250
‘‘(ii) an export license was issued
under section 109 b. of the 1954 Act;
‘‘(iii) approvals were issued under the
Export Act of 1994, or section 109 b.(3)
of the 1954 Act, for the retransfer of any
item, technical data, component, or sub-
stance; or
‘‘(iv) authorizations were made as re-
quired by section 57 b.(2) of the 1954 Act
to engage, directly or indirectly, in the pro-
duction of special nuclear material;
‘‘(B) each instance in which—
‘‘(i) a sanction has been imposed
under section 221(a), 224(h), or 226(a) of
the Nuclear Proliferation Prevention Act of
1994;
‘‘(ii) sales or leases have been denied
under section 3(f) of the Arms Export
Control Act or transactions prohibited by
reason of acts 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 221(c)(2) of the Nu-
clear Proliferation Prevention Act of 1994
251
or the imposition of a sanction has been
delayed under section 226(d) of that Act;
or
‘‘(iv) a waiver of a sanction has been
made under—
‘‘(I) section 221(f), section 224,
or subsection (e) or (f)(2) of section
226, of the Nuclear Proliferation Pre-
vention Act of 1994,
‘‘(II) section 620E(d) of the For-
eign Assistance Act of 1961,
‘‘(III) section 40(g) of the Arms
Export Control Act with respect to
the last sentence of section 40(d) of
that Act, or
‘‘(IV) section 614 of the Foreign
Assistance Act of 1961 with respect to
section 620E of that Act or section
3(f), or the last sentence of section
40(d), of the Arms Export Control
Act; and
‘‘(7) the progress of those independent states of
the former Soviet Union that are non-nuclear-weap-
on states and of the Baltic states towards achieving
252
the objective of applying full scope safeguards to all
their peaceful nuclear activities.
Portions of the information required by paragraphs (6)
and (7) may be submitted in classified form, as necessary.
Any such information that may not be published or dis-
closed under section 114(g)(1) of the Export Act of 1994
shall be submitted as confidential.’’.
SEC. 212. EFFECTIVE DATE.
The amendments made by this part shall take effect
on the date of the enactment of this Act.
PART B—SANCTIONS FOR NUCLEAR
PROLIFERATION
SEC. 221. IMPOSITION OF SANCTIONS ON PERSONS ENGAG-
ING IN EXPORT ACTIVITIES THAT CONTRIB-
UTE TO PROLIFERATION.
(a) DETERMINATION BY THE PRESIDENT.—
(1) IN GENERAL.—Except as provided in sub-
section (b)(2), the President shall impose the sanc-
tions described in subsection (c) if the President de-
termines in writing that, on or after the effective
date of this part, a foreign person or a United
States person has materially and with requisite
knowledge contributed, through the export from the
United States or any other country of any goods or
technology (as defined in section 231(2)), to the ef-
253
forts by any individual, group, or non-nuclear-weap-
on state to acquire unsafeguarded special nuclear
material or to use, develop, produce, stockpile, or
otherwise acquire any nuclear explosive device.
(2) PERSONS AGAINST WHICH THE SANCTIONS
ARE TO BE IMPOSED.—The sanctions shall be im-
posed pursuant 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 person.
254
(3) OTHER SANCTIONS AVAILABLE.—The sanc-
tions which are required to be imposed for activities
described in this subsection is 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).
(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 the
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 the sanctions pursuant to this section for up to
90 days. Following these consultations, the Presi-
dent shall impose the sanctions unless the President
255
determines and certifies in writing to the Congress
that that government has taken specific and effective
actions, including appropriate penalties, to terminate
the involvement of the foreign person in the activi-
ties described in subsection (a)(1). The President
may delay the imposition of the sanctions for up to
an additional 90 days if the President determines
and certifies in writing to the Congress that that
government is in the process of taking the actions
described in the preceding sentence.
(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)
256
are, except as provided in paragraph (2) of this sub-
section, the following:
(A) The United States Government shall
not procure, or enter into any contract for the
procurement of, any goods or services from any
person described in subsection (a)(2).
(B) The importation into the United
States of products produced by any person de-
scribed in subsection (a)(2) shall be prohibited.
(2) EXCEPTIONS.—The President shall not be
required to apply or maintain the 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 in
writing that the person or other entity to
which the sanctions would otherwise be ap-
plied is a sole source supplier of the de-
fense articles or services, that the defense
articles or services are essential, and that
257
alternative sources are not readily or rea-
sonably available; or
(iii) if the President determines in
writing that such articles or services are
essential to the national security under de-
fense 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.
258
(d) ADVISORY OPINIONS.—Upon the request of any
person, the Secretary of State may, in consultation with
the Secretary of Defense, issue in writing an advisory
opinion to that person as to whether a proposed activity
by that person would subject that person to the sanctions
under this section. Any person who relies in good faith
on such an advisory opinion which states that the pro-
posed activity would not subject a person to such sanc-
tions, and any person who thereafter engages in such ac-
tivity, may not be made subject to such sanctions on ac-
count of such activity.
(e) TERMINATION OF THE SANCTIONS.—The sanc-
tions imposed pursuant to this section shall apply for a
period of at least 12 months following the imposition of
the sanctions and shall cease to apply thereafter only if
the President determines and certifies in writing 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
259
(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 the sanctions imposed
on any person pursuant to this section, after the end
of the 12-month period beginning on the date on
which the sanctions were imposed on that person, if
the President determines and certifies in writing to
the Congress that the continued imposition of the
sanctions 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-
260
tionale and circumstances which led the President to
exercise the waiver authority.
SEC. 222. ELIGIBILITY FOR ASSISTANCE.
(a) AMENDMENTS TO THE ARMS EXPORT CONTROL
ACT.—
(1) PROHIBITION.—Section 3 of the Arms Ex-
port Control Act (22 U.S.C. 2753) is amended by
adding at the end the following new subsection:
‘‘(f) No sales or leases shall be made to any country
that the President has determined is in material breach
of its binding commitments to the United States under
international treaties or agreements concerning the non-
proliferation of nuclear explosive devices (as defined in
section 231(4) of the Nuclear Proliferation Prevention Act
of 1994) and unsafeguarded special nuclear material (as
defined in section 231(8) of that Act).’’.
(2) DEFINITION
OF
SUPPORT
FOR
INTER-
NATIONAL TERRORISM.—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 subsection, such acts shall include all ac-
tivities that the Secretary determines willfully
aid or abet the international proliferation of nu-
clear explosive devices to individuals or groups
261
or willfully aid or abet an individual or group
in acquiring unsafeguarded special nuclear ma-
terial.’’; and
(B) in subsection (l)—
(i) in paragraph (2), by striking
‘‘and’’ after the semicolon;
(ii) in paragraph (3), by striking the
period at the end and inserting a semi-
colon; and
(iii) by adding at the end the follow-
ing:
‘‘(4) the term ‘nuclear explosive device’ has the
meaning given that term in section 231(4) of the
Nuclear Proliferation Prevention Act of 1994; and
‘‘(5) the term ‘unsafeguarded special nuclear
material’ has the meaning given that term in section
231(8) of the Nuclear Proliferation Prevention Act
of 1994.’’.
(b) FOREIGN ASSISTANCE ACT OF 1961.—
(1) PRESIDENTIAL
DETERMINATION 82–7.—
Notwithstanding any other provision of law, Presi-
dential Determination No. 82–7 of February 10,
1982, made pursuant to section 670(a)(2) of the
Foreign Assistance Act of 1961, shall have no force
or effect with respect to any grounds for the prohibi-
262
tion of assistance under section 102(a) of the Arms
Export Control Act arising on or after the effective
date of this part.
(2) AMENDMENT.—Section 620E(d) of the For-
eign 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 101 of the Arms Export Control Act with respect to
any grounds for the prohibition of assistance under that
section arising before the effective date of part B of the
Nuclear Proliferation Prevention Act of 1994 to provide
assistance to Pakistan if he determines that to do so is
in the national interest of the United States.’’.
SEC. 223. 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
United States to oppose any use of the institution’s funds
to promote the acquisition of unsafeguarded special nu-
clear material or the development, stockpiling, or use of
any nuclear explosive device by any non-nuclear-weapon
state.
263
(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) is seeking to acquire unsafeguarded
special nuclear material (as defined in section
231(8) of the Nuclear Proliferation Prevention
Act of 1994) or a nuclear explosive device (as
defined in section 231(4) of that Act);
‘‘(B) is not a State Party to the Treaty on
the Non-Proliferation of Nuclear Weapons; or
‘‘(C) has detonated a nuclear explosive de-
vice; and’’.
SEC. 224. PROHIBITION ON ASSISTING NUCLEAR PRO-
LIFERATION THROUGH THE PROVISION OF
FINANCING.
(a) PROHIBITED ACTIVITY DEFINED.—For purposes
of this section, the term ‘‘prohibited activity’’ means the
act of knowingly, materially, and directly contributing or
attempting to contribute, through the provision of financ-
ing, to—
(1) the acquisition of unsafeguarded special nu-
clear material; or
264
(2) the use, development, production, stock-
piling, or other acquisition of any nuclear explosive
device,
by any individual, group, or non-nuclear-weapon state.
(b) PROHIBITION.—To the extent that the United
States has jurisdiction to prohibit such activity by such
person, no United States person and no foreign person
may engage in any prohibited activity.
(c) PRESIDENTIAL DETERMINATION
AND ORDER
WITH RESPECT TO UNITED STATES AND FOREIGN PER-
SONS.—If the President determines, in writing after op-
portunity for a hearing on the record, that a United States
person or a foreign person has engaged in a prohibited
activity (without regard to whether subsection (b) applies),
the President shall, by order, impose the sanctions de-
scribed in subsection (d) on such person.
(d) SANCTIONS.—The following sanctions shall be
imposed pursuant to any order issued under subsection
(c) with respect to any United States person or any for-
eign person:
(1) BAN
ON
DEALINGS
IN
GOVERNMENT
FI-
NANCE.—
(A) DESIGNATION AS PRIMARY DEALER.—
Neither the Board of Governors of the Federal
Reserve System nor the Federal Reserve Bank
265
of New York may designate, or permit the con-
tinuation of any prior designation of, the person
as a primary dealer in United States Govern-
ment debt instruments.
(B) SERVICE AS DEPOSITARY.—The person
may not serve as a depositary for United States
Government funds.
(2) RESTRICTIONS ON OPERATIONS.—The per-
son may not, directly or indirectly—
(A) commence any line of business in the
United States in which the person was not en-
gaged as of the date of the order; or
(B) conduct business from any location in
the United States at which the person did not
conduct business as of the date of the order.
(e) JUDICIAL REVIEW.—Any determination of the
President under subsection (c) shall be subject to judicial
review in accordance with chapter 7 of part I of title 5,
United States Code.
(f) CONSULTATION WITH AND ACTIONS BY FOREIGN
GOVERNMENT OF JURISDICTION.—
(1) CONSULTATIONS.—If the President makes a
determination under subsection (c) with respect to a
foreign person, the Congress urges the President to
initiate consultations immediately with any appro-
266
priate foreign government with respect to the impo-
sition of any sanction pursuant to this section.
(2) ACTIONS
BY
GOVERNMENT
OF
JURISDIC-
TION.—
(A) SUSPENSION OF IMPOSITION OF SANC-
TIONS.—In order to pursue consultations de-
scribed in paragraph (1) with any government
referred to in such paragraph, the President
may delay, for up to 90 days, the effective date
of an order under subsection (c) imposing any
sanction.
(B) COORDINATION WITH ACTIVITIES OF
FOREIGN
GOVERNMENT.—Following consulta-
tions described in paragraph (1), the order is-
sued by the President under subsection (c) im-
posing any sanction on a foreign person shall
take effect unless the President determines, and
certifies in writing to the Congress, that the
government referred to in paragraph (1) has
taken specific and effective actions, including
the imposition of appropriate penalties, to ter-
minate the involvement of the foreign person in
any prohibited activity.
(C) EXTENSION
OF
PERIOD.—After the
end of the period described in subparagraph