SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Security Assistance and Arms Export Control Reform 
Act of 2008’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
TITLE I—REFORM OF ARMS EXPORT CONTROL PROCEDURES 
Subtitle A—Defense Trade Controls Performance Improvement Act of 2008 
Sec. 101. Short title. 
Sec. 102. Findings. 
Sec. 103. Strategic review and assessment of the United States export controls 
system. 
Sec. 104. Performance goals for processing of applications for licenses to export 
items on USML. 
Sec. 105. Requirement to ensure adequate staff and resources for DDTC of the 
Department of State. 
Sec. 106. Audit by Inspector General of the Department of State. 
Sec. 107. Increased flexibility for use of defense trade controls registration fees. 
Sec. 108. Review of ITAR and USML. 
Sec. 109. Special licensing authorization for certain exports to NATO member 
states, Australia, Japan, New Zealand, Israel, and South 
Korea. 
Sec. 110. Availability of information on the status of license applications under 
chapter 3 of the Arms Export Control Act. 
Sec. 111. Sense of Congress. 
Sec. 112. Definitions. 
Sec. 113. Authorization of appropriations. 
Subtitle B—Miscellaneous Provisions 
Sec. 121. Report on self-financing options for export licensing functions of 
DDTC of the Department of State. 
Sec. 122. Expediting congressional defense export review period for South 
Korea and Israel. 
Sec. 123. Availability to Congress of Presidential directives regarding United 
States arms export policies, practices, and regulations. 
Sec. 124. Increase in congressional notification thresholds and expediting con-
gressional review for South Korea and Israel. 
Sec. 125. Diplomatic efforts to strengthen national and international arms ex-
port controls. 
Sec. 126. Reporting requirement for unlicensed exports. 
Sec. 127. Report on value of major defense equipment and defense articles ex-
ported under section 38 of the Arms Export Control Act. 
Sec. 128. Report on satellite export controls. 
Sec. 129. Definition.
TITLE II—SECURITY ASSISTANCE AND RELATED SUPPORT FOR 
ISRAEL 
Sec. 201. Assessment of Israel’s qualitative military edge over military threats. 
Sec. 202. Report on United States’ commitments to the security of Israel. 
Sec. 203. War Reserves Stockpile. 
Sec. 204. Implementation of Memorandum of Understanding with Israel. 
Sec. 205. Definitions. 
TITLE III—WAIVER OF CERTAIN SANCTIONS TO FACILITATE 
DENUCLEARIZATION ACTIVITIES IN NORTH KOREA 
Sec. 301. Waiver authority and exceptions. 
Sec. 302. Certification regarding waiver of certain sanctions. 
Sec. 303. Congressional notification and report. 
Sec. 304. Termination of waiver authority. 
Sec. 305. Expiration of waiver authority. 
Sec. 306. Continuation of restrictions against the Government of North Korea. 
Sec. 307. Report on verification measures relating to North Korea’s nuclear 
programs. 
Sec. 308. Definitions. 
TITLE IV—MISCELLANEOUS PROVISIONS 
Sec. 401. Authority to build the capacity of foreign military forces. 
Sec. 402. Maintenance of European Union arms embargo against China. 
Sec. 403. Reimbursement of salaries of members of the reserve components in 
support of security cooperation missions. 
Sec. 404. Foreign Military Sales Stockpile Fund. 
Sec. 405. Sense of Congress. 
TITLE V—AUTHORITY TO TRANSFER NAVAL VESSELS 
Sec. 501. Authority to transfer naval vessels to certain foreign recipients. 
TITLE I—REFORM OF ARMS 
EXPORT CONTROL PROCEDURES 
Subtitle A—Defense Trade Controls 
Performance Improvement Act 
of 2008 
SEC. 101. SHORT TITLE. 
This subtitle may be cited as the ‘‘Defense Trade 
Controls Performance Improvement Act of 2008’’. 
SEC. 102. FINDINGS. 
Congress finds the following:
(1) In a time of international terrorist threats 
and a dynamic global economic and security environ-
ment, United States policy with regard to export 
controls is in urgent need of a comprehensive review 
in order to ensure such controls are protecting the 
national security and foreign policy interests of the 
United States. 
(2) In January 2007, the Government Account-
ability Office designated the effective identification 
and protection of critical technologies as a govern-
ment-wide, high-risk area, warranting a strategic re-
examination of existing programs, including pro-
grams relating to arms export controls. 
(3) Federal Government agencies must review 
licenses for export of munitions in a thorough and 
timely manner to ensure that the United States is 
able to assist United States allies and to prevent nu-
clear and conventional weapons from getting into the 
hands of enemies of the United States. 
(4) Both staffing and funding that relate to the 
Department of State’s arms export control respon-
sibilities have not kept pace with the increased work-
load relating to such responsibilities, especially over 
the last five years.
(5) Outsourcing and off-shoring of defense pro-
duction and the policy of many United States trad-
ing partners to require offsets for major sales of de-
fense and aerospace articles present a potential 
threat to United States national security and eco-
nomic well-being and serve to weaken the defense in-
dustrial base. 
(6) Export control policies can have a negative 
impact on United States employment, nonprolifera-
tion goals, and the health of the defense industrial 
base, particularly when facilitating the overseas 
transfer of technology or production and other forms 
of outsourcing, such as offsets (direct and indirect), 
co-production, subcontracts, overseas investment and 
joint ventures in defense and commercial industries. 
Federal Government agencies must develop new and 
effective procedures for ensuring that export control 
systems address these problems and the threat they 
pose to national security. 
(7) In the report to Congress required by the 
Conference Report (Report 109–272) accompanying 
the bill, H.R. 2862 (the Science, State, Justice, 
Commerce and Related Agencies Appropriations Act, 
2006; Public Law 109–108), the Department of 
State concluded that—
(A) defense trade licensing has become 
much more complex in recent years as a con-
sequence of the increasing globalization of the 
defense industry; 
(B) the most important challenge to the 
Department of State’s licensing process has 
been the sheer growth in volume of applicants 
for licenses and agreements, without the cor-
responding increase in licensing officers; 
(C) fiscal year 2005 marked the third 
straight year of roughly 8 percent annual in-
creases in licensing volume; 
(D) although an 8 percent increase in 
workload equates to a requirement for three ad-
ditional licensing officers per year, there has 
been no increase in licensing officers during this 
period; and 
(E) the increase in licensing volume with-
out a corresponding increase in trained and ex-
perienced personnel has resulted in delays and 
increased processing times. 
(8) In 2006, the Department of State processed 
over three times as many licensing applications as 
the Department of Commerce with about a fifth of 
the staff of the Department of Commerce.
(9) On July 27, 2007, in testimony delivered to 
the Subcommittee on Terrorism, Nonproliferation 
and Trade of the House Committee on Foreign Af-
fairs to examine the effectiveness of the United 
States export control regime, the Government Ac-
countability Office found that— 
(A) the United States Government needs 
to conduct assessments to determine its overall 
effectiveness in the area of arms export control; 
and 
(B) the processing times of the Depart-
ment of State doubled over the period from 
2002 to 2006. 
(10) Although the current number of unproc-
essed applications for licenses to export defense 
items is less than 3,800 applications, due to the ex-
traordinary efforts of the personnel and manage-
ment of the Department of State’s Directorate of 
Defense Trade Controls, at the end of 2006, the De-
partment of State’s backlog of such unprocessed ap-
plications reached its highest level at more than 
10,000 unprocessed applications. This resulted in 
major management and personnel challenges for the 
Directorate of Defense Trade Controls.
items exported to United States NATO allies and 
other major non-NATO allies. 
(13) A Government Accountability Office report 
of October 9, 2001 (GAO–02–120), documented am-
biguous export control jurisdiction affecting 25 per-
cent of the items that the United States Government 
agreed to control as part of its commitments to the 
Missile Technology Control Regime. The United 
States Government has not clearly determined which 
department has jurisdiction over these items, which 
increases the risk that these items will fall into the 
wrong hands. During both the 108th and 109th 
Congresses, the House of Representatives passed 
legislation mandating that the Administration clarify 
this issue. 
SEC. 103. STRATEGIC REVIEW AND ASSESSMENT OF THE 
UNITED STATES EXPORT CONTROLS SYSTEM. 
(a) REVIEW AND ASSESSMENT.— 
(1) IN GENERAL.—Not later than March 31, 
2009, the President shall conduct a comprehensive 
and systematic review and assessment of the United 
States arms export controls system in the context of 
the national security interests and strategic foreign 
policy objectives of the United States.
(2) ELEMENTS.—The review and assessment 
required under paragraph (1) shall— 
(A) determine the overall effectiveness of 
the United States arms export controls system 
in order to, where appropriate, strengthen con-
trols, improve efficiency, and reduce unneces-
sary redundancies across Federal Government 
agencies, through administrative actions, in-
cluding regulations, and to formulate legislative 
proposals for new authorities that are needed; 
(B) develop processes to ensure better co-
ordination of arms export control activities of 
the Department of State with activities of other 
departments and agencies of the United States 
that are responsible for enforcing United States 
arms export control laws; 
(C) ensure that weapons-related nuclear 
technology, other technology related to weapons 
of mass destruction, and all items on the Mis-
sile Technology Control Regime Annex are sub-
ject to stringent control by the United States 
Government; 
(D) determine the overall effect of arms 
export controls on counterterrorism, law en-
forcement, and infrastructure protection mis-
sions of the Department of Homeland Security; 
(E) contain a detailed summary of known 
attempts by unauthorized end-users (such as 
international arms traffickers, foreign intel-
ligence agencies, and foreign terrorist organiza-
tions) to acquire items on the United States 
Munitions List and related technical data, in-
cluding— 
(i) data on— 
(I) commodities sought, such as 
M–4 rifles, night vision devices, F–14 
spare parts; 
(II) parties involved, such as the 
intended 
end-users, 
brokers, 
con-
signees, and shippers; 
(III) attempted acquisition of 
technology and technical data critical 
to manufacture items on the United 
States Munitions List; 
(IV) destination countries and 
transit countries; 
(V) modes of transport; 
(VI) trafficking methods, such as 
use of false documentation and front
companies registered under flags of 
convenience; 
(VII) whether the attempted il-
licit transfer was successful; and 
(VIII) 
any 
administrative 
or 
criminal enforcement actions taken by 
the United States and any other gov-
ernment in relation to the attempted 
illicit transfer; 
(ii) a thorough evaluation of the Blue 
Lantern Program, including the adequacy 
of current staffing and funding levels; 
(iii) a detailed analysis of licensing ex-
emptions and their successful exploitation 
by unauthorized end-users; and 
(iv) an examination of the extent to 
which the increased tendency toward 
outsourcing and off-shoring of defense pro-
duction harm United States national secu-
rity and weaken the defense industrial 
base, including direct and indirect impact 
on employment, and formulate policies to 
address these trends as well as the policy 
of some United States trading partners to
require offsets for major sales of defense 
articles; and 
(F) assess the extent to which export con-
trol policies and practices under the Arms Ex-
port Control Act promote the protection of 
basic human rights. 
(b) CONGRESSIONAL
BRIEFINGS.—The President 
shall provide periodic briefings to the appropriate congres-
sional committees on the progress of the review and as-
sessment conducted under subsection (a). The require-
ment to provide congressional briefings under this sub-
section shall terminate on the date on which the President 
transmits to the appropriate congressional committees the 
report required under subsection (c). 
(c) REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the President shall 
transmit to the appropriate congressional committees and 
the Committee on Armed Services of the House of Rep-
resentatives and the Committee on Armed Services of the 
Senate a report that contains the results of the review and 
assessment conducted under subsection (a). The report re-
quired by this subsection shall contain a certification that 
the requirement of subsection (a)(2)(C) has been met, or 
if the requirement has not been met, the reasons therefor. 
The report required by this subsection shall be submitted
in unclassified form, but may contain a classified annex, 
if necessary. 
SEC. 104. PERFORMANCE GOALS FOR PROCESSING OF AP-
PLICATIONS 
FOR 
LICENSES 
TO 
EXPORT 
ITEMS ON USML. 
(a) IN GENERAL.—The Secretary of State, acting 
through the head of the Directorate of Defense Trade 
Controls of the Department of State, shall establish the 
following goals: 
(1) The processing time for review of each ap-
plication for a license to export items on the United 
States Munitions List (other than applications for 
approval of agreements under part 124 of title 22, 
Code of Federal Regulations (or successor regula-
tions)) shall be not more than 60 days from the date 
of receipt of the application. 
(2) The processing time for review of each ap-
plication for a commodity jurisdiction determination 
shall be not more than 60 days from the date of re-
ceipt of the application. 
(3) The total number of applications described 
in paragraph (1) that are unprocessed shall be not 
more than 7 percent of the total number of such ap-
plications submitted in the preceding calendar year.
(b) ADDITIONAL REVIEW.—(1) If an application de-
scribed in paragraph (1) or (2) of subsection (a) is not 
processed within the time period described in the respec-
tive paragraph of such subsection, then the Managing Di-
rector of the Directorate of Defense Trade Controls or the 
Deputy Assistant Secretary for Defense Trade and Re-
gional Security of the Department of State, as appro-
priate, shall review the status of the application to deter-
mine if further action is required to process the applica-
tion. 
(2) If an application described in paragraph (1) or 
(2) of subsection (a) is not processed within 90 days from 
the date of receipt of the application, then the Assistant 
Secretary for Political-Military Affairs of the Department 
of State shall— 
(A) review the status of the application to de-
termine if further action is required to process the 
application; and 
(B) submit to the appropriate congressional 
committees a notification of the review conducted 
under subparagraph (A), including a description of 
the application, the reason for delay in processing 
the application, and a proposal for further action to 
process the application.
tive measures that the Directorate of Defense Trade Con-
trols will take to comply with the requirements of sub-
section (a). 
(f) TRANSPARENCY OF COMMODITY JURISDICTION 
DETERMINATIONS.— 
(1) DECLARATION
OF
POLICY.—Congress de-
clares that the complete confidentiality surrounding 
several hundred commodity jurisdiction determina-
tions made each year by the Department of State 
pursuant to the International Traffic in Arms Regu-
lations is not necessary to protect legitimate propri-
etary interests of persons or their prices and cus-
tomers, is not in the best security and foreign policy 
interests of the United States, is inconsistent with 
the need to ensure a level playing field for United 
States exporters, and detracts from United States 
efforts to promote greater transparency and respon-
sibility by other countries in their export control sys-
tems. 
(2) PUBLICATION
ON
INTERNET
WEBSITE.— 
The Secretary of State shall— 
(A) upon making a commodity jurisdiction 
determination referred to in paragraph (1) pub-
lish on the Internet website of the Department
of State not later than 30 days after the date 
of the determination— 
(i) the name of the manufacturer of 
the item; 
(ii) a brief general description of the 
item; 
(iii) the model or part number of the 
item; and 
(iv) the United States Munitions List 
designation under which the item has been 
designated, except that— 
(I) the name of the person or 
business organization that sought the 
commodity jurisdiction determination 
shall not be published if the person or 
business organization is not the man-
ufacturer of the item; and 
(II) the names of the customers, 
the price of the item, and any propri-
etary information relating to the item 
indicated by the person or business 
organization that sought the com-
modity 
jurisdiction 
determination 
shall not be published; and
(B) maintain on the Internet website of 
the Department of State an archive, that is ac-
cessible to the general public and other depart-
ments and agencies of the United States, of the 
information published under subparagraph (A). 
(g) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to prohibit the President or Con-
gress from undertaking a thorough review of the national 
security and foreign policy implications of a proposed ex-
port of items on the United States Munitions List. 
SEC. 105. REQUIREMENT TO ENSURE ADEQUATE STAFF 
AND RESOURCES FOR DDTC OF THE DEPART-
MENT OF STATE. 
(a) REQUIREMENT.—The Secretary of State shall en-
sure that the Directorate of Defense Trade Controls of 
the Department of State has the necessary staff and re-
sources to carry out this subtitle and the amendments 
made by this subtitle. 
(b) MINIMUM NUMBER OF LICENSING OFFICERS.— 
For fiscal year 2010 and each subsequent fiscal year, the 
Secretary of State shall ensure that the Directorate of De-
fense Trade Controls has at least 1 licensing officer for 
every 1,250 applications for licenses and other authoriza-
tions to export items on the United States Munitions List 
by not later than the third quarter of such fiscal year,
based on the number of licenses and other authorizations 
expected to be received during such fiscal year. The Sec-
retary shall ensure that in meeting the requirement of this 
subsection, the performance of other functions of the Di-
rectorate of Defense Trade Controls is maintained and 
adequate staff is provided for those functions. 
(c) MINIMUM NUMBER OF STAFF FOR COMMODITY 
JURISDICTION DETERMINATIONS.—For each of the fiscal 
years 2009 through 2011, the Secretary of State shall en-
sure that the Directorate of Defense Trade Controls has, 
to the extent practicable, not less than three individuals 
assigned to review applications for commodity jurisdiction 
determinations. 
(d) ENFORCEMENT
RESOURCES.—In accordance 
with section 127.4 of title 22, Code of Federal Regula-
tions, U.S. Immigration and Customs Enforcement is au-
thorized to investigate violations of the International Traf-
fic in Arms Regulations on behalf of the Directorate of 
Defense Trade Controls of the Department of State. The 
Secretary of State shall ensure that the Directorate of De-
fense Trade Controls has adequate staffing for enforce-
ment of the International Traffic in Arms Regulations.
SEC. 106. AUDIT BY INSPECTOR GENERAL OF THE DEPART-
MENT OF STATE. 
(a) AUDIT.—Not later than the end of each of the 
fiscal years 2010 and 2011, the Inspector General of the 
Department of State shall conduct an independent audit 
to determine the extent to which the Department of State 
is meeting the requirements of sections 104 and 105 of 
this Act. 
(b) REPORT.—The Inspector General shall submit to 
the appropriate congressional committees a report that 
contains the result of each audit conducted under sub-
section (a). 
SEC. 107. INCREASED FLEXIBILITY FOR USE OF DEFENSE 
TRADE CONTROLS REGISTRATION FEES. 
(a) IN GENERAL.—Section 45 of the State Depart-
ment Basic Authorities Act of 1956 (22 U.S.C. 2717) is 
amended— 
(1) in the first sentence— 
(A) by striking ‘‘For’’ and inserting ‘‘(a) 
IN GENERAL.—For’’; and 
(B) by striking ‘‘Office’’ and inserting ‘‘Di-
rectorate’’; 
(2) by amending the second sentence to read as 
follows:
‘‘(b) AVAILABILITY OF FEES.—Fees credited to the 
account referred to in subsection (a) shall be available only 
for payment of expenses incurred for— 
‘‘(1) management, 
‘‘(2) licensing (in order to meet the require-
ments of section 105 of the Defense Trade Controls 
Performance Improvement Act of 2008 (relating to 
adequate staff and resources of the Directorate of 
Defense Trade Controls)), 
‘‘(3) compliance, 
‘‘(4) policy activities, and 
‘‘(5) facilities, 
of defense trade controls functions.’’; and 
(3) by adding at the end the following: 
‘‘(c) ALLOCATION OF FEES.—In allocating fees for 
payment of expenses described in subsection (b), the Sec-
retary of State shall accord the highest priority to pay-
ment of expenses incurred for personnel and equipment 
of the Directorate of Defense Trade Controls, including 
payment of expenses incurred to meet the requirements 
of section 105 of the Defense Trade Controls Performance 
Improvement Act of 2008.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
38(b)(3)(A) of the Arms Export Control Act (22 U.S.C. 
2778(b)(3)(A)) is amended to read as follows:
‘‘(3)(A) For each fiscal year, 100 percent of registra-
tion fees collected pursuant to paragraph (1) shall be cred-
ited to a Department of State account, to be available 
without fiscal year limitation. Fees credited to that ac-
count shall be available only for the payment of expenses 
incurred for— 
‘‘(i) management, 
‘‘(ii) licensing (in order to meet the require-
ments of section 105 of the Defense Trade Controls 
Performance Improvement Act of 2008 (relating to 
adequate staff and resources of the Directorate of 
Defense Trade Controls)), 
‘‘(iii) compliance, 
‘‘(iv) policy activities, and 
‘‘(v) facilities, 
of defense trade controls functions.’’. 
SEC. 108. REVIEW OF ITAR AND USML. 
(a) IN GENERAL.—The Secretary of State, in coordi-
nation with the heads of other relevant departments and 
agencies of the United States Government, shall review, 
with the assistance of United States manufacturers and 
other interested parties described in section 111(2) of this 
Act, the International Traffic in Arms Regulations and 
the United States Munitions List to determine those tech-
nologies and goods that warrant different or additional 
controls. 
(b) CONDUCT OF REVIEW.—In carrying out the re-
view required under subsection (a), the Secretary of State 
shall review not less than 20 percent of the technologies 
and goods on the International Traffic in Arms Regula-
tions and the United States Munitions List in each cal-
endar year so that for the 5-year period beginning with 
calendar year 2009, and for each subsequent 5-year pe-
riod, the International Traffic in Arms Regulations and 
the United States Munitions List will be reviewed in their 
entirety. 
(c) REPORT.—The Secretary of State shall submit to 
the appropriate congressional committees and the Com-
mittee on Armed Services of the House of Representatives 
and the Committee on Armed Services of the Senate an 
annual report on the results of the review carried out 
under this section. 
SEC. 109. SPECIAL LICENSING AUTHORIZATION FOR CER-
TAIN EXPORTS TO NATO MEMBER STATES, 
AUSTRALIA, JAPAN, NEW ZEALAND, ISRAEL, 
AND SOUTH KOREA. 
(a) IN GENERAL.—Section 38 of the Arms Export 
Control Act (22 U.S.C. 2778) is amended by adding at 
the end the following:
‘‘(k) SPECIAL LICENSING AUTHORIZATION FOR CER-
TAIN EXPORTS TO NATO MEMBER STATES, AUSTRALIA, 
JAPAN, NEW ZEALAND, ISRAEL, AND SOUTH KOREA.— 
‘‘(1) AUTHORIZATION.—(A) The President may 
provide for special licensing authorization for exports 
of United States-manufactured spare and replace-
ment parts or components listed in an application 
for such special licensing authorization in connection 
with defense items previously exported to NATO 
member states, Australia, Japan, New Zealand, 
Israel, and South Korea. A special licensing author-
ization issued pursuant to this clause shall be effec-
tive for a period not to exceed 5 years. 
‘‘(B) An authorization may be issued under 
subparagraph (A) only if the applicable government 
of the country described in subparagraph (A), acting 
through the applicant for the authorization, certifies 
that— 
‘‘(i) the export of spare and replacement 
parts or components supports a defense item 
previously lawfully exported; 
‘‘(ii) the spare and replacement parts or 
components will be transferred to a defense 
agency of a country described in subparagraph 
(A) that is a previously approved end-user of
the defense items and not to a distributor or a 
foreign consignee of such defense items; 
‘‘(iii) the spare and replacement parts or 
components will not to be used to materially en-
hance, optimize, or otherwise modify or upgrade 
the capability of the defense items; 
‘‘(iv) the spare and replacement parts or 
components relate to a defense item that is 
owned, operated, and in the inventory of the 
armed forces a country described in subpara-
graph (A); 
‘‘(v) the export of spare and replacement 
parts or components will be effected using the 
freight forwarder designated by the purchasing 
country’s diplomatic mission as responsible for 
handling transfers under chapter 2 of this Act 
as required under regulations; and 
‘‘(vi) the spare and replacement parts or 
components to be exported under the special li-
censing authorization are specifically identified 
in the application. 
‘‘(C) An authorization may not be issued under 
subparagraph (A) for purposes of establishing off-
shore procurement arrangements or producing de-
fense articles offshore.
‘‘(D)(i) For purposes of this subsection, the 
term ‘United States-manufactured spare and re-
placement parts or components’ means
spare and 
replacement parts or components— 
‘‘(I) with respect to which— 
‘‘(aa) United States-origin content 
costs constitute at least 85 percent of the 
total content costs; 
‘‘(bb) United States manufacturing 
costs constitute at least 85 percent of the 
total manufacturing costs; and 
‘‘(cc) foreign content, if any, is limited 
to content from countries eligible to receive 
exports of items on the United States Mu-
nitions List under the International Traffic 
in Arms Regulations (other than de mini-
mis foreign content); 
‘‘(II) that were last substantially trans-
formed in the United States; and 
‘‘(III) that are not— 
‘‘(aa) classified as significant military 
equipment; or 
‘‘(bb) listed on the Missile Technology 
Control Regime Annex.
‘‘(ii) For purposes of clause (i)(I)(aa) and (bb), 
the costs of non-United States-origin content shall 
be determined using the final price or final cost as-
sociated with the non-United States-origin content. 
‘‘(2) INAPPLICABILITY
PROVISIONS.—(A) The 
provisions of this subsection shall not apply with re-
spect to re-exports or re-transfers of spare and re-
placement parts or components and related services 
of defense items described in paragraph (1). 
‘‘(B) The congressional notification require-
ments contained in section 36(c) of this Act shall 
not apply with respect to an authorization issued 
under paragraph (1).’’. 
(b) EFFECTIVE DATE.—The President shall issue 
regulations to implement amendments made by subsection 
(a) not later than 180 days after the date of the enactment 
of this Act. 
SEC. 110. AVAILABILITY OF INFORMATION ON THE STATUS 
OF LICENSE APPLICATIONS UNDER CHAPTER 
3 OF THE ARMS EXPORT CONTROL ACT. 
Chapter 3 of the Arms Export Control Act (22 
U.S.C. 2771 et seq.) is amended by inserting after section 
38 the following new section:
‘‘SEC. 38A. AVAILABILITY OF INFORMATION ON THE STA-
TUS OF LICENSE APPLICATIONS UNDER THIS 
CHAPTER. 
‘‘(a) AVAILABILITY
OF INFORMATION.—Not later 
than one year after the date of the enactment of the De-
fense Trade Controls Performance Improvement Act of 
2008, the President shall make available to persons who 
have pending license applications under this chapter and 
the committees of jurisdiction the ability to access elec-
tronically current information on the status of each license 
application required to be submitted under this chapter. 
‘‘(b) MATTERS TO BE INCLUDED.—The information 
referred to in subsection (a) shall be limited to the fol-
lowing: 
‘‘(1) The case number of the license application. 
‘‘(2) The date on which the license application 
is received by the Department of State and becomes 
an ‘open application’. 
‘‘(3) The date on which the Directorate of De-
fense Trade Controls makes a determination with re-
spect to the license application or transmits it for 
interagency review, if required. 
‘‘(4) The date on which the interagency review 
process for the license application is completed, if 
such a review process is required.
‘‘(5) The date on which the Department of 
State begins consultations with the congressional 
committees of jurisdiction with respect to the license 
application. 
‘‘(6) The date on which the license application 
is sent to the congressional committees of jurisdic-
tion.’’. 
SEC. 111. SENSE OF CONGRESS. 
It is the sense of Congress that— 
(1)(A) the advice provided to the Secretary of 
State by the Defense Trade Advisory Group 
(DTAG) supports the regulation of defense trade 
and helps ensure that United States national secu-
rity and foreign policy interests continue to be pro-
tected and advanced while helping to reduce unnec-
essary impediments to legitimate exports in order to 
support the defense requirements of United States 
friends and allies; and 
(B) therefore, the Secretary of State should 
share significant planned rules and policy shifts with 
DTAG for comment; and 
(2) recognizing the constraints imposed on the 
Department of State by the nature of a voluntary 
organization such as DTAG, the Secretary of State 
is encouraged to ensure that members of DTAG are
drawn from a representative cross-section of subject 
matter experts from the United States defense in-
dustry, relevant trade and labor associations, aca-
demic, and foundation personnel. 
SEC. 112. DEFINITIONS. 
In this subtitle: 
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means the Committee on Foreign Affairs of 
the House of Representatives and the Committee on 
Foreign Relations of the Senate. 
(2) INTERNATIONAL TRAFFIC IN ARMS REGULA-
TIONS; ITAR.—The term ‘‘International Traffic in 
Arms Regulations’’ or ‘‘ITAR’’ means those regula-
tions contained in parts 120 through 130 of title 22, 
Code of Federal Regulations (or successor regula-
tions). 
(3) MAJOR NON-NATO ALLY.—The term ‘‘major 
non-NATO ally’’ means a country that is designated 
in accordance with section 517 of the Foreign As-
sistance Act of 1961 (22 U.S.C. 2321k) as a major 
non-NATO ally for purposes of the Foreign Assist-
ance Act of 1961 (22 U.S.C. 2151 et seq.) and the 
Arms Export Control Act (22 U.S.C. 2751 et seq.).
(4) MISSILE TECHNOLOGY CONTROL REGIME; 
MTCR.—The term ‘‘Missile Technology Control Re-
gime’’ or ‘‘MTCR’’ has the meaning given the term 
in section 11B(c)(2) of the Export Administration 
Act of 1979 (50 U.S.C. App. 2401b(c)(2)). 
(5) MISSILE
TECHNOLOGY
CONTROL
REGIME 
ANNEX; MTCR
ANNEX.—The term ‘‘Missile Tech-
nology Control Regime Annex’’ or ‘‘MTCR Annex’’ 
has the meaning given the term in section 11B(c)(4) 
of the Export Administration Act of 1979 (50 
U.S.C. App. 2401b(c)(4)). 
(6) OFFSETS.—The term ‘‘offsets’’ includes 
compensation practices required of purchase in ei-
ther government-to-government or commercial sales 
of defense articles or defense services under the 
Arms Export Control Act (22 U.S.C. 2751 et seq.) 
and the International Traffic in Arms Regulations. 
(7) UNITED STATES MUNITIONS LIST; USML.— 
The term ‘‘United States Munitions List’’ or 
‘‘USML’’ means the list referred to in section 
38(a)(1) of the Arms Export Control Act (22 U.S.C. 
2778(a)(1)). 
SEC. 113. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated such sums 
as may be necessary for fiscal year 2009 and each subse-
quent fiscal year to carry out this subtitle and the amend-
ments made by this subtitle. 
Subtitle B—Miscellaneous 
Provisions 
SEC. 121. REPORT ON SELF-FINANCING OPTIONS FOR EX-
PORT LICENSING FUNCTIONS OF DDTC OF 
THE DEPARTMENT OF STATE. 
Not later than 90 days after the date of the enact-
ment of this Act, the Secretary of State shall submit to 
the appropriate congressional committees a report on pos-
sible mechanisms to place the export licensing functions 
of the Directorate of Defense Trade Controls of the De-
partment of State on a 100 percent self-financing basis. 
SEC. 122. EXPEDITING CONGRESSIONAL DEFENSE EXPORT 
REVIEW PERIOD FOR SOUTH KOREA AND 
ISRAEL. 
The Arms Export Control Act (22 U.S.C. 2751 et 
seq.) is amended— 
(1) 
in 
sections 
3(d)(2)(B), 
3(d)(3)(A)(i), 
3(d)(5), 
21(e)(2)(A), 
36(b)(2), 
36(c)(2)(A), 
36(d)(2)(A), 62(c)(1), and 63(a)(2) by inserting 
‘‘the Republic of Korea, Israel,’’ before ‘‘or New 
Zealand’’;
(2) in section 3(b)(2), by inserting ‘‘the Govern-
ment of the Republic of Korea,’’ before ‘‘or the Gov-
ernment of New Zealand’’; and 
(3) in section 21(h)(1)(A), by inserting ‘‘the 
Republic of Korea,’’ before ‘‘or Israel’’. 
SEC. 123. AVAILABILITY TO CONGRESS OF PRESIDENTIAL 
DIRECTIVES 
REGARDING 
UNITED 
STATES 
ARMS EXPORT POLICIES, PRACTICES, AND 
REGULATIONS. 
(a) IN GENERAL.—The President shall make avail-
able to the appropriate congressional committees the text 
of each Presidential directive regarding United States ex-
port policies, practices, and regulations relating to the im-
plementation of the Arms Export Control Act (22 U.S.C. 
2751 et seq.) not later than 15 days after the date on 
which the directive has been signed or authorized by the 
President. 
(b) TRANSITION PROVISION.—Any Presidential di-
rective described in subsection (a) that is signed or author-
ized by the President on or after January 1, 2008, and 
before the date of the enactment of this Act shall be made 
available to the appropriate congressional committees not 
later than 90 days after the date of the enactment of this 
Act.
(c) FORM.—To the maximum extent practicable, the 
Presidential directives required to be made available to the 
appropriate congressional committees under this section 
shall be made available on an unclassified basis. 
SEC. 124. INCREASE IN CONGRESSIONAL NOTIFICATION 
THRESHOLDS AND EXPEDITING CONGRES-
SIONAL REVIEW FOR SOUTH KOREA AND 
ISRAEL. 
(a) FOREIGN MILITARY SALES.— 
(1) IN GENERAL.—Subsection (b) of section 36 
of the Arms Export Control Act (22 U.S.C. 2776) 
is amended— 
(A) 
by 
redesignating 
paragraphs 
(2) 
through (6) as paragraphs (3) through (7), re-
spectively; and 
(B) by striking ‘‘The letter of offer shall 
not be issued’’ and all that follows through ‘‘en-
acts a joint resolution’’ and inserting the fol-
lowing: 
‘‘(2) The letter of offer shall not be issued— 
‘‘(A) with respect to a proposed sale of any 
defense articles or defense services under this 
Act for $200,000,000 or more, any design and 
construction services for $300,000,000 or more, 
or 
any 
major 
defense 
equipment 
for
$75,000,000 or more, to the North Atlantic 
Treaty Organization (NATO), any member 
country of NATO, Japan, Australia, the Repub-
lic of Korea, Israel, or New Zealand, if Con-
gress, within 15 calendar days after receiving 
such certification, or 
‘‘(B) with respect to a proposed sale of any 
defense articles or services under this Act for 
$100,000,000 or more, any design and con-
struction services for $200,000,000 or more, or 
any major defense equipment for $50,000,000 
or more, to any other country or organization, 
if Congress, within 30 calendar days after re-
ceiving such certification, 
enacts a joint resolution’’. 
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENTS.—Such section is further amended— 
(A) in subsection (b)— 
(i) in paragraph (6)(C), as redesig-
nated, by striking ‘‘Subject to paragraph 
(6), if’’ and inserting ‘‘If’’; and 
(ii) by striking paragraph (7), as re-
designated; and
(B) in subsection (c)(4), by striking ‘‘sub-
section (b)(5)’’ each place it appears and insert-
ing ‘‘subsection (b)(6)’’. 
(b) COMMERCIAL SALES.—Subsection (c) of such sec-
tion is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (A)— 
(i) by inserting after ‘‘for an export’’ 
the following: ‘‘of any major defense equip-
ment sold under a contract in the amount 
of $75,000,000 or more or of defense arti-
cles or defense services sold under a con-
tract in the amount of $200,000,000 or 
more, (or, in the case of a defense article 
that is a firearm controlled under category 
I of the United States Munitions List, 
$1,000,000 or more)’’; and 
(ii) by striking ‘‘Organization,’’ and 
inserting ‘‘Organization (NATO),’’ and by 
further striking ‘‘that Organization’’ and 
inserting ‘‘NATO’’; and 
(B) in subparagraph (C), by inserting after 
‘‘license’’ the following: ‘‘for an export of any 
major defense equipment sold under a contract 
in the amount of $50,000,000 or more or of de-
fense articles or defense services sold under a 
contract in the amount of $100,000,000 or 
more, (or, in the case of a defense article that 
is a firearm controlled under category I of the 
United States Munitions List, $1,000,000 or 
more)’’; and 
(2) by striking paragraph (5). 
SEC. 125. DIPLOMATIC EFFORTS TO STRENGTHEN NA-
TIONAL AND INTERNATIONAL ARMS EXPORT 
CONTROLS. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that the President should redouble United States 
diplomatic efforts to strengthen national and international 
arms export controls by establishing a senior-level initia-
tive to ensure that such arms export controls are com-
parable to and supportive of United States arms export 
controls, particularly with respect to countries of concern 
to the United States. 
(b) REPORT.—No later than one year after the date 
of the enactment of this Act, and annually thereafter for 
four years, the President shall transmit to the appropriate 
committees of Congress a report on United States diplo-
matic efforts described in subsection (a).
SEC. 126. REPORTING REQUIREMENT FOR UNLICENSED EX-
PORTS. 
Section 655(b) of the Foreign Assistance Act of 1961 
(22 U.S.C. 2415(b)) is amended— 
(1) in paragraph (2), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (3), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(4) were exported without a license under sec-
tion 38 of the Arms Export Control Act (22 U.S.C. 
2778) pursuant to an exemption established under 
the International Traffic in Arms Regulations, other 
than defense articles exported in furtherance of a 
letter of offer and acceptance under the Foreign 
Military Sales program or a technical assistance or 
manufacturing license agreement, including the spe-
cific exemption provision in the regulation under 
which the export was made.’’. 
SEC. 127. REPORT ON VALUE OF MAJOR DEFENSE EQUIP-
MENT AND DEFENSE ARTICLES EXPORTED 
UNDER SECTION 38 OF THE ARMS EXPORT 
CONTROL ACT. 
Section 38 of the Arms Export Control Act (22 
U.S.C. 2778) is amended by adding at the end the fol-
lowing:
‘‘(l) REPORT.— 
‘‘(1) IN GENERAL.—The President shall trans-
mit to the appropriate congressional committees a 
report that contains a detailed listing, by country 
and by international organization, of the total dollar 
value of major defense equipment and defense arti-
cles exported pursuant to licenses authorized under 
this section for the previous fiscal year. 
‘‘(2) INCLUSION IN ANNUAL BUDGET.—The re-
port required by this subsection shall be included in 
the supporting information of the annual budget of 
the United States Government required to be sub-
mitted to Congress under section 1105 of title 31, 
United States Code. 
‘‘(3) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES DEFINED.—In this subsection, the term ‘ap-
propriate congressional committees’ means the Com-
mittee on Foreign Affairs of the House of Rep-
resentatives and the Committee on Foreign Rela-
tions of the Senate.’’. 
SEC. 128. REPORT ON SATELLITE EXPORT CONTROLS. 
(a) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, the President shall transmit 
to the appropriate congressional committees and the Com-
mittee on Armed Services of the House of Representatives
and the Committee on Armed Services of the Senate a 
report regarding— 
(1) the extent to which current United States 
export controls on satellites and related items under 
the Arms Export Control Act are successfully pre-
venting the transfer of militarily-sensitive tech-
nologies to countries of concern, especially the Peo-
ple’s Republic of China; 
(2) the extent to which comparable satellites 
and related items are available from foreign sources 
without comparable export controls; and 
(3) whether the current export controls on sat-
ellites and related items should be altered and in 
what manner, including whether other incentives or 
disincentives should also be employed to discourage 
exports of satellites and related items to the People’s 
Republic of China by any country. 
(b) DEFINITIONS.—In this section, the terms ‘‘sat-
ellite’’ and ‘‘related items’’ mean satellites and all specifi-
cally designed or modified systems or subsystems, compo-
nents, parts, accessories, attachments, and associated 
equipment for satellites as covered under category XV of 
the International Traffic in Arms Regulations (as in effect 
on the date of the enactment of this Act).
SEC. 129. DEFINITION. 
In this subtitle, the term ‘‘appropriate congressional 
committees’’ means the Committee on Foreign Affairs of 
the House of Representatives and the Committee on For-
eign Relations of the Senate. 
TITLE 
II—SECURITY 
ASSIST-
ANCE 
AND 
RELATED 
SUP-
PORT FOR ISRAEL 
SEC. 201. ASSESSMENT OF ISRAEL’S QUALITATIVE MILI-
TARY EDGE OVER MILITARY THREATS. 
(a) ASSESSMENT REQUIRED.—The President shall 
carry out an empirical and qualitative assessment on an 
ongoing basis of the extent to which Israel possesses a 
qualitative military edge over military threats to Israel. 
The assessment required under this subsection shall be 
sufficiently robust so as to facilitate comparability of data 
over concurrent years. 
(b) USE OF ASSESSMENT.—The President shall en-
sure that the assessment required under subsection (a) is 
used to inform the review by the United States of applica-
tions to sell defense articles and defense services under 
the Arms Export Control Act (22 U.S.C. 2751 et seq.) 
to countries in the Middle East. 
(c) REPORTS.— 
(1) INITIAL REPORT.—Not later than 180 days 
after the date of the enactment of this Act, the
President shall transmit to the appropriate congres-
sional committees a report on the initial assessment 
required under subsection (a). 
(2) QUADRENNIAL
REPORT.—Not later than 
four years after the date on which the President 
transmits the initial report under paragraph (1), 
and every four years thereafter, the President shall 
transmit to the appropriate congressional commit-
tees a report on the most recent assessment required 
under subsection (a). 
(d) CERTIFICATION.—Section 36 of the Arms Export 
Control Act (22 U.S.C. 2776) is amended by adding at 
the end the following: 
‘‘(h) 
CERTIFICATION
REQUIREMENT
RELATING 
ISRAEL’S QUALITATIVE MILITARY EDGE.— 
‘‘(1) IN GENERAL.—Any certification relating 
to a proposed sale or export of defense articles or 
defense services under this section to any country in 
the Middle East other than Israel shall include a de-
termination that the sale or export of the defense ar-
ticles or defense services will not adversely affect 
Israel’s qualitative military edge over military 
threats to Israel. 
‘‘(2) DEFINITION.—In this subsection, the term 
‘qualitative military edge’ has the meaning given the
term in section 205 of the Security Assistance and 
Arms Export Control Reform Act of 2008.’’. 
SEC. 202. REPORT ON UNITED STATES’ COMMITMENTS TO 
THE SECURITY OF ISRAEL. 
(a) INITIAL REPORT.—Not later than 30 days after 
the date of the enactment of this Act, the President shall 
transmit to the appropriate congressional committees a re-
port that contains— 
(1) a complete, unedited, and unredacted copy 
of each assurance made by United States Govern-
ment officials to officials of the Government of Israel 
regarding Israel’s security and maintenance of 
Israel’s qualitative military edge, as well as any 
other assurance regarding Israel’s security and 
maintenance of Israel’s qualitative military edge pro-
vided in conjunction with exports under the Arms 
Export Control Act (22 U.S.C. 2751 et seq.), for the 
period beginning on January 1, 1975, and ending on 
the date of the enactment of this Act; and 
(2) an analysis of the extent to which, and by 
what means, each such assurance has been and is 
continuing to be fulfilled. 
(b) SUBSEQUENT REPORTS.— 
(1) NEW
ASSURANCES
AND
REVISIONS.—The 
President shall transmit to the appropriate congres-
sional committees a report that contains the infor-
mation required under subsection (a) with respect 
to— 
(A) each assurance described in subsection 
(a) made on or after the date of the enactment 
of this Act, or 
(B) revisions to any assurance described in 
subsection (a) or subparagraph (A) of this 
paragraph, 
within 15 days of the new assurance or revision 
being conveyed. 
(2) 5-YEAR REPORTS.—Not later than 5 years 
after the date of the enactment of this Act, and 
every 5 years thereafter, the President shall trans-
mit to the appropriate congressional committees a 
report that contains the information required under 
subsection (a) with respect to each assurance de-
scribed in subsection (a) or paragraph (1)(A) of this 
subsection and revisions to any assurance described 
in subsection (a) or paragraph (1)(A) of this sub-
section during the preceding 5-year period. 
(c) FORM.—Each report required by this section shall 
be transmitted in unclassified form, but may contain a 
classified annex, if necessary.
SEC. 203. WAR RESERVES STOCKPILE. 
(a) DEPARTMENT
OF DEFENSE APPROPRIATIONS 
ACT, 2005.—Section 12001(d) of the Department of De-
fense Appropriations Act, 2005 (Public Law 108–287; 
118 Stat. 1011), is amended by striking ‘‘4’’ and inserting 
‘‘6’’. 
(b) FOREIGN ASSISTANCE ACT OF 1961.—Section 
514(b)(2)(A) of the Foreign Assistance Act of 1961 (22 
U.S.C. 2321h(b)(2)(A)) is amended by striking ‘‘fiscal 
years 2007 and 2008’’ and inserting ‘‘fiscal years 2009 
and 2010’’. 
(c) EFFECTIVE DATE.—The amendment made by 
subsection (a) takes effect on August 5, 2008. 
SEC. 204. IMPLEMENTATION OF MEMORANDUM OF UNDER-
STANDING WITH ISRAEL. 
(a) IN GENERAL.—Of the amount made available for 
fiscal year 2009 for assistance under the program author-
ized by section 23 of the Arms Export Control Act (22 
U.S.C. 2763) (commonly referred to as the ‘‘Foreign Mili-
tary Financing Program’’), the amount specified in sub-
section (b) is authorized to be made available on a grant 
basis for Israel. 
(b) COMPUTATION OF AMOUNT.—The amount re-
ferred to in subsection (a) is the amount equal to—
(1) the amount specified under the heading 
‘‘Foreign Military Financing Program’’ for Israel for 
fiscal year 2008; plus 
(2) $150,000,000. 
(c) OTHER AUTHORITIES.— 
(1) AVAILABILITY OF FUNDS FOR ADVANCED 
WEAPONS SYSTEMS.—To the extent the Government 
of Israel requests the United States to provide as-
sistance for fiscal year 2009 for the procurement of 
advanced weapons systems, amounts authorized to 
be made available for Israel under this section shall, 
as agreed to by Israel and the United States, be 
available for such purposes, of which not less than 
$670,650,000 shall be available for the procurement 
in Israel of defense articles and defense services, in-
cluding research and development. 
(2) DISBURSEMENT OF FUNDS.—Amounts au-
thorized to be made available for Israel under this 
section shall be disbursed not later than 30 days 
after the date of the enactment of an Act making 
appropriations for the Department of State, foreign 
operations, and related programs for fiscal year 
2009, or October 31, 2008, whichever occurs later. 
SEC. 205. DEFINITIONS. 
In this subtitle—
(1) the term ‘‘appropriate congressional com-
mittees’’ means the Committee on Foreign Affairs of 
the House of Representatives and the Committee on 
Foreign Relations of the Senate; and 
(2) the term ‘‘qualitative military edge’’ means 
the ability to counter and defeat any credible con-
ventional military threat from any individual state or 
possible coalition of states or from non-state actors, 
while sustaining minimal damages and casualties, 
through the use of superior military means, pos-
sessed in sufficient quantity, including weapons, 
command, control, communication, intelligence, sur-
veillance, and reconnaissance capabilities that in 
their technical characteristics are superior in capa-
bility to those of such other individual or possible co-
alition of states or non-state actors. 
TITLE III—WAIVER OF CERTAIN 
SANCTIONS 
TO 
FACILITATE 
DENUCLEARIZATION ACTIVI-
TIES IN NORTH KOREA 
SEC. 301. WAIVER AUTHORITY AND EXCEPTIONS. 
(a) WAIVER AUTHORITY.—Except as provided in 
subsection (b), the President may waive, in whole or in 
part, the application of any sanction contained in subpara-
graph (A), (B), (D), or (G) of section 102(b)(2) of the
Arms Export Control Act (22 U.S.C. 2799aa–1(b)(2)) 
with respect to North Korea in order to provide material, 
direct, and necessary assistance for disablement, dis-
mantlement, verification, and physical removal activities 
in the implementation of the commitment of North Korea, 
undertaken in the Joint Statement of September 19, 
2005, ‘‘to abandoning all nuclear weapons and existing 
nuclear 
programs’’ 
as 
part 
of 
the 
verifiable 
denuclearization of the Korean Peninsula. 
(b) EXCEPTIONS.—The waiver authority under sub-
section (a) may not be exercised with respect to the fol-
lowing: 
(1) Any export of lethal defense articles that 
would be prevented by the application of section 
102(b)(2)(B) of the Arms Export Control Act. 
(2) Any sanction relating to credit or credit 
guarantees contained in section 102(b)(2)(D) of the 
Arms Export Control Act. 
SEC. 302. CERTIFICATION REGARDING WAIVER OF CER-
TAIN SANCTIONS. 
Assistance described in subparagraph (B) or (G) of 
section 102(b)(2) of the Arms Export Control Act (22 
U.S.C. 2799aa–1(b)(2)) may be provided with respect to 
North Korea by reason of the exercise of the waiver au-
thority under section 301 only if the President first deter-
mines and certifies to the appropriate congressional com-
mittees that— 
(1) all necessary steps will be taken to ensure 
that the assistance will not be used to improve the 
military capabilities of the armed forces of North 
Korea; and 
(2) the exercise of the waiver authority is in the 
national security interests of the United States. 
SEC. 303. CONGRESSIONAL NOTIFICATION AND REPORT. 
(a) NOTIFICATION.—The President shall notify the 
appropriate congressional committees in writing not later 
than 15 days before exercising the waiver authority under 
section 301. 
(b) REPORT.—Not later than 60 days after the date 
of the enactment of this Act, and annually thereafter for 
such time during which the exercise of the waiver author-
ity under section 301 remains in effect, the President shall 
transmit to the appropriate congressional committees a re-
port that— 
(1) describes in detail the progress that is being 
made in the implementation of the commitment of 
North Korea described in section 301, including all 
United States and international activities to verify 
compliance with such commitment;
(1)(A) on or after September 19, 2005, trans-
ferred to a non-nuclear-weapon state, or received, a 
nuclear explosive device; or 
(B) on or after October 10, 2006, detonated a 
nuclear explosive device; or 
(2) on or after September 19, 2005— 
(A) transferred to a non-nuclear-weapon 
state any design information or component 
which is determined by the President to be im-
portant to, and known by North Korea to be in-
tended by the recipient state for use in, the de-
velopment or manufacture of any nuclear explo-
sive device, or 
(B) sought and received any design infor-
mation or component which is determined by 
the President to be important to, and intended 
by North Korea for use in, the development or 
manufacture of any nuclear explosive device, 
unless the President determines and certifies to the 
appropriate congressional committees that such 
waiver is vital to the national security interests of 
the United States. 
SEC. 305. EXPIRATION OF WAIVER AUTHORITY. 
Any waiver in effect by reason of the exercise of the 
waiver authority under section 301 shall terminate on the
date that is 4 years after the date of the enactment of 
this Act. The waiver authority under section 301 may not 
be exercised beginning on the date that is 3 years after 
the date of the enactment of this Act. 
SEC. 306. CONTINUATION OF RESTRICTIONS AGAINST THE 
GOVERNMENT OF NORTH KOREA. 
(a) IN GENERAL.—Except as provided in section 
301(a), restrictions against the Government of North 
Korea that were imposed by reason of a determination of 
the Secretary of State that North Korea is a state sponsor 
of terrorism shall remain in effect, and shall not be lifted 
pursuant to the provisions of law under which the deter-
mination was made, unless the President certifies to the 
appropriate congressional committees that— 
(1) the Government of North Korea is no 
longer engaged in the transfer of technology related 
to the acquisition or development of nuclear weap-
ons, particularly to the Governments of Iran, Syria, 
or any other country that is a state sponsor of ter-
rorism; 
(2) in accordance with the Six-Party Talks 
Agreement of February 13, 2007, the Government 
of North Korea has ‘‘provided a complete and cor-
rect declaration of all its nuclear programs,’’ and 
there are measures to effectively verify this declara-
tion by the United States which, ‘‘[a]t the request 
of the other Parties,’’ is leading ‘‘disablement activi-
ties’’ and ‘‘provid[ing] the funding for those activi-
ties’’; and 
(3) the Government of North Korea has agreed 
to the participation of the International Atomic En-
ergy Agency in the monitoring and verification of 
the shutdown and sealing of the Yongbyon nuclear 
facility. 
(b) STATE SPONSOR OF TERRORISM DEFINED.—In 
this section, the term ‘‘state sponsor of terrorism’’ means 
a country the government of which the Secretary of State 
has determined, for purposes of section 6(j) of the Export 
Administration Act of 1979 (as continued in effect pursu-
ant to the International Emergency Economic Powers 
Act), section 40 of the Arms Export Control Act, section 
620A of the Foreign Assistance Act of 1961, or any other 
provision of law, is a government that has repeatedly pro-
vided support for acts of international terrorism. 
SEC. 307. REPORT ON VERIFICATION MEASURES RELATING 
TO NORTH KOREA’S NUCLEAR PROGRAMS. 
(a) IN GENERAL.—Not later than 15 days after the 
date of enactment of this Act, the Secretary of State shall 
submit to the appropriate congressional committees a re-
port on verification measures relating to North Korea’s
nuclear programs under the Six-Party Talks Agreement 
of February 13, 2007, with specific focus on how such 
verification measures are defined under the Six-Party 
Talks Agreement and understood by the United States 
Government. 
(b) MATTERS TO BE INCLUDED.—The report re-
quired under subsection (a) shall include, among other ele-
ments, a detailed description of— 
(1) the methods to be utilized to confirm that 
North Korea has ‘‘provided a complete and correct 
declaration of all of its nuclear programs’’; 
(2) the specific actions to be taken in North 
Korea and elsewhere to ensure a high and ongoing 
level of confidence that North Korea has fully met 
the terms of the Six-Party Talks Agreement relating 
to its nuclear programs; 
(3) any formal or informal agreement with 
North Korea regarding verification measures relat-
ing to North Korea’s nuclear programs under the 
Six-Party Talks Agreement; and 
(4) any disagreement expressed by North Korea 
regarding verification measures relating to North 
Korea’s nuclear programs under the Six-Party Talks 
Agreement.
(c) FORM.—The report required under subsection (a) 
shall be submitted in unclassified form, but may include 
a classified annex. 
SEC. 308. DEFINITIONS. 
In this title— 
(1) the term ‘‘appropriate congressional com-
mittees’’ means— 
(A) the Committee on Foreign Affairs, the 
Committee on Appropriations, and the Com-
mittee on Armed Services of the House of Rep-
resentatives; and 
(B) the Committee on Foreign Relations, 
the Committee on Appropriations, the Com-
mittee on Armed Services of the Senate; 
(2) the terms ‘‘non-nuclear-weapon state’’, ‘‘de-
sign information’’, and ‘‘component’’ have the mean-
ings given such terms in section 102 of the Arms 
Export Control Act (22 U.S.C. 2799aa–1); and 
(3) the term ‘‘Six-Party Talks Agreement of 
February 13, 2007’’ or ‘‘Six-Party Talks Agree-
ment’’ means the action plan released on February 
13, 2007, of the Third Session of the Fifth Round 
of the Six-Party Talks held in Beijing among the 
People’s Republic of China, the Democratic People’s 
Republic of Korea (North Korea), Japan, the Re-
public of Korea (South Korea), the Russian Federa-
tion, and the United States relating to the 
denuclearization of the Korean Peninsula, normal-
ization of relations between the North Korea and the 
United States, normalization of relations between 
North Korea and Japan, economy and energy co-
operation, and matters relating to the Northeast 
Asia Peace and Security Mechanism. 
TITLE IV—MISCELLANEOUS 
PROVISIONS 
SEC. 401. AUTHORITY TO BUILD THE CAPACITY OF FOR-
EIGN MILITARY FORCES. 
(a) AUTHORITY.—The Secretary of State is author-
ized to conduct a program to respond to contingencies in 
foreign countries or regions by providing training, pro-
curement, and capacity-building of a foreign country’s na-
tional military forces and dedicated counter-terrorism 
forces in order for that country to— 
(1) conduct counterterrorist operations; or 
(2) participate in or support military and sta-
bility operations in which the United States is a par-
ticipant. 
(b) TYPES OF CAPACITY-BUILDING.—The program 
authorized under subsection (a) may include the provision 
of equipment, supplies, and training.
(c) LIMITATIONS.— 
(1) ANNUAL FUNDING LIMITATION.—The Sec-
retary of State may use up to $25,000,000 of funds 
available under the Foreign Military Financing pro-
gram for each of the fiscal years 2009 and 2010 to 
conduct the program authorized under subsection 
(a). 
(2) ASSISTANCE
OTHERWISE
PROHIBITED
BY 
LAW.—The Secretary of State may not use the au-
thority in subsection (a) to provide any type of as-
sistance described in subsection (b) that is otherwise 
prohibited by any provision of law. 
(3) LIMITATION
ON
ELIGIBLE
COUNTRIES.— 
The Secretary of State may not use the authority in 
subsection (a) to provide assistance described in sub-
section (b) to any foreign country that is otherwise 
prohibited from receiving such type of assistance 
under any other provision of law. 
(d) FORMULATION
AND EXECUTION
OF ACTIVI-
TIES.—The Secretary of State shall consult with the head 
of any other appropriate department or agency in the for-
mulation and execution of the program authorized under 
subsection (a). 
(e) CONGRESSIONAL NOTIFICATION.—
(1) ACTIVITIES IN A COUNTRY.—Not less than 
15 days before obligating funds for activities in any 
country under the program authorized under sub-
section (a), the Secretary of State shall submit to 
the congressional committees specified in paragraph 
(3) a notice of the following: 
(A) The country whose capacity to engage 
in activities in subsection (a) will be assisted. 
(B) The budget, implementation timeline 
with milestones, and completion date for com-
pleting the activities. 
(2) 
SPECIFIED
CONGRESSIONAL
COMMIT-
TEES.—The congressional committees specified in 
this paragraph are the following: 
(A) The Committee on Foreign Affairs and 
the Committee on Appropriations of the House 
of Representatives. 
(B) The Committee on Foreign Relations 
and the Committee on Appropriations of the 
Senate. 
SEC. 402. MAINTENANCE OF EUROPEAN UNION ARMS EM-
BARGO AGAINST CHINA. 
(a) FINDINGS.—Congress makes the following find-
ings:
(1) Congress has previously expressed its strong 
concerns in House Resolution 57 of February 2, 
2005, and Senate Resolution 91 of March 17, 2005, 
with the transfer of armaments and related tech-
nology to the People’s Republic of China by member 
states of the European Union, which increased 
eightfold from 2001 to 2003, and with plans to ter-
minate in the near future the arms embargo they 
imposed in 1989 following the Tiananmen Square 
massacre. 
(2) The deferral of a decision by the European 
Council to terminate its arms embargo following 
adoption of the resolutions specified in paragraph 
(1), the visit by the President of the United States 
to Europe, and growing concern among countries in 
the regions and the general public on both sides of 
the Atlantic, was welcomed by the Congress. 
(3) The decision by the European Parliament 
on April 14, 2005, by a vote of 421 to 85, to oppose 
the lifting of the European Union’s arms embargo 
on the People’s Republic of China, and resolutions 
issued by a number of elected parliamentary bodies 
in Europe also opposing the lifting of the arms em-
bargo, was also welcomed by the Congress as a reas-
surance that its European friends and allies under-
stood the gravity of prematurely lifting the embargo. 
(4) The onset of a strategic dialogue between 
the European Commission and the Government of 
the United States on the security situation in East 
Asia holds out the hope that a greater under-
standing will emerge of the consequences of Euro-
pean assistance to the military buildup of the Peo-
ple’s Republic of China for peace and stability in 
that region, to the security interests of the United 
States and its friends and allies in the region, and, 
in particular, to the safety of United States Armed 
Forces whose presence in the region has been a deci-
sive factor in ensuring peace and prosperity since 
the end of World War II. 
(5) A more intensive dialogue with Europe on 
this matter will clarify for United States’ friends 
and allies in Europe how their ‘‘non-lethal’’ arms 
transfers improve the force projection of the People’s 
Republic of China, are far from benign, and enhance 
the prospects for the threat or use of force in resolv-
ing the status of Taiwan. 
(6) This dialogue may result in an important 
new consensus between the United States and its 
European partners on the need for coordinated poli-
cies that encourage the development of democracy in 
the People’s Republic of China and which discour-
age, not assist, China’s unjustified military buildup 
and pursuit of weapons that threaten its neighbors. 
(7) However, the statement by the President of 
France in Beijing in November 2007 that the Euro-
pean Union arms embargo should be lifted is trou-
bling, especially since France will assume the six- 
month presidency of the European Union in July 
2008. 
(8) There continues to be wide-spread concerns 
regarding the lack of any significant progress by the 
Government of the People’s Republic of China in re-
specting the civil and political rights of the Chinese 
people. 
(b) STATEMENT OF POLICY.—It shall be the policy 
of the United States Government to oppose any diminu-
tion or termination of the arms embargo that was estab-
lished by the Declaration of the European Council of June 
26, 1989, and to take whatever diplomatic and other 
measures that are appropriate to convince the Member 
States of the European Union, individually and collec-
tively, to continue to observe this embargo in principle and 
in practice. Appropriate measures should include prohibi-
tions on entering into defense procurement contracts or
defense-related research and development arrangements 
with European Union Member States that do not observe 
such an embargo in practice. 
(c) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, and every six months there-
after until December 31, 2010, the President shall trans-
mit to the Committee on Foreign Affairs and Committee 
on Armed Services of the House of Representatives and 
the Committee on Foreign Relations and the Committee 
on Armed Services of the Senate a report on all efforts 
and activities of the United States Government to ensure 
the success of the policy declared in subsection (b). 
SEC. 403. REIMBURSEMENT OF SALARIES OF MEMBERS OF 
THE RESERVE COMPONENTS IN SUPPORT OF 
SECURITY COOPERATION MISSIONS. 
Section 632(d) of the Foreign Assistance Act of 1961 
(22 U.S.C. 2392(d)) is amended— 
(1) by striking ‘‘(d) Except as otherwise pro-
vided’’ and inserting ‘‘(d)(1) Except as otherwise 
provided’’; and 
(2) by adding at the end the following: 
‘‘(2) Notwithstanding provisions concerning the ex-
clusion of the costs of salaries of members of the Armed 
Forces in section 503(a) of this Act and paragraph (1) 
of this subsection, the full cost of salaries of members of
the reserve components of the Armed Forces (specified in 
section 10101 of title 10, United States Code) may, during 
each of fiscal years 2009 and 2010, be included in calcu-
lating pricing or value for reimbursement charged under 
section 503(a) of this Act and paragraph (1) of this sub-
section, respectively.’’. 
SEC. 404. FOREIGN MILITARY SALES STOCKPILE FUND. 
(a) IN GENERAL.—Subsection (a) of section 51 of the 
Arms Export Control Act (22 U.S.C. 2795) is amended— 
(1) in paragraph (1), by striking ‘‘Special De-
fense Acquisition Fund’’ and inserting ‘‘Foreign 
Military Sales Stockpile Fund’’; and 
(2) in paragraph (4), by inserting ‘‘building the 
capacity of recipient countries and’’ before ‘‘nar-
cotics control purposes’’. 
(b) CONTENTS OF FUND.—Subsection (b) of such 
section is amended— 
(1) in paragraph (2), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (3), by inserting ‘‘and’’ at the 
end; and 
(3) by inserting after paragraph (3) the fol-
lowing: 
‘‘(4) collections from leases made pursuant to 
section 61 of this Act,’’.
(c) CONFORMING AMENDMENTS.—(1) The heading 
of such section is amended by striking ‘‘SPECIAL DE-
FENSE ACQUISITION FUND’’ and inserting ‘‘FOREIGN 
MILITARY SALES STOCKPILE FUND’’. 
(2) The heading of chapter 5 of the Arms Export 
Control Act is amended by striking ‘‘SPECIAL DE-
FENSE ACQUISITION FUND’’ and inserting 
‘‘FOREIGN MILITARY SALES STOCKPILE 
FUND’’. 
SEC. 405. SENSE OF CONGRESS. 
It is the sense of Congress that the United States 
should not provide security assistance or arms exports to 
nations contributing to massive, widespread, and system-
atic violations of human rights or acts of genocide, par-
ticularly with respect to Darfur, Sudan. 
TITLE V—AUTHORITY TO 
TRANSFER NAVAL VESSELS 
SEC. 501. AUTHORITY TO TRANSFER NAVAL VESSELS TO 
CERTAIN FOREIGN RECIPIENTS. 
(a) TRANSFERS BY GRANT.—The President is au-
thorized to transfer vessels to foreign countries on a grant 
basis under section 516 of the Foreign Assistance Act of 
1961 (22 U.S.C. 2321j), as follows:
(1) PAKISTAN.—To the Government of Paki-
stan, the OLIVER HAZARD PERRY class guided 
missile frigate MCINERNEY (FFG–8). 
(2) GREECE.—To the Government of Greece, 
the OSPREY class minehunter coastal ships OS-
PREY (MHC–51) and ROBIN (MHC–54). 
(3) CHILE.—To the Government of Chile, the 
KAISER class oiler ANDREW J. HIGGINS (AO– 
190). 
(4) PERU.—To the Government of Peru, the 
NEWPORT class amphibious tank landing ships 
FRESNO (LST–1182) and RACINE (LST–1191). 
(b) GRANTS NOT COUNTED IN ANNUAL TOTAL OF 
TRANSFERRED EXCESS DEFENSE ARTICLES.—The value 
of a vessel transferred to a recipient on a grant basis pur-
suant to authority provided by subsection (a) shall not be 
counted against the aggregate value of excess defense arti-
cles transferred in any fiscal year under section 516(g) 
of the Foreign Assistance Act of 1961. 
(c) COSTS OF TRANSFERS.—Any expense incurred by 
the United States in connection with a transfer authorized 
by this section shall be charged to the recipient. 
(d) 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 recipient 
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 the recipient performed at a ship-
yard located in the United States, including a United 
States Navy shipyard. 
(e) EXPIRATION OF AUTHORITY.—The authority to 
transfer a vessel under this section shall expire at the end 
of the 2-year period beginning on the date of the enact-
ment of this Act. 
Passed the House of Representatives May 14, 2008. 
Attest: 
Clerk.
110TH CONGRESS 
2D SESSION 
H. R. 5916 
AN ACT 
To reform the administration of the Arms Export 
Control Act, and for other purposes.