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SEC. 11. AUTHORITY AND PROCEDURES.
(a) UNDER SECRETARY OF COMMERCE.—The Presi-
dent shall appoint, by and with the advice and consent
of the Senate, and Under Secretary of Commerce for Ex-
port Administration who shall carry out all functions of
the Secretary under this Act, under other statutes that
relate to national security, and under such other statutes
as the Secretary may delegate. The President shall ap-
point, by and with the advice and consent of the Senate,
two Assistant Secretaries of Commerce to assist the Under
Secretary in carrying out such functions.
(b) REGULATIONS.—The Secretary may issue such
regulations as are necessary to carry out the provisions
of this Act, and amend or revise them as necessary. Such
regulations may apply to financing, transporting, or other
servicing of exports subject to this Act and the participa-
tion therein by any person. The Secretary shall consult
with the appropriate technical advisory committees au-
thorized under this Act in formulating or amending regu-
lations issued under this Act. Any regulations to carry out
the provisions of section 5 may be issued only after the
regulations are submitted for review to such departments
or agencies as the Secretary considers appropriate. The
requirement for prior agency review does not confer the
right of concurrence or approval by any official, depart-
ment, or agency to which such regulations are submitted.
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(c) CONFIDENTIALITY OF INFORMATION.—
(1) EXEMPTIONS FROM DISCLOSURE.—
(A) Except as otherwise provided by the
third sentence of section 7(b)(2) of this Act, in-
formation obtained under the Export Adminis-
tration Act of 1979 and its predecessor statutes
on or before June 30, 1980, which is deemed
confidential, including Shipper’s Export Dec-
larations, or with reference to which a request
for confidential treatment is made by the per-
son furnishing such information, shall not be
subject to disclosure under section 552 of title
5, United States Code, and such information
shall not be published or disclosed unless the
Secretary determines that the withholding
thereof is contrary to the national interest.
(B) Except as otherwise provided by the
third sentence of section 7(b)(2) of this Act, in-
formation obtained under this Act, under the
Export Administration Act of 1979 after June
30, 1980, or under the Export Administration
Regulations as maintained and amended under
the authority of the International Emergency
Economic Powers Act (50 U.S.C. 1706) may be
withheld only to the extent permitted by stat-
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ute, except that information submitted, ob-
tained or considered in connection with an ap-
plication for an export license or other export
authorization, including the export license or
other export authorization itself, classification
requests, information obtained during the
course of a foreign availability assessment, in-
formation or evidence obtained in the course of
any investigation, and information obtained or
furnished in connection with multilateral agree-
ments, treaties, or obligations under this Act,
under the Export Administration Act of 1979
after June 30, 1980, or under the Export Ad-
ministration Regulations as maintained and
amended under the authority of the Inter-
national Emergency Economic Powers Act (50
U.S.C. 1706) shall not be subject to disclosure
under section 552 of title 5, United States
Code, and such information shall not be pub-
lished or disclosed unless the Secretary deter-
mines that the withholding thereof is contrary
to the national interest.
(2) INFORMATION TO CONGRESS AND GAO.—
(A) IN
GENERAL.—Nothing in this Act
shall be construed as authorizing the withhold-
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ing of information from the Congress or from
the General Accounting Office.
(B) AVAILABILITY TO THE CONGRESS.—
(i) IN GENERAL.—All information ob-
tained at any time under this Act or pre-
vious Acts regarding the control of exports,
including any report or license application
required under this Act, shall upon request
be made available to the Committee on
Foreign Affairs and the Subcommittee on
International Economic Policy and Trade
of the House of Representatives and the
Committee on Banking, Housing and
Urban Affairs and the Subcommittee on
International Finance and Monetary Policy
of the Senate. Each of the above des-
ignated committees and subcommittees
may provide other members of Congress
information obtained under this authority
provided that such information may not be
further disclosed except upon a finding
made under the following subparagraph.
(ii) PROHIBITION ON FURTHER DIS-
CLOSURE.—No such committee or sub-
committee, or member thereof, and no
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other committee, subcommittee, or member
of Congress shall disclose any information
obtained under this Act or previous Acts
regarding the control of exports which is
submitted pursuant to this subsection un-
less one of the above-described full commit-
tees determines that the withholding of
that information is contrary to the national
interest.
(C) AVAILABILITY TO THE GAO.—
(i) IN
GENERAL.—Notwithstanding
paragraph (1), information referred to in
subparagraph (B) shall, consistent with
the protection of intelligence, counterintel-
ligence, and law enforcement sources,
methods, and activities, as determined by
the agency that originally obtained the in-
formation, and consistent with the provi-
sions of section 313 of the Budget and Ac-
counting Act of 1921, be made available
only by the agency, upon request, to the
Comptroller General of the United States
or to any officer or employee of the Gen-
eral Accounting Office authorized by the
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Comptroller General to have access to such
information.
(ii) PROHIBITION ON FURTHER DIS-
CLOSURES.—No officer or employee of the
General Accounting Office shall disclose,
except to the Congress in accordance with
this paragraph, any such information
which is submitted on a confidential basis
and from which any individual can be iden-
tified.
(3) COMMERCE/CUSTOMS
INFORMATION
EX-
CHANGE.—Notwithstanding the provisions of section
11(c)(1), the Secretary and the Commissioner of
Customs shall exchange any licensing and enforce-
ment information with each other which is necessary
to facilitate enforcement efforts and effective license
decisions.
(4) PENALTIES
FOR
DISCLOSURE
OF
CON-
FIDENTIAL INFORMATION.—Any officer or employee
of the United States, or any department or agency
thereof, who publishes, divulges, discloses, or makes
known in any manner or to any extent not author-
ized by law any information coming to him in the
course of his or her employment or official duties or
by reason of any examination or investigation made
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by, report or record made to or filed with, such de-
partment or agency, or officer or employee thereof,
which information is exempt from disclosure under
this subsection, shall be fined not more than $1,000,
or imprisoned not more than one year, or both, and
may be removed from office or employment and shall
be subject to an administrative fine of not more than
$1,000 to be enforced under the authorities and pro-
cedures of section 10 of this Act.
(d) PUBLIC PARTICIPATION.—It is the intent of the
Congress that, to the extent practicable, all regulations
imposing controls on exports under this Act be issued in
proposed form with meaningful opportunity for public
comment before taking effect. In cases where a regulation
imposing controls under this Act is issued with immediate
effect, it is the intent of the Congress that meaningful op-
portunity for public comment also be provided and that
the regulation be reissued in final form after public com-
ments have been fully considered.
(e) CONTROL LIST DEVELOPMENT AND REVIEW.—
(1) IN GENERAL.—The Secretary shall establish
and maintain a Control List comprising all items re-
quiring a validated license for export to designated
countries under this Act. The Control List and other
implementing regulations shall clearly identify the
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specific items controlled to each country. The Sec-
retary shall establish validated license requirements
on the Control List.
(2) DEVELOPMENT AND REVIEW OF THE CON-
TROL LIST.—The Secretary shall consult with appro-
priate departments and agencies regarding the addi-
tion, deletion, or maintenance of a license require-
ment for a given item. The Secretary of State, in
consultation with appropriate departments and agen-
cies, shall be responsible for conducting negotiations
and developing negotiating positions with other
countries regarding multilateral arrangements for
restricting the export of items to carry out the poli-
cies of this Act. All appropriate departments and
agencies shall consult to develop initial technical pa-
rameters and item definitions in connection with the
development of proposals within the United States
Government to be made to multilateral regimes in
consultation with the Technical Advisory Committees
as provided in paragraph (3) below.
For items controlled by a multilateral regime,
the Secretary shall conduct periodic reviews sched-
uled sufficiently in advance of regime deliberations
to permit the United States to present appropriate
proposals after consultation with United States in-
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dustry and the technical advisory committees. The
Secretary shall seek the advice of United States in-
dustry and appropriate technical advisory commit-
tees as to the control of items subject to this Act.
This review shall serve as a basis for United States
proposals for revision of items subject to multilateral
regimes. The Secretary of State shall seek to ensure
that each multilateral regime in which the United
States is a member shall review each item on its list
of controlled items at least once every 2 years. In
any case when such a multilateral regime fails to re-
view an entry on its list of controlled items within
2 years of the prior review, the Secretary of State
shall propose a review by the relevant multilateral
regime of such an entry. Regardless of the frequency
of list reviews by a given regime, the Secretary shall
review each item controlled in cooperation with a
multilateral regime at least once every 2 years.
(3) TECHNICAL
ADVISORY
COMMITTEES
AND
THE
PUBLIC.—The appropriate technical advisory
committee appointed under section 4(g) shall be con-
sulted by the Secretary with respect to changes in
the Control List established pursuant to this sub-
section, and such technical advisory committee may
submit recommendations to the Secretary with re-
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spect to such changes. The Secretary shall consider
the recommendations of the technical advisory com-
mittee and shall inform the committee of the disposi-
tion of its recommendations. The Secretary shall
also seek comments and recommendations from the
public in connection with changes in the Control List
established pursuant to this subsection. To the maxi-
mum extent practicable and consistent with the con-
duct or international negotiations, in every possible
instance, such comments and recommendations shall
be taken into consideration in the development of
United States Government proposals for all list revi-
sions and positions to be taken in multilateral re-
gimes.
(f) AUTHORITY FOR SEMINAR AND PUBLICATIONS
FUND.—The Secretary is authorized to cooperate with
public agencies, other governments, international organi-
zations, private individuals, private associations, and other
groups in connection with seminars, publications, and re-
lated activities to carry out export activities, including
educating the public or government officials on the appli-
cation of this Act and the regulations issued under this
Act. The Secretary is further authorized to accept con-
tributions of funds, property, or services in connection
with such activities to recover the cost of such programs
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and activities over time. Contributions shall include pay-
ments for materials or services provided as part of these
activities. The contributions collected may be retained for
use in covering the costs of these activities, and for sup-
porting all outreach functions of the Department in con-
nection with this Act and other export control programs
of the United States and other governments.
(g) SUPPORT OF OTHER COUNTRIES’ EXPORT CON-
TROL PROGRAM.—The Secretary may participate in the
education and training of officials of other countries on
the principles and procedures for the implementation of
effective export controls.
(h) APPLICABILITY
OF ADMINISTRATIVE PROCE-
DURES ACT.—
(1) EXEMPTION.—Except as provided in sub-
section (d) of section 9, the functions exercised
under this Act are excluded from the operation of
sections 551, 553 through 559, and 701 through
706 of title 5, United States Code.
(2) JUDICIAL REVIEW.—Except as provided by
subsections (d), (g), and (j) of section 9, a final
agency action under this Act may be reviewed by ap-
peal to the United States Court of Appeals for the
District of Columbia Circuit, to the extent provided
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in this paragraph. The court’s review in any such
appeal shall be limited to determining whether—
(A) a regulation—
(i) fails to take an action compelled by
this Act;
(ii) takes an action prohibited by this
Act; or
(iii) otherwise violates this Act;
(B) an agency action violates this Act;
(C) an agency action violates an agency
regulation establishing time requirements or
other procedural requirements of a non-discre-
tionary nature;
(D) the issuance of regulations compelled
by this Act complies with time restrictions im-
posed by this Act;
(E) license decisions are made and appeals
thereof are concluded in compliance with time
restrictions imposed by this Act;
(F) classifications and advisory opinions
are issued in compliance with time restrictions
imposed by this Act;
(G) unfair impact determinations are in
compliance with time restrictions imposed by
this Act; or
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(H) the United States has complied with
the requirements of section 5(k) after an unfair
impact determination has been rendered.
(i) INCORPORATED
COMMODITIES, TECHNOLOGY,
AND SOFTWARE.—
(1) COMMODITIES
CONTAINING
CONTROLLED
PARTS AND COMPONENTS.—Export licenses may not
be required under this Act or any other provision of
law for a commodity solely because the commodity
contains parts or components subject to export con-
trol under this Act if such parts or components—
(A) are essential to the functioning of the
good;
(B) are customarily included in sales of the
item in countries other than target countries;
and
(C) comprise 25 percent or less of the total
value of the good, unless the good itself, if ex-
ported, would by virtue of the functional char-
acteristics of the good as a whole make a sig-
nificant contribution to the military or pro-
liferation potential of a target country or end
user which would prove detrimental to the na-
tional security of the United States.
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(2) REEXPORTS OF FOREIGN-MADE ITEMS IN-
CORPORATING UNITED STATES ITEMS.—Except for
countries embargoed under this Act, the Inter-
national Emergency Economic Powers Act or the
Trading with the Enemy Act, and except for coun-
tries named as terrorist-supporting countries under
section 5(j)(4), no authority or permission may be
required under this Act to—
(A) reexport a foreign-made commodity in-
corporating United States origin commodities
valued at 25 percent or less of the total value
of the foreign-made commodity;
(B) reexport foreign-made software incor-
porating United States origin software valued
at 25 percent or less of the total value of the
foreign-made software; or
(C) reexport foreign technology commin-
gled with or drawn from United States origin
technology valued at 25 percent or less of the
total value of the foreign technology.
For countries embargoed under this Act, the Inter-
national Emergency Economic Powers Act or the
Trading with the Enemy Act, and except for coun-
tries named as terrorist-supporting countries under
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section 5(j)(4), no authority or permission may be
required under this Act to—
(D) reexport a foreign-made commodity in-
corporating United States origin commodities
valued at 10 percent or less of the total value
of the foreign-made commodity;
(E) reexport foreign-made software incor-
porating United States origin software valued
at 10 percent or less of the total value of the
foreign-made software; or
(F) reexport foreign technology commin-
gled with or drawn from United States origin
technology valued at 10 percent or less of the
total value of the foreign technology.
For purposes of this subsection, technology and
source code used to design or produce foreign-made
commodities or software are not incorporated into
such foreign-made commodities or software.
Notwithstanding the above provisions, the Secretary
may require firms to report to the Department of Com-
merce their proposed calculations and underlying data suf-
ficient for the Department of Commerce to evaluate the
adequacy of those calculations and data related to com-
modities, technology, and software before a reexporter
may rely upon this exclusion from controls.
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(j) EXCEPTIONS FOR MEDICAL AND HUMANITARIAN
PURPOSES.—This Act does not authorize controls on—
(1) medical instruments and equipment subject
to the provisions of subsection (j)(1) of this section;
(2) medicine or medical supplies; or
(3) donations of items that are intended to
meet basic human needs including food, educational
materials, seeds, hand tools, water resources equip-
ment, clothing and shelter materials, and basic
household supplies.
(k) SANCTITY OF EXISTING CONTRACTS AND LI-
CENSES.—
(1) IN GENERAL.—Under a unilateral control
imposed under section 5 of this Act, the President
may not prohibit the export or reexport of items—
(A) in performance of a contract, agree-
ment, or other contractual commitment entered
into before the effective date of any export con-
trols mandated by this law, or the date on
which the President reports to the Congress the
President’s intention to impose controls on the
export or reexport of such items; or
(B) under a validated license issued under
this Act before the effective date of any export
controls mandated by this law, or the date on
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which the President reports to the Congress the
President’s intention to impose controls on the
export or reexport of such items.
(2) EXCEPTION.—The prohibition in paragraph
(1) shall not apply if the President determines and
certifies to the Congress that—
(A) a breach of the peace poses a serious
and direct threat to the strategic interest of the
United States;
(B) the prohibition or curtailment of each
such contract, agreement, commitment, license,
or authorization to be controlled will be directly
instrumental in remedying the situation posing
the direct threat; and
(C) the emergency controls will continue
only so long as the direct threat persists.
(3) The determination authority provided to the
President in this subparagraph (2) may not be dele-
gated.
(l) FACT-FINDING AUTHORITY.—
(1) To the extent necessary or appropriate to
the administration of this Act or any multilateral re-
gime in which the United States participates pursu-
ant to this Act, the Secretary (and officers or em-
ployees of the Department of Commerce designated
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by the Secretary), the Commissioner of Customs, or
the head of any other department or agency des-
ignated by the Secretary may exercise the authori-
ties described in paragraph (2).
(2) Any officer or employee designated by the
Secretary may do the following in carrying out the
authority of this Act:
(A) Make investigations of, obtain informa-
tion from, require reports or the keeping of
such records by, make inspection of the books,
records, and other writings, premises, or prop-
erty of, and take the sworn testimony of, any
person.
(B) Administer oaths or affirmations, and
by subpoena require any person to appear and
testify or to appear and produce books, records,
and other writings, or both. In the case of con-
tumacy by, or refusal to obey a subpoena issued
to, any such person, a district court of the
United States, after notice to any such person
and hearing, shall have jurisdiction to issue an
order requiring such person to appear and give
testimony or to appear and produce books,
records, and other writings, or both, and any
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failure to obey such order of the court may be
punished by such court as a contempt thereof.
(m) MILITARILY CRITICAL TECHNOLOGIES LIST DE-
VELOPMENT, REVIEW AND USE.—
(1) In developing the Militarily Critical Tech-
nologies List (MCTL), established pursuant to sub-
section 4(c) of this Act, primary emphasis shall be
given to—
(A) development and production tech-
nology;
(B) test, inspection, and production equip-
ment;
(C) advanced materials, chemicals, and bi-
ological agents;
(D) unique software; and
(E) systems, subsystems, assemblies and
components.
(2) The list referred to in paragraph (1) shall
be sufficiently specific to guide the determinations of
any official exercising export licensing responsibil-
ities under this Act. For purposes of completeness
and cross-reference, the MCTL shall include both
dual-use items controlled by this Act and other mili-
tarily critical items that may be controlled under
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(5) The establishment of adequate export con-
trols for militarily critical technology, equipment,
and materials shall be accompanied by suitable re-
ductions in the controls on the products of that tech-
nology, equipment, and materials.
SEC. 12A. SANCTIONS FOR PROLIFERATION ACTIVITY AND
THE USE OF CHEMICAL AND BIOLOGICAL
WEAPONS AND MISSILES.
(a) DETERMINATIONS.—
(1) DETERMINATION OF ACTIVITY SUPPORTING
THE PROLIFERATION OF CHEMICAL AND BIOLOGICAL
WEAPONS AND MISSILES.—The President shall de-
termine whether any foreign person has, on or after
the date of the enactment of this section, knowingly
or with reason to know contributed materially to the
efforts of any government, group, entity, or project
to use, design, develop, produce, stockpile, or other-
wise acquire chemical or biological weapons or mis-
siles—
(A) through the export or transfer of—
(i) any item on the MTCR Annex
whether or not of United States-origin; or
(ii) any chemicals, biological agents,
or equipment which may contribute to a
chemical or biological weapons program
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such as those listed by the Australia
Group, whether or not of United States-
origin;
(B) by participating in any financial trans-
action related to the activity described in para-
graphs (1)(A) or (1)(B); or
(C) by facilitating the activity described in
paragraphs (1)(A) or (1)(B); and
(D) this subsection does not apply—
(i) under (a)(1)(A)(i) to an export or
transfer that is authorized by the govern-
ment of a country that is an adherent to
the MTCR or is to a country that is an ad-
herent to the MTCR; or
(ii) under (a)(1)(A)(ii) for an export
or transfer that is to a country that is both
authorized by a country that is an adher-
ent to the Australia Group or a signatory
to the Chemical Weapons Convention and
is to a country that is an adherent to the
Australia Group or a signatory to the
Chemical Weapons Convention.
(2) DETERMINATION OF USE OF CHEMICAL OR
BIOLOGICAL WEAPONS.—Whenever persuasive infor-
mation becomes available to the executive branch in-
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dicating the substantial possibility that, on or after
the date of enactment of this Act, the government
of a foreign country has made substantial prepara-
tion to use chemical or biological weapons, the Presi-
dent shall, within 60 days after the receipt of such
information by the executive branch, determine
whether that government, on or after such date of
enactment, has used chemical or biological weapons
in violation of international law or has used lethal
chemical or biological weapons against its own na-
tionals.
(b) PERSONS AGAINST WHICH SANCTIONS ARE TO
BE IMPOSED.—In the event of an affirmative determina-
tion under subsection (a)(1)(A)(i) or (a)(1)(A)(ii), the
President shall impose sanctions described under sub-
section (c) on the foreign person that engaged in, facili-
tated, or solicited the conduct that is the subject of the
determination, on other persons as the President deter-
mines should be subject to sanctions because they are re-
lated to that person, and on any successor of a sanctioned
person.
(c) SANCTIONS.—
(1) MANDATORY
SANCTIONS.—The following
sanctions shall be imposed for a minimum of 2 years
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in the event the President makes a determination
under subsections (a)(1)(A)(i) or (a)(1)(A)(ii):
(A) If the determination is for activity re-
lated to missile proliferation, validated licenses
for items on the MTCR annex shall be denied
under this Act and the Arms Export Control
Act and imports of such items from such enti-
ties shall be prohibited.
(B) If the determination is for activity re-
lated to chemical or biological weapons pro-
liferation, validated licenses for items listed by
the Australia Group shall be denied under this
Act and the Arms Export Control Act and im-
ports of such items from such entities shall be
prohibited.
(C) The United States Government shall
not procure, or enter into any contract for the
procurement of, any services, commodities, soft-
ware, and technology, or other products from or
produced by any entity described in subsection
(a)(2).
(2) DISCRETIONARY
SANCTIONS.—In addition
to the sanctions described in paragraph (1), the
President may also take any of the actions listed in
paragraphs (3) and (5), if the President determines
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that such additional measures would further the ob-
jectives of this section. Such additional sanctions
shall be proportionate to the harm the sanctioned
behavior has caused or will cause the national secu-
rity or nonproliferation interests of the United
States.
(3) MANDATORY
SANCTIONS
FOR
USE
OF
CHEMICAL OR BIOLOGICAL WEAPONS.—The follow-
ing sanctions shall be imposed in the event the
President makes a determination under subsection
(a)(2):
(A) FOREIGN
ASSISTANCE.—The United
States Government shall terminate assistance to
that country under the Foreign Assistance Act
of 1961, except for urgent humanitarian assist-
ance and food or other agricultural commodities
or products.
(B) ARMS
SALES.—The United States
Government shall terminate—
(i) sales to that country under the
Arms Export Control Act of any defense
articles, defense services, or design and
construction services; and
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(ii) licenses for the export to that
country of any item on the United States
Munitions List.
(C) ARMS SALES FINANCING.—The United
States Government shall terminate all foreign
military financing for that country under the
Arms Export Control Act.
(D) DENIAL OF UNITED STATES GOVERN-
MENT
CREDIT
OR
OTHER
FINANCIAL
ASSIST-
ANCE.—The United States Government shall
deny to that country any credit, credit guaran-
tees, or other financial assistance by any de-
partment, agency, or instrumentality of the
United States Government, including the Ex-
port-Import Bank of the United States.
(E) EXPORTS
OF
NATIONAL
SECURITY-
SENSITIVE ITEMS.—The authorities of this Act
shall be used to prohibit the export to that
country of any items controlled for non-pro-
liferation, regional stability, or national security
reasons.
(4) ADDITIONAL SANCTIONS IF CERTAIN CONDI-
TIONS NOT MET.—Unless, within three (3) months
after making a determination pursuant to subsection
(a)(2) with respect to a foreign government, the
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President determines and certifies, in writing, to the
Congress that—
(A) the government is no longer using
chemicals or biological weapons in violation of
international law or using lethal chemicals or
biological weapons against its own nationals;
(B) the government has provided reliable
assurances that it will not, in the future, en-
gage in any such activities; and
(C) the government is willing to allow on-
site inspections by United Nations observers or
other internationally-recognized, impartial ob-
servers, or other reliable means exist, to ensure
that government is not using chemical or bio-
logical weapons in violation of international law
and is not using lethal chemical or biological
weapons against its won nationals, then the
President, after consultation with the Congress,
shall impose on that country the sanctions set
forth in at least three (3) of subparagraphs (A)
through (F) of paragraph (5).
(5) ADDITIONAL
SANCTIONS
FOR
USE
OF
CHEMICAL
OR
BIOLOGICAL
WEAPONS.—The sanc-
tions referred to in paragraph (4) are the following:
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(A) MULTILATERAL DEVELOPMENT BANK
ASSISTANCE.—The United States Government
shall oppose, in accordance with Section 701 of
the International Financial Institutions Act (22
U.S.C. 262d), the extension of any loan or fi-
nancial or technical assistance to that country
by international financial institutions.
(B) BANK
LOANS.—The United States
Government shall prohibit 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 purchas-
ing food or other agricultural commodities or
products.
(C) FURTHER
EXPORT
RESTRICTIONS.—
The authorities of this Act may be used to pro-
hibit exports to the country of all other items
(excluding food and other agricultural commod-
ities and products).
(D) IMPORT
RESTRICTIONS.—Restriction
shall be imposed on the importation into the
United States of articles (which may include pe-
troleum or any petroleum product) that are the
growth, product, or manufacture of that coun-
try.
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(E) DIPLOMATIC RELATIONS.—The Presi-
dent shall use constitutional authorities to
downgrade or suspend diplomatic relations be-
tween the United States and the government of
that country.
(F) PRESIDENTIAL
ACTION
REGARDING
AVIATION.—
(i)(I) The President is authorized to
notify the government of a country with re-
spect to which the President has made a
determination, 
pursuant 
to 
subsection
(12(a), regarding intention to suspend the
authority of foreign air carriers owned or
controlled by the government of that coun-
try to engage in foreign air transportation
to or from the United States.
(II) Within 10 days after the date of
notification 
of 
a 
government 
under
subclause (I), the Secretary of Transpor-
tation shall take all steps necessary to sus-
pend at the earliest possible date the au-
thority of any foreign air carrier owned or
controlled, directly or indirectly, by that
government to engage in foreign air trans-
portation to or from the United States,
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notwithstanding any agreement relating to
air services.
(ii)(I) The President may direct the
Secretary of State to terminate any air
service agreement between the United
States and a country with respect to which
the President has made a determination
pursuant to subsection (a), in accordance
with the provisions of that agreement.
(II) Upon termination of an agree-
ment under this clause, the Secretary of
Transportation shall take such steps as
may be necessary to revoke at the earliest
possible date the right of any foreign air
carrier owned, or controlled, directly or in-
directly, by the government of that country
to engage in foreign air transportation to
or from the United States.
(iii) The Secretary of Transportation
may provide for such exceptions from
clauses (i) and (ii) as the Secretary consid-
ers necessary to provide for emergencies in
which the safety of an aircraft or its crew
or passengers is threatened.
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(iv) For purposes of this subpara-
graph, the terms ‘‘air transportation’’, ‘‘air
carrier’’, ‘‘foreign air carrier’’, and ‘‘for-
eign air transportation’’ have the meanings
such terms have under Section 101 of the
Federal Aviation Act of 1958 (49 U.S.C.
App. 1301).
(d) DEFERRAL AND LIMITATION.—
(1) The President may delay the making of a
determination under subsection (a) or the imposition
of sanctions in order to protect—
(A) ongoing criminal investigations; or
(B) sensitive intelligence sources and meth-
ods which are being used to acquire further in-
formation on the proliferation of weapons of
mass destruction, their delivery systems, or ad-
vanced conventional weapons.
The President shall exercise this authority only when
the President determines that nonproliferation objec-
tives do not outweigh the need to delay the imposi-
tion of sanctions to avoid compromising the criminal
investigation or intelligence sources and methods in-
volved. The President shall proceed when the basis
for the delay no longer exists.
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(2) The President may delay the imposition of
sanctions for up to 180 days if the United States is
engaged in diplomatic efforts and consultations with
the objective of—
(A) curtailing the policies and conduct of
the government or person in the country of
weapons activity determined to have engaged in
the sanctioned conduct; or
(B) obtaining, from the government with
effective jurisdiction over the sanctioned person
appropriate sanctions against such person or
the initiation of legal process to impose such
sanctions.
If such diplomatic efforts and consultations succeed
(i) in curtailing the conduct of the government or
person engaged in the sanctioned conduct, or (ii) in
obtaining enforcement action in accordance with
subparagraph (B), the President shall not be re-
quired to apply or maintain sanctions under this sec-
tion.
(3) The President should seek multilateral sup-
port for sanctions against activity covered by this
section. If multilateral sanctions are achieved that
the President determines will be more effective than
unilateral sanctions in furthering the national secu-
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rity or nonproliferation objectives of the United
States, the President shall not be required to exer-
cise the authority in this section in a manner incon-
sistent with such multilateral sanctions.
(e) EXCEPTIONS.—The President shall not be re-
quired to apply or maintain sanctions under this section—
(1) in the case of procurement of defense arti-
cles or defense services—
(A) under existing contracts or sub-
contracts, including the exercise of options for
production quantities to satisfy United States
operational military requirements;
(B) if the President determines that the
person to which the sanctions would otherwise
be applied is a sole source supplier of the de-
fense articles or services, that the defense arti-
cles or services are essential, and that alter-
native sources are not readily or reasonably
available; or
(C) if the President determines that such
articles or services are essential to the national
security under defense co-production agree-
ments;
(2) to the import of—
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(A) products or services provided under
contracts entered into before the date on which
the President publishes notice of intention to
impose sanctions; or
(B)(i) spare parts;
(ii) component parts, but not finished
products, essential to United States products or
production;
(iii) information and technology essential
to United States products or production; or
(iv) routine servicing and maintenance of
products, to the extent that alternative sources
are not readily or reasonably available;
(3) to medical or other humanitarian items;
(4) to any transaction subject to the reporting
requirements of title V of the National Security Act
of 1947; or
(5) when the President determines, categori-
cally or on a case-by-case basis, that the application
of sanctions to bar performance of a contract or
agreement entered into before the date of the impo-
sition of sanctions is not necessary to achieve the
national security or nonproliferation objectives of the
United States and would be contrary to the national
interest.
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(f) TERMINATION OF SANCTIONS FOR USING CHEMI-
CAL OR BIOLOGICAL WEAPONS.—During the minimum 2
years period of the mandatory sanctions imposed pursuant
to a determination under subsection (a)(2), such sanctions
may be removed if the President determines and so cer-
tifies to the Congress that—
(1) the government of that country has pro-
vided reliable assurances that it will not use chemi-
cal or biological weapons in violation of international
law and will not use lethal chemical or biological
weapons against its own nationals;
(2) that government is not making preparations
to use chemical or biological weapons in violation of
international law or to use lethal chemical or biologi-
cal weapons against its own nationals;
(3) that government is willing to allow on-site
inspections by United Nations observers or other
internationally-recognized, impartial observers to
verify that it is not making preparations to use
chemical or biological weapons in violation of inter-
national law or to use lethal chemical or biological
weapons against its own nationals, or other reliable
means exist to verify that it is not making such
preparations; and
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(4) that government is making restitution to
those affected by any use of chemical or biological
weapons in violation of international law or by any
use of lethal chemical or biological weapons against
its own nationals.
(g) WAIVER.—
(1) CRITERION
FOR
WAIVER.—The President
may waive or partially waive the application of any
sanction imposed on any entity pursuant to this sec-
tion, if the President determines and certifies to
Congress that such waiver is important to the na-
tional interests of the United States.
(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 stating the reasons for ex-
ercise of the waiver authority.
(h) REGULATORY
IMPLEMENTATION
OF
SANC-
TIONS.—For items subject to the jurisdiction of the Sec-
retary under this Act, sanctions shall be implemented in
regulations issued by the Secretary and shall specify the
scope of products and entities. For items subject to the
jurisdiction of the Secretary of State under the Arms Ex-
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port Control Act, sanctions shall be implemented in regu-
lation issued by the Secretary of State and shall specify
the scope of products and entities.
SEC. 12B. SANCTIONS FOR PROLIFERATION ACTIVITY AND
THE USE OF CHEMICAL AND BIOLOGICAL
WEAPONS.
Section 72 of the Arms Export Control Act is amend-
ed to read as follows:
‘‘SEC. 72. SANCTIONS AGAINST CERTAIN FOREIGN PER-
SONS AND COUNTRIES.
‘‘(a) DETERMINATIONS.—
‘‘(1) DETERMINATION OF ACTIVITY SUPPORT-
ING THE PROLIFERATION OF CHEMICAL AND BIO-
LOGICAL WEAPONS AND MISSILES.—The President
shall determine whether any foreign person has, on
or after the date of the enactment of this section,
knowingly or with reason to know contributed mate-
rially to the efforts of any government, group, entity,
or project to use, design, develop, produce, stockpile,
or otherwise acquire chemical or biological weapons
or missiles—
‘‘(A) through the export or transfer of—
‘‘(i) any item on the MTCR Annex
whether or not of United States-origin;
and
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‘‘(ii) any chemical, biological agents,
or equipment which may contribute to a
chemical or biological weapons program
such as those listed by the Australia
Group, whether or not of United States-
origin;
‘‘(B) by participating in any financial
transaction related to the activity described in
paragraphs (1)(A) or (1)(B); or
‘‘(C) by facilitating or soliciting the activ-
ity described in paragraphs (1)(A) or (1)(B);
and
‘‘(D) this subsection does not apply—
‘‘(i) under (a)(1)(A)(i) to an export or
transfer that is authorized by the govern-
ment of a country that is an adherent to
the MTCR or is to a country that is an ad-
herent to the MTCR; or
‘‘(ii) under (a)(1)(A)(ii) for an export
or transfer that is to a country that is both
authorized by a country that is an adher-
ent to the Australia Group or a signatory
to the Chemical Weapons Convention and
is to a country that is an adherent to the
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Australia Group or a signatory to the
Chemical Weapons Convention.
‘‘(2) DETERMINATION OF USE OF CHEMICAL OR
BIOLOGICAL WEAPONS.—Whenever persuasive infor-
mation becomes available to the executive branch in-
dicating the substantial possibility that, on or after
the date of enactment of this Act, the government
of a foreign country has made substantial prepara-
tion to use chemical or biological weapons, the Presi-
dent shall, within 60 days after the receipt of such
information by the executive branch, determine
whether that government, on or after such date of
enactment, has used chemical or biological weapons
in violation of international law or has used lethal
chemical or biological weapons against its own na-
tionals.
‘‘(b) PERSONS AGAINST WHICH SANCTIONS ARE TO
BE IMPOSED.—In the event of an affirmative determina-
tion under subsection (a)(1)(A)(i) or (a)(1)(A)(ii), the
President shall impose sanctions described under sub-
section (c) on the foreign person that engaged in, facili-
tated, or solicited the conduct that is the subject of the
determination, on other persons as the President deter-
mines should be subject to sanctions because they are re-
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lated to that person, and on any successor of a sanctioned
person.
‘‘(c) SANCTIONS.—
‘‘(1) MANDATORY
SANCTIONS.—The following
sanctions shall be imposed for a minimum of 2 years
in the event the President makes a determination
under subsections (a)(1)(A)(i) or (a)(1)(A)(ii):
‘‘(A) If the determination is for activity re-
lated to missile proliferation, validated licenses
for items on the MTCR annex shall be denied
under this Act and the Export Administration
Act and imports of such items from such enti-
ties shall be prohibited.
‘‘(B) If the determination is for activity re-
lated to chemical or biological weapons pro-
liferation, validated licenses for items listed by
the Australia Group shall be denied under this
Act and the Export Administration Act and im-
ports of such items from such entities shall be
prohibited.
‘‘(C) The United States Government shall
not procure, or enter into any contract for the
procurement of, any services, commodities, soft-
ware, and technology, or other products from or
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produced by any entity described in subsection
(a)(2).
‘‘(2) DISCRETIONARY SANCTIONS.—In addition
to the sanctions described in paragraph (1), the
President may also take any of the actions listed in
paragraphs (3) and (5), if the President determines
that such additional measures would further the ob-
jectives of this section. Such additional sanctions
shall be proportionate to the harm the sanctioned
behavior has caused or will cause the national secu-
rity or nonproliferation interests of the United
States.
‘‘(3) MANDATORY
SANCTIONS
FOR
USE
OF
CHEMICAL OR BIOLOGICAL WEAPONS.—The follow-
ing sanctions shall be imposed in the event the
President makes a determination under subsection
(a)(2):
‘‘(A) FOREIGN ASSISTANCE.—The United
States Government shall terminate assistance to
that country under the Foreign Assistance Act
of 1961, except for urgent humanitarian assist-
ance and food or other agricultural commodities
or products.
‘‘(B) ARMS
SALES.—The United States
Government shall terminate—
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‘‘(i) sales to that country under this
Act of any defense articles, defense serv-
ices, or design and construction services;
and
‘‘(ii) licenses for the export to that
country of any item on the United States
Munitions List.
‘‘(C) 
ARMS
SALES
FINANCING.—The
United States Government shall terminate all
foreign military financing for that country
under this Act.
‘‘(D) DENIAL OF UNITED STATES GOVERN-
MENT
CREDIT
OR
OTHER
FINANCIAL
ASSIST-
ANCE.—The United States Government shall
deny to that country any credit, credit guaran-
tees, or other financial assistance by any de-
partment, agency, or instrumentality of the
United States Government, including the Ex-
port-Import Bank of the United States.
‘‘(E) EXPORTS
OF
NATIONAL
SECURITY-
SENSITIVE ITEMS.—The authorities of this Act
shall be used to prohibit the export to that
country of any items controlled for non-pro-
liferation, regional stability, or national security
reasons.
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‘‘(4) ADDITIONAL SANCTIONS IF CERTAIN CON-
DITIONS NOT MET.—Unless, within three (3) months
after making a determination pursuant to subsection
(a)(2) with respect to a foreign government, the
President determines and certifies, in writing, to the
Congress that—
‘‘(A) the government is no longer using
chemicals or biological weapons in violation of
international law or using lethal chemicals or
biological weapons against its own nationals;
‘‘(B) the government has provided reliable
assurances that it will not, in the future, en-
gage in any such activities; and
‘‘(C) the government is willing to allow on-
site inspections by United Nations observers or
other internationally-recognized, impartial ob-
servers, or other reliable means exist, to ensure
that government is not using chemicals or bio-
logical weapons in violation of international law
and is not using lethal chemical or biological
weapons against its own nationals, then the
President, after consultation with the Congress,
shall impose on that country the sanctions set
forth in at least three (3) of subparagraphs (A)
through (F) of paragraph (5).
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‘‘(5) ADDITIONAL
SANCTIONS
FOR
USE
OF
CHEMICAL
OR
BIOLOGICAL
WEAPONS.—The sanc-
tions referred to in paragraph (4) are the following:
‘‘(A) MULTILATERAL DEVELOPMENT BANK
ASSISTANCE.—The United States Government
shall oppose, in accordance with section 701 of
the International Financial Institutions Act (22
U.S.C. 262d), the extension of any loan or fi-
nancial or technical assistance to that country
by international financial institutions.
‘‘(B) BANK
LOANS.—The United States
Government shall prohibit 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 purchas-
ing food or other agricultural commodities or
products.
‘‘(C) FURTHER EXPORT RESTRICTIONS.—
The authorities of this Act may be used to pro-
hibit exports to the country of all other items
(excluding food and other agricultural commod-
ities and products).
‘‘(D) IMPORT RESTRICTIONS.—Restriction
shall be imposed on the importation into the
United States of articles (which may include pe-
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troleum or any petroleum product) that are the
growth, product, or manufacture of that coun-
try.
‘‘(E) 
DIPLOMATIC
RELATIONS.—The
President shall use constitutional authorities to
downgrade or suspend diplomatic relations be-
tween the United States and the government of
that country.
‘‘(F) PRESIDENTIAL
ACTION
REGARDING
AVIATION.—
‘‘(i)(I) The President is authorized to
notify the government of a country with re-
spect to which the President has made a
determination, 
pursuant 
to 
subsection
12(a), regarding intention to suspend the
authority of foreign air carriers owned or
controlled by the government of that coun-
try to engage in foreign air transportation
to or from the United States.
‘‘(II) Within 10 days after the date of
notification 
of 
a 
government 
under
subclause (I), the Secretary of Transpor-
tation shall take all steps necessary to sus-
pend at the earliest possible date the au-
thority of any foreign air carrier owned or
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controlled, directly or indirectly, by that
government to engage in foreign air trans-
portation to or from the United States,
notwithstanding any agreement relating to
air services.
‘‘(ii)(I) The President may direct the
Secretary of State to terminate any air
services agreement between the United
States and a country with respect to which
the President has made a determination
pursuant to subsection (a), in accordance
with the provisions of that agreement.
‘‘(II) Upon termination of an agree-
ment under this clause, the Secretary of
Transportation shall take such steps as
may be necessary to revoke at the earliest
possible date the right of any foreign air
carrier owned, or controlled, directly or in-
directly, by the government of that country
to engage in foreign air transportation to
or from the United States.
‘‘(iii) The Secretary of Transportation
may provide for such exceptions from
clauses (i) and (ii) as the Secretary consid-
ers necessary to provide for emergencies in
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which the safety of an aircraft or its crew
or passengers is threatened.
‘‘(iv) For purposes of this subpara-
graph, the terms ‘air transportation’, ‘air
carrier’, ‘foreign air carrier’, and ‘foreign
air transportation’ have the meanings such
terms have under Section 101 of the Fed-
eral Aviation Act of 1958 (49 U.S.C. App.
1301).
‘‘(d) DEFERRAL AND LIMITATION.—
‘‘(1) The President may delay the making of a
determination under subsection (a) or the imposition
of sanctions in order to protect—
‘‘(A) ongoing criminal investigations; or
‘‘(B) sensitive intelligence sources and
methods which are being used to acquire fur-
ther information on the proliferation of weapons
of mass destruction, their delivery systems, or
advanced conventional weapons.
The President shall exercise this authority only when
the President determines that nonproliferation objec-
tives do not outweigh the need to delay the imposi-
tion of sanctions to avoid compromising the criminal
investigation or intelligence sources and methods in-
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volved. The President shall proceed when the basis
for the delay no longer exists.
‘‘(2) The President may delay the imposition of
sanctions for up to 180 days if the United States is
engaged in diplomatic efforts and consultations with
the objective of—
‘‘(A) curtailing the policies and conduct of
the government or person in the country of
weapons activity determined to have engaged in
the sanctioned conduct; or
‘‘(B) obtaining, from the government with
effective jurisdiction over the sanctioned person
appropriate sanctions against such person or
the initiation of legal process to impose such
sanctions.
If such diplomatic efforts and consultations succeed
(i) in curtailing the conduct of the government or
person engaged in the sanctioned conduct, or (ii) in
obtaining enforcement action in accordance with
subparagraph (B), the President shall not be re-
quired to apply or maintain sanctions under this
section.
‘‘(3) The President should seek multilateral
support for sanctions against activity covered by this
section. If multilateral sanctions are achieved that
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the President determines will be more effective than
unilateral sanctions in furthering the national secu-
rity or nonproliferation objectives of the United
States, the President shall not be required to exer-
cise the authority in this section in a manner incon-
sistent with such multilateral sanctions.
‘‘(e) EXCEPTIONS.—The President shall not be re-
quired to apply or maintain sanctions under this section—
‘‘(1) in the case of procurement of defense arti-
cles or defense services—
‘‘(A) under existing contracts or sub-
contracts, including the exercise or options for
production quantities to satisfy United States
operational military requirements;
‘‘(B) if the President determines that the
person to which the sanctions would otherwise
be applied is a sole source supplier of the de-
fense articles or services, that the defense arti-
cles or services are essential, and that alter-
native sources are not readily or reasonably
available; or
‘‘(C) if the President determines that such
articles or services are essential to the national
security under defense coproduction agree-
ments;
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‘‘(2) to the import of—
‘‘(A) products or services provided under
contracts entered into before the date on which
the President publishes notice of intention to
impose sanctions; or
‘‘(B)(i) spare parts;
‘‘(ii) component parts, but not finished
products, essential to United States products or
production;
‘‘(iii) information and technology essential
to United States products or production; and
‘‘(iv) routine servicing and maintenance of
products, to the extent that alternative sources
are not readily or reasonably available;
‘‘(3) to medical or other humanitarian items; or
‘‘(4) to any transaction subject to the reporting
requirements of title V of the National Security Act
of 1947; and
‘‘(5) when the President determines, categori-
cally or on a case-by-case basis, that the application
of sanctions to bar performance of a contract or
agreement entered into before the date of the impo-
sition of sanctions is not necessary to achieve the
national security or nonproliferation objectives of the
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United States and would be contrary to the national
interest.
‘‘(f) TERMINATION OF SANCTIONS FOR USING CHEM-
ICAL OR BIOLOGICAL WEAPONS.—During the minimum 2
years period of the mandatory sanctions imposed pursuant
to a determination under subsection (a)(2), such sanctions
may be removed if the President determines and so cer-
tifies to the Congress that—
‘‘(1) the government of that country has pro-
vided reliable assurances that it will not use chemi-
cal or biological weapons in violation of international
law and will not use lethal chemical or biological
weapons against its own nationals;
‘‘(2) that government is not making prepara-
tions to use chemical or biological weapons in viola-
tion of international law or to use lethal chemical or
biological weapons against its own nationals;
‘‘(3) that government is willing to allow on-site
inspections by United Nations observers or other
internationally-recognized, impartial observers to
verify that it is not making preparations to use
chemical or biological weapons in violation of inter-
national law or to use lethal chemical or biological
weapons against its own nationals, or other reliable
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means exist to verify that it is not making such
preparations; and
‘‘(4) that government is making restitution to
those affected by any use of chemical or biological
weapons in violation of international law or by any
use of lethal chemical or biological weapons against
its own nationals.
‘‘(g) WAIVER.—
‘‘(1) CRITERION FOR WAIVER.—The President
may waive or partially waive the application of any
sanction imposed on any entity pursuant to this sec-
tion, if the President determines and certifies to
Congress that such waiver is important to the na-
tional interests of the United States.
‘‘(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 stating the reasons for ex-
ercise of the waiver authority.
‘‘(h) REGULATORY
IMPLEMENTATION
OF
SANC-
TIONS.—For items subject to the jurisdiction of the Sec-
retary of Commerce under the Export Administration Act,
sanctions shall be implemented in regulations issued by
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the Secretary and shall specify the scope of products and
entities. For items subject to the jurisdiction of the Sec-
retary of State under this Act, sanctions shall be imple-
mented in regulations issued by the Secretary State and
shall specify the scope of products and entities.’’.
SEC. 13. ANNUAL REPORT.
(a) CONTENTS.—Not later than March 1 of each
year, the Secretary shall submit to the Congress a report
on the administration of this Act during the preceding cal-
endar year. All agencies shall cooperate fully with the Sec-
retary in providing information for such report. Such re-
port shall include detailed information on—
(1) the implementation of the policies set forth
in section 3, including delegations of authority by
the President as provided in section 4(e), consulta-
tions with the technical advisory committees estab-
lished pursuant to section 4(g), and any changes in
the exercise of the authorities contained in sections
5(a), 6(a), and 7(a);
(2) adjustments to multilateral export controls;
activities involving the license free zones authorized
by section 5(f)(4); and determinations under section
5(l), the criteria used to make such determinations,
the removal of any export controls under such sec-
tion, and any evidence demonstrating a need to
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maintain export controls notwithstanding foreign
availability;
(3) the effectiveness of unilateral export con-
trols imposed under section 5, and any adjustments
thereto; and embargoes imposed, maintained, or re-
moved in accordance with section 5, including de-
scriptions of each embargo and the rationale for im-
posing, maintaining, or removing such embargoes;
(4) short supply controls and monitoring in ac-
cordance with section 6;
(5) organizational and procedural changes un-
dertaken in furtherance of the policies set forth in
this Act, including changes to increase the efficiency
of the export licensing process and to fulfill the re-
quirements of section 8, including an accounting of
appeals received, and actions taken pursuant thereto
under section 8(h);
(6) violations under section 9, enforcement ac-
tivities under section 10, and any reviews under-
taken in furtherance of the policies of this Act;
(7) the issuance of regulations under the au-
thority of this Act;
(8) the results, in as much detail as may be in-
cluded consistent with multilateral arrangements
and the need to maintain the confidentiality of pro-
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prietary information and classified information, of
the reviews of the Commerce Control List, and any
revisions to the Commerce Control List resulting
from such reviews, required by section 11; and
(9) the imposition or removal of sanctions
against certain entities and foreign countries in ac-
cordance with section 12.
(b) REPORT ON CERTAIN EXPORT CONTROLS.—To
the extent that the President determines that the policies
set forth in section 3 require the control of the export of
items other than those subject to multilateral controls, or
require more stringent controls than the multilateral re-
gimes, the President shall include in each annual report
the reasons for the need to impose, or to continue to im-
pose, such controls and the estimated domestic economic
impact on the various industries affected by such controls.
SEC. 14. DEFINITIONS.
As used in this Act:
(1) AFFILIATES.—The term ‘‘affiliates’’ in-
cludes both governmental entities and commercial
entities that are controlled in fact by target coun-
tries;
(2) AUSTRALIA
GROUP
(‘‘AG’’).— The term
‘‘Australia Group’’ or ‘‘AG’’ means the multilateral
arrangement in which the United States participates