the People’s Republic of 
China, who are also participants in numerous sen-
sitive United States Government weapons programs, 
and the increased risks of diversion of United States 
weapons technology to China inherent in such an 
undesirable situation; and 
(9) in view of the gravity of European arms 
sales to the People’s Republic of China, which have 
not abated, believes it is necessary to make provision 
for greater scrutiny and oversight with respect to 
those areas of international armament cooperation 
that present increased levels of risk to the security 
interests of the United States and to authorize ap-
propriate measures which the President may draw 
on in deterring foreign support for China’s military 
buildup in order to safeguard the national security
214
interests of the United States and peace and secu-
rity in East Asia. 
SEC. 903. REPORT ON FOREIGN MILITARY EXPORTS TO 
CHINA. 
(a) REPORT.—The President shall, at the times spec-
ified in subsection (b), transmit to the appropriate con-
gressional committees a report that identifies every person 
of a member country of the European Union, and any 
other foreign person the President may consider appro-
priate, with respect to whom there is credible information 
indicating that the person, on or after January 1, 2005, 
exported to—
(1) the People’s Republic of China any item on 
the Wassenaar Munitions List of July 12, 1996, and 
subsequent revisions; or 
(2) the military, intelligence, or other security 
forces of the People’s Republic of China—
(A) any item on the Wassenaar List of 
Dual Use Goods and Technologies of July 12, 
1996, and subsequent revisions; or 
(B) any other dual use item if the item is 
intended, entirely or in part, for use with an 
item described in paragraph (1). 
(b) TIMING OF REPORT.—The report required under 
subsection (a) shall be transmitted not later than 180 days
215
after the date of the enactment of this Act and not later 
than the end of each 12-month period thereafter. 
(c) EXCEPTIONS.—A foreign person is not required 
to be identified in a report required under subsection (a) 
if the person—
(1) was identified in a previous report trans-
mitted under subsection (a) on account of a par-
ticular export, except to the extent that the export 
may have continued, involved additional transfers, or 
was larger, more significant, or different in nature 
than described in the previous report; 
(2) was engaged solely in an export on behalf 
of, or in concert with, the Government of the United 
States; or 
(3) was engaged in an export which, as deter-
mined by the President, would be exempt from the 
restrictions of section 902(a) of the Foreign Rela-
tions Authorization Act, Fiscal Years 1990 and 
1991 (Public Law 101–246; 22 U.S.C. 2151 note), 
if the export were subject to the jurisdiction of the 
United States, by reason of the issuance of a report 
under section 902(b) of such Act. 
(d) FORM.—If the President considers it appropriate, 
reports transmitted under subsection (a), or appropriate 
parts thereof, may be transmitted in classified form.
216
SEC. 904. REPORT ON CHINA ARMS TRANSFER POLICIES OF 
COUNTRIES 
PARTICIPATING 
IN 
UNITED 
STATES DEFENSE COOPERATIVE PROJECTS; 
CERTAIN LICENSE REQUIREMENTS. 
(a) STATEMENT OF POLICY.—Congress is concerned 
with the significant additional risk of unlawful use and 
diversion of sensitive United States weapons system re-
search, design, and development arising from cooperative 
research and development projects with foreign govern-
ments and foreign persons who may also transfer arms 
and related technology to the People’s Republic of China. 
(b) REPORT.—The President shall, at the times spec-
ified in subsection (c), transmit to the appropriate con-
gressional committees a report that—
(1) identifies every foreign government with re-
spect to which the United States is carrying out a 
cooperative project described in subsection (d) and 
whose policies or practices, on or after the date of 
the enactment of this Act, permit the export of any 
item described in paragraph (1), or subparagraph 
(A) or (B) of paragraph (2), of section 903(a); and 
(2) describes the cooperative projects and poli-
cies or practices referred to in paragraph (1) of 
every foreign government identified under such para-
graph.
217
(c) TIMING OF REPORT.—The report required under 
subsection (b)—
(1) shall be transmitted not later than 180 days 
after the date of the enactment of this Act and not 
later than the end of each 12-month period there-
after; and 
(2) may be included in the report required 
under section 903, as the President determines ap-
propriate. 
(d) 
COOPERATIVE
PROJECTS.—The 
cooperative 
projects referred to in subsection (b) are projects carried 
out under section 27 of the Arms Export Control Act (22 
U.S.C. 2767) or section 2350a, 2358, or a memorandum 
of understanding under section 2531 of title 10, United 
States Code. 
(e) LICENSE REQUIREMENTS.—
(1) 
REQUIREMENT.—Notwithstanding 
any 
other provision of law, a license under section 38 of 
the Arms Export Control Act (22 U.S.C. 2778) shall 
be required for the export of defense articles or de-
fense services by any person who is not an officer or 
employee of the Government of the United States in 
furtherance of a cooperative project described in 
subsection (d) with a country identified in a report 
transmitted under subsection (b).
218
(2) 
CONGRESSIONAL
NOTIFICATION.—The 
issuance of a license pursuant to paragraph (1) shall 
be subject to the same requirements as are applica-
ble to the export of items described in section 36(c) 
of the Arms Export Control Act (22 U.S.C. 2776(c)) 
(without regard to the dollar amount requirements 
relating to contracts contained in such section), in-
cluding the transmittal of information and the appli-
cation of congressional review procedures in accord-
ance with such section. 
(3) EXCEPTIONS.—The Secretary of State shall 
not be required to apply the license requirement of 
paragraph (1)—
(A) in the case of contracts or sub-
contracts in effect on the date of the enactment 
of this Act, including the exercise of options for 
production quantities to satisfy United States 
operational military requirements; 
(B) if the Secretary determines in writing 
that the person or other entity to which the ex-
port of defense articles or defense services 
would be made is a sole source supplier of the 
articles or services, that the articles or services 
are essential, and that the articles or services 
are not readily or reasonably available;
219
(C) in the case of routine servicing and 
maintenance, to products or services provided 
under contracts entered into before transmittal 
of the report required under subsection (b), if 
the Secretary determines in writing that alter-
native sources are not readily or reasonably 
available; or 
(D) with respect to other defense articles 
or defense services, the export of which without 
a license the Secretary determines in writing is 
essential to the national security of the United 
States and provides written notification thereof 
to the appropriate congressional committees. 
(4) PUBLICATION
IN
THE
FEDERAL
REG-
ISTER.—The Secretary of State shall publish in the 
Federal Register each determination made under 
paragraph (3). 
SEC. 905. CERTAIN FOREIGN OWNERSHIP AND CONTROL 
OF DEFENSE ARTICLES IN THE UNITED 
STATES. 
(a) STATEMENT OF POLICY.—Congress determines 
that special care should be taken by the United States 
with respect to foreign persons who sell arms and related 
technology to the People’s Republic of China, while simul-
taneously seeking ownership of United States defense arti-
220
cles or defense services, including the results of United 
States Government funded defense research and develop-
ment, through the acquisition or control of United States 
defense firms, directly or through their subsidiaries and 
affiliates based in the United States. 
(b) LICENSE REQUIREMENTS.—
(1) REQUIREMENT.—The President shall re-
quire a license pursuant to regulations issued under 
section 38(g)(6) of the Arms Export Control Act (22 
U.S.C. 2778(g)(6)) for the transfer of ownership or 
control of United States defense articles or defense 
services arising from the acquisition or control of a 
person required to be registered under section 
38(b)(1) of such Act (22 U.S.C. 2778(b)(1)), or any 
subsidiary, division, affiliate or other entity thereof, 
whenever the person gaining acquisition or control 
is—
(A) a foreign national of the People’s Re-
public of China or a foreign person otherwise 
subject to the jurisdiction, ownership, or control 
of the People’s Republic of China; 
(B) a foreign person identified in a report 
transmitted under section 903 or having its 
principal place of business in a country de-
221
scribed in a report transmitted under section 
904; or 
(C) a United States person owned or con-
trolled by a foreign person, including a sub-
sidiary or affiliate of a foreign person described 
in subparagraph (B). 
(2) ADDITIONAL
REQUIREMENT.—A license 
under section 38(g)(6) of the Arms Export Control 
Act for a person described in paragraph (1)(A) shall 
not be issued until 30 days after the date on which 
the President transmits a report that contains a de-
termination of the President that—
(A) the Government of the People’s Repub-
lic of China meets the requirements of section 
902(b)(1) of the Foreign Relations Authoriza-
tion Act, Fiscal Years 1990 and 1991 (Public 
Law 101–246; 22 U.S.C. 2151 note); or 
(B) it is in the national interest of the 
United States to issue the license. 
(c) CONGRESSIONAL NOTIFICATION.—The issuance 
of a license pursuant to subsection (b) shall be subject 
to the same requirements as are applicable to the export 
of items described in section 36(c) of the Arms Export 
Control Act (22 U.S.C. 2776(c)) (without regard to the 
dollar amount requirements relating to contracts con-
222
tained in such section), including the transmittal of infor-
mation and the application of congressional review proce-
dures in accordance with such section. 
(d) EXCEPTION.—The issuance of a license pursuant 
to subsection (b) shall not be required in the case of an 
amendment to a munitions license or a change in registra-
tion arising from a sale or transfer of ownership or control 
of United States defense articles or defense services to a 
person described in subparagraph (A), (B), or (C) of sub-
section (b)(1) that was approved prior to the date of en-
actment of this Act unless the President determines that 
it is in the national security interests of the United States 
to require the issuance of a new license pursuant to sub-
section (b). 
SEC. 906. CHINESE MILITARY END USE OF DUAL USE EX-
PORTS. 
(a) STATEMENT OF POLICY.—Congress welcomes the 
understanding reached at the Wassenaar Arrangement’s 
December 2003 plenary meeting to require governmental 
authorization for the transfer of non-listed dual use items 
intended for military end use in a destination subject to 
any relevant regional arms embargo or to any United Na-
tions Security Council resolution. 
(b) REPORTS.—
223
(1) REPORT TO SECRETARY OF COMMERCE.—
As prescribed in regulations issued under the Export 
Administration Act of 1979 (as continued in effect 
under the International Emergency Economic Pow-
ers Act), a United States person who exports an 
item described in subparagraph (A) or (B) of section 
903(a)(2) for military end use shall, not later than 
15 days after the item is exported, submit to the 
Secretary of Commerce a report that contains a de-
scription of all shipment information, including a de-
scription of the item and the quantity, value, port of 
exit, and end user. 
(2) REPORT TO CONGRESS.—Not later than 60 
days after the end of each calendar quarter, the Sec-
retary of Commerce shall submit to the appropriate 
congressional committees a written report that con-
tains a compilation all of information submitted in 
each report to the Secretary under paragraph (1) for 
the prior calendar quarter. 
(c) DEFINITION.—In this section, the term ‘‘military 
end use’’ means, with respect to an item, the item is or 
may be intended, entirely or in part, for use in conjunction 
with an item described on the Wassenaar Munitions List 
of July 12, 1996, and subsequent revisions.
224
SEC. 907. APPLICATION OF MEASURES TO CERTAIN FOR-
EIGN PERSONS. 
(a) APPLICATION OF MEASURES.—Subject to sec-
tions 908 and 909, the President may apply with respect 
to any foreign person (including a foreign government) 
identified in a report transmitted under section 903, and 
shall apply with respect to any foreign person (including 
a foreign government) identified in more than one report 
transmitted under section 903, any or all of the following 
measures: 
(1) RESEARCH AND DEVELOPMENT.—Denial of 
participation in existing and new cooperative re-
search and development programs and projects 
under section 27 of the Arms Export Control Act 
(22 U.S.C. 2767) or sections 2350a, 2358, or a 
memorandum of understanding under 2531 of title 
10, United States Code. 
(2) CONTROL
OF
UNITED
STATES
DEFENSE 
FIRMS.—Prohibition of ownership and control of any 
business organization required to be registered with 
the United States Government as a manufacturer or 
exporter of defense articles or defense services under 
section 38(b)(1) of the Arms Export Control Act (22 
U.S.C. 2778(b)(1)). 
(3) SECURITY
ASSISTANCE.—Prohibition on 
participation in any foreign military sales under
225
chapter 2 of the Arms Export Control Act (22 
U.S.C. 2761 et seq.) or any design and construction 
sales under chapter 2A of such Act (22 U.S.C. 
2769). 
(4) MUNITIONS LIST APPROVALS.—Prohibition 
on licenses and other forms of approval under sec-
tion 38 of the Arms Export Control Act (22 U.S.C. 
2778) for the export of any item on the United 
States Munitions List as in effect on August 8, 
1995. 
(b) APPLICATION OF ADDITIONAL MEASURES.—Sub-
ject to sections 908 and 909, and notwithstanding any 
other provision of law, the President may, with respect to 
any foreign person (including a foreign government) iden-
tified in a report transmitted under section 903, and shall, 
with respect to any foreign person (including a foreign 
government) identified in more than one report trans-
mitted under section 903—
(1) suspend the use of any license exemption 
and expedited license procedure established in the 
International Traffic in Arms Regulations or other 
provisions of law for the export or temporary import 
of defense articles and defense services;
226
(2) require the execution of a non-transfer and 
end use certificate for the export of any defense arti-
cles and defense services; and 
(3) require, as a condition of issuance of any li-
cense for the export of defense articles and defense 
services, United States access to and verification of 
the items after the export of the items or alternative 
measures to ensure compliance with restrictions on 
the transfer of the items to third-parties. 
(c) EFFECTIVE DATE OF MEASURES.—Measures ap-
plied pursuant to subsection (a) or (b) shall be effective 
with respect to a foreign person (including a foreign gov-
ernment) no later than—
(1) 30 days after the report identifying the for-
eign person is transmitted, if the report is trans-
mitted on or before the date required by section 
903(b); or 
(2) on the date that the report identifying the 
foreign person is transmitted, if the report is trans-
mitted more than 30 days after the date required by 
section 903(b). 
(d) DURATION
OF MEASURES.—Measures applied 
pursuant to subsection (a) shall be for a period of 2 years 
or longer, as the President determines appropriate. Meas-
ures applied pursuant to subsection (b) shall be, at a min-
227
imum, consistent with the duration of the license and the 
normal requirements for record keeping established in the 
International Traffic in Arms Regulations or longer, as 
the President determines appropriate. 
(e) PUBLICATION IN FEDERAL REGISTER.—The ap-
plication of measures to a foreign person pursuant to sub-
section (a) or (b) shall be announced by notice published 
in the Federal Register, except if the President determines 
that doing so would be inconsistent with the protection 
of classified information. 
SEC. 908. PROCEDURES IF DISCRETIONARY MEASURES ARE 
NOT APPLIED. 
(a) REQUIREMENT TO NOTIFY CONGRESS.—If the 
President does not exercise the authority of subsection (a) 
or (b) of section 907 to apply any or all of the discre-
tionary measures described in such subsection with respect 
to a foreign person identified in a report transmitted 
under section 903, the President shall so notify the appro-
priate congressional committees not later than the effec-
tive date under section 907(c) for measures with respect 
to that person. 
(b) WRITTEN
JUSTIFICATION.—Any notification 
transmitted by the President under subsection (a) shall 
include a written justification describing in detail the facts 
and circumstances relating specifically to the foreign per-
228
son identified in a report transmitted under section 903 
that support the President’s decision not to exercise the 
authority of subsection (a) or (b) of section 907 with re-
spect to that person. 
(c) FORM.—If the President considers it appropriate, 
the notification of the President under subsection (a), and 
the written justification under subsection (b), or appro-
priate parts thereof, may be transmitted in classified form. 
SEC. 909. DETERMINATIONS EXEMPTING FOREIGN PER-
SONS FROM MANDATORY MEASURES. 
(a) WAIVER.—Any mandatory measure described in 
section 907 shall not apply with respect to a foreign per-
son if the President transmits to the appropriate congres-
sional committees a report that contains a determination 
of the President that—
(1) on the basis of information provided by that 
person or the foreign government having primary ju-
risdiction over the person, the person did not, on or 
after January 1, 2005, knowingly export to the Peo-
ple’s Republic of China the item the apparent export 
of which caused the person to be identified in a re-
port transmitted under section 903; or 
(2) the foreign government having primary ju-
risdiction over the person has entered into a written 
agreement with the United States which—
229
(A) is binding under international law; 
(B) prohibits further exports of any item 
described in paragraph (1), or subparagraph 
(A) or (B) of paragraph (2), of section 903(a) 
by any person subject to its jurisdiction; 
(C) is supported by the foreign govern-
ment’s adoption of policies and procedures pro-
viding for credible implementation of the re-
quirements in subparagraphs (A) and (B); 
(D) does not constrain the President’s au-
thority to impose measures under this act in 
the event of a future export of concern by the 
same or other persons subject to the jurisdic-
tion of the foreign government party to the 
agreement; and 
(E) is submitted to the appropriate con-
gressional committees 30 days prior to its entry 
into force. 
(b) ADDITIONAL WAIVER.—Any mandatory measure 
described in section 907 shall not apply to a foreign person 
if the President determines that it is important to the 
counterterrorism, nonproliferation, or other national secu-
rity interests of the United States and transmits to the 
appropriate congressional committees a report in writing 
that contains such determination.
230
(c) SENSE OF CONGRESS.—It is the sense of Con-
gress that the President should—
(1) strengthen international coordination and 
execution of arms export policy through the develop-
ment of bilateral and multilateral agreements under 
subsection (a)(2), particularly with member states of 
the North Atlantic Treaty Organization (NATO), 
Japan, Australia and New Zealand, and exercise the 
waivers provided under this section in all appro-
priate instances that further this objective; and 
(2) whenever the President determines that the 
measures described in section 907 should be applied, 
that the measures be applied comprehensively with 
respect to the affected foreign person’s affiliates and 
subsidiaries, wherever located, in order to deter to 
the fullest extent possible a recurrence or continu-
ation of the export giving rise to the President’s de-
termination. 
(d) FORM.—If the President considers it appropriate, 
the determination and report of the President under sub-
section (a), or appropriate parts thereof, may be trans-
mitted in classified form. 
SEC. 910. DEFINITIONS. 
In this title:
231
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means—
(A) the Committee on International Rela-
tions and the Committee on Armed Services of 
the House of Representatives; and 
(B) the Committee on Foreign Relations 
and the Committee on Armed Services of the 
Senate. 
(2) DEFENSE ARTICLES AND DEFENSE SERV-
ICES.—The term ‘‘defense articles and defense serv-
ices’’ has the meaning given the term in section 
47(7) of the Arms Export Control Act (22 U.S.C. 
2794 note). 
(3) DUAL USE.—The term ‘‘dual use’’ means, 
with respect to goods or technology, those goods or 
technology that are specifically designed or devel-
oped for civil purposes but which also may be used 
or deployed in a military or proliferation mode. Such 
term does not include purely commercial items. 
(4) EXPORT.—The term ‘‘export’’ has the 
meaning given that term in section 120.17 of the 
International Traffic in Arms Regulations, and in-
cludes re-exports, transfers, and retransfers by any 
means.
232
(5) EXPORT ADMINISTRATION REGULATIONS.—
The term ‘‘Export Administration Regulations’’ 
means those regulations contained in sections 730 
through 774 of title 15, Code of Federal Regulations 
(or successor regulations). 
(6) FOREIGN
GOVERNMENT.—The term ‘‘for-
eign government’’ has the meaning given the term in 
section 38(g)(9)(B) of the Arms Export Control Act 
(22 U.S.C. 2778(g)(9)(B)). 
(7) FOREIGN PERSON.—The term ‘‘foreign per-
son’’ has the meaning given the term in section 
38(g)(9)(C) of the Arms Export Control Act (22 
U.S.C. 2778(g)(9)(C)). 
(8) GOOD.—The term ‘‘good’’ has the meaning 
given the term in section 16(3) of the Export Ad-
ministration Act of 1979 (50 U.S.C. App. 2415(3)). 
(9) INTERNATIONAL TRAFFIC IN ARMS REGULA-
TIONS.—The term ‘‘International Traffic in Arms 
Regulations’’ means those regulations contained in 
sections 120 through 130 of title 22, Code of Fed-
eral Regulations (or successor regulations). 
(10) ITEM.—The term ‘‘item’’ means any good 
or technology, defense article or defense service sub-
ject to the export jurisdiction of the United States 
under law or regulation.