178
(3) the President transmits to the committees 
referred to in subsection (b)—
(A) a justification for designating the waiv-
er as classified information; and 
(B) a description of—
(i) any discussions with the foreign 
person, concerning the activities that were 
the subject of the sanctions, that have been 
conducted by United States Government 
officials, or by officials of the government 
of the country that has jurisdiction over 
the foreign person or in which the foreign 
person conducted such activities; and 
(ii) any actions that the foreign per-
son, or the government of the country that 
has jurisdiction over the foreign person or 
in which the foreign person conducted the 
activities that were the subject of the sanc-
tions, has taken to prevent a recurrence of 
the same or similar activities. 
SEC. 742. STRENGTHENING UNITED STATES MISSILE PRO-
LIFERATION SANCTIONS ON FOREIGN PER-
SONS. 
(a) ARMS EXPORT CONTROL ACT.—Section 73(a)(2) 
of the Arms Export Control Act (22 U.S.C. 2797b(a)(2))
179
is amended by striking ‘‘2 years’’ each place it appears 
and inserting ‘‘4 years’’. 
(b) PUBLIC INFORMATION.—Section 73(e)(2) of the 
Arms Export Control Act (22 U.S.C. 2797b(e)(2)) is 
amended by adding at the end the following new sen-
tences: ‘‘Such report may be classified only to the extent 
necessary to protect intelligence sources and methods. If 
the report is so classified, the President shall make every 
effort to acquire sufficient alternative information that 
would allow a subsequent unclassified version of the report 
to be issued.’’. 
(c) EXPORT ADMINISTRATION ACT OF 1979.—Any 
sanction imposed on a foreign person under section 
11B(b)(1) of the Export Administration Act of 1979 (50 
U.S.C. App. 2410b(b)(1)), as continued in effect under 
the International Emergency Economic Powers Act, shall 
be in effect for a period of four years beginning on the 
date on which the sanction was imposed. 
(d) APPLICABILITY.—The amendments made by sub-
sections (a) and (b) and the provisions of subsection (c) 
shall apply to all sanctions imposed under section 73(a) 
of the Arms Export Control Act or section 11B(b)(1) of 
the Export Administration Act of 1979, as continued in 
effect under the International Emergency Economic Pow-
ers Act, by reason of acts giving rise to such sanctions
180
that were committed by foreign persons on or after Janu-
ary 1, 2004. 
SEC. 743. COMPREHENSIVE UNITED STATES MISSILE PRO-
LIFERATION SANCTIONS ON ALL RESPON-
SIBLE FOREIGN PERSONS. 
(a) ARMS EXPORT CONTROL ACT.—Section 73(a) of 
the Arms Export Control Act (22 U.S.C. 2797b(a)) is 
amended by adding at the end the following new para-
graph: 
‘‘(3)(A) Sanctions imposed upon a foreign person 
under paragraph (2) shall also be imposed on any govern-
mental entity that the President determines exercises ef-
fective control over, benefits from, or directly or indirectly 
facilitates the activities of that foreign person. 
‘‘(B) When a sanction is imposed on a foreign person 
under paragraph (2), the President may also impose that 
sanction on any other person or entity that the President 
has reason to believe has or may acquire prohibited items 
with the intent to transfer to that foreign person, or pro-
vide to that foreign person access to, such items. In this 
subparagraph, ‘prohibited items’ are items that may not 
be exported to that foreign person on account of the sanc-
tion imposed on that foreign person. 
‘‘(C) The President may also prohibit, for such period 
of time as the President may determine, any transaction
181
or dealing, by a United States person or within the United 
States, with any foreign person on whom sanctions have 
been imposed under this subsection. 
‘‘(D) The President shall report on an annual basis 
to the Committee on International Relations of the House 
of Representatives and the Committee on Foreign Rela-
tions of the Senate the identity of any foreign person that 
engages in any transaction or activity with a foreign per-
son on whom sanctions have been imposed under this sub-
section that either—
‘‘(i) would be the basis for imposing sanctions 
under subparagraph (B) but for which sanctions 
have not been imposed; or 
‘‘(ii) would be the basis for imposing sanctions 
under subparagraph (C) if the transaction or activity 
had been carried out by a United States person or 
by a person in the United States. 
Such report shall be unclassified to the maximum extent 
feasible, but may include a classified annex.’’. 
(b) DEFINITION OF PERSON.—Section 74(a)(8)(A) of 
the Arms Export Control Act (22 U.S.C. 2797c(a)(8)(A)) 
is amended to read as follows: 
‘‘(8)(A) The term ‘person’ means—
‘‘(i) a natural person;
182
‘‘(ii) a corporation, business associa-
tion, 
partnership, 
society, 
trust, 
transnational corporation, or transnational 
joint venture, any other nongovernmental 
entity, organization, or group, and any 
governmental entity; 
‘‘(iii) any subsidiary, subunit, or par-
ent entity of any business enterprise or 
other organization or entity listed in clause 
(ii); and 
‘‘(iv) any successor of any business 
enterprise or other organization or entity 
listed in clause (ii) or (iii); and’’. 
(c) EXPORT ADMINISTRATION ACT OF 1979.—
(1) SANCTIONS
IMPOSED
ON
GOVERNMENTAL 
ENTITIES.—Any sanction imposed on a foreign per-
son under section 11B(b)(1)(B) of the Export Ad-
ministration 
Act 
of 
1979 
(50 
U.S.C. 
App. 
2410b(b)(1)(B)), as continued in effect under the 
International Emergency Economic Powers Act (in 
this subsection referred to as a ‘‘dual use sanction’’), 
shall also be imposed on any governmental entity 
that the President determines exercises effective con-
trol over, benefits from, or directly or indirectly fa-
cilitates the activities of that foreign person.
183
(2) OTHER ENTITIES.—When a dual use sanc-
tion is imposed on a foreign person, the President 
may also impose that sanction on any other person 
or entity that the President has reason to believe 
has or may acquire prohibited items with the intent 
to transfer to that foreign person, or provide to that 
foreign person access to, such items. In this para-
graph, ‘‘prohibited items’’ are items that may not be 
exported to that foreign person on account of the 
dual use sanction imposed on that foreign person. 
(3) TRANSACTIONS BY THIRD PARTIES.—The 
President may also prohibit, for such period of time 
as he may determine, any transaction or dealing, by 
a United States person or within the United States, 
with any foreign person on whom dual use sanctions 
have been imposed. 
(4) REPORT.—The President shall submit on 
an annual basis to the Committee on International 
Relations of the House of Representatives and the 
Committee on Banking, Housing and Urban Affairs 
and the Committee on Foreign Relations of the Sen-
ate a report that contains the identity of any foreign 
person that engages in any transaction or activity 
with a foreign person on whom dual use sanctions 
have been imposed that either—
184
(A) would be the basis for imposing dual 
use sanctions under paragraph (2) but for 
which such sanctions have not been imposed; or 
(B) would be the basis for imposing dual 
use sanctions under paragraph (3) if the trans-
action or activity had been carried out by a 
United States person or by a person in the 
United States. 
Such report shall be unclassified to the maximum 
extent feasible, but may include a classified annex. 
(5) DEFINITIONS.—In this subsection: 
(A) 
MISSILE
EQUIPMENT
OR
TECH-
NOLOGY.—The term ‘‘missile equipment or 
technology’’ has the meaning given that term in 
section 11B(c) of the Export Administration 
Act of 1979 (50 U.S.C. App. 2410b(c)). 
(B) PERSON.—
(i) The term ‘‘person’’ means—
(I) a natural person; 
(II) a corporation, business asso-
ciation, partnership, society, trust, 
transnational 
corporation, 
or 
transnational joint venture, any other 
nongovernmental entity, organization,
185
or group, and any governmental enti-
ty; 
(III) any subsidiary, subunit, or 
parent entity of any business enter-
prise or other organization or entity 
listed in subclause (II); and 
(IV) any successor of any busi-
ness enterprise or other organization 
or entity listed in subclause (II) or 
(III). 
(ii) In the case of countries where it 
may be impossible to identify a specific 
governmental entity referred to in clause 
(i), the term ‘‘person’’ means—
(I) all activities of that govern-
ment relating to the development or 
production of any missile equipment 
or technology; and 
(II) all activities of that govern-
ment affecting the development or 
production of aircraft, electronics, and 
space systems or equipment. 
(C) UNITED STATES PERSON.—The term 
‘‘United States person’’ has the meaning given 
that term in section 16(2) of the Export Ad-
186
ministration Act of 1979 (50 U.S.C. App. 
2415(2)). 
(d) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) shall apply with respect to sanc-
tions imposed on or after January 1, 2004, on foreign per-
sons under section 73(a)(2) of the Arms Export Control 
Act, and the provisions of subsection (c) shall apply with 
respect to sanctions imposed on or after January 1, 2004, 
on foreign persons under section 11B(b)(1) of the Export 
Administration 
Act 
of 
1979 
(50 
U.S.C. 
App. 
2410b(b)(1)), as continued in effect under the Inter-
national Emergency Economic Powers Act. 
Subtitle F—Security Assistance 
and Related Provisions 
SEC. 751. AUTHORITY TO TRANSFER NAVAL VESSELS TO 
CERTAIN FOREIGN COUNTRIES. 
(a) AUTHORITY
TO TRANSFER
BY GRANT.—The 
President is authorized to transfer vessels to foreign coun-
tries on a grant basis under section 516 of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2321j), as follows: 
(1) GREECE.—To the Government of Greece, 
the OSPREY class minehunter coastal ship PELI-
CAN (MHC–53).
187
(2) EGYPT.—To the Government of Egypt, the 
OSPREY class minehunter coastal ships CAR-
DINAL (MHC–60) and RAVEN (MHC–61). 
(3) PAKISTAN.—To the Government of Paki-
stan, 
the 
SPRUANCE 
class 
destroyer 
ship 
FLETCHER (DD–992). 
(4) TURKEY.—To the Government of Turkey, 
the SPRUANCE class destroyer ship CUSHING 
(DD–985). 
(b) AUTHORITY TO TRANSFER BY SALE.—The Presi-
dent is authorized to transfer vessels to foreign countries 
on a sale basis under section 21 of the Arms Export Con-
trol Act (22 U.S.C. 2761), as follows: 
(1) INDIA.—To the Government of India, the 
AUSTIN class amphibious transport dock ship 
TRENTON (LPD–14). 
(2) GREECE.—To the Government of Greece, 
the OSPREY class minehunter coastal ship HERON 
(MHC–52). 
(3) TURKEY.—To the Government of Turkey, 
the SPRUANCE class destroyer ship O’BANNON 
(DD–987). 
(c) GRANTS NOT COUNTED IN ANNUAL TOTAL OF 
TRANSFERRED EXCESS DEFENSE ARTICLES.—The value 
of a vessel transferred to another country on a grant basis
188
pursuant to authority provided by subsection (a) shall not 
be counted against the aggregate value of excess defense 
articles transferred to countries in any fiscal year under 
section 516(g) of the Foreign Assistance Act of 1961 (22 
U.S.C. 2321j(g)). 
(d) COSTS OF TRANSFERS.—Any expense incurred by 
the United States in connection with a transfer authorized 
under subsection (a) or (b) shall be charged to the recipi-
ent. 
(e) REPAIR
AND
REFURBISHMENT
IN
UNITED 
STATES SHIPYARDS.—To the maximum extent prac-
ticable, the President shall require, as a condition of the 
transfer of a vessel under this section, that the country 
to which the vessel is transferred have such repair or re-
furbishment of the vessel as is needed, before the vessel 
joins the naval forces of that country, performed at a ship-
yard located in the United States, including a United 
States Navy shipyard. 
(f) EXPIRATION OF AUTHORITY.—The authority to 
transfer a vessel under this section shall expire at the end 
of the two-year period beginning on the date of the enact-
ment of this Act.
189
SEC. 752. TRANSFER OF OBSOLETE AND SURPLUS ITEMS 
FROM KOREAN WAR RESERVES STOCKPILE 
AND REMOVAL OR DISPOSAL OF REMAINING 
ITEMS. 
(a) TRANSFER OF ITEMS IN KOREAN STOCKPILE.—
(1) AUTHORITY.—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, 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-
riel such as tanks, trucks, artillery, mortars, general 
purpose bombs, repair parts, 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 the enactment of this 
Act, located in a stockpile in the Republic of 
Korea.
190
(3) VALUATION
OF
CONCESSIONS.—(A) The 
value of concessions negotiated pursuant to para-
graph (1) shall be at least equal to—
(i) the fair market value of the items 
transferred; minus 
(ii) the savings to the Department of De-
fense of the cost of removal of the items from 
the Republic of Korea and disposal of the items 
that would have been incurred by the Depart-
ment but for the transfer of the items pursuant 
to paragraph (1), not to exceed the fair market 
value of the items transferred. 
(B) The concessions may include cash com-
pensation, service, waiver of charges otherwise pay-
able by the United States, such as charges for demo-
lition of United States-owned or United States-in-
tended munitions, and other items of value. 
(4) 
PRIOR
NOTIFICATIONS
OF
PROPOSED 
TRANSFERS.—Not less than 30 days before making 
a transfer under the authority of this subsection, the 
President shall transmit to the Committees on 
Armed Services and International Relations of the 
House of Representatives and the Committees on 
Armed Services and Foreign Relations of the Senate 
a detailed notification of the proposed transfer,