[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3100 Reported in House (RH)]






                                                 Union Calendar No. 102
109th CONGRESS
  1st Session
                                H. R. 3100

                          [Report No. 109-165]

 To authorize measures to deter arms transfers by foreign countries to 
                    the People's Republic of China.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 29, 2005

 Mr. Hyde (for himself, Mr. Lantos, Mr. Hunter, Mr. Faleomavaega, Ms. 
 Ros-Lehtinen, Mr. McCotter, Mrs. Jo Ann Davis of Virginia, Mr. Burton 
 of Indiana, Mr. Smith of New Jersey, Mr. McCaul of Texas, Ms. Harris, 
 Mr. Weller, Mr. Boozman, and Mr. Issa) introduced the following bill; 
     which was referred to the Committee on International Relations

                             July 12, 2005

                      Additional sponsor: Mr. Poe

                             July 12, 2005

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed

_______________________________________________________________________

                                 A BILL


 
 To authorize measures to deter arms transfers by foreign countries to 
                    the People's Republic of China.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``East Asia Security Act of 2005''.

SEC. 2. STATEMENTS OF POLICY.

    Congress--
            (1) 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 
        technology 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 terminate in the near future the arms 
        embargo they imposed in 1989 following the Tiananmen Square 
        massacre;
            (2) welcomes deferral of a decision by the European Council 
        to terminate its arms embargo following adoption of those 
        Resolutions, the President's visit to Europe, and growing 
        concern among countries in the regions and the general public 
        on both sides of the Atlantic;
            (3) welcomes 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 embargo;
            (4) also welcomes the onset of a strategic dialogue between 
        the European Commission and the Government of the United States 
        on the security situation in East Asia, through which it is 
        hoped a greater understanding will emerge of the consequences 
        of European assistance to the military buildup of the People'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 decisive factor in ensuring peace and prosperity since 
        the end of World War II;
            (5) hopes that 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 resolving the status of Taiwan, a troubling prospect 
        made more ominous by recent adoption of a new law by the 
        Chinese National People's Congress expressly authorizing the 
        use of force;
            (6) also hopes that this dialogue will result in an 
        important new consensus between the United States and its 
        European partners on the need for coordinated policies which 
        encourage the development of democracy in the People's Republic 
        of China and which discourage, not assist, China's unjustified 
        military buildup and pursuit of weapons that threaten its 
        neighbors;
            (7) however, deeply regrets that none of the European 
        friends and allies of the United States who have been 
        transferring arms to the People's Republic of China has 
        announced a cessation or even a temporary halt to those 
        transfers while this new dialogue with the United States 
        ensues, and notes with concern that such European friends and 
        allies have provided little, if any, transparency to the United 
        States Government into the full range and capabilities of all 
        of the armaments and related technology that they have 
        transferred to date and continue even now to do so;
            (8) is further troubled by public reports describing well 
        known European companies as suppliers to weapons programs of 
        the People's Republic of China, who are also participants in 
        numerous sensitive United States Government weapons programs, 
        and the increased risks of diversion of United States weapons 
        technology to China inherent in such an undesirable situation; 
        and
            (9) in view of the gravity of European arms sales to the 
        People's Republic of China, which have not abated, believes it 
        is necessary to make provision for greater scrutiny and 
        oversight with respect to those areas of international armament 
        cooperation that present increased levels of risk to the 
        security interests of the United States and to authorize 
        appropriate measures which the President may drawn on in 
        deterring foreign support for China's military buildup in order 
        to safeguard the national security interests of the United 
        States and peace and security in East Asia.

SEC. 3. REPORT ON FOREIGN MILITARY EXPORTS TO CHINA.

    (a) Report.--The President shall, at the times specified in 
subsection (b), transmit to the appropriate congressional committees a 
report that identifies every person of a member country of the European 
Union, and any other foreign person the President may consider 
appropriate, with respect to whom there is credible information 
indicating that the person, on or after January 1, 2005, exported to--
            (1) the People's Republic of China any item on the 
        Wassenaar Munitions List of July 12, 1996, and subsequent 
        revisions; or
            (2) the military, intelligence, or other security forces of 
        the People's Republic of China--
                    (A) any item on the Wassenaar List of Dual Use 
                Goods and Technologies of July 12, 1996, and subsequent 
                revisions; or
                    (B) any other dual use item if the item is 
                intended, entirely or in part, for use with an item 
                described in paragraph (1).
    (b) Timing of Report.--The report required under subsection (a) 
shall be transmitted not later than 180 days after the date of the 
enactment of this Act and not later than the end of each 12-month 
period thereafter.
    (c) Exceptions.--A foreign person is not required to be identified 
in a report required under subsection (a) if the person--
            (1) was identified in a previous report transmitted under 
        subsection (a) on account of a particular export, except to the 
        extent that the export may have continued, involved additional 
        transfers, or was larger, more significant, or different in 
        nature than described in the previous report;
            (2) was engaged solely in an export on behalf of, or in 
        concert with, the Government of the United States; or
            (3) was engaged in an export which, as determined by the 
        President, would be exempt from the restrictions of section 
        902(a) of the Foreign Relations Authorization Act, Fiscal Years 
        1990 and 1991 (Public Law 101-246; 22 U.S.C. 2151 note), if the 
        export were subject to the jurisdiction of the United States, 
        by reason of the issuance of a report under section 902(b) of 
        such Act.
    (d) Form.--If the President considers it appropriate, reports 
transmitted under subsection (a), or appropriate parts thereof, may be 
transmitted in classified form.

SEC. 4. REPORT ON CHINA ARMS TRANSFER POLICIES OF COUNTRIES 
              PARTICIPATING IN UNITED STATES DEFENSE COOPERATIVE 
              PROJECTS; CERTAIN LICENSE REQUIREMENTS.

    (a) Statement of Policy.--Congress is concerned with the 
significant additional risk of unlawful use and diversion of sensitive 
United States weapons system research, design, and development arising 
from cooperative research and development projects with foreign 
governments and foreign persons who may also transfer arms and related 
technology to the People's Republic of China.
    (b) Report.--The President shall, at the times specified in 
subsection (c), transmit to the appropriate congressional committees a 
report that--
            (1) identifies every foreign government with respect to 
        which the United States is carrying out a cooperative project 
        described in subsection (d) and whose policies or practices, on 
        or after the date of the enactment of this Act, permit the 
        export of any item described in paragraph (1), or subparagraph 
        (A) or (B) of paragraph (2), of section 3(a); and
            (2) describes the cooperative projects and policies or 
        practices referred to in paragraph (1) of every foreign 
        government identified under such paragraph.
    (c) Timing of Report.--The report required under subsection (b)--
            (1) shall be transmitted not later than 180 days after the 
        date of the enactment of this Act and not later than the end of 
        each 12-month period thereafter; and
            (2) may be included in the report required under section 3, 
        as the President determines appropriate.
    (d) Cooperative Projects.--The cooperative projects referred to in 
subsection (b) are projects carried out under section 27 of the Arms 
Export Control Act (22 U.S.C. 2767) or section 2350a, 2358, or a 
memorandum of understanding under section 2531 of title 10, United 
States Code.
    (e) License Requirements.--
            (1) Requirement.--Notwithstanding any other provision of 
        law, a license under section 38 of the Arms Export Control Act 
        (22 U.S.C. 2778) shall be required for the export of defense 
        articles or defense services by any person who is not an 
        officer or employee of the Government of the United States in 
        furtherance of a cooperative project described in subsection 
        (d) with a country identified in a report transmitted under 
        subsection (b).
            (2) Congressional notification.--The issuance of a license 
        pursuant to paragraph (1) shall be subject to the same 
        requirements as are applicable to the export of items described 
        in section 36(c) of the Arms Export Control Act (22 U.S.C. 
        2776(c)) (without regard to the dollar amount requirements 
        relating to contracts contained in such section), including the 
        transmittal of information and the application of congressional 
        review procedures in accordance with such section.

SEC. 5. CERTAIN FOREIGN OWNERSHIP AND CONTROL OF DEFENSE ARTICLES IN 
              THE UNITED STATES.

    (a) Statement of Policy.--Congress determines that special care 
should be taken by the United States with respect to foreign persons 
who sell arms and related technology to the People's Republic of China, 
while simultaneously seeking ownership of United States defense 
articles or defense services, including the results of United States 
Government funded defense research and development, through the 
acquisition or control of United States defense firms, directly or 
through their subsidiaries and affiliates based in the United States.
    (b) License Requirements.--
            (1) Requirement.--The President shall require a license 
        pursuant to regulations issued under section 38(g)(6) of the 
        Arms Export Control Act (22 U.S.C. 2778(g)(6)) for the transfer 
        of ownership or control of United States defense articles or 
        defense services arising from the acquisition or control of a 
        person required to be registered under section 38(b)(1) of such 
        Act (22 U.S.C. 2778(b)(1)), or any subsidiary, division, 
        affiliate or other entity thereof, whenever the person gaining 
        acquisition or control is--
                    (A) a foreign national of the People's Republic of 
                China or a foreign person otherwise subject to the 
                jurisdiction, ownership, or control of the People's 
                Republic of China;
                    (B) a foreign person identified in a report 
                transmitted under section 3 or having its principal 
                place of business in a country described in a report 
                transmitted under section 4; or
                    (C) a United States person owned or controlled by a 
                foreign person, including a subsidiary or affiliate of 
                a foreign person described in subparagraph (B).
            (2) Additional requirement.--A license under section 
        38(g)(6) of the Arms Export Control Act for a person described 
        in paragraph (1)(A) shall not be issued until 30 days after the 
        date on which the President transmits a report that contains a 
        determination of the President that--
                    (A) the Government of the People's Republic of 
                China meets the requirements of section 902(b)(1) of 
                the Foreign Relations Authorization Act, Fiscal Years 
                1990 and 1991 (Public Law 101-246; 22 U.S.C. 2151 
                note); or
                    (B) it is in the national interest of the United 
                States to issue the license.
    (c) Congressional Notification.--The issuance of a license pursuant 
to subsection (b) shall be subject to the same requirements as are 
applicable to the export of items described in section 36(c) of the 
Arms Export Control Act (22 U.S.C. 2776(c)) (without regard to the 
dollar amount requirements relating to contracts contained in such 
section), including the transmittal of information and the application 
of congressional review procedures in accordance with such section.
    (d) Exception.--The issuance of a license pursuant to subsection 
(b) shall not be required in the case of an amendment to a munitions 
license or a change in registration arising from a sale or transfer of 
ownership or control of United States defense articles or defense 
services to a person described in subparagraph (A), (B), or (C) of 
subsection (b)(1) that was approved prior to the date of enactment of 
this Act unless the President determines that it is in the national 
security interests of the United States to require the issuance of a 
new license pursuant to subsection (b).

SEC. 6. CHINESE MILITARY END USE OF DUAL USE EXPORTS.

    (a) Statement of Policy.--Congress welcomes the understanding 
reached at the Wassenaar Arrangement's December 2003 plenary meeting to 
require governmental authorization for the transfer of non-listed dual 
use items intended for military end use in a destination subject to any 
relevant regional arms embargo or to any United Nations Security 
Council resolution.
    (b) License Requirement.--
            (1) Requirement.--The President shall require a license 
        under the Export Administration Regulations for the export of 
        any item described in paragraph (1), or subparagraph (A) or (B) 
        of paragraph (2), of section 3(a) that is not subject to a 
        license under section 38 of the Arms Export Control Act (22 
        U.S.C. 2778) if the item is intended for military end use by 
        the People's Republic of China.
            (2) Sense of congress.--It is the sense of Congress that 
        the President should not approve a license pursuant to 
        paragraph (1) unless the President determines that approval is 
        important to counterterrorism, nonproliferation, or other 
        national security interests of the United States.
    (c) Congressional Notification.--The issuance of a license pursuant 
to subsection (b) shall be subject to the same requirements as are 
applicable to the export of items described in section 36(c) of the 
Arms Export Control Act (22 U.S.C. 2776(c)) (without regard to the 
dollar amount requirements relating to contracts contained in such 
section), including the transmittal of information and the application 
of congressional review procedures in accordance with such section.
    (d) Definition.--In this section, the term ``military end use'' 
means, with respect to an item, the item is or may be intended, 
entirely or in part, for use in conjunction with an item described on 
the Wassenaar Munitions List of July 12, 1996, and subsequent 
revisions.

SEC. 7. APPLICATION OF MEASURES TO CERTAIN FOREIGN PERSONS.

    (a) Application of Measures.--Subject to sections 8 and 9, the 
President may apply with respect to any foreign person (including a 
foreign government) identified in a report transmitted under section 3, 
and shall apply with respect to any foreign person (including a foreign 
government) identified in more than one report transmitted under 
section 3, any or all of the following measures:
            (1) Research and development.--Denial of participation in 
        existing and new cooperative research and development programs 
        and projects under section 27 of the Arms Export Control Act 
        (22 U.S.C. 2767) or sections 2350a, 2358, or a memorandum of 
        understanding under 2531 of title 10, United States Code.
            (2) Control of united states defense firms.--Prohibition of 
        ownership and control of any business organization required to 
        be registered with the United States Government as a 
        manufacturer or exporter of defense articles or defense 
        services under section 38(b)(1) of the Arms Export Control Act 
        (22 U.S.C. 2778(b)(1)).
            (3) Security assistance.--Prohibition on participation in 
        any foreign military sales under chapter 2 of the Arms Export 
        Control Act (22 U.S.C. 2761 et seq.) or any design and 
        construction sales under chapter 2A of such Act (22 U.S.C. 
        2769).
            (4) Munitions list approvals.--Prohibition on licenses and 
        other forms of approval under section 38 of the Arms Export 
        Control Act (22 U.S.C. 2778) for the export of any item on the 
        United States Munitions List as in effect on August 8, 1995.
            (5) Dual use approvals.--Prohibition on licenses and other 
        forms of approval for dual use goods or technology, the export 
        of which is controlled under the Export Administration Act of 
        1979 (as continued in effect under the International Emergency 
        Economic Powers Act) or the Export Administration Regulations.
    (b) Application of Additional Measures.--Subject to sections 8 and 
9, and notwithstanding any other provision of law, the President may, 
with respect to any foreign person (including a foreign government) 
identified in a report transmitted under section 3, and shall, with 
respect to any foreign person (including a foreign government) 
identified in more than one report transmitted under section 3--
            (1) suspend the use of any license exemption and expedited 
        license procedure established in the International Traffic in 
        Arms Regulations or other provisions of law for the export or 
        temporary import of defense articles and defense services;
            (2) require the execution of a non-transfer and end use 
        certificate for the export of any defense articles and defense 
        services; and
            (3) require, as a condition of issuance of any license for 
        the export of defense articles and defense services, United 
        States access to and verification of the items after the export 
        of the items or alternative measures to ensure compliance with 
        restrictions on the transfer of the items to third-parties.
    (c) Effective Date of Measures.--Measures applied pursuant to 
subsection (a) or (b) shall be effective with respect to a foreign 
person (including a foreign government) no later than--
            (1) 30 days after the report identifying the foreign person 
        is transmitted, if the report is transmitted on or before the 
        date required by section 3(b); or
            (2) on the date that the report identifying the foreign 
        person is transmitted, if the report is transmitted more than 
        30 days after the date required by section 3(b).
    (d) Duration of Measures.--Measures applied pursuant to subsection 
(a) shall be for a period of 2 years or longer, as the President 
determines appropriate. Measures applied pursuant to subsection (b) 
shall be, at a minimum, consistent with the duration of the license and 
the normal requirements for record keeping established in the 
International Traffic in Arms Regulations or longer, as the President 
determines appropriate.
    (e) Publication in Federal Register.--The application of measures 
to a foreign person pursuant to subsection (a) or (b) shall be 
announced by notice published in the Federal Register, except if the 
President determines that doing so would be inconsistent with the 
protection of classified information.

SEC. 8. PROCEDURES IF DISCRETIONARY MEASURES ARE NOT APPLIED.

    (a) Requirement to Notify Congress.--If the President does not 
exercise the authority of subsection (a) or (b) of section 7 to apply 
any or all of the discretionary measures described in such subsection 
with respect to a foreign person identified in a report transmitted 
under section 3, the President shall so notify the appropriate 
congressional committees not later than the effective date under 
section 7(c) for measures with respect to that person.
    (b) Written Justification.--Any notification transmitted by the 
President under subsection (a) shall include a written justification 
describing in detail the facts and circumstances relating specifically 
to the foreign person identified in a report transmitted under section 
3 that support the President's decision not to exercise the authority 
of subsection (a) or (b) of section 7 with respect to that person.
    (c) Form.--If the President considers it appropriate, the 
notification of the President under subsection (a), and the written 
justification under subsection (b), or appropriate parts thereof, may 
be transmitted in classified form.

SEC. 9. DETERMINATIONS EXEMPTING FOREIGN PERSONS FROM MANDATORY 
              MEASURES.

    (a) Waiver.--Any mandatory measure described in section 7 shall not 
apply with respect to a foreign person if the President transmits to 
the appropriate congressional committees a report that contains a 
determination of the President that--
            (1) on the basis of information provided by that person or 
        the foreign government having primary jurisdiction over the 
        person, the person did not, on or after January 1, 2005, 
        knowingly export to the People's Republic of China the item the 
        apparent export of which caused the person to be identified in 
        a report transmitted under section 3; or
            (2) the foreign government having primary jurisdiction over 
        the person has entered into a written agreement with the United 
        States which--
                    (A) is binding under international law;
                    (B) prohibits further exports of any item described 
                in paragraph (1), or subparagraph (A) or (B) of 
                paragraph (2), of section 3(a) by any person subject to 
                its jurisdiction;
                    (C) is supported by the foreign government's 
                adoption of policies and procedures providing for 
                credible implementation of the requirements in 
                subparagraphs (A) and (B);
                    (D) does not constrain the President's authority to 
                impose measures under this act in the event of a future 
                export of concern by the same or other persons subject 
                to the jurisdiction of the foreign government party to 
                the agreement; and
                    (E) is submitted to the appropriate congressional 
                committees 30 days prior to its entry into force.
    (b) Additional Waiver.--Any mandatory measure described in section 
7 shall not apply to a foreign person if the President determines that 
it is important to the counterterrorism, nonproliferation, or other 
national security interests of the United States and transmits to the 
appropriate congressional committees a report in writing that contains 
such determination.
    (c) Sense of Congress.--It is the sense of Congress that the 
President should--
            (1) strengthen international coordination and execution of 
        arms export policy through the development of bilateral and 
        multilateral agreements under subsection (a)(2), particularly 
        with member states of the North Atlantic Treaty Organization 
        (NATO), Japan, Australia and New Zealand, and exercise the 
        waivers provided under this section in all appropriate 
        instances that further this objective; and
            (2) whenever the President determines that the measures 
        described in section 7 should be applied, that the measures be 
        applied comprehensively with respect to the affected foreign 
        person's affiliates and subsidiaries, wherever located, in 
        order to deter to the fullest extent possible a recurrence or 
        continuation of the export giving rise to the President's 
        determination.
    (d) Form.--If the President considers it appropriate, the 
determination and report of the President under subsection (a), or 
appropriate parts thereof, may be transmitted in classified form.

SEC. 10. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on International Relations and 
                the Committee on Armed Services of the House of 
                Representatives; and
                    (B) the Committee on Foreign Relations and the 
                Committee on Armed Services of the Senate.
            (2) Defense articles and defense services.--The term 
        ``defense articles and defense services'' has the meaning given 
        the term in section 47(7) of the Arms Export Control Act (22 
        U.S.C. 2794 note).
            (3) Dual use.--The term ``dual use'' means, with respect to 
        goods or technology, those goods or technology that are 
        specifically designed or developed for civil purposes but which 
        also may be used or deployed in a military or proliferation 
        mode. Such term does not include purely commercial items.
            (4) Export.--The term ``export'' has the meaning given that 
        term in section 120.17 of the International Traffic in Arms 
        Regulations, and includes re-exports, transfers, and 
        retransfers by any means.
            (5) Export administration regulations.--The term ``Export 
        Administration Regulations'' means those regulations contained 
        in sections 730 through 774 of title 15, Code of Federal 
        Regulations (or successor regulations).
            (6) Foreign government.--The term ``foreign government'' 
        has the meaning given the term in section 38(g)(9)(B) of the 
        Arms Export Control Act (22 U.S.C. 2778(g)(9)(B)).
            (7) Foreign person.--The term ``foreign person'' has the 
        meaning given the term in section 38(g)(9)(C) of the Arms 
        Export Control Act (22 U.S.C. 2778(g)(9)(C)).
            (8) Good.--The term ``good'' has the meaning given the term 
        in section 16(3) of the Export Administration Act of 1979 (50 
        U.S.C. App. 2415(3)).
            (9) International traffic in arms regulations.--The term 
        ``International Traffic in Arms Regulations'' means those 
        regulations contained in sections 120 through 130 of title 22, 
        Code of Federal Regulations (or successor regulations).
            (10) Item.--The term ``item'' means any good or technology, 
        defense article or defense service subject to the export 
        jurisdiction of the United States under law or regulation.
            (11) License.--The term ``license'' means an official 
        written document of the United States Government issued 
        pursuant to the Export Administration Regulations or the 
        International Traffic in Arms Regulations, as the case may be, 
        authorizing a specific export.
            (12) Other forms of approval.--The term ``other forms of 
        approval'' includes any authorization, rule or exemption 
        contained in any statute or regulation that permits an export 
        without a license.
            (13) Ownership or control.--The term ``ownership or 
        control'' has the meaning given the term in section 122.2(c) of 
        the International Traffic in Arms Regulations.
            (14) Person.--The term ``person'' has the meaning given the 
        term in section 38(g)(9)(E) of the Arms Export Control Act (22 
        U.S.C. 2778(g)(9)(E)).
            (15) Technology.--The term ``technology'' has the meaning 
        given the term in section 16(4) of the Export Administration 
        Act of 1979 (50 U.S.C. App. 2415(4)).
            (16) United states munitions list.--The term ``United 
        States Munitions List'' means the list referred to in section 
        38(a)(1) of the Arms Export Control Act (22 U.S.C. 2778(a)(1)).
                                                 Union Calendar No. 102

109th CONGRESS

  1st Session

                               H. R. 3100

                          [Report No. 109-165]

_______________________________________________________________________

                                 A BILL

 To authorize measures to deter arms transfers by foreign countries to 
                    the People's Republic of China.

_______________________________________________________________________

                             July 12, 2005

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed