110 HR 4246 IH: Defense Trade Controls Performance Improvement Act
U.S. House of Representatives
2007-11-15
text/xml
EN
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1.Short title and table of
contents
(a)This Act may be cited
as the Defense Trade Controls Performance Improvement Act
of 2007
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Strategic review and assessment of the United States
export controls system.
Sec. 4. Performance requirements in the processing of
applications for licenses to export or import items on the United States
Munitions List.
Sec. 5. Requirement to ensure adequate staff and resources for
the Directorate of Defense Trade Controls of the Department of
State.
Sec. 6. Audit by Government Accountability Office.
Sec. 7. Increased flexibility for use of defense trade controls
registration fees.
Sec. 8. Increased transparency through publication of licensing
information.
Sec. 9. Control of items on Missile Technology Control Regime
Annex.
Sec. 10. Waiver of licensing requirements for spare and
replacement parts or components and related services of defense items for
exports to NATO member states, Australia, Japan, and New Zealand.
Sec. 11. Availability of information on the status of license
applications under chapter 3 of the Arms Export Control Act.
Sec. 12. Export controls of civil aircraft
products.
Sec. 13. Definitions.
Sec. 14. Authorization of appropriations.
2.Congress finds the following:
(1)In a time of
international terrorist threats and a dynamic global economic and security
environment, 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 Accountability Office designated the effective identification
and protection of critical technologies as a government wide, high-risk area,
warranting a strategic re-examination of existing programs to include those
relating to arms export controls.
(3)Federal Government agencies must review
licenses for the export of munitions and dual-use items in a thorough and
timely manner to ensure that the United States is able to help its allies and
to prevent nuclear and conventional weapons from getting into the hands of our
enemies.
(4)A Government Accountability Office report
of October 9, 2001 (GAO–02–120), documented ambiguous export control
jurisdiction affecting 25 percent of the items that the United States
Government agreed to control as part of its commitments to the Missile
Technology Control Regime. More than 6 years later, the Departments of Commerce
and State have 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.
(5)Both the staffing and funding that relate
to the Department of State’s arms export control responsibilities have not kept
pace with the increased workload relating to such responsibilities, especially
over the last five years.
(6)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 consequence 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
corresponding increase in licensing officers;
(C)fiscal year 2005
marked the third straight year of roughly 8 percent annual increases in
licensing volume;
(D)although an 8
percent increase in workload equates to a requirement for three additional
licensing officers per year, there has been no increase in licensing officers
during this period; and
(E)the increase in
licensing volume without corresponding increase in trained and experienced
personnel has resulted in delays and increased processing times.
(7)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.
(8)On July 27, 2007, in testimony delivered to
the Subcommittee on Terrorism, Nonproliferation and Trade of the House
Committee on Foreign Affairs to examine the effectiveness of the United States
export control regime, the Government Accountability Office found that—
(A)despite the
existence of known vulnerabilities, neither the Departments of Commerce and
State have conducted assessments to determine their overall effectiveness in
the area of arms export control;
(B)the initiatives of
the Department of State to facilitate defense trade by reducing the time it
takes to process export license applications have generally not been
successful; and
(C)the processing
times of the Department of State doubled over the period from 2002 to
2006.
(9)At the end of 2006, the Department of
State’s backlog or open license applications reached its highest level by
exceeding 10,000 cases. This resulted in major management and personnel
challenges for the Department of State’s Directorate of Defense Trade
Controls.
(10)Allowing a continuation of the status quo
in resources for defense trade licensing could ultimately harm the United
States defense industrial base. The 2007 Institute for Defense Analysis report
entitled Export Controls and the U.S. Defense Industrial Base
found that the large backlog and long processing times for Department of State
processed licenses led to an impairment of United States firms in some sectors
to conduct global business relative to foreign competitors. Additionally, the
report found that United States commercial firms have been reluctant to engage
in research and development activities for the Department of Defense because
this raises the future prospects that the products based on this research and
development, even if intrinsically commercial, will be saddled by Department of
State munitions controls due to the link to that research.
(11)According to the Department of State’s
fiscal year 2008 budget justification to Congress, commercial exports licensed
or approved under the Arms Export Control Act exceeded $30,000,000,000, with
nearly eighty percent of these items exported to United States NATO allies and
other major non-NATO allies. The inability of Federal Government agencies to
properly assess and categorize United States manufactured goods in a timely and
consistent manner hinders legitimate trade and exacerbates the United States
merchandise trade deficit, which reached $836,000,000,000 in 2006.
(12)The failure on the part of the Departments
of Commerce and State to assess the overall effectiveness of their export
controls, combined with the lack of resources dedicated to these efforts at the
Department of State, raises serious national and economic security concerns for
the United States that must be addressed expeditiously.
3.Strategic review
and assessment of the United States export controls system
(a)The Secretary of State, in coordination
with the heads of other Federal agencies (including relevant law enforcement
agencies), as appropriate, shall conduct a comprehensive and systematic review
and assessment of the United States export controls system in the context of
the strategic foreign policy objectives of the United States. Such review and
assessment shall determine the overall effectiveness of the United States
export controls system in order to, where appropriate, strengthen controls,
improve efficiency, and reduce unnecessary redundancies across Federal
Government agencies, through administrative actions, including regulations, and
to formulate legislative proposals for new authorities that are needed.
(b)Not later than one year after the date of
the enactment of this Act, the Secretary of State shall submit to the
appropriate congressional committees a report that contains the results of the
review and assessment conducted under subsection (a).
(c)At the time the report required by subsection (b) is
submitted to the appropriate congressional committees in accordance with such
subsection, the Secretary of State (or the Secretary’s designee) shall brief
the chairmen and ranking members of the appropriate congressional committees on
the matters contained in the report.
4.Performance
requirements in the processing of applications for licenses to export or import
items on the United States Munitions List
(a)The Secretary of State, acting through the
Directorate of Defense Trade Controls of the Department of State, shall ensure
that—
(1)the average processing time for review and
issuance or denial of applications for licenses to export or import items on
the United States Munitions List that are not subject to the requirements of
subsection (b) or (c) of section 36 of the Arms Export Control Act (22 U.S.C.
2776)—
(A)to countries that are member states of the
North Atlantic Treaty Organization (NATO), Australia, Israel, Japan, and New
Zealand is not more than 20 days from receipt of application;
(B)to countries that are major non–NATO allies
(other than major non-NATO allies described in subparagraph (A)) is not more
than 30 days from receipt of application; and
(C)to other eligible countries is not more
than 60 days from receipt of application; and
(2)prior to consultation with the appropriate
congressional committees, the average processing time for review of
applications for licenses to export or import items on the United States
Munitions List that are subject to the requirements of subsection (b) or (c) of
section 36 of the Arms Export Control Act (22 U.S.C. 2776)—
(A)to countries that are member states of the
North Atlantic Treaty Organization (NATO), Australia, Israel, Japan, and New
Zealand is not more than 40 days from receipt of application;
(B)to countries that are major non–NATO allies
(other than major non-NATO allies described in subparagraph (A)) is not more
than 60 days from receipt of application; and
(C)to other eligible countries is not more
than 120 days from receipt of application;
(3)the average processing time for review and
determinations of commodity jurisdiction requests is not more than 60 days;
(4)the average processing time for review and
determinations of technical assistance agreements is not more than 120 days;
(5)at no time does the Directorate of Defense
Trade Controls have more than 2,000 open applications for licenses to export or
import items on the United States Munitions List; and
(6)applications for licenses to export or
import items on the United States Munitions List that are returned without
action or denied are periodically reviewed by the Managing Director of the
Directorate of Defense Trade Controls to ensure such decisions are consistent
with both policy and regulatory requirements of the Department of State.
(b)Congress states that
it shall be the policy of the Directorate of Defense Trade Controls of the
Department of State to ensure that, to the maximum extent practicable, the
average processing time for review and issuance or denial of applications for
licenses to export or import items on the United States Munitions List that are
not subject to the requirements of subsection (b) or (c) of section 36 of the
Arms Export Control Act (22 U.S.C. 2776) to United States NATO allies and major
non-NATO allies in direct support of combat operations or peacekeeping or
humanitarian operations with United States Armed Forces is not more than seven
calendar days from receipt of application.
(c)Determination of
average processing timeThe
Secretary of State shall determine the average processing times established
under subsections (a) and (b) on the basis of the volume of applications
received by the Directorate of Defense Trade Controls during the immediately
preceding 6-month period.
(d)If, at the end of
any month—
(1)the average
processing times for review and issuance or denial of applications for licenses
to export or import items under any category of the United States Munitions
List is in excess of the times specified in subparagraphs (A), (B), and (C) of
paragraphs (1) and (2) of subsection (a),
(2)the average processing time for review and
determinations of commodity jurisdiction requests is more than 60 days as
described in subsection (a)(3), or
(3)the Directorate of
Defense Trade Controls has more than 2,000 open applications as described in
subsection (a)(5),
the
Secretary of State, acting through the Undersecretary for Arms Control and
International Affairs, the Assistant Secretary for Political and Military
Affairs, or the Deputy Assistant Secretary for Defense Trade Controls of the
Department of State, shall brief the appropriate congressional committees on
such matters and the corrective measures that the Directorate of Defense Trade
Controls will take to comply with the requirements of subsection (a).(e)If the processing time
for review and determination of a commodity jurisdiction request is more than
120 days, the Secretary of State shall submit to the appropriate congressional
committees a report that describes the request and the reasons for the extended
duration of the processing time of the request.
(f)Review and
assessment of comprehensive defense trade security initiatives
(1)The Secretary of State, in coordination with the heads
of other relevant Federal departments and agencies, shall review each of the
Department of State’s Comprehensive Defense Trade Security Initiative’s export
authorizations described in paragraph (2) and assess the effectiveness of each
such authorization, including the extent to which the authorization is utilized
and is achieving the initiative’s stated objectives. This review should also
assess how well such authorizations are supporting defense cooperation and
interoperability with United States allies and partners by permitting timely
sharing of technology, maintenance information, and spare parts and components
for cooperative defense programs.
(2)Comprehensive
defense trade security initiativesThe Comprehensive Defense
Trade Security Initiative’s export authorizations referred to in paragraph (1)
are the following:
(A)Major Project
AuthorizationComprehensive authorization for a range of export
activities between a single registered United States exporter, as original
equipment manufacturer, and a foreign company or government, including
integration, codevelopment, or production.
(B)Major Program
AuthorizationComprehensive authorization for a range of export
activities for a principal registered contractor covering all aspects of a
commercial project with a foreign company or government, including
participation by multiple subcontractors and exporters, such as a transaction
for a foreign government’s purchase of a United States major weapons
system.
(C)Global Project
AuthorizationComprehensive authorization for a United States
exporter to carry out broad range of activities associated with a cooperative
project pursuant to a government -to-government agreement.
(3)Not
later than 180 days after the date of the enactment of this Act, the Secretary
of State shall submit to the appropriate congressional committees a report that
contains the results of the review and assessment conducted under paragraph (1)
and recommendations based on the review and assessment of any needed
improvements.
(g)Nothing in this section shall be construed to
prohibit the President or Congress from undertaking a thorough review of the
national security and foreign policy implications of a proposed export or
import of items on the United States Munitions List.
5.Requirement to
ensure adequate staff and resources for the Directorate of Defense Trade
Controls of the Department of State
(a)The Secretary of State shall ensure that
the Directorate of Defense Trade Controls of the Department of State has the
necessary staff and resources to carry out this Act and the amendments made by
this Act.
(b)Minimum number
of licensing officersThe
Secretary of State shall ensure that the Directorate of Defense Trade Controls
has not less than the following number of licensing officers for the following
fiscal years:
(1)60 licensing
officers for fiscal year 2009.
(2)70 licensing
officers for fiscal year 2010.
(3)An appropriate number of licensing officers
so that the ratio between the number of licensing officers to the estimated
number of applications for licenses to export or import items on the United
States Munitions List for fiscal year 2011 and each subsequent fiscal year is
not less than 1 to 1,250.
(c)Minimum number of
staff for commodity jurisdiction requestsFor each of the fiscal years 2009 through
2011, the Secretary of State shall ensure that the Directorate of Defense Trade
Controls has not less than three individuals assigned to review and make
determinations of commodity jurisdiction requests.
6.Audit by
Government Accountability Office
(a)Not later than end of each of the fiscal
years 2009 through 2011, the Comptroller General shall conduct an independent
audit to determine whether or not the Department of State is meeting the
requirements of sections 4 and 5 of this Act.
(b)The
Comptroller General shall submit to the appropriate congressional committees a
report that contains the result of each audit conducted under subsection
(a).
7.Increased flexibility
for use of defense trade controls registration feesSection 45 of the State Department Basic
Authorities Act of 1956 (22 U.S.C. 2717) is amended—
(1)in the first
sentence, by striking Office
and inserting
Directorate
; and
(2)in the second
sentence, to read as follows: Fees credited to that account shall be
available only for payment of expenses incurred for management, licensing,
compliance, and policy activities of defense trade controls functions. In
allocating fees for payment of expenses described in the preceding sentence,
the Secretary of State shall accord the highest priority to payment of expenses
incurred for personnel of the Directorate of Defense Trade Controls, including
payment of expenses incurred to meet the requirements of section 5 of the
Defense Trade Controls Performance Improvement Act of 2007 (relating to
adequate staff and resources of the Directorate of Defense Trade
Controls).
.
8.Increased
transparency through publication of licensing information
(a)The Directorate
of Defense Trade Controls shall establish a secure Internet-based system for
tracking the progress of applications for licenses to export or import items on
the United States Munitions List so that applicants can track the status of
their applications.
(b)Beginning not
later than 180 days after the date of the enactment of this Act, the Secretary
of State shall publish on the Internet website of the Department of State, and
update as appropriate—
(1)information concerning the average
processing times, by category, and the number of open applications, as required
by section 4 of this Act; and
(2)information concerning staff and resources
of the Directorate of Defense Trade Controls of the Department of State,
including the number of licensing officers, as required by section 5 of this
Act.
9.Control of items
on Missile Technology Control Regime Annex
(a)Control of items
on MTCR AnnexThe Secretary of State, in coordination with the
Secretary of Commerce, the Secretary of Defense, and the heads of other federal
agencies, as appropriate, shall ensure that all items on the Missile Technology
Control Regime Annex are subject to stringent control by the Government of the
United States pursuant to the International Traffic in Arms Regulations and the
Export Administration Regulations.
(b)Not later than 180 days after the date of
the enactment of this Act, the Secretary of State, in coordination with the
Secretary of Commerce, the Secretary of Defense, and the heads of other federal
agencies, as appropriate, shall submit to the appropriate congressional
committees a report that contains—
(1)a
certification that the requirement of subsection (a) has been met, or if the
requirement has not been met, the reasons therefore; and
(2)a
description of the updated coverage, if any, of the regulations referred to in
subsection (a) with respect to all items on the MTCR Annex and an explanation
of any areas of overlap or omissions, if any, among the regulations.
10.Waiver of
licensing requirements for spare and replacement parts or components and
related services of defense items for exports to NATO member states, Australia,
Japan, and New Zealand
(a)Section 38(j) of the
Arms Export Control Act (22 U.S.C. 2778(j)) is amended—
(1)by
redesignating paragraph (4) as paragraph (5); and
(2)by inserting after
paragraph (3) the following new paragraph:
(4)Waiver of
licensing requirements for spare and replacement parts or components and
related services of defense items for exports to NATO member states, Australia,
Japan, and New Zealand
(A)(i)Subject to subparagraph
(B), the President shall waive the licensing requirements of this Act for
exports of spare and replacement parts or components and related services of
defense items exported to NATO member states, Australia, Japan, and New
Zealand.
(ii)A waiver may be issued under this
subparagraph only if—
(I)the
export of spare and replacement parts or components and related
services—
- (aa)supports a defense item previously
lawfully exported;
- (bb)is a one-for-one replacement of the spare
and replacement parts or components and related services; and
- (cc)is limited to destruction or return of the
replaced part or component and documentation of the process;
(II)the
spare and replacement parts or components and related services will be
transferred to a defense agency of a country described in clause (i) that is a
previously approved end-user of the defense items and not to a distributor of
such defense items;
(III)the
spare and replacement parts or components and related services will not to be
used to enhance, optimize, or otherwise upgrade the capability of the defense
items; and
(IV)the
spare and replacement parts or components and related services relate to a
defense item that is owned, operated, and in the inventory of the armed forces
a country described in clause (i).
(iii)For purposes of this paragraph, the term
defense items has the meaning given the term in paragraph (5) of
this subsection, except that such term does not include items on the list
referred to in subsection (a)(1) of this section that are significant military
equipment or items on the Missile Technology Control Regime Annex (as such term
is defined in section 11B(c)(4) of the Export Administration Act of 1979 (50
U.S.C. App. 2401b(c)(4))).
(B)The President is authorized to not issue a
waiver under subparagraph (A) with respect to a country described in such
subparagraph if the President determines that it is in the national security
interests of the United States to do so.
(C)Inapplicability
to re-exports and re-transfersThe provisions of this paragraph shall not
apply with respect to re-exports or re-transfers of spare and replacement parts
or components and related services of defense items described in subparagraph
(A).
(D)Advance
notification and disapproval provisionsEvery person who seeks to export spare and
replacement parts or components and related services of defense items described
in subparagraph (A)—
(i)shall, not less
than 5 days prior to the export of such parts, components, and services, notify
the Secretary of State of the type, number, and monetary value of such parts,
components, and services; and
(ii)may export such
parts, components, and services only if the Secretary of State does not
disapprove the export of such parts, components, and services during such 5-day
period.
.
(b)The amendments made by subsection (a) shall take effect on
October 1, 2008.
11.Availability of
information on the status of license applications under chapter 3 of the Arms
Export Control ActChapter 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:
38A.Availability of
information on the status of license applications under this chapter
(a)Not later than six
months after the date of the enactment of the Defense Trade Controls
Performance Improvement Act of 2007, the President shall make available to the
congressional committees of jurisdiction the ability to access electronically,
by secure means, current information on the status of all license applications
required to be submitted under this chapter.
(b)The information described in subsection (a) shall
include, but is not limited to, the following:
(1)The date on which
each license is received by the Department of State and becomes an open
application
.
(2)The date on which
the Directorate of Defense Trade Controls makes a determination with respect to
each license or sends it out for interagency review, if required.
(3)The date on which the interagency review
process for each license is completed, if such a review process is
required.
(4)The date on which
each license is sent to the Bureau of Legislative Affairs of the Department
State for action.
(5)The date on which
the Bureau of Legislative Affairs of the Department of State begins
consultations with the congressional committees of jurisdiction with respect to
each license.
(6)The date on which
each license is formally sent to the congressional committees of jurisdiction.
(c)Availability to
United States exportersNo
later than 12 months after the date of the enactment of the Defense Trade
Controls Performance Improvement Act of 2007, the President shall make
available to each United States exporter, through secure electronic means, the
information described in subsection (b) with respect to each license that such
exporter has submitted pursuant to this
chapter.
.
12.Export controls
of civil aircraft products
(a)Export controls
under jurisdiction of department of commerceSubject to subsections (b), (c), and (d),
any civil aircraft product that was included in the type design of a type
certificate for a civil aircraft issued by the Federal Aviation Administration
under part 21 of title 14, Code of Federal Regulations, on or before the date
of the enactment of this Act, shall be subject to the exclusive jurisdiction of
the Department of Commerce and shall not be subject to controls under section
38 of the Arms Export Control Act (22 U.S.C. 2778).
(b)Revision To
export controlsNot later than 180 days after the date of the
enactment of this Act, the Secretary of State and the Secretary of Commerce
shall promulgate regulations and publish in the Federal Register amendments, as
appropriate, to the Commerce Control List or the United States Munitions List,
or both, specifying any civil aircraft product described in subsection (a) that
requires additional or different export controls than the export controls
described in such subsection.
(c)Export controls
under jurisdiction of department of stateAny civil aircraft
product that has a lethal military end-use, is currently subject to a license
issued by the Department of State, is determined to be subject to the
jurisdiction of the Department of State as a result of a commodity jurisdiction
determination, or is an anti-missile defense item, including a special mission
system installed on United States commercial aircraft for anti-missile defense,
shall be subject to the jurisdiction of the Department of State unless
determined otherwise by the Secretary of State.
(d)The
President shall waive the application of any provision of this section with
respect to any civil aircraft product for which the President determines that
exercising such waiver is in the national security interests of the United
States.
(e)Civil aircraft
product definedIn this
section, the term civil aircraft product means—
(1)a
Class I product, Class II product, or Class III product, as defined in section
21.321(b) of title 14, Code of Federal Regulations (as in effect on June 1,
2007); and
(2)any part,
component, or related technical data of a product described in paragraph
(1).
13.In this Act:
(1)Appropriate
congressional committeesThe
term appropriate congressional committees means the Committee on
Foreign Affairs of the House of Representatives and the Committee on Foreign
Relations of the Senate.
(2)Export
administration regulationsThe term Export Administration
Regulations means those regulations contained in sections 730 through
774 of title 15, Code of Federal Regulations (or successor regulations).
(3)The term Commerce
Control List means the list maintained under part 774 of title 15, Code
of Federal Regulations.
(4)International
traffic in arms regulationsThe 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).
(5)The term major
non-NATO ally means a country that is designated in accordance with
section 517 of the Foreign Assistance Act of 1961 (22 U.S.C. 2321k) as a major
non-NATO ally for purposes of the Foreign Assistance Act of 1961 (22 U.S.C.
2151 et seq.) and the Arms Export Control Act (22 U.S.C. 2751 et seq.).
(6)Missile
technology control regime; MTCRThe term Missile Technology
Control Regime 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)).
(7)Missile
technology control regime annex; MTCR annexThe term
Missile Technology 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)).
(8)Technical
assistance agreementThe term technical assistance
agreement means an agreement described in section 120.22 of title 22,
Code of Federal Regulations (or successor regulations).
(9)United States
Munitions ListThe 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)).
14.Authorization of
appropriationsThere are
authorized to be appropriated such sums as may be necessary for fiscal year
2009 and each subsequent fiscal year to carry out this Act and the amendments
made by this Act.