I
103D CONGRESS
1ST SESSION
H. R. 2359
To amend the Nuclear Non-Proliferation Act of 1978 and the Atomic Energy
Act of 1954 to improve the organization and management of United
States nuclear export controls, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 9, 1993
Mr. LANTOS introduced the following bill; which was referred jointly to the
Committees on Foreign Affairs and Banking, Finance and Urban Affairs
A BILL
To amend the Nuclear Non-Proliferation Act of 1978 and
the Atomic Energy Act of 1954 to improve the organiza-
tion and management of United States nuclear export
controls, and for other purposes.
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 ‘‘Nuclear Export Reor-
ganization Act of 1993’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definitions.
Sec. 4. Findings and Policy.
TITLE I—AMENDMENTS TO THE NUCLEAR NON-PROLIFERATION
ACT OF 1978
Sec. 101. Reports of the President.
Sec. 102. Export controls over nuclear dual-use items.
Sec. 103. Non-nuclear energy resources.
TITLE II—INITIATIVES TO STRENGTHEN COMPLIANCE
Sec. 201. Fair market initiative.
Sec. 202. Measures to improve the licensing process.
TITLE III—AMENDMENTS TO THE ATOMIC ENERGY ACT OF 1954
Sec. 301. Subsequent arrangements.
Sec. 302. Cooperation with other nations.
Sec. 303. Prohibition on foreign production of special nuclear material.
Sec. 304. Prohibition on nuclear exports.
Sec. 305. Control of component parts.
TITLE IV—SANCTIONS FOR NUCLEAR PROLIFERATION
Sec. 401. Imposition of sanctions.
Sec. 402. Eligibility for assistance.
Sec. 403. Role of international financial institutions.
Sec. 404. Amendment to the International Emergency Economic Powers Act.
Sec. 405. Amendment to the Federal Deposit Insurance Corporation Improve-
ment Act of 1991.
Sec. 406. Export-Import Bank of the United States.
Sec. 407. Additional amendments to the Foreign Assistance Act of 1961.
Sec. 408. Reward.
Sec. 409. Reports.
Sec. 410. Technical correction.
TITLE V—INTERNATIONAL ATOMIC ENERGY AGENCY
Sec. 501. Bilateral and multilateral initiatives.
Sec. 502. Reforms in IAEA safeguards.
Sec. 503. Reporting requirement.
TITLE VI—REVIEW OF PLUTONIUM USE POLICY
Sec. 601. Findings and declarations.
Sec. 602. Report.
SEC. 3. DEFINITIONS.
For purposes of this Act—
(1) the term ‘‘direct-use material’’ means nu-
clear material that can be used for the manufacture
of nuclear explosive components without transmuta-
tion or further enrichment, such as plutonium con-
taining less than 80 percent plutonium-238, ura-
nium enriched to 20 percent uranium-235 or more,
uranium-233, and chemical compounds, mixtures of
direct-use materials (including mixed oxide reactor
fuel), and plutonium contained in spent nuclear fuel;
(2) the term ‘‘goods or technology’’ means nu-
clear materials and equipment and sensitive nuclear
technology (as such terms are defined in section 4
of the Nuclear Non-Proliferation Act of 1978), all
export items designated pursuant to section 309(c)
of the Nuclear Non-Proliferation Act of 1978, and
all technical assistance requiring authorization under
section 57b. of the Atomic Energy Act of 1954;
(3) the term ‘‘highly enriched uranium’’ means
uranium enriched to 20 percent or more in the iso-
tope U–235;
(4) the term ‘‘IAEA’’ means the International
Atomic Energy Agency;
(5) the term ‘‘IAEA safeguards’’ means the
safeguards set forth in an agreement between a
country and the International Atomic Energy Agen-
cy, as authorized by Article III(A)(5) of the Statute
of the International Atomic Energy Agency;
(6) the term ‘‘near real time material account-
ancy’’ means a method of accounting for the loca-
tion, quantity, and disposition of special fissionable
material at facilities that store or process such mate-
rial, in which verification of peaceful use is continu-
ously achieved by means of frequent physical inven-
tories and the use of in-process instrumentation;
(7) the term ‘‘non-nuclear-weapon state’’ means
any country which is not a nuclear-weapon state, as
defined by Article IX(3) of the Treaty on the Non-
Proliferation of Nuclear Weapons, signed at Wash-
ington, London, and Moscow on July 1, 1968;
(8) the term ‘‘nuclear dual-use items’’ means all
goods and technologies whose export from the Unit-
ed States is controlled pursuant to sections 309(c)
and 311 of the Nuclear Non-Proliferation Act of
1978;
(9) the term ‘‘nuclear explosive device’’ means
any device, whether assembled or disassembled, that
is designed to release in one microsecond or less an
amount of nuclear energy from special nuclear mate-
rial that is greater than the amount of energy that
would be released from the detonation of one pound
of trinitrotoluene (TNT);
(1) the proliferation of nuclear explosive devices
poses a serious and growing threat to the national
security of the United States;
(2) any effective response to this threat should
include measures to curb both the demand for and
the supply of goods and technology to acquire such
devices;
(3) non-nuclear-weapon states with clandestine
programs for the manufacture of nuclear explosive
devices continue to seek foreign sources of goods and
technologies that are important to the success of
such programs;
(4) export controls, especially when coordinated
internationally, inhibit such programs by adding to
the costs of acquiring alternative sources of re-
stricted goods and technologies and by delaying the
implementation of such programs;
(5) the implementation of export controls gen-
erates information that is useful in assessing the ef-
forts by importing nations to acquire capabilities to
develop or produce such devices and that provides an
early warning of illicit foreign procurement patterns;
(6) a renewed effort is needed to improve con-
trols over nuclear dual-use items; and
(7) the economy and effectiveness of the execu-
tive branch of Government, and the effectiveness of
congressional oversight, require the reorganization
and centralization of certain export licensing func-
tions of the Government in a single agency to which
all persons and commercial interests seeking to en-
gage in foreign commerce may apply.
(b) POLICY.—It is the policy of the United States—
(1) to restrict the export or reexport of goods
or technology that would be contrary to the objec-
tives of the United States with respect to the non-
proliferation of nuclear explosive devices;
(2) to strengthen sanctions against illicit suppli-
ers of nuclear goods or technology;
(3) to ensure that significant national security
interests will prevail over commercial considerations
in the event of any conflict in the nuclear export li-
censing process between these national objectives;
(4) to cooperate with other nations to develop
multilateral measures to halt the global proliferation
of nuclear explosive devices;
(5) to encourage individuals and companies to
develop voluntary measures to ensure that goods or
technology will not be exported that would promote
the global proliferation of nuclear explosive devices;
(6) to ensure greater openness and accountabil-
ity in the nuclear export licensing process; and
(7) to undertake reforms devoted to improving
the efficiency and effectiveness of the nuclear export
licensing process.
TITLE I—AMENDMENTS TO THE
NUCLEAR 
NON-PROLIFERA-
TION ACT OF 1978
SEC. 101. REPORTS OF THE PRESIDENT.
Section 601(a) of the Nuclear Non-Proliferation Act
of 1978 (22 U.S.C. 3281(a)) is amended—
(1) in paragraph (4), by striking ‘‘and’’ after
the semicolon;
(2) in paragraph (5), by striking the period and
inserting ‘‘; and’’; and
(3) by adding after paragraph (5) the following
new paragraph:
‘‘(6) a description of the implementation of nu-
clear export controls in the preceding calendar year,
including a summary by type of commodity, by value
per type of commodity, and by destination, of—
‘‘(A) any transactions for which—
‘‘(i) a license was issued for the ex-
port or retransfer of any good controlled
under section 309(c) or 311 of the Nuclear
Non-Proliferation Act of 1978;
‘‘(ii) a license was issued for the ex-
port or retransfer of any good controlled
under section 109 b. of the 1954 Act; and
‘‘(iii) an authorization was made as
required by section 57 b.(2) of the 1954
Act to engage, directly or indirectly, in the
production of special nuclear material; and
‘‘(B) each instance in which—
‘‘(i) a sanction has been imposed
under section 401(a) of the Nuclear Ex-
port Reorganization Act of 1993, section
670(b)(1) of the Foreign Assistance Act of
1961, or section 601 or 602 of the Federal
Deposit Insurance Corporation Improve-
ment Act of 1991;
‘‘(ii) a sale or lease has been denied
under section 3(f) of the Arms Export
Control Act or a transaction prohibited by
reason of any act relating to proliferation
of nuclear explosive devices, as described in
section 40(d) of that Act;
‘‘(iii) a sanction has not been imposed
by reason of section 401(c)(2) of the Nu-
clear Export Reorganization Act of 1993
or the imposition of a sanction has been
delayed under section 670(b)(4) of the
Foreign Assistance Act of 1961; or
‘‘(iv) a waiver of a sanction has been
made under—
‘‘(I) section 401(f) of the Nuclear
Export Reorganization Act of 1993,
‘‘(II) section 620E(d), or para-
graph (5) or (6) of section 670(b), of
the Foreign Assistance Act of 1961,
‘‘(III) section 605 of the Federal
Deposit Insurance Corporation Im-
provement Act of 1991,
‘‘(IV) section 40(g) of the Arms
Export Control Act with respect to
the last sentence of section 40(d) of
that Act, or
‘‘(V) section 614 of the Foreign
Assistance Act of 1961 with respect to
section 620E or 670(b)(1) of that Act
or section 3(f), or the last sentence of
section 40(d), of the Arms Export
Control Act.’’.
SEC. 102. EXPORT CONTROLS OVER NUCLEAR DUAL-USE
ITEMS.
(a) AMENDMENT TO THE NATIONAL SECURITY ACT
OF 1947.—Section 101 of the National Security Act of
1947 (50 U.S.C. 402) is amended by adding at the end
thereof the following new subsection:
‘‘(h)(1) The President shall establish within the Na-
tional Security Council a ‘Subgroup on Nuclear Export
Coordination’. The principal function of the Subgroup
shall be to implement the export controls required by sec-
tions 309(c) and 311 of the Nuclear Non-Proliferation Act
of 1978 (Public Law 95–242).
‘‘(2) There are authorized to be appropriated to the
Subgroup such sums as may be necessary to carry out the
functions of the Subgroup under title III of the Nuclear
Non-Proliferation Act of 1978.’’.
(b) AMENDMENT
TO
THE
NUCLEAR
NON-PRO-
LIFERATION ACT OF 1978.—Title III of the Nuclear Non-
Proliferation Act of 1978 is amended by adding at the
end thereof the following new sections:
‘‘SEC. 310. SUBGROUP ON NUCLEAR EXPORT COORDINA-
TION.
‘‘(a) COMPOSITION
OF
THE SUBGROUP.—(1) The
Subgroup on Nuclear Export Coordination (hereafter in
this title referred to as the ‘Subgroup’), established in sec-
tion 101(h) of the National Security Act of 1947, shall
be composed of six members who shall be Government offi-
cials having expertise in the control of exports and the
non-proliferation of nuclear explosive devices. Each such
member shall be designated by the head of one of the fol-
lowing United States agencies from among officials of that
agency, with no agency represented by more than one
member:
‘‘(A) The Department of State.
‘‘(B) The Department of Defense.
‘‘(C) The Department of Energy.
‘‘(D) The Department of Commerce.
‘‘(E) The Arms Control and Disarmament
Agency.
‘‘(F) The Nuclear Regulatory Commission.
‘‘(2) The representative of the Arms Control and Dis-
armament Agency shall serve as Chairman of the Sub-
group.
‘‘(3) Upon request of the Chairman of the Subgroup,
other departments and agencies of the United States, in-
cluding elements of the intelligence community, the De-
partment of Treasury, the United States Customs Service,
and the Federal Bureau of Investigation, shall detail per-
sonnel to the Subgroup for the performance of duties on
a temporary basis.
‘‘(b) FUNCTIONS.—The Subgroup shall—
‘‘(1) serve as a forum for identifying and ex-
pressing the views of the constituent agencies with
respect to—
‘‘(A) the proliferation risks associated with
the export of nuclear dual-use items;
‘‘(B) possible international initiatives to
strengthen the global administration and en-
forcement of controls over the export of such
items; and
‘‘(C) recommendations to the President on
regulatory and legislative measures to improve
the efficiency or effectiveness of export controls
over such items, including the verification of
peaceful end-uses and the design and execution
of improved post-export verification measures;
‘‘(2) review applications for the export of nu-
clear dual-use items in accordance with sections
309(c) and 311;
‘‘(3) designate the items for inclusion on the
Nuclear Referral List established under section
311(a) and shall determine their description and
technical specifications;
‘‘(4) monitor and facilitate the interagency
process with respect to the nuclear export licensing
activities described in this Act or in the Atomic En-
ergy Act of 1954, and in regulations issued pursuant
to such Acts; and
‘‘(5) undertake investigations and make rec-
ommendations in accordance with section 201 of the
Nuclear Export Reorganization Act of 1993.
‘‘(c) ACCESS
TO
EXPORT
LICENSING INFORMA-
TION.—Notwithstanding any other provision of law—
‘‘(1) the members of the Subgroup shall have
full, timely, and equal access to information con-
tained in applications for the export from the United
States, or the reexport from any other country, of
any nuclear dual-use item;
‘‘(2) the Secretary of Commerce shall, upon re-
quest by any member of the Subgroup, provide that
member with information contained in applications
for licenses to export any other item from the Unit-
ed States, if that member requests such information
for purposes relating to the objectives of this Act;
and
‘‘(3) the Secretary of Commerce shall, within
six months after the issuance of a license to export
any nuclear dual-use item from the United States,
open to the public for examination and inspection all
nonproprietary data pertaining to such license, in-
cluding—
‘‘(A) the commodity description,
‘‘(B) the country destination,
‘‘(C) the end-use and end-user,
‘‘(D) the quantity,
‘‘(E) the date of approval, and
‘‘(F) the date and method of shipment,
if no names of persons or companies and no dollar
values of commodities in individual licenses are in-
cluded among this data.
‘‘(d) EXPORT CONTROL BULLETIN.—(1) The Chair-
man of the Subgroup shall, in consultation with the Sub-
group, establish and publish an export control bulletin on
issues relating to the proliferation of nuclear explosive de-
vices, including regulations, international agreements, and
other relevant developments that the Chairman determines
may be necessary for the purpose of informing exporters
and the general public about the risks of proliferation and
efforts to reduce or eliminate such risks.
‘‘(2) Information appearing in the bulletin shall con-
stitute one, but not an exclusive, basis for satisfaction of
the criterion of ‘requisite knowledge’ in section 401(a) of
the Nuclear Export Reorganization Act of 1993 and in
section 601(a) of the Federal Deposit Insurance Corpora-
tion Improvement Act of 1991, and the criterion of ‘knows
or has reason to know’ in section 311(b)(3) of this Act.
‘‘SEC. 311. LICENSING PROCESS.
‘‘(a) CONTROLLED ITEMS.—(1)(A) The President
shall establish and maintain a list of items, designated by
the Subgroup, whose export is controlled pursuant to sec-
tion 309(c). Such list may be known as the ‘Nuclear Re-
ferral List’.
‘‘(B) The President shall cause the Nuclear Referral
List and any modification thereof to be published in the
Federal Register.
‘‘(C) Except as otherwise provided under section
202(b) of the Nuclear Export Reorganization Act of 1993,
an individual validated license is required for the export
from the United States of any item on the Nuclear Refer-
ral List.
‘‘(2) For purposes of this section, any item that—
‘‘(A) is not on the Nuclear Referral List,
‘‘(B) requires a validated export license for na-
tional security reasons, and
‘‘(C) is intended for a nuclear-related end-use
or end-user,
shall be subject to the procedures established under this
title which are otherwise applicable to items on the Nu-
clear Referral List.
‘‘(3)(A) An individual validated license is required for
an export to any destination of any technical data or com-
modity where the exporter knows or has reason to know
that the data or commodity will be used directly or indi-
rectly in any of the following activities, whether or not the
item is specifically designed or modified for such activities:
‘‘(i) Designing, developing, fabricating, or test-
ing any nuclear explosive device.
‘‘(ii) Designing, constructing, fabricating, or op-
erating any of the following facilities, or components
for such facilities:
‘‘(I) Facilities for the chemical processing
of irradiated special nuclear or source material.
‘‘(II) Facilities for the production of heavy
water.
‘‘(III) Facilities for the separation of iso-
topes of source and special nuclear material.
‘‘(IV) Facilities for the fabrication of nu-
clear reactor fuel containing plutonium or high-
ly enriched uranium.
‘‘(V) Unsafeguarded nuclear fuel cycle fa-
cilities.
‘‘(B) An item is used indirectly in an activity de-
scribed in subparagraph (A)—
‘‘(i) if any United States agency notifies an ex-
porter of the risk of any such use; or
‘‘(ii) the item would materially assist the per-
formance of any such activity.
‘‘(b) AUTHORITY
OF
THE SECRETARY
OF COM-
MERCE.—Except as otherwise provided in this section, the
Secretary of Commerce shall be responsible for—
‘‘(1) processing all applications for validated li-
censes for the export of all nuclear dual-use items
requiring such a license before the export from the
United States or the reexport from any other coun-
try of any such items; and
‘‘(2) record keeping with respect to the ap-
proval or denial of such licenses or authorizations.
‘‘(c) LICENSE
APPROVALS
AND
DENIALS.—(1)
Whenever the Secretary of Commerce receives an applica-
tion for a validated license for the export from the United
States of any nuclear dual-use item, the Secretary shall
submit the application to the Subgroup for review as to
whether—
‘‘(A) approval of such export would be contrary
to the objective of averting the proliferation of nu-
clear explosive devices; or
‘‘(B) the proposed export would pose an unac-
ceptable risk of diversion to a nuclear explosive ac-
tivity or to an unsafeguarded nuclear fuel cycle.
‘‘(2) The Secretary shall issue no license for the ex-
port of any nuclear dual-use item without the concurrence
of all members of the Subgroup that each of the review
criteria of paragraph (1) has been fully satisfied.
‘‘(3) In performing the reviews required by paragraph
(1), the members of the Subgroup shall include the follow-
ing factors among the considerations used to determine
what action should be taken on individual applications:
‘‘(A) The stated end-use of the commodity or
technical data.
‘‘(B) The significance for nuclear purposes of
the particular commodity or technical data.
‘‘(C) The availability of the commodity or tech-
nical data from non-United States sources.
‘‘(D) The types of assurances or guarantees
against use for nuclear explosive purposes or pro-
liferation given in the particular case.
‘‘(E) The non-proliferation credentials of the
importing country concerned, based on consideration
of factors such as—
‘‘(i) a country’s status as a party to the
Treaty on the Non-Proliferation of Nuclear
Weapons or the Treaty for the Prohibition of
Nuclear Weapons in Latin America;
‘‘(ii) whether the country has all its nu-
clear activities under International Atomic En-
‘‘(d) PROCEDURES AND APPEALS.—(1) Applications
for the export of nuclear dual-use items shall be made to
the Department of Commerce.
‘‘(2)(A) Upon receipt of any such application, the
Secretary of Commerce shall promptly refer the applica-
tion to the Subgroup.
‘‘(B) Not later than 90 days after receipt of an appli-
cation from the Secretary, the Subgroup shall complete
its review of that application in accordance with subsection
(c)(1) and shall report to the Secretary its determination
regarding the application of that subsection.
‘‘(3) If the Subgroup has not taken action on an ap-
plication by 90 days after receipt of that application, the
applicant may file a petition with the Secretary of Com-
merce requesting compliance with the requirements of this
section. Whenever such a petition is filed, the Secretary
shall take immediate steps to correct the situation giving
rise to the petition and shall immediately notify the appli-
cant of such steps.
‘‘(4) If, within 20 days after a petition is filed under
paragraph (3), the processing of the application does not
meet the requirements of this section, or the application
meets such requirements but the Secretary has not so no-
tified the applicant, then the applicant may bring an ac-
tion in an appropriate United States district court for a
restraining order, a temporary or permanent injunction,
or other appropriate relief, to require compliance with the
requirements of this section. The United States district
courts shall have jurisdiction to provide such relief, as ap-
propriate.
‘‘(5)(A)(i) Any constituent agency of the Subgroup
may appeal the denial of a license under this section to
the President and, if the President determines that the
license should be approved, the President shall direct the
Secretary of Commerce to issue such license.
‘‘(ii) The Secretary of Commerce shall report to the
Congress on data from such licenses in accordance with
section 602(c) of the Nuclear Non-Proliferation Act of
1978.
‘‘(B) The procedures of this paragraph shall be the
exclusive means of appeal for denials of licenses issued
under this section.
‘‘(C) Documentation describing and supporting the
agency’s position shall be submitted to the President as
part of any appeal.
‘‘(D) The President shall prescribe such regulations
as may be necessary to carry out this paragraph.’’.
SEC. 103. NON-NUCLEAR ENERGY RESOURCES.
Title V of the Nuclear Non-Proliferation Act of 1978
is amended—
(1) in section 501, by inserting ‘‘(a)’’ imme-
diately after ‘‘SEC. 501.’’;
(2) by adding at the end of section 501 the fol-
lowing:
‘‘(b)(1) The Congress declares that it is both in the
national security and economic interests of the United
States to promote the development in the United States
of a domestic industry capable of competing on inter-
national markets for the sale of energy technologies capa-
ble of achieving the objectives of section 501(a).
‘‘(2) The Congress urges the President to pursue all
appropriate means to encourage the development of such
an industry in the United States and otherwise to assist
developing countries to acquire such technologies.’’; and
(3) by adding at the end of the title the follow-
ing new section:
‘‘SEC. 504. REVIEW OF RESEARCH AND DEVELOP-
MENT.—Not later than 6 months after the date of enact-
ment of the Nuclear Export Reorganization Act of 1993,
the President shall undertake a review of all federally
funded research and development consistent with the ob-
jectives of section 501 and shall report to the Congress
on the adequacy of such activities to achieve such objec-
tives.’’.
TITLE II—INITIATIVES TO
STRENGTHEN COMPLIANCE
SEC. 201. FAIR MARKET INITIATIVE.
(a) PETITION
FOR INVESTIGATION.—Any United
States person that finds that a foreign person has, on or
after the date of enactment of this Act, engaged in an
activity outside the United States that is inconsistent with
the guidelines adopted by the United States and other
member countries of the Nuclear Suppliers Group with re-
spect to exports of nuclear dual-use items, or successor
guidelines adopted by such countries, may petition the
Subgroup on Nuclear Export Coordination to begin an in-
vestigation of such activities.
(b) DETERMINATION
BY SUBGROUP.—Within 30
days of the date of receipt of any such petition, the Sub-
group shall determine whether to undertake an investiga-
tion.
(c) RECOMMENDATION REGARDING SANCTIONS.—If
the Subgroup undertakes an investigation and determines
that the claims of the petitioner are sustained by available
evidence, the Chairman of the Subgroup shall transmit a
determination to that effect to the President, together
with the specific recommendation of the Subgroup as to
the imposition of the appropriate sanctions under title IV
of this Act or under the amendments made by that title.
(d) PUBLICATION IN THE FEDERAL REGISTER.—If
the President does not disapprove such determination
within a period of 30 days after receipt of such determina-
tion, the Chairman shall publish such determination in the
Federal Register and the sanctions shall take effect.
SEC. 202. MEASURES TO IMPROVE THE LICENSING PROC-
ESS.
(a) GUIDELINES FOR VOLUNTARY CODES OF CON-
DUCT.—(1) Within 6 months after the date of enactment
of this Act, the Subgroup shall develop guidelines to serve
as a basis for the adoption of voluntary codes of conduct
by companies that engage in exports of nuclear dual-use
items.
(2) The Chairman shall publish in the Federal Reg-
ister such guidelines and the names of all companies that
have agreed to adopt such codes of conduct.
(b) REVIEW OF TYPES OF LICENSES.—(1) The Sub-
group shall undertake a comprehensive review of the cir-
cumstances under which certain nuclear dual-use goods
could be exported under licenses other than an individual
validated license, without jeopardizing the national secu-
rity, national interest, or nonproliferation objectives of the
United States.
(2) The Secretary of Commerce may, with the con-
currence of the Subgroup, issue any such license identified
in paragraph (1).
(3) The Secretary of Commerce shall report to the
Congress on data from such licenses in accordance with
section 602(c) of the Nuclear Non-Proliferation Act of
1978.
(c) ADVISORY OPINIONS.—(1) Upon the request of
any person, the Subgroup may, after appropriate consulta-
tion, issue an advisory opinion in writing to that person
as to whether a proposed activity by that person would
subject that person to sanctions under existing nuclear ex-
port control laws.
(2) Issuance of an advisory opinion under paragraph
(1) shall not exempt any person from compliance with the
requirements of this Act.
(3) For purposes of this subsection, the term ‘‘appro-
priate consultation’’ means consultation by the Subgroup
with the Secretary of State, the Secretary of Defense, the
Director of the Arms Control and Disarmament Agency,
and the heads of such other Federal agencies as the Sub-
group may determine are necessary.
(d) PROCEDURES TO EXPEDITE LICENSE APPROV-
ALS.—The Subgroup may develop and implement proce-
dures to expedite the approvals of licenses for nuclear
dual-use items to be exported to countries that the Sub-
group has determined are not engaged, and are unlikely
to become engaged, in promoting, directly or indirectly,
the proliferation of nuclear explosive devices if no such
procedures would eliminate the fundamental requirement
of licensing of goods or technology that are controlled be-
cause of their association with the development, acquisi-
tion, or use of nuclear explosive devices.
(e) PROCEDURES TO EXPEDITE LICENSING DECI-
SIONS.—Within 12 months after the date of enactment of
this Act, the Secretary of Commerce, in consultation with
the members of the Committee, shall develop procedures
to ensure that applicants for validated licenses for the ex-
port of nuclear dual-use items will receive notice of ap-
proval or denial of any such license not later than 60 days
after submission of an application.
TITLE 
III—AMENDMENTS 
TO
THE ATOMIC ENERGY ACT OF
1954
SEC. 301. SUBSEQUENT ARRANGEMENTS.
Section 131 of the Atomic Energy Act of 1954 (42
U.S.C. 2160) is amended—
(1) by inserting ‘‘and the Secretary of Defense’’
after ‘‘concurrence of the Secretary of State’’ in sub-
section a.(1);
(2) by striking all after ‘‘and shall consult
with’’ through the colon and inserting ‘‘the Director
and the Commission:’’;
(3) in subsection a.(2), by striking ‘‘may’’ in
the first sentence and inserting ‘‘shall’’;
(4) in subsection b.(1), by inserting after ‘‘such
arrangement’’ the following ‘‘, including documenta-
tion of the technical basis for the Secretary’s judg-
ment that such arrangement will ensure timely
warning to the United States of any diversion well
in advance of the time at which the non-nuclear-
weapon state could transform the diverted material
into a nuclear explosive device,’’; and
(5) in subsection d., by striking all after
‘‘States,’’ and inserting in lieu thereof the following:
‘‘and nothing in this section is intended to promote
the reprocessing of spent fuel owned by any nation
which lacks a reasonable economic justification for
such reprocessing’’.
SEC. 302. COOPERATION WITH OTHER NATIONS.
Section 123 a. of the Atomic Energy Act of 1954 (42
U.S.C. 2153) is amended—
(1) by inserting ‘‘and the Secretary of Defense’’ after
‘‘concurrence of the Secretary of Energy’’; and
(2) by striking ‘‘jointly by the Secretary of State and
the Secretary of Energy’’ and inserting ‘‘jointly by the
Secretary of State, the Secretary of Energy, and the Sec-
retary of Defense’’.
SEC. 303. PROHIBITION ON FOREIGN PRODUCTION OF SPE-
CIAL NUCLEAR MATERIAL.
Section 57 b. of the Atomic Energy Act of 1954 (42
U.S.C. 2077) is amended—
(1) by inserting ‘‘and the Department of De-
fense’’ after ‘‘concurrence of the Department of
State’’; and
(2) by striking ‘‘the Department of Commerce,
and the Department of Defense’’ and inserting ‘‘and
the Department of Commerce’’.
SEC. 304. PROHIBITION ON NUCLEAR EXPORTS.
Section 129 of the Atomic Energy Act of 1954 (42
U.S.C. 2158) is amended by inserting after ‘‘No nuclear
materials and equipment’’ the following: ‘‘including any
items whose export from the United States is controlled
pursuant to the authorities of this Act, the Nuclear Non-
Proliferation Act of 1978, or the Nuclear Export Reorga-
nization Act of 1993,’’.
SEC. 305. CONTROL OF COMPONENT PARTS.
Section 109 b. of the Atomic Energy Act of 1954 (42
U.S.C. 2139(b)) is amended by inserting ‘‘Defense,’’ after
‘‘State,’’.
TITLE IV—SANCTIONS FOR
NUCLEAR PROLIFERATION
SEC. 401. IMPOSITION OF SANCTIONS.
(a) DETERMINATION BY THE PRESIDENT.—
(1) IN GENERAL.—Except as provided in sub-
section (b)(2), the President shall impose the appli-
cable sanctions described in subsection (c) if the
President determines that a foreign person or a
United States person, on or after the date of enact-
ment of this Act, has materially and with requisite
knowledge contributed—
(A) through the export from the United
States of any goods or technology that are sub-
ject to the jurisdiction of the United States, or
(B) through the export from any other
country of any goods or technology that would
be, if they were exported from the United
States, subject to the jurisdiction of the United
States,
to the efforts by any individual, group, or non-nu-
clear-weapon state to acquire unsafeguarded special
nuclear material or to use, develop, produce, stock-
pile, or otherwise acquire any nuclear explosive de-
vice, whether or not the goods or technology is spe-
cifically designed or modified for that purpose.
(2) PERSONS AGAINST WHICH SANCTIONS ARE
TO BE IMPOSED.—Sanctions shall be imposed pursu-
ant to paragraph (1) on—
(A) the foreign person or United States
person with respect to which the President
makes the determination described in that para-
graph;
(B) any successor entity to that foreign
person or United States person;
(C) any foreign person or United States
person that is a parent or subsidiary of that
person if that parent or subsidiary materially
and with requisite knowledge assisted in the ac-
tivities which were the basis of that determina-
tion; and
(D) any foreign person or United States
person that is an affiliate of that person if that
affiliate materially and with requisite knowledge
assisted in the activities which were the basis of
that determination and if that affiliate is con-
trolled in fact by that foreign person.
(3) OTHER SANCTIONS AVAILABLE.—The sanc-
tions which are required to be imposed for activities
described in this subsection are in addition to any
other sanction which may be imposed for the same
activities under any other provision of law.
(4) DEFINITION.—For purposes of this sub-
section, the term ‘‘requisite knowledge’’ means situa-
tions in which a person ‘‘knows’’, as ‘‘knowing’’ is
defined in section 104 of the Foreign Corrupt Prac-
tices Act of 1977 (15 U.S.C. 78dd–2), and includes
situations in which a person has reason to know.
(b) CONSULTATION WITH AND ACTIONS BY FOREIGN
GOVERNMENT OF JURISDICTION.—
(1) CONSULTATIONS.—If the President makes a
determination described in subsection (a)(1) with re-
spect to a foreign person, the 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
that government, the President may delay imposition
of sanctions pursuant to this section for up to 90
days. Following these consultations, the President
shall impose sanctions unless the President deter-
mines and certifies to the Congress that that govern-
ment has taken specific and effective actions, includ-
ing appropriate penalties, to terminate the involve-
ment of the foreign person in the activities described
in subsection (a)(1). The President may delay the
imposition of sanctions for up to an additional 90
days if the President determines and certifies to the
Congress that that government is in the process of
taking the actions described in the preceding sen-
tence.
(3) REPORT TO CONGRESS.—Not later than 90
days after making a determination under subsection
(a)(1), the President shall submit to the Committee
on Foreign Relations and the Committee on Govern-
mental Affairs of the Senate and the Committee on
Foreign Affairs of the House of Representatives a
report on the status of consultations with the appro-
priate government under this subsection, and the
basis for any determination under paragraph (2) of
this subsection that such government has taken spe-
cific corrective actions.
(c) SANCTIONS.—
(1) DESCRIPTION
OF
SANCTIONS.—The sanc-
tions to be imposed pursuant to subsection (a)(1)
are, except as provided in paragraph (2) of this sub-
section, that the United States Government shall not
procure, or enter into any contract for the procure-
ment of, any goods or services from any person de-
scribed in subsection (a)(2).
(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 require-
ments essential to the national security of
the United States;
(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
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
coproduction agreements;
(B) to products or services provided under
contracts entered into before the date on which
the President publishes his intention to impose
the sanctions;
(C) to—
(i) spare parts which are essential to
United States products or production;
(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.
(d) ADVISORY OPINIONS.—(1) Upon the request of
any person, the Secretary of State may, after appropriate
consultation, issue an advisory opinion in writing to that
person as to whether a proposed activity by that person
would subject that person to sanctions under this section.
(2) Issuance of an advisory opinion under paragraph
(1) shall not exempt any person from compliance with the
requirements of this Act.
(3) For purposes of this subsection, the term ‘‘appro-
priate consultation’’ means consultation by the Secretary
of State with the Secretary of Defense, the Director of
the Arms Control and Disarmament Agency, and the
heads of such other Federal agencies as the Secretary of
State may determine are necessary.
(e) 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—
(1) reliable information indicates that the for-
eign person or United States person with respect to
which the determination was made under subsection
(a)(1) has ceased to aid or abet any individual,
group, or non-nuclear-weapon state in its efforts to
acquire unsafeguarded special nuclear material or
any nuclear explosive device, as described in that
subsection; and
(2) the President has received reliable assur-
ances from the foreign person or United States per-
son, as the case may be, that such person will not,
in the future, aid or abet any individual, group, or
non-nuclear-weapon state in its efforts to acquire
unsafeguarded special nuclear material or any nu-
clear explosive device, as described in subsection
(a)(1).
(f) 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 the Con-
gress that the continued imposition of the sanction
would have a serious adverse effect on vital United
States interests.
(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-
tionale and circumstances which led the President to
exercise the waiver authority.
(g) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘foreign person’’ means—
(A) an individual who is not a citizen of
the United States or an alien admitted for per-
manent residence to the United States; or
(B) a corporation, partnership, or other
nongovernment entity which is created or orga-
nized under the laws of a foreign country or
which has its principal place of business outside
the United States; and
(2) the term ‘‘United States person’’ means—
(A) an individual who is a citizen of the
United States or an alien admitted for perma-
nent residence to the United States; or
(B) a corporation, partnership, or other
entity which is not a foreign person.
SEC. 402. ELIGIBILITY FOR ASSISTANCE.
(a) AMENDMENTS TO THE ARMS EXPORT CONTROL
ACT.—(1) Section 3 of the Arms Export Control Act (22
U.S.C. 2753) is amended by adding at the end the follow-
ing new subsection:
‘‘(f) No sales or leases shall be made under this Act
to any country that the President has determined is in
material breach of its commitments to the United States
under international treaties or agreements concerning the
nonproliferation of nuclear explosive devices (as defined in
section 3(9) of the Nuclear Export Reorganization Act of
1993) and unsafeguarded special nuclear material (as de-
fined in section 3(13) of that Act).’’.
(2) Section 40 of such Act (22 U.S.C. 2780) is
amended—
(A) in subsection (d), by adding at the end the
following new sentence: ‘‘For purposes of this sub-
section, such acts shall include any activity that the
Secretary determines willfully aids or abets the
international proliferation of nuclear explosive de-
vices to an individual or group or willfully aids or
abets 
an 
individual 
or 
group 
in 
acquiring
unsafeguarded special nuclear material.’’; and
(B) in subsection (l)—
(i) in paragraph (2), by striking ‘‘and’’
after the semicolon;
(ii) in paragraph (3), by striking the pe-
riod at the end and inserting a semicolon; and
(iii) by adding at the end the following:
‘‘(4) the term ‘nuclear explosive device’ has the
meaning given that term in section 3(9) of the Nu-
clear Export Reorganization Act of 1993; and
‘‘(5) the term ‘unsafeguarded special nuclear
material’ has the meaning given that term in section
3(13) of the Nuclear Export Reorganization Act of
1993.’’.
(b) AMENDMENTS
TO
THE FOREIGN ASSISTANCE
ACT OF 1961.—
(1) Section 670(a)(2) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2429a(a)(2)) is amended in
the first sentence—
(A) by inserting ‘‘in any fiscal year’’ after
‘‘President’’; and
(B) by inserting ‘‘during that fiscal year’’
after ‘‘certifies in writing’’.
(2) Notwithstanding any other provision of law,
Presidential Determination No. 82–7 of February
10, 1982, shall have no force or effect with respect
to any grounds for the prohibition of assistance
under section 670(a)(1) of such Act arising on or
after the date of enactment of this Act.
(3) Section 620E(d) of the Foreign Assistance
Act of 1961 (22 U.S.C. 2375(d)) is amended to read
as follows:
‘‘(d) The President may waive the prohibitions of sec-
tion 669 of this Act with respect to any grounds for the
prohibition of assistance under that section arising before
the date of enactment of the Nuclear Export Reorganiza-
tion Act of 1993 to provide assistance to Pakistan if he
determines that to do so is in the national interest of the
United States.’’.
SEC. 403. ROLE OF INTERNATIONAL FINANCIAL INSTITU-
TIONS.
(a) IN GENERAL.—The Secretary of the Treasury
shall instruct the United States executive director to each
of the international financial institutions described in sec-
tion 701(a) of the International Financial Institutions Act
(22 U.S.C. 262d(a)) to use the voice and vote of the Unit-
ed States to oppose any direct or indirect use of the insti-
tution’s funds to promote the acquisition of unsafeguarded
special nuclear material or the development, stockpiling,
or use of any nuclear explosive device by any non-nuclear-
weapon state.
(b) DUTIES OF UNITED STATES EXECUTIVE DIREC-
TORS.—Section 701(b)(3) of the International Financial
Institutions Act (22 U.S.C. 262d(b)(3)) is amended to
read as follows:
‘‘(3) whether the recipient country—
‘‘(A) has been found by the President to be
seeking to acquire unsafeguarded special nu-
clear material (as defined in section 3(13) of
the Nuclear Export Reorganization Act of
1993) or a nuclear explosive device (as defined
in section 3(9) of that Act);
‘‘(B) is not a State Party to the Treaty on
Non-Proliferation of Nuclear Weapons; or
‘‘(C) has detonated a nuclear explosive de-
vice; and’’.
SEC. 404. AMENDMENT TO THE INTERNATIONAL EMER-
GENCY ECONOMIC POWERS ACT.
Section 202 of the International Emergency Eco-
nomic Powers Act (50 U.S.C. 1701) is amended by adding
at the end thereof the following new subsection:
‘‘(c) For the purpose of this section, the term ‘any
unusual and extraordinary threat’ includes any inter-
national event that the President determines may involve
the detonation of a nuclear explosive device (as defined
in section 3(9) of the Nuclear Export Reorganization Act
of 1993) or an action or activity that substantially contrib-
utes to the likelihood of the proliferation or detonation of
such devices, including the acquisition by a non-nuclear-
weapon state of unsafeguarded special nuclear material
(as defined in section 3(13) of that Act).’’.
SEC. 405. AMENDMENT TO THE FEDERAL DEPOSIT INSUR-
ANCE CORPORATION IMPROVEMENT ACT OF
1991.
The Federal Deposit Insurance Corporation Improve-
ment Act of 1991 is amended by adding at the end the
following new title:
‘‘TITLE VI—SANCTIONS ON
FINANCIAL INSTITUTIONS
‘‘SEC. 601. PRESIDENTIAL DETERMINATION.
‘‘(a) IN GENERAL.—The prohibitions in section 603
shall be imposed on a financial institution if the President
determines that such financial institution, on or after the
date which is 60 days after the date of enactment of this
section, has materially and with requisite knowledge con-
tributed, through provision of financing or other services,
to the efforts by any individual, group, or non-nuclear-
weapon state to acquire unsafeguarded special nuclear ma-
terial or to use, develop, produce, stockpile, or otherwise
acquire any nuclear explosive device, as these standards
and terms would be applied under section 401(a) of the
Nuclear Export Reorganization Act of 1993.
‘‘(b) PRESIDENTIAL ORDER.—Whenever the Presi-
dent makes a determination under subsection (a) with re-
spect to a financial institution, the President shall issue
an order specifying a date within 180 days after such de-
termination on which the prohibitions in section 603 shall
begin to apply to such institution.
‘‘SEC. 602. ADDITIONAL ENTITIES AGAINST WHICH SANC-
TIONS ARE TO BE IMPOSED.
‘‘The prohibitions described in section 603 shall also
be imposed, pursuant to section 601, on—
mit the continuation of any prior designation
of, such financial institution or any such entity
as a primary dealer in United States Govern-
ment debt instruments.
‘‘(B) GOVERNMENT FUNDS.—Such finan-
cial institution or any such entity shall not
serve as agent of the United States Government
or serve as repository for United States Govern-
ment funds.
‘‘(2) RESTRICTIONS ON OPERATIONS.—Such fi-
nancial institution or any such entity shall not, di-
rectly or indirectly—
‘‘(A) commence any line of business in the
United States in which it was not engaged as
of the date of the determination; or
‘‘(B) conduct business from any location in
the United States at which it did not conduct
business as of the date of the determination.
‘‘SEC. 604. CONDITIONS AND TERMINATION OF SANCTIONS.
‘‘The same requirements for consultation with the
foreign government of jurisdiction, where appropriate, and
for termination of sanctions shall apply under this title
as are provided in subsections (b) and (e), respectively,
of section 401 of the Nuclear Export Reorganization Act
of 1993.
‘‘SEC. 605. WAIVER.
‘‘The President may waive the imposition of any pro-
hibition imposed on any financial institution or other en-
tity pursuant to section 601 or 602 if the President deter-
mines and certifies to the Congress that the imposition
of such prohibition would have a serious adverse effect on
the safety and soundness of the domestic or international
financial system or on domestic or international payments
systems.
‘‘SEC. 606. DEFINITIONS.
‘‘As used in this title—
‘‘(1) the term ‘financial institution’ includes—
‘‘(A) a depository institution, including a
branch or agency of a foreign bank;
‘‘(B) a securities firm, including a broker
or dealer;
‘‘(C) an insurance company, including an
agency or underwriter;
‘‘(D) any other company that provides fi-
nancial services; or
‘‘(E) any subsidiary of any entity described
in subparagraph (A), (B), (C), or (D);
‘‘(2) the term ‘requisite knowledge’ means situ-
ations in which a person ‘knows’, as ‘knowing’ is de-
fined in section 104 of the Foreign Corrupt Prac-
tices Act of 1977 (15 U.S.C. 78dd–2), and includes
situations in which a person has reason to know;
and
‘‘(3) the terms ‘foreign person’ and ‘United
States person’ have the meanings given those terms
in section 401(g) of the Nuclear Export Reorganiza-
tion Act of 1993.’’.
SEC. 406. EXPORT-IMPORT BANK OF THE UNITED STATES.
Section 2(b)(4) of the Export-Import Bank Act of
1945 (12 U.S.C. 635(b)(4)) is amended in the first sen-
tence by inserting after ‘‘device’’ the following: ‘‘(as de-
fined in section 3(9) of the Nuclear Export Reorganization
Act of 1993), or that any country has willfully aided or
abetted any non-nuclear-weapon state (as defined in sec-
tion 3(7) of that Act) to acquire any such nuclear explo-
sive device or to acquire unsafeguarded special nuclear
material (as defined in section 3(13) of that Act).’’.
SEC. 407. ADDITIONAL AMENDMENTS TO THE FOREIGN AS-
SISTANCE ACT OF 1961.
(a) ADDITIONAL SANCTIONS.—Section 670 of the
Foreign Assistance Act of 1961 (22 U.S.C. 2429a(b)) is
amended—
(1) in subsection (b), by redesignating para-
graphs (2), (3), and (4) as paragraphs (4), (5), and
(6), respectively; and
(2) by amending subsection (b)(1) to read as
follows:
‘‘(b)(1) Except as provided in paragraphs (4), (5),
and (6), in the event that the President determines that
any country, after the date of enactment of the Nuclear
Export Reorganization Act of 1993—
‘‘(A) transfers to a non-nuclear-weapon state a
nuclear explosive device,
‘‘(B) is a non-nuclear-weapon state and ei-
ther—
‘‘(i) receives a nuclear explosive device, or
‘‘(ii) detonates a nuclear explosive device,
‘‘(C) transfers to a non-nuclear-weapon state
any design information or component which is deter-
mined by the President to be important to, and
known by the transferring country to be intended by
the recipient state for use in, the development or
manufacture of any nuclear explosive device, or
‘‘(D) is a non-nuclear-weapon state and has
sought and received any design information or com-
ponent which is determined by the President to be
important to, and intended by the recipient state for
use in, the development or manufacture of any nu-
clear explosive device,
then the President shall forthwith report in writing his
determination to the Congress and shall forthwith impose
the sanctions described in paragraph (2) against that
country.
‘‘(2) The sanctions referred to in paragraph (1) are
as follows:
‘‘(A) The United States Government shall ter-
minate assistance to that country under this Act, ex-
cept for humanitarian assistance or food or other
agricultural commodities.
‘‘(B) The United States Government shall ter-
minate—
‘‘(i) sales to that country under the Arms
Export Control Act of any defense articles, de-
fense services, or design and construction serv-
ices, and
‘‘(ii) licenses for the export to that country
of any item on the United States Munitions
List.
‘‘(C) The United States Government shall ter-
minate all foreign military financing for that country
under the Arms Export Control Act.
‘‘(D) The United States Government shall deny
to that country any credit, credit guarantees, or
other financial assistance by any department, agen-
cy, or instrumentality of the United States Govern-
ment, except that the sanction of this subparagraph
shall not apply—
‘‘(i) to any transaction subject to the re-
porting requirements of title V of the National
Security Act of 1947 (relating to congressional
oversight of intelligence activities), or
‘‘(ii) to humanitarian assistance.
‘‘(E) The United States Government shall op-
pose, in accordance with section 701 of the Inter-
national Financial Institutions Act (22 U.S.C.
262d), the extension of any loan or financial or tech-
nical assistance to that country by any international
financial institution.
‘‘(F) The United States Government shall pro-
hibit any United States bank from making any loan
or providing any credit to the government of that
country, except for loans or credits for the purpose
of purchasing food or other agricultural commod-
ities.
‘‘(G) The President shall prohibit exports to
that country of all goods and technology (excluding
food and other agricultural commodities), except
that such prohibition shall not apply to any trans-
action subject to the reporting requirements of title
V of the National Security Act of 1947 (relating to
congressional oversight of intelligence activities).
‘‘(3) As used in this subsection—
‘‘(A) the term ‘design information’ means infor-
mation that relates to the design of a nuclear explo-
sive device and that is not available to the public;
and
‘‘(B) the term ‘component’ means a component
of a nuclear explosive device.’’.
(b) DEFINITION OF NUCLEAR EXPLOSIVE DEVICE.—
Section 644 of the Foreign Assistance Act of 1961 (22
U.S.C. 2403) is amended by adding at the end the follow-
ing:
‘‘(q) ‘Nuclear explosive device’ has the meaning given
that term in section 3(9) of the Nuclear Export Reorga-
nization Act of 1993.’’.
(c) CONFORMING AMENDMENTS.—Section 670(b) of
the Foreign Assistance Act of 1961 (22 U.S.C. 2429a(b))
is further amended—
(1) in paragraph (4) (as redesignated by sub-
section (a)(1) of this section)—
(A) in subparagraph (A)—
(i) by striking ‘‘furnish assistance
which would otherwise be prohibited under
paragraph (1)’’ and inserting ‘‘delay the
imposition of sanctions which would other-
wise be required under paragraph (1)(A)
or (1)(B)’’;
(ii) by striking ‘‘, before furnishing
such assistance, the President’’ and insert-
ing ‘‘the President first’’; and
(iii) by striking ‘‘termination of assist-
ance to’’ and inserting ‘‘imposition of sanc-
tions on’’;
(B) in subparagraph (B) by striking ‘‘(3)’’
and inserting ‘‘(5)’’; and
(C) in subparagraph (E)—
(i) by striking ‘‘(b)(2)’’ and inserting
‘‘(b)(4)’’; and
(ii) by striking ‘‘(b)(3)’’ and inserting
‘‘(b)(5)’’;
(2) in paragraph (5) (as so redesignated)—
(A) by striking ‘‘(2)’’ and inserting ‘‘(4)’’;
(B) by striking ‘‘furnish assistance which
would otherwise be prohibited under paragraph
(1)’’ and inserting ‘‘waive any sanction which
would otherwise be required under paragraph
(1)(A) or (1)(B)’’; and
(C) by striking ‘‘termination of such assist-
ance’’ and inserting ‘‘imposition of such sanc-
tion’’;
(3) by redesignating paragraph (6) (as so re-
designated) as paragraph (7); and
(4) by inserting after paragraph (5) (as so re-
designated) the following:
‘‘(6) Notwithstanding any other provision of
law, the sanctions which are required to be imposed
against a country under paragraph (1)(C) or (1)(D)
shall not apply if the President determines and cer-
tifies in writing to the Committee on Foreign Rela-
tions and the Committee on Governmental Affairs of
the Senate and the Committee on Foreign Affairs of
the House of Representatives that the application of
such sanctions against such country would have a
serious adverse effect on vital United States inter-
ests. The President shall transmit with such certifi-
cation a statement setting forth the specific reasons
therefor.’’.
SEC. 408. REWARD.
Section 36(a) of the State Department Basic Au-
thorities Act of 1956 (22 U.S.C. 2708(a)) is amended—
(1) by redesignating paragraphs (1) through
(3) as subparagraphs (A) through (C), respectively;
(2) by inserting ‘‘(1)’’ after ‘‘(a)’’; and
(3) by adding at the end the following:
‘‘(2) For purposes of this subsection, the term
‘act of international terrorism’ includes any act sub-
stantially 
contributing 
to 
the 
acquisition 
of
unsafeguarded special nuclear material (as defined
in section 3(13) of the Nuclear Export Reorganiza-
tion Act of 1993) or any nuclear explosive device (as
defined in section 3(9) of that Act) by an individual
or group.’’.
SEC. 409. REPORTS.
(a) CONTENT OF ACDA ANNUAL REPORT.—Section
52 of the Arms Control and Disarmament Act (22 U.S.C.
2592) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘The Congress’’;
(2) by striking ‘‘and’’ at the end of paragraph
(4);
(3) by striking the period at the end of para-
graph (5) and inserting ‘‘; and’’;
(4) by adding after paragraph (5) the following
new paragraph:
‘‘(6) a section of the report shall deal with any
material noncompliance by foreign governments with
their commitments to the United States with respect
to the prevention of the spread of nuclear explosive
devices (as defined in section 3(9) of the Nuclear
Export Reorganization Act of 1993) by non-nuclear-
weapon states (as defined in section 3(7) of that
Act) 
or 
the 
acquisition 
by 
such 
states 
of
unsafeguarded special nuclear material (as defined
in section 3(13) of that Act), including—
‘‘(A) a net assessment of the aggregate
military significance of all such violations;
‘‘(B) a statement of the compliance policy
of the United States with respect to violations
of those commitments; and
‘‘(C) what actions, if any, the President
has taken or proposes to take to bring any na-
tion committing such a violation into compli-
ance with its commitments.’’; and
(5) by adding at the end the following new sub-
section:
‘‘(b) REPORTING CONSECUTIVE NONCOMPLIANCE.—
If the President in consecutive reports submitted to the
Congress under this section reports that any designated
nation is not in full compliance with its nonproliferation
commitments to the United States, then the President
shall include in the second such report an assessment of