I
106TH CONGRESS
1ST SESSION
H. R. 973
To modify authorities with respect to the provision of security assistance
under the Foreign Assistance Act of 1961 and the Arms Export Control
Act, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 4, 1999
Mr. GILMAN (for himself and Mr. GEJDENSON) introduced the following bill;
which was referred to the Committee on International Relations
A BILL
To modify authorities with respect to the provision of secu-
rity assistance under the Foreign Assistance Act of 1961
and the Arms Export Control Act, and for other pur-
poses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Security Assistance
Act of 1999’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—TRANSFERS OF EXCESS DEFENSE ARTICLES
Sec. 101. Excess defense articles for central European countries.
Sec. 102. Excess defense articles for certain independent States of the former
Soviet Union.
TITLE II—FOREIGN MILITARY SALES AUTHORITIES
Sec. 201. Termination of foreign military financed training.
Sec. 202. Sales of excess Coast Guard property.
Sec. 203. Competitive pricing for sales of defense articles.
Sec. 204. Reporting of offset agreements.
Sec. 205. Notification of upgrades to direct commercial sales.
Sec. 206. Expanded prohibition on incentive payments.
Sec. 207. Administrative fees for leasing of defense articles.
TITLE III—STOCKPILING OF DEFENSE ARTICLES FOR FOREIGN
COUNTRIES
Sec. 301. Additions to United States war reserve stockpiles for allies.
Sec. 302. Transfer of certain obsolete or surplus defense articles in the war re-
serves stockpile for allies.
TITLE IV—INTERNATIONAL ARMS SALES CODE OF CONDUCT ACT
OF 1999
Sec. 401. Short title.
Sec. 402. Findings.
Sec. 403. International arms sales code of conduct.
TITLE V—AUTHORITY TO EXEMPT INDIA AND PAKISTAN FROM
CERTAIN SANCTIONS
Sec. 501. Waiver authority.
Sec. 502. Consultation.
Sec. 503. Reporting requirement.
Sec. 504. Appropriate congressional committees defined.
TITLE VI—MISCELLANEOUS PROVISIONS
Sec. 601. Annual military assistance reports.
Sec. 602. Publication of arms sales certifications.
Sec. 603. Notification requirements for commercial export of significant mili-
tary equipment on United States Munitions List.
Sec. 604. Enforcement of Arms Export Control Act.
Sec. 605. Violations relating to material support to terrorists.
Sec. 606. Authority to consent to third party transfer of ex-U.S.S. Bowman
County to USS LST Ship Memorial, Inc.
Sec. 607. Exceptions relating to prohibitions on assistance to countries involved
in transfer or use of nuclear explosive devices.
Sec. 608. Penalties for violations of Export Administration Act of 1979.
TITLE I—TRANSFERS OF EXCESS
DEFENSE ARTICLES
SEC. 101. EXCESS DEFENSE ARTICLES FOR CENTRAL EURO-
PEAN COUNTRIES.
Section 105 of Public Law 104–164 (110 Stat. 1427)
is amended by striking ‘‘1996 and 1997’’ and inserting
‘‘2000 and 2001’’.
SEC. 102. EXCESS DEFENSE ARTICLES FOR CERTAIN INDE-
PENDENT STATES OF THE FORMER SOVIET
UNION.
(a) USES FOR WHICH FUNDS ARE AVAILABLE.—
Notwithstanding section 516(e) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2321j(e)), during each of the fiscal
years 2000 and 2001, funds available to the Department
of Defense may be expended for crating, packing, han-
dling, and transportation of excess defense articles trans-
ferred under the authority of section 516 of that Act to
Georgia, 
Kazakhstan, 
Kyrgyzstan, 
Moldova,
Turkmenistan, Ukraine, and Uzbekistan.
(b) CONTENT OF CONGRESSIONAL NOTIFICATION.—
Each notification required to be submitted under section
516(f) of the Foreign Assistance Act of 1961 (22 U.S.C.
2321j(f)) with respect to a proposed transfer of a defense
article described in subsection (a) shall include an esti-
mate of the amount of funds to be expended under sub-
section (a) with respect to that transfer.
TITLE II—FOREIGN MILITARY
SALES AUTHORITIES
SEC. 201. TERMINATION OF FOREIGN MILITARY FINANCED
TRAINING.
Section 617 of the Foreign Assistance Act of 1961
(22 U.S.C. 2367) is amended—
(1) by inserting in the second sentence ‘‘and the
Arms Export Control Act’’ after ‘‘under this Act’’
the first place it appears;
(2) by striking ‘‘under this Act’’ the second
place it appears; and
(3) by inserting in the third sentence ‘‘and
under the Arms Export Control Act’’ after ‘‘this
Act’’.
SEC. 202. SALES OF EXCESS COAST GUARD PROPERTY.
Section 21(a)(1) of the Arms Export Control Act (22
U.S.C. 2761(a)(1)) is amended in the text above subpara-
graph (A) by inserting ‘‘and the Coast Guard’’ after ‘‘De-
partment of Defense’’.
SEC. 203. COMPETITIVE PRICING FOR SALES OF DEFENSE
ARTICLES.
Section 22(d) of the Arms Export Control Act (22
U.S.C. 2762(d)) is amended—
(1) by striking ‘‘Procurement contracts’’ and
inserting ‘‘(1) Procurement contracts’’; and
(2) by adding at the end the following:
‘‘(2) Direct costs associated with meeting additional
or unique requirements of the purchaser shall be allowable
under contracts described in paragraph (1). Loadings ap-
plicable to such direct costs shall be permitted at the same
rates applicable to procurement of like items purchased
by the Department of Defense for its own use.’’.
SEC. 204. REPORTING OF OFFSET AGREEMENTS.
(a) GOVERNMENT-TO-GOVERNMENT
SALES.—Sec-
tion 36(b)(1) of the Arms Export Control Act (22 U.S.C.
2776(b)(1)) is amended in the fourth sentence by striking
‘‘(if known on the date of transmittal of such certifi-
cation)’’ and inserting ‘‘and, if known on the date of trans-
mittal of such certification, a description of the offset
agreement. Such description may be included in the classi-
fied portion of such numbered certification’’.
(b) COMMERCIAL SALES.—Section 36(c)(1) of the
Arms Export Control Act (22 U.S.C. 2776(c)(1)) is
amended in the second sentence by striking ‘‘(if known
on the date of transmittal of such certification)’’ and in-
serting ‘‘and, if known on the date of transmittal of such
certification, a description of the offset agreement. Such
description may be included in the classified portion of
such numbered certification’’.
SEC. 205. NOTIFICATION OF UPGRADES TO DIRECT COM-
MERCIAL SALES.
Section 36(c) of the Arms Export Control Act (22
U.S.C. 2776(c)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(4) The provisions of subsection (b)(5) shall apply
to any equipment, article, or service for which a numbered
certification has been transmitted to Congress pursuant
to paragraph (1) in the same manner and to the same
extent as that subsection applies to any equipment, article,
or service for which a numbered certification has been
transmitted to Congress pursuant to subsection (b)(1).
For purposes of such application, any reference in sub-
section (b)(5) to ‘a letter of offer’ or ‘an offer’ shall be
deemed to be a reference to ‘a contract’.’’.
SEC. 206. EXPANDED PROHIBITION ON INCENTIVE PAY-
MENTS.
(a) IN GENERAL.—Section 39A(a) of the Arms Ex-
port Control Act (22 U.S.C. 2779a(a)) is amended—
(1) by inserting ‘‘or licensed’’ after ‘‘sold’’; and
(2) by inserting ‘‘or export’’ after ‘‘sale’’.
(b) DEFINITION OF UNITED STATES PERSON.—Sec-
tion 39A(d)(3)(B)(ii) of the Arms Export Control Act (22
U.S.C. 2779a(d)(3)(B)(ii)) is amended by inserting ‘‘or by
an entity described in clause (i)’’ after ‘‘subparagraph
(A)’’.
SEC. 207. ADMINISTRATIVE FEES FOR LEASING OF DE-
FENSE ARTICLES.
Section 61(a) of the Arms Export Control Act (22
U.S.C. 2796(a)) is amended in paragraph (4) of the first
sentence by inserting after ‘‘including reimbursement for
depreciation of such articles while leased,’’ the following:
‘‘a fee for the administrative services associated with proc-
essing such leasing,’’.
TITLE III—STOCKPILING OF DE-
FENSE ARTICLES FOR FOR-
EIGN COUNTRIES
SEC. 301. ADDITIONS TO UNITED STATES WAR RESERVE
STOCKPILES FOR ALLIES.
Paragraph (2) of section 514(b) of the Foreign As-
sistance Act of 1961 (22 U.S.C. 2321h(b)(2)) is amended
to read as follows:
‘‘(2)(A) The value of such additions to stock-
piles of defense articles in foreign countries shall not
exceed $340,000,000 for fiscal year 1999 and
$60,000,000 for fiscal year 2000.
‘‘(B)(i) Of the amount specified in subpara-
graph (A) for fiscal year 1999, not more than
$320,000,000 may be made available for stockpiles
in the Republic of Korea and not more than
$20,000,000 may be made available for stockpiles in
Thailand.
‘‘(ii) Of the amount specified in subparagraph
(A) for fiscal year 2000, not more than $40,000,000
may be made available for stockpiles in the Republic
of Korea and not more than $20,000,000 may be
made available for stockpiles in Thailand.’’.
SEC. 302. TRANSFER OF CERTAIN OBSOLETE OR SURPLUS
DEFENSE ARTICLES IN THE WAR RESERVES
STOCKPILE FOR ALLIES.
(a) ITEMS IN THE KOREAN STOCKPILE.—
(1) IN GENERAL.—Notwithstanding section 514
of the Foreign Assistance Act of 1961 (22 U.S.C.
2321h), the President is authorized to transfer to
the Republic of Korea, in return for concessions to
be negotiated by the Secretary of Defense, with the
concurrence of the Secretary of State, any or all of
the items described in paragraph (2).
(2) COVERED ITEMS.—The items referred to in
paragraph (1) are munitions, equipment, and mate-
rial such as tanks, trucks, artillery, mortars, general
purpose bombs, repair parts, ammunition, barrier
material, and ancillary equipment, if such items
are—
(A) obsolete or surplus items;
(B) in the inventory of the Department of
Defense;
(C) intended for use as reserve stocks for
the Republic of Korea; and
(D) as of the date of enactment of this
Act, located in a stockpile in the Republic of
Korea.
(b) ITEMS IN THE THAILAND STOCKPILE.—
(1) IN GENERAL.—Notwithstanding section 514
of the Foreign Assistance Act of 1961 (22 U.S.C.
2321h), the President is authorized to transfer to
Thailand, in return for concessions to be negotiated
by the Secretary of Defense, with the concurrence of
the Secretary of State, any or all of the items in the
WRS–T stockpile described in paragraph (2).
(2) COVERED ITEMS.—The items referred to in
paragraph (1) are munitions, equipment, and mate-
rial such as tanks, trucks, artillery, mortars, general
purpose bombs, repair parts, ammunition, barrier
material, and ancillary equipment, if such items
are—
(A) obsolete or surplus items;
(B) in the inventory of the Department of
Defense;
(C) intended for use as reserve stocks for
Thailand; and
(D) as of the date of enactment of this
Act, located in a stockpile in Thailand.
(c) VALUATION OF CONCESSIONS.—The value of con-
cessions negotiated pursuant to subsections (a) and (b)
shall be at least equal to the fair market value of the items
transferred. The concessions may include cash compensa-
tion, services, waiver of charges otherwise payable by the
United States, and other items of value.
(d) PRIOR NOTIFICATIONS OF PROPOSED TRANS-
FERS.—Not less 30 days before making a transfer under
the authority of this section, the President shall transmit
to the chairmen of the Committee on Foreign Relations
of the Senate and the Committee on International Rela-
tions of the House of Representatives a detailed notifica-
tion of the proposed transfer, which shall include an iden-
tification of the items to be transferred and the conces-
sions to be received.
(e) TERMINATION OF AUTHORITY.—No transfer may
be made under the authority of this section more than five
years after the date of enactment of this Act.
TITLE 
IV—INTERNATIONAL
ARMS SALES CODE OF CON-
DUCT ACT OF 1999
SEC. 401. SHORT TITLE.
This title may be cited as the ‘‘International Arms
Sales Code of Conduct Act of 1999’’.
SEC. 402. FINDINGS.
The Congress finds the following:
(1) The proliferation of conventional arms and
conflicts around the globe are multilateral problems.
The only way to effectively prevent rogue nations
from acquiring conventional weapons is through a
multinational ‘‘arms sales code of conduct’’.
(2) Approximately 40,000,000 people, over 75
percent of whom were civilians, died as a result of
civil and international wars fought with conventional
weapons during the 45 years of the cold war, dem-
onstrating that conventional weapons can in fact be
weapons of mass destruction.
(3) Conflict has actually increased in the post
cold war era.
(4) It is in the national security and economic
interests of the United States to reduce dramatically
the $840,000,000,000 that all countries spend on
armed forces every year, $191,000,000,000 of which
is spent by developing countries, an amount equiva-
lent to 4 times the total bilateral and multilateral
foreign assistance such countries receive every year.
(5) The Congress has the constitutional respon-
sibility to participate with the executive branch in
decisions to provide military assistance and arms
transfers to a foreign government, and in the formu-
lation of a policy designed to reduce dramatically the
level of international militarization.
(6) A decision to provide military assistance
and arms transfers to a government that is undemo-
cratic, does not adequately protect human rights, or
is currently engaged in acts of armed aggression
should require a higher level of scrutiny than does
a decision to provide such assistance and arms
transfers to a government to which these conditions
do not apply.
SEC. 403. INTERNATIONAL ARMS SALES CODE OF CON-
DUCT.
(a) NEGOTIATIONS.—The President shall attempt to
achieve the foreign policy goal of an international arms
sales code of conduct with all Wassenaar Arrangement
countries. The President shall take the necessary steps to
begin negotiations with all Wassenaar Arrangement coun-
tries within 120 days after the date of the enactment of
this Act. The purpose of these negotiations shall be to con-
clude an agreement on restricting or prohibiting arms
transfers to countries that do not meet the following cri-
teria:
(1) PROMOTES DEMOCRACY.—The government
of the country—
(A) was chosen by and permits free and
fair elections;
(B) promotes civilian control of the mili-
tary and security forces and has civilian institu-
tions controlling the policy, operation, and
spending of all law enforcement and security in-
stitutions, as well as the armed forces;
(C) promotes the rule of law, equality be-
fore the law, and respect for individual and mi-
nority rights, including freedom to speak, pub-
lish, associate, and organize; and
(D) promotes the strengthening of politi-
cal, legislative, and civil institutions of democ-
racy, as well as autonomous institutions to
monitor the conduct of public officials and to
combat corruption.
(2) RESPECTS
HUMAN
RIGHTS.—The govern-
ment of the country—
(A) does not engage in gross violations of
internationally 
recognized 
human 
rights,
including—
(i) extra judicial or arbitrary execu-
tions;
(ii) disappearances;
(iii) torture or severe mistreatment;
(iv) prolonged arbitrary imprisonment;
(v) systematic official discrimination
on the basis of race, ethnicity, religion,
gender, national origin, or political affili-
ation; and
(vi) grave breaches of international
laws of war or equivalent violations of the
laws of war in internal conflicts;
(B) vigorously investigates, disciplines, and
prosecutes those responsible for gross violations
of internationally recognized human rights;
(C) permits access on a regular basis to
political prisoners by international humani-
tarian organizations such as the International
Committee of the Red Cross;
(D) promotes the independence of the judi-
ciary and other official bodies that oversee the
protection of human rights;
(E) does not impede the free functioning of
domestic and international human rights orga-
nizations; and
(F) provides access on a regular basis to
humanitarian organizations in situations of con-
flict or famine.
(3) NOT ENGAGED IN CERTAIN ACTS OF ARMED
AGGRESSION.—The government of the country is not
currently engaged in acts of armed aggression in
violation of international law.
(4) FULL PARTICIPATION IN U.N. REGISTER OF
CONVENTIONAL
ARMS.—The government of the
country is fully participating in the United Nations
Register of Conventional Arms.
(b) REPORTS TO CONGRESS.—(1) In the report re-
quired in sections 116(d) and 502B of the Foreign Assist-
ance Act of 1961, the Secretary of State shall describe
the extent to which the practices of each country evaluated
meet the criteria in paragraphs (1) through (4) of sub-
section (a).
(2) Not later than 6 months after the commencement
of the negotiations under subsection (a), and not later
than the end of every 6-month period thereafter until an
agreement described in subsection (a) is concluded, the
President shall report to the appropriate committees of the
Congress on the progress made during these negotiations.
(c) DEFINITION.—The term ‘‘Wassenaar Arrange-
ment countries’’ means Argentina, Australia, Austria, Bel-
gium, Bulgaria, Canada, the Czech Republic, Denmark,
Finland, France, Germany, Greece, Hungary, Ireland,
Italy, Japan, Luxembourg, Netherlands, New Zealand,
Norway, Poland, Portugal, the Republic of Korea, Roma-
nia, Russia, Slovakia, Spain, Sweden, Switzerland, Tur-
key, Ukraine, and the United Kingdom.
TITLE 
V—AUTHORITY 
TO 
EX-
EMPT INDIA AND PAKISTAN
FROM CERTAIN SANCTIONS
SEC. 501. WAIVER AUTHORITY.
(a) AUTHORITY.—
(1) IN GENERAL.—Except as provided in sub-
section (b), the President may waive, with respect to
India or Pakistan, the application of any sanction or
prohibition (or portion thereof) contained in section
101 or 102 of the Arms Export Control Act (22
U.S.C. 2799aa or 2799aa–1), section 620E(e) of the
Foreign Assistance Act of 1961 (22 U.S.C.
2375(e)), or section 2(b)(4) of the Export Import
Bank Act of 1945 (12 U.S.C. 635(b)(4)).
(2) EFFECTIVE DATE.—A waiver of the applica-
tion of a sanction or prohibition (or portion thereof)
under paragraph (1) shall be effective only for a pe-
riod ending on or before September 30, 2000.
(b) EXCEPTION.—The authority to waive the applica-
tion of a sanction or prohibition (or portion thereof) under
subsection (a) shall not apply with respect to a sanction
or prohibition contained in subparagraph (B), (C), or (G)
of section 102(b)(2) of the Arms Export Control Act.
(c) NOTIFICATION.—A waiver of the application of a
sanction or prohibition (or portion thereof) contained in
section 541 of the Foreign Assistance Act of 1961 shall
not become effective until 15 days after notice of such
waiver has been reported to the congressional committees
specified in section 634A(a) of such Act in accordance
with the procedures applicable to reprogramming notifica-
tions under that section.
SEC. 502. CONSULTATION.
Prior to each exercise of the authority provided in
section 601, the President shall consult with the appro-
priate congressional committees.
SEC. 503. REPORTING REQUIREMENT.
Not later than August 31, 2000, the Secretary of
State shall prepare and submit to the appropriate congres-
sional committees a report on economic and national secu-
rity developments in India and Pakistan.
SEC. 504. APPROPRIATE CONGRESSIONAL COMMITTEES
DEFINED.
In this title, the term ‘‘appropriate congressional
committees’’ means—
(1) the Committee on International Relations
and the Committee on Appropriations of the House
of Representatives; and
(2) the Committee on Foreign Relations and
the Committee on Appropriations of the Senate.
TITLE VI—MISCELLANEOUS
PROVISIONS
SEC. 601. ANNUAL MILITARY ASSISTANCE REPORTS.
Section 655(b) of the Foreign Assistance Act of 1961
(22 U.S.C. 2415(b)) is amended to read as follows:
‘‘(b) INFORMATION RELATING TO MILITARY ASSIST-
ANCE AND MILITARY EXPORTS.—Each such report shall
show the aggregate dollar value and quantity of defense
articles (including excess defense articles), defense serv-
ices, and international military education and training ac-
tivities authorized by the United States and of such arti-
cles, services, and activities provided by the United States,
excluding any activity that is reportable under title V of
the National Security Act of 1947, to each foreign country