(3) GOVERNMENT-TO-GOVERNMENT ACTIVITIES 
DESCRIBED.—The government-to-government activi-
ties described in this paragraph include— 
(A) cooperation by agencies and depart-
ments of the United States with counterpart 
agencies and departments in a country des-
ignated as a Destination of Possible Diversion 
Concern under paragraph (1) to— 
(i) develop or strengthen export con-
trol systems in the country; 
(ii) strengthen cooperation and facili-
tate enforcement of export control systems 
in the country; and 
(iii) promote information and data ex-
changes among agencies of the country 
and with the United States; and 
(B) efforts by the Office of International 
Programs of the Department of Commerce to 
strengthen the export control systems of the 
country to— 
(i) facilitate legitimate trade in high- 
technology goods; and 
(ii) prevent terrorists and state spon-
sors of terrorism, including Iran, from ob-
taining nuclear, biological, and chemical 
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weapons, defense technologies, components 
for improvised explosive devices, and other 
defense items. 
(b) DESTINATIONS OF DIVERSION CONCERN.— 
(1) DESIGNATION.—The Secretary of Com-
merce shall designate a country as a Destination of 
Diversion Concern if the Secretary, in consultation 
with the Secretary of State and the Secretary of the 
Treasury, determines— 
(A) that the government of the country is 
directly involved in transshipment, reexpor-
tation, or diversion of items that originated in 
the United States to end-users whose identities 
cannot be verified or to entities owned or con-
trolled by the Government of Iran; or 
(B) in the case of a country that has been 
designated as a Destination of Possible Diver-
sion Concern under subsection (a)(1), that the 
country has, upon the expiration of the 12- 
month period beginning on the date of such 
designation— 
(i) failed to cooperate with the govern-
ment-to-government activities initiated by 
the United States under subsection (a)(2); 
or 
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(ii) based on the criteria described in 
subsection (a)(1), failed to adequately 
strengthen the export control systems of 
the country. 
(2) LICENSING CONTROLS WITH RESPECT TO 
DESTINATIONS OF DIVERSION CONCERN.— 
(A) REPORT ON SUSPECT ITEMS.— 
(i) IN GENERAL.—Not later than 45 
days after the date of the enactment of 
this Act, the Secretary of Commerce, in 
consultation with appropriate representa-
tives of the United States intelligence com-
munity, the Secretary of State, and the 
Secretary of the Treasury, shall submit to 
the appropriate congressional committees a 
report containing a list of items that, if the 
items were transshipped, reexported, or di-
verted to Iran, could contribute to— 
(I) Iran obtaining nuclear, bio-
logical, or chemical weapons, defense 
technologies, components for impro-
vised explosive devices, or other de-
fense items; or 
(II) support by Iran for acts of 
international terrorism. 
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(ii) CONSIDERATIONS FOR LIST.—In 
developing the list required under clause 
(i), the Secretary of Commerce shall con-
sider— 
(I) the items subject to licensing 
requirements under section 742.8 of 
title 15, Code of Federal Regulations 
(or any corresponding similar regula-
tion or ruling) and other existing li-
censing requirements; and 
(II) the items added to the list of 
items for which a license is required 
for exportation to North Korea by the 
final rule of the Bureau of Export Ad-
ministration of the Department of 
Commerce issued on June 19, 2000 
(65 Fed. Reg. 38148; relating to ex-
port restrictions on North Korea). 
(B) LICENSING REQUIREMENT.—Not later 
than 180 days after the date of the enactment 
of this Act, the Secretary of Commerce shall re-
quire a license to export an item on the list re-
quired under subparagraph (A)(i) to a country 
designated as a Destination of Diversion Con-
cern. 
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(3) WAIVER.—The President may waive the im-
position of the licensing requirement under para-
graph (2)(B) with respect to a country designated as 
a Destination of Diversion Concern if the Presi-
dent— 
(A) determines that such a waiver is in the 
national interest of the United States; and 
(B) submits to the appropriate congres-
sional committees a report describing the rea-
sons for the determination. 
(c) TERMINATION OF DESIGNATION.—The designa-
tion of a country as a Destination of Possible Diversion 
Concern or a Destination of Diversion Concern shall ter-
minate on the date on which the Secretary of Commerce 
determines, based on the criteria described in subpara-
graphs (A) through (D) of subsection (a)(1), and certifies 
to the appropriate congressional committees and the 
President that the country has adequately strengthened 
the export control systems of the country to prevent trans-
shipment, reexportation, and diversion of items through 
the country to end-users whose identities cannot be 
verified or to entities owned or controlled by the Govern-
ment of Iran. 
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(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as may be 
necessary to carry out this section. 
SEC. 223. REPORT ON EXPANDING DIVERSION CONCERN 
SYSTEM TO COUNTRIES OTHER THAN IRAN. 
Not later than 180 days after the date of the enact-
ment of this Act, the President shall submit to the appro-
priate congressional committees a report that— 
(1) identifies any country that the President de-
termines may be transshipping, reexporting, or di-
verting items subject to the provisions of the Export 
Administration Regulations to another country if 
such other country— 
(A) is seeking to obtain nuclear, biological, 
or chemical weapons, defense technologies, com-
ponents for improvised explosive devices, or 
other defense items; or 
(B) provides support for acts of inter-
national terrorism; and 
(2) assesses the feasability and advisability of 
expanding the system established under section 222 
for designating countries as Destinations of Possible 
Diversion Concern and Destinations of Diversion 
Concern to include countries identified under para-
graph (1). 
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SEC. 224. ANNUAL REPORT ON TRANSFERS OF MILITARILY 
SENSITIVE TECHNOLOGY TO COUNTRIES AND 
ENTITIES OF CONCERN. 
(a) ANNUAL REPORT.—Not later than March 30 of 
each year beginning in 2010, the President shall transmit 
to the Congress a report on transfers to countries and en-
tities of concern during the preceding calendar year of the 
most significant categories of United States technologies 
and technical information with potential military applica-
tions. 
(b) CONTENTS OF REPORT.—The report required by 
subsection (a) shall include, at a minimum, the following: 
(1) An assessment by the President of efforts 
by countries and entities of concern to acquire tech-
nologies and technical information referred to in 
subsection (a) during the preceding calendar year. 
(2) An assessment by the President of the cu-
mulative impact of licenses granted by the United 
States for exports of technologies and technical in-
formation referred to in subsection (a) to countries 
and entities of concern during the preceding 5-cal-
endar year period on— 
(A) the military capabilities of such coun-
tries and entities; and 
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(B) countermeasures that may be nec-
essary to overcome the use of such technologies 
and technical information. 
(3) An audit by the Inspectors General of the 
Departments of Defense, State, Commerce, Home-
land Security, Energy, and the Treasury, in con-
sultation with appropriate representatives of the 
United States intelligence community, of the policies 
and procedures of the United States Government 
with respect to the export of technologies and tech-
nical information referred to in subsection (a) to 
countries and entities of concern. 
(c) ADDITIONAL REQUIREMENT
FOR FIRST RE-
PORT.—The first annual report required by subsection (a) 
shall include an assessment by the Inspectors General of 
the Departments of Defense, State, Commerce, Homeland 
Security, Energy, and the Treasury of the adequacy of 
current export controls and counterintelligence measures 
to protect against the acquisition by countries and entities 
of concern of United States technology and technical infor-
mation referred to in subsection (a). 
(d) SUPPORT OF OTHER AGENCIES.—Upon the re-
quest of any of the officials responsible for preparing an 
assessment or audit required by subsection (b) or (c), the 
heads of other departments and agencies shall make avail-
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able to those officials all information necessary to carry 
to prepare such assessment or audit. 
(e) CLASSIFIED
AND UNCLASSIFIED REPORTS.— 
Each report required by this section shall be submitted 
in classified form and unclassified form. 
(f) DEFINITION.—In this section, the term ‘‘countries 
and entities of concern’’ means— 
(1) any country that is a state sponsor of ter-
rorism; 
(2) any country that— 
(A) has detonated a nuclear explosive de-
vice (as defined in section 830(4) of the Nu-
clear Proliferation Prevention Act of 1994 (22 
U.S.C. 6305(4))); and 
(B) is not a member of the North Atlantic 
Treaty Organization; and 
(3) any entity that— 
(A) is engaged in international terrorism 
or activities in preparation thereof; or 
(B) is directed or controlled by the govern-
ment of a country described in paragraph (1) or 
(2). 
SEC. 225. DEFINITIONS. 
In this subtitle: 
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(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means— 
(A) the Committee on Banking, Housing, 
and Urban Affairs, the Committee on Foreign 
Relations, and the Select Committee on Intel-
ligence of the Senate; and 
(B) the Committee on Financial Services, 
the Committee on Foreign Affairs, and the Per-
manent Select Committee on Intelligence of the 
House of Representatives. 
(2) END-USER.—The term ‘‘end-user’’ means 
an end-user as that term is used in the Export Ad-
ministration Regulations. 
(3) ENTITY OWNED OR CONTROLLED BY THE 
GOVERNMENT OF IRAN.—The term ‘‘entity owned or 
controlled by the Government of Iran’’ includes— 
(A) any corporation, partnership, associa-
tion, or other entity in which the Government 
of Iran owns a majority or controlling interest; 
and 
(B) any entity that is otherwise controlled 
by the Government of Iran. 
(4) EXPORT ADMINISTRATION REGULATIONS.— 
The term ‘‘Export Administration Regulations’’ 
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means the Export Administration Regulations as 
maintained and amended under the authority of the 
International Emergency Economic Powers Act and 
codified, as of the date of the enactment of this Act, 
in subchapter C of chapter VII of title 15, Code of 
Federal Regulations. 
(5) GOVERNMENT.—The term ‘‘government’’ 
includes any agency or instrumentality of a govern-
ment. 
(6) IRAN.—The term ‘‘Iran’’ includes any agen-
cy or instrumentality of Iran. 
(7) STATE SPONSOR OF TERRORISM.—The term 
‘‘state sponsor of terrorism’’ means any country the 
government of which the Secretary of State has de-
termined has repeatedly provided support for acts of 
international terrorism pursuant to— 
(A) section 6(j)(1)(A) of the Export Ad-
ministration Act of 1979 (50 U.S.C. App. 
2405(j)(1)(A)) (or any successor thereto); 
(B) section 40(d) of the Arms Export Con-
trol Act (22 U.S.C. 2780(d)); or 
(C) section 620A(a) of the Foreign Assist-
ance Act of 1961 (22 U.S.C. 2371(a)). 
(8) TRANSSHIPMENT, REEXPORTATION, OR DI-
VERSION.—The term ‘‘transshipment, reexportation, 
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or diversion’’ means the exportation, directly or indi-
rectly, of items that originated in the United States 
to an end-user whose identity cannot be verified or 
to an entity owned or controlled by the Government 
of Iran in violation of the laws or regulations of the 
United States by any means, including by— 
(A) shipping such items through one or 
more foreign countries; or 
(B) using false information regarding the 
country of origin of such items. 
Æ 
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