[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6828 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6828

   To make improvements in the electronic filing of export data, to 
strengthen enforcement authorities under the Export Administration Act 
                    of 1979, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 1, 2008

 Mr. Sherman (for himself, Mr. Manzullo, and Mr. Smith of Washington) 
 introduced the following bill; which was referred to the Committee on 
Foreign Affairs, and in addition to the Committee on Homeland Security, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To make improvements in the electronic filing of export data, to 
strengthen enforcement authorities under the Export Administration Act 
                    of 1979, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Export Control 
Improvements Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
       TITLE I--IMPROVEMENTS IN ELECTRONIC FILING OF EXPORT DATA

Sec. 101. Short title.
Sec. 102. Mandatory electronic filing of export data.
Sec. 103. Information sharing of Automated Export System data; 
                            conferences; automated export system 
                            licenses and filings.
Sec. 104. Definitions.
Sec. 105. Conforming amendments.
Sec. 106. Authorization of appropriations.
                TITLE II--EXPORT ENFORCEMENT ENHANCEMENT

Sec. 201. Short title.
Sec. 202. Declaration of policy.
Sec. 203. Enforcement.
Sec. 204. Authorization of appropriations.
Sec. 205. Termination date.
Sec. 206. Designation of destinations of diversion concern.
Sec. 207. Validated end-user program review.
Sec. 208. Annual report on transfers of militarily sensitive technology 
                            to countries and entities of concern.
Sec. 209. Definition.

       TITLE I--IMPROVEMENTS IN ELECTRONIC FILING OF EXPORT DATA

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Securing Exports Through 
Coordination and Technology Act''.

SEC. 102. MANDATORY ELECTRONIC FILING OF EXPORT DATA.

    Section 1404(b) of the Foreign Relations Authorization Act, Fiscal 
Year 2003 (13 U.S.C. 301 note) is amended to read as follows:.
    ``(b) In General.--
            ``(1) Filing through aes.--The Secretary of Commerce shall 
        maintain regulations that require that persons who are required 
        to file Shipper's Export Declarations under chapter 9 of title 
        13, United States Code, file (either themselves or through 
        their intermediaries) such Declarations through the Automated 
        Export System before the items are exported from any United 
        States port, unless the Secretary of Commerce, with the 
        concurrence of the Secretary of State, the Secretary of 
        Defense, the Secretary of the Treasury, and the Secretary of 
        Homeland Security, determines that it is appropriate to grant 
        an exception to this requirement. Such filing of data shall, at 
        a minimum, include--
                    ``(A) the name and address of the principal party-
                in-interest in the United States;
                    ``(B) the name and address of the foreign principal 
                party-in-interest;
                    ``(C) the name and address of all intermediate 
                consignees;
                    ``(D) the name and address of the ultimate 
                consignee;
                    ``(E) the commodity classification of each item 
                being exported;
                    ``(F) when appropriate, the license number or 
                regulatory authorization for the export; and
                    ``(G) a declaration, under penalty of perjury under 
                the laws of the United States, that the information 
                filed under this paragraph is true and correct.
            ``(2) Modifications to regulations.--Any modifications to 
        the regulations referred to in paragraph (1) may be made only 
        with the concurrence of the heads of the relevant departments 
        and agencies.
            ``(3) Intermediary defined.--In this subsection, the term 
        `intermediary' means a freight forwarder, a non-vessel 
        operating common carrier (NVOCC), an ATA (Admission Temporaire/
        Temporary Admission) Carnet national guaranteeing association 
        and its service providers, or any other similar entity as 
        determined by the Secretary of Commerce, in consultation with 
        the Secretary of Homeland Security.''.

SEC. 103. INFORMATION SHARING OF AUTOMATED EXPORT SYSTEM DATA; 
              CONFERENCES; AUTOMATED EXPORT SYSTEM LICENSES AND 
              FILINGS.

    Chapter 9 of title 13, United States Code, is amended--
            (1) by redesignating sections 302 through 307 as sections 
        306 through 311, respectively; and
            (2) by inserting after section 301 the following new 
        sections:
``Sec. 302. Conferences and seminars
    ``(a) Mandatory Conference Participation.--The Secretary shall work 
with the Secretary of State, the Secretary of Defense, the Secretary of 
Homeland Security, and the Secretary of the Treasury to ensure that 
appropriate personnel of each of their respective departments and 
agencies that are involved in the regulation of exports or the 
enforcement of such regulation are made available, subject to the 
availability of such personnel, to participate in fora the purpose of 
which is to educate exporters about laws and regulations of the United 
States governing exports and about the Automated Export System in 
particular, including through seminars, educational or training 
meetings, exhibitions, symposiums, and other similar meetings.
    ``(b) Authority To Collect Fees.--The Secretary may collect fees 
from any individual or other person attending or participating in any 
forum described in subsection (a) that is conducted by, or jointly 
with, the Department of Commerce. The Secretary may use contractors to 
collect such fees. Fees under this subsection may be collected in 
advance of the forum.
    ``(c) Disposition of Collected Fees.--Amounts collected under 
subsection (b) shall be used to pay all or part of the cost of fora 
described in subsection (a), and shall be credited to the account from 
which the costs of such fora have been paid or will be paid.
    ``(d) Budget for Participating Agencies.--In the case of any agency 
that does not have the available funds to participate in a forum under 
subsection (a), the Secretary shall make such sums available, from fees 
collected under subsection (b), as are necessary to allow such 
participation by the agency.
    ``(e) Availability of Materials to the Public.--The Secretary shall 
make available to the public, including through its public website, 
relevant materials provided for the fora held under subsection (a).
``Sec. 303. Automated Export System registrations for filers
    ``(a) Registrations.--
            ``(1) In general.--The Secretary may establish a 
        registration program for persons to file information in the 
        Automated Export System, either on behalf of themselves or 
        acting as an intermediary. Such registration program may 
        include authorization for individuals to file as well as any 
        corporation, association, or partnership that is organized 
        under the laws of the United States or of any State, the 
        District of Columbia, or any commonwealth, territory, or 
        possession of the United States.
            ``(2) Qualifications for individuals.--The Secretary may 
        establish qualification requirements for an individual seeking 
        to register under the program, except that an individual may be 
        so registered only if the individual is a United States 
        citizen, an alien lawfully admitted for permanent residence to 
        the United States, or a national of the United States (in the 
        case of a resident of a territory or possession of the United 
        States). In assessing the qualification of an applicant for 
        registration, the Secretary may conduct an examination to 
        determine the applicant's knowledge of the Automated Export 
        System and laws, regulations, and procedures related to the 
        export of goods from the United States, and may require 
        participation in a continuing education program on a periodic 
        basis. The Secretary may also obtain information to determine 
        an applicant's fitness and character to act as an Automated 
        Export System filer. An individual who meets the requirements 
        for registration under this paragraph shall be issued an 
        Automated Export System registration.
            ``(3) Qualifications for corporations and other business 
        entities.--A corporation, association, or partnership may be 
        registered under this subsection only if at least one official 
        of the corporation or association who is designated by the 
        corporation or association, or one member of the partnership, 
        who is authorized to act on behalf of the corporation, 
        association, or partnership, as the case may be--
                    ``(A) holds a valid Automated Export System 
                registration under paragraph (2);
                    ``(B) is responsible for the supervision and 
                control of filing Shipper's Export Declaration 
                information in the Automated Export System; and
                    ``(C) is a United States citizen, an alien lawfully 
                admitted for permanent residence to the United States, 
                or a national of the United States (in the case of a 
                resident of a territory or possession of the United 
                States).
        The Secretary may establish such other registration 
        requirements for corporations, associations, and partnerships 
        as the Secretary considers appropriate. A corporation, 
        association, or partnership that meets the requirements for 
        registration under this paragraph shall be issued an Automated 
        Export System registration.
            ``(4) Federal maritime commission licenses.--An ocean 
        transportation intermediary (OTI) license issued by the Federal 
        Maritime Commission may be used to satisfy the initial 
        qualification requirements of the registration program under 
        this subsection, if the Federal Maritime Commission maintains 
        sufficient requirements with respect to such license, as 
        determined by the Secretary.
            ``(5) Lapse of registration.--Registrations under this 
        subsection shall be granted for a period of not less than 3 
        years, and may be renewed in such manner and under such 
        conditions as are established by the Secretary.
    ``(b) Denial, Suspension, or Revocation of Registration.--
            ``(1) General rule.--The Secretary may revoke or suspend a 
        registration or deny an application for registration under 
        subsection (a), which may take effect immediately, if the 
        Secretary has reason to believe that the registrant or 
        applicant has violated or will violate any regulations issued 
        under this section or any law or regulation of the United 
        States controlling exports. The Secretary may provide rules for 
        notifying registrants and registration applicants of the 
        process for revoking or suspending a registration or denying an 
        application, consistent with the need to protect national 
        security.
            ``(2) Procedures for denial, revocation, or suspension.--
                    ``(A) In general.--If a registration is revoked or 
                suspended or an application is denied under paragraph 
                (1), the Secretary shall send the registrant or 
                applicant notice in writing specifically setting forth 
                the grounds for suspension, revocation, or denial, 
                shall allow the registrant or applicant a period of 30 
                calendar days beginning on the date on which the notice 
                is received to respond in writing, and shall advise the 
                registrant or applicant of the right to a hearing. A 
                registrant or applicant may request an extension of 
                time for such response, and the Secretary shall grant 
                such extension for good cause shown. If no response is 
                filed within that 30-day period, or any extension 
                thereof, and the Secretary determines that the 
                revocation, suspension, or denial is still warranted, 
                the revocation, suspension, or denial shall become 
                final.
                    ``(B) Hearing.--If a timely response is received 
                under subparagraph (A) and the registrant or applicant 
                requests a hearing, a hearing shall be held within 30 
                calendar days after the date on which the request is 
                received, or at a later date if the registrant or 
                applicant requests an extension and shows good cause 
                therefor. An administrative law judge appointed under 
                section 3105 of title 5 shall preside at the hearing, 
                which shall be conducted in accordance with regulations 
                issued by the Secretary. The administrative law judge 
                shall issue a written decision either upholding, 
                reversing, or modifying the decision of the Secretary, 
                based solely on the record, setting forth the findings 
                of fact, and the reasons for the decision.
                    ``(C) Suspension of registration pending appeal.--
                In a case in which a person appeals a decision revoking 
                or suspending a registration under this subsection, 
                including an appeal under subsection (c), the Secretary 
                may order that the registration continue to be 
                suspended while the appeal is pending.
            ``(3) Settlement and compromise.--The Secretary may settle 
        and compromise any proceeding that has been instituted under 
        this subsection according to the terms and conditions agreed to 
        by the parties, including the reduction of any proposed 
        suspension or revocation.
            ``(4) Limitation of actions.--The Secretary may revoke or 
        suspend a registration or deny an application for registration 
        under this subsection only if the appropriate service of 
        written notice is made under paragraph (2)(A) within 5 years 
        after the date on which the alleged act described in paragraph 
        (1) was committed, except that if the alleged act consists of 
        fraud, the 5-year period shall begin on the date on which the 
        alleged act was discovered.
    ``(c) Judicial Appeal.--
            ``(1) In general.--A registrant under this section, or an 
        applicant for a registration under this section, may appeal any 
        decision of the administrative law judge under subsection (b) 
        suspending or revoking the registration or denying the 
        application by filing in the appropriate United States district 
        court, within 60 days after the date on which the decision is 
        issued, a written petition requesting that the decision be 
        modified or set aside in whole or in part. A copy of the 
        petition shall be served upon the Secretary. In cases involving 
        revocation or suspension of a registration, the Secretary, 
        after receiving the petition, shall file in the court the 
        record upon which the decision complained of was entered.
            ``(2) Failure to appeal.--If an appeal is not filed within 
        the time limits specified in paragraph (1), the decision of the 
        administrative law judge under subsection (b) shall be final 
        and conclusive.
    ``(d) Regulations.--The Secretary shall provide a period of at 
least 90 days for the submission of public comments on any regulations 
issued to carry out this section, before such regulations may become 
effective.
``Sec. 304. Blocking prohibited or restricted exports
    ``(a) In General.--The Secretary, with the concurrence of the heads 
of the appropriate departments and agencies, shall issue regulations to 
ensure that the Automated Export System will identify the filing of 
data in connection with an export from the United States if the country 
of destination of intended export or the export control information, or 
lack thereof, would result in a violation of any prohibition or 
restriction on exports under the laws and regulations of the United 
States.
    ``(b) Sufficiency and Timeliness of Export Control Information in 
the Automated Export System.--Not later than 1 year after the date of 
the enactment of the Securing Exports Through Coordination and 
Technology Act, the Secretary, with the concurrence of the heads of the 
relevant departments and agencies and in consultation with 
representatives of affected industries and nongovernmental 
organizations with relevant expertise, shall--
            ``(1) ensure on an ongoing basis that changes in laws and 
        regulations controlling exports from the United States are 
        reflected in the Automated Export System upon implementation of 
        those changes;
            ``(2) enable on an ongoing basis the classification of 
        products to be exported in a manner sufficient to carry out the 
        purposes of this section; and
            ``(3) ensure on an ongoing basis that all lists maintained 
        by the United States and comprised of persons or entities to 
        whom exports are restricted are available in a standardized 
        format and contain sufficient descriptive information to enable 
        their effective use by exporters (through the Automated Export 
        System or otherwise) to screen transactions and prevent 
        diversions of exported items for unauthorized destinations, 
        parties, or uses.
    ``(c) Minimum Requirements.--The Secretary, with the concurrence of 
the heads of the relevant departments and agencies and in consultation 
with representatives of affected industries and nongovernmental 
organizations with relevant expertise, shall ensure that the Automated 
Export System contains at least the following operational features:
            ``(1) The Automated Export System will process data filed 
        in connection with an export and will alert the filer to export 
        license requirements under the laws and regulations of the 
        United States.
            ``(2) If the data filed that is associated with the export 
        does not satisfy requirements under the export control laws and 
        regulations of the United States, the Automated Export System 
        will issue notices that the transaction cannot be completed, 
        compliance alerts, and other warnings, as appropriate, 
        accompanied by references to the applicable authorities.
            ``(3) The Automated Export System will retain records of 
        actions of users while filing export data.
    ``(d) Construction.--Nothing in this section shall be construed to 
authorize an export solely because the Automated Export System accepts 
the filing of data.
``Sec. 305. Fees and charges
    ``The Secretary may issue regulations prescribing reasonable fees 
and charges, with particular sensitivity to small businesses, to defray 
the costs of the Secretary in carrying out this chapter.''.

SEC. 104. DEFINITIONS.

    Chapter 9 of title 13, United States Code, is amended by adding at 
the end the following new section:
``Sec. 312. Definitions
    ``In this chapter:
            ``(1) Automated export system.--The term `Automated Export 
        System' means the automated and electronic system for filing 
        export information established under this chapter.
            ``(2) Intermediary.--The term `intermediary' means a 
        freight forwarder, a non-vessel operating common carrier 
        (NVOCC), an ATA (Admission Temporaire/Temporary Admission) 
        Carnet national guaranteeing association and its service 
        providers, or any other similar entity as determined by the 
        Secretary, in consultation with the Secretary of Homeland 
        Security.
            ``(3) Relevant departments and agencies.--The term 
        `relevant departments and agencies' means the Department of 
        State, the Department of Defense, the Department of Homeland 
        Security, and the Department of the Treasury.
            ``(4) Shipper's export declaration.--The term `Shipper's 
        Export Declaration' means the export information filed under 
        this chapter.''.

SEC. 105. CONFORMING AMENDMENTS.

    (a) Collection and Publication.--Section 301 of title 13, United 
States Code, is amended by striking subsection (g) and redesignating 
subsection (h) as subsection (g).
    (b) Regulations, Orders, etc.--Section 306 of title 13, United 
States Code, as redesignated by section 103(1) of this Act, is amended 
by striking the last sentence and inserting ``The Secretary shall make 
rules, regulations, and orders, and amendments thereto, in consultation 
with the Secretary of Homeland Security.''.
    (c) Cross References.--Section 309 of title 13, United States Code, 
as redesignated by section 103(1) of this Act, is amended--
            (1) in subsection (b), by striking ``304'' and inserting 
        ``308''; and
            (2) in subsection (c)--
                    (A) in paragraph (1), by striking ``304'' and 
                inserting ``308'';
                    (B) in paragraph (4), by striking ``306'' and 
                inserting ``310''; and
                    (C) in paragraph (5), by striking ``304'' and 
                inserting ``308''.
    (d) Table of Contents.--The table of contents for chapter 9 of 
title 13, United States Code, is amended to read as follows:

``301. Collection and publication.
``302. Conferences and seminars.
``303. Automated Export System registrations for filers.
``304. Blocking prohibited or restricted exports.
``305. Fees and charges.
``306. Rules, regulations, and orders.
``307. Secretary of Treasury functions.
``308. Filing export information, delayed filings, penalties for 
                            failure to file.
``309. Penalties for unlawful export information activities.
``310. Delegation of functions.
``311. Relationship to general census law.
``312. Definitions.''.

SEC. 106. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as may be 
necessary to carry out the amendments made by this Act.

                TITLE II--EXPORT ENFORCEMENT ENHANCEMENT

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Export Enforcement Act of 2008''.

SEC. 202. DECLARATION OF POLICY.

    The Congress declares that, at a time of evolving threats and 
changing relationships with other countries, as well as rapid 
technological change and an increasingly globalized economy, United 
States strategic export controls are in urgent need of a comprehensive 
review in order to assure those controls are achieving their intended 
purposes of protecting the national security of the United States in 
the Global War on Terrorism and of promoting the economic and foreign 
policy interests of the United States, in particular by assuring that--
            (1) export authorization procedures are properly designed 
        to prioritize which exports may be approved quickly for trusted 
        partners of the United States and which require greater 
        scrutiny in order to safeguard national interests;
            (2) strategic export controls appropriately and effectively 
        identify and protect technologies critical to United States 
        national security interests; and
            (3) coordination among the responsible departments and 
        agencies of the Government of the United States is improved in 
        order to enhance efficiency, information sharing, and the 
        consistent execution of United States policy.

SEC. 203. ENFORCEMENT.

    Section 12 of the Export Administration Act of 1979 (50 U.S.C. App. 
2411) is amended as follows:
            (1) Subsection (a) is amended by striking paragraphs (1), 
        (2), (3), and (4) and inserting after ``(a) General 
        Authority.--'' the following:
            ``(1) In general.--To the extent necessary or appropriate 
        to the enforcement of this Act or to the imposition of any 
        penalty, forfeiture, or liability arising under this Act--
                    ``(A) the head of any department or agency 
                exercising any function under this Act (and officers or 
                employees of such department or agency specifically 
                designated by the head thereof) may conduct 
                investigations within the United States;
                    ``(B) the Secretary of Homeland Security (and 
                officers or employees of U.S. Immigration and Customs 
                Enforcement specifically designated by the Secretary of 
                the Department of Homeland Security) and the Secretary 
                of Commerce (and officers and employees of the Office 
                of Export Enforcement of the Department of Commerce 
                specifically designated by the Secretary of Commerce) 
                may conduct investigations outside of the United 
                States;
                    ``(C) the head of any department or agency 
                exercising any function under this Act (and such 
                officers or employees) may obtain information from, 
                require reports or the keeping of records by, inspect 
                the books, records, and other writings, premises, or 
                property of, and take the sworn testimony of, any 
                person;
                    ``(D)(i) such officers or employees may administer 
                oaths or affirmations, and may by subpoena require any 
                person to appear and testify or to appear and produce 
                books, records, and other writings, or both; and
                    ``(ii) in the case of contumacy by, or refusal to 
                obey a subpoena issued to, any such person, a district 
                court of the United States, after notice to any such 
                person and hearing, shall have jurisdiction to issue an 
                order requiring such person to appear and give 
                testimony or to appear and produce books, records, and 
                other writings, or both, and any failure to obey such 
                order of the court may be punished by such court as a 
                contempt thereof; and
                    ``(E) the Secretary (and officers or employees of 
                the Department of Commerce designated by the Secretary) 
                may conduct, outside the United States, pre-license 
                checks and post-shipment verifications of items 
                licensed for export.
            ``(2) Authority of immigration and customs enforcement and 
        customs and border protection.--
                    ``(A) In general.--Subject to subparagraph (B), 
                U.S. Immigration and Customs Enforcement and U.S. 
                Customs and Border Protection are authorized, in the 
                enforcement of this Act--
                            ``(i) to search, detain (after search), and 
                        seize goods or technology at those places 
                        outside the United States where such entities 
                        are authorized, pursuant to agreements or other 
                        arrangements with other countries, to perform 
                        enforcement activities; and
                            ``(ii) to conduct such activities at those 
                        ports of entry or exit from the United States 
                        where officers of U.S. Immigration and Customs 
                        Enforcement and U.S. Customs and Border 
                        Protection are authorized by law to conduct 
                        such activities.
                    ``(B) Searches and seizures.--An officer of U.S. 
                Immigration and Customs Enforcement or U.S. Customs and 
                Border Protection may do the following in carrying out 
                enforcement authority under this Act:
                            ``(i) Stop, search, and examine a vehicle, 
                        vessel, aircraft, person, package, or container 
                        on which or whom such officer has reasonable 
                        cause to suspect there are any goods or 
                        technology that has been, is being, or is about 
                        to be exported from the United States in 
                        violation of this Act.
                            ``(ii) Detain (after search) or seize and 
                        secure for trial any goods or technology on or 
                        about such vehicle, vessel, aircraft, or 
                        person, or in such package or container, if 
                        such officer has probable cause to believe the 
                        goods or technology has been, is being, or is 
                        about to be exported from the United States in 
                        violation of this Act.
                            ``(iii) Make arrests without warrant for 
                        any violation of this Act committed in the 
                        presence or view of the officer or if the 
                        officer has probable cause to believe that the 
                        person to be arrested has committed or is 
                        committing such a violation.
                    ``(C) Arrest authority.--The arrest authority 
                conferred by subparagraph (B)(iii) is in addition to 
                any arrest authority under other laws.
                    ``(D) Detention of goods.--U.S. Immigration and 
                Customs Enforcement and U.S. Customs and Border 
                Protection may not detain for more than 45 days any 
                shipment of goods or technology that is eligible for 
                export without prior authorization under this Act. In a 
                case in which such detention is on account of a 
                disagreement between the Secretary and the head of any 
                other department or agency with export license 
                authority under other provisions of law concerning the 
                export license requirements for such goods or 
                technology, such disagreement shall be resolved within 
                that 45-day period. At the end of that 45-day period, 
                U.S. Immigration and Customs Enforcement or U.S. 
                Customs and Border Protection (as the case may be) 
                shall either release the goods or technology, or seize 
                the goods or technology as authorized by other 
                provisions of law.
            ``(3) Enforcement.--
                    ``(A) In general.--Subject to subparagraph (B)--
                            ``(i) the Secretary shall have the 
                        responsibility for the enforcement of section 
                        8;
                            ``(ii) in the enforcement of the other 
                        provisions of this Act, the Secretary is 
                        authorized to search, detain (after search), 
                        and seize goods or technology--
                                    ``(I) at those places within the 
                                United States other than those ports 
                                specified in paragraph (2)(A); and
                                    ``(II) at those places outside the 
                                United States where the Office of 
                                Export Enforcement of the Department of 
                                Commerce, pursuant to agreements or 
                                other arrangements with other 
                                countries, is authorized to perform 
                                enforcement activities;
                            ``(iii) the search, detention (after 
                        search), or seizure of goods or technology at 
                        those ports and places specified in paragraph 
                        (2)(A) may be conducted by officers or 
                        employees of the Department of Commerce 
                        designated by the Secretary, with the 
                        concurrence of the Secretary of Homeland 
                        Security; and
                            ``(iv) enforcement activities conducted 
                        outside the United States, except for pre-
                        license checks and post-shipment verifications, 
                        shall be undertaken with the concurrence of the 
                        Secretary of Homeland Security.
                    ``(B) Authority of office of export enforcement.--
                The Secretary may designate any employee of the Office 
                of Export Enforcement of the Department of Commerce to 
                do the following in carrying out the enforcement 
                authority conferred by this Act:
                            ``(i) Execute any warrant or other process 
                        issued by a court or officer of competent 
                        jurisdiction.
                            ``(ii) Make arrests without warrant for any 
                        offense against the United States committed in 
                        such officer's presence or view or any felony 
                        offense against the United States, if such 
                        officer has probable cause to believe that the 
                        person to be arrested has committed or is 
                        committing that felony offense.
                            ``(iii) Carry firearms.
            ``(4) Attorney general guidelines.--The authorities 
        conferred by the Export Enforcement Act of 2008 under paragraph 
        (3) shall be exercised consistent with guidelines approved by 
        the Attorney General.''.
            (2) Subsection (a) is further amended--
                    (A) by striking paragraphs (6), (7), and (8);
                    (B) in paragraph (5)--
                            (i) by striking ``(5) All'' and inserting 
                        ``(5) Referral of violations.--All''; and
                            (ii) by moving the remaining text 2 ems to 
                        the right; and
                    (C) by inserting after paragraph (5) the following:
            ``(6) Best practices guidelines.--
                    ``(A) In general.--The Secretary, in consultation 
                with the technical advisory committees established 
                under section 5(h) and exporters, shippers, trade 
                facilitators, freight forwarders, and reexporters 
                representative of their respective industries, shall 
                continue to publish and update `best practices' 
                guidelines to help those industries develop and 
                implement, on a voluntary basis, effective export 
                control programs in compliance with this Act.
                    ``(B) Export compliance program.--The existence of 
                an effective export compliance program and high quality 
                overall export compliance efforts are factors that 
                ordinarily should be given weight as mitigating factors 
                in civil penalty enforcement actions under this Act.
            ``(7) Reference to enforcement.--For purposes of this 
        section, a reference to the enforcement of this Act or to a 
        violation of this Act includes a reference to the enforcement 
        or a violation of any regulation, order, or license issued 
        under this Act, and the enforcement or violation of the Export 
        Administration Regulations as maintained and amended under the 
        authority of the International Emergency Economic Powers Act 
        (50 U.S.C. 1701 et seq.), or any order or license issued 
        pursuant to those regulations.''.
            (3) Subsection (c)(3) is amended by striking ``Commissioner 
        of Customs'' each place it appears and inserting ``Secretary of 
        Homeland Security''.
            (4) Section 12 is further amended by adding at the end the 
        following new subsections:
    ``(f) Forfeiture.--
            ``(1) In general.--Any tangible items lawfully seized under 
        subsection (a) by designated officers or employees shall be 
        subject to forfeiture to the United States.
            ``(2) Procedures.--Any seizure or forfeiture under this 
        subsection shall be carried out in accordance with the 
        procedures set forth in chapter 46 of title 18, United States 
        Code.
    ``(g) Undercover Investigation Operations.--
            ``(1) Use of funds.--With respect to any undercover 
        investigative operation conducted by the Office of Export 
        Enforcement of the Department of Commerce that is necessary for 
        the detection and prosecution of violations of this Act--
                    ``(A) funds made available for export enforcement 
                under this Act may be used to purchase property, 
                buildings, and other facilities, and to lease 
                equipment, conveyances, and space within the United 
                States, without regard to sections 1341 and 3324 of 
                title 31, United States Code, section 8141 of title 40, 
                United States Code, sections 3732(a) and 3741 of the 
                Revised Statutes of the United States (41 U.S.C. 11(a) 
                and 22), and sections 304(a), 304A, 304B, 304C, and 305 
                of the Federal Property and Administrative Services Act 
                of 1949 (41 U.S.C. 254(a), 254b, 254c, 254d, and 255);
                    ``(B) funds made available for export enforcement 
                under this Act may be used to establish or to acquire 
                proprietary corporations or business entities as part 
                of an undercover operation, and to operate such 
                corporations or business entities on a commercial 
                basis, without regard to sections 1341, 3324, and 9102 
                of title 31, United States Code;
                    ``(C) funds made available for export enforcement 
                under this Act and the proceeds from undercover 
                operations may be deposited in banks or other financial 
                institutions without regard to section 648 of title 18, 
                United States Code, and section 3302 of title 31, 
                United States Code; and
                    ``(D) the proceeds from undercover operations may 
                be used to offset necessary and reasonable expenses 
                incurred in such operations without regard to section 
                3302 of title 31, United States Code, if the Secretary 
                certifies, in writing, that the action authorized by 
                subparagraph (A), (B), or (C) for which the funds would 
                be used is necessary for the conduct of the undercover 
                operation.
            ``(2) Disposition of business entities.--If a corporation 
        or business entity established or acquired as part of an 
        undercover operation has a net value of more than $250,000 and 
        is to be liquidated, sold, or otherwise disposed of, the 
        Secretary shall report the circumstances to the Comptroller 
        General of the United States as much in advance of such 
        disposition as the Secretary determines is practicable. The 
        proceeds of the liquidation, sale, or other disposition, after 
        obligations incurred by the corporation or business enterprise 
        are met, shall be deposited in the Treasury of the United 
        States as miscellaneous receipts. Any property or equipment 
        purchased pursuant to paragraph (1) may be retained for 
        subsequent use in undercover operations under this section. 
        When such property or equipment is no longer needed, it shall 
        be considered surplus and disposed of as surplus government 
        property.
            ``(3) Deposit of proceeds.--As soon as the proceeds from an 
        undercover investigative operation of the Office of Export 
        Enforcement of the Department of Commerce with respect to which 
        an action is authorized and carried out under this subsection 
        are no longer needed for the conduct of such operation, the 
        proceeds or the balance of the proceeds remaining at the time 
        shall be deposited into the Treasury of the United States as 
        miscellaneous receipts.
            ``(4) Audit and report.--
                    ``(A) Audit.--The Secretary shall conduct a 
                detailed financial audit of each closed undercover 
                investigative operation of the Office of Export 
                Enforcement of the Department of Commerce. Not later 
                than 180 days after an undercover operation is closed, 
                the Secretary shall submit to the Congress a report on 
                the results of the audit.
                    ``(B) Report.--The Secretary shall submit annually 
                to the Congress a report, which may be included in the 
                annual report under section 14, including the following 
                information:
                            ``(i) The number of undercover 
                        investigative operations pending as of the end 
                        of the period for which the report is 
                        submitted.
                            ``(ii) The number of undercover 
                        investigative operations commenced in the 1-
                        year period preceding the period for which the 
                        report is submitted.
                            ``(iii) The number of undercover 
                        investigative operations closed in the 1-year 
                        period preceding the period for which such 
                        report is submitted and, with respect to each 
                        such closed undercover operation, the results 
                        obtained and any civil claims made with respect 
                        to the operation.
                    ``(C) Definitions.--In this paragraph:
                            ``(i) Closed.--The term `closed', with 
                        respect to an undercover investigative 
                        operation, refers to the earliest point in time 
                        at which all criminal proceedings (other than 
                        appeals) pursuant to the investigative 
                        operation are concluded, or covert activities 
                        pursuant to such operation are concluded, 
                        whichever occurs later.
                            ``(ii) Undercover investigative operation 
                        and undercover operation.--
                                    ``(I) In general.--The terms 
                                `undercover investigative operation' 
                                and `undercover operation' mean any 
                                undercover investigative operation 
                                conducted by the Office of Export 
                                Enforcement of the Department of 
                                Commerce--
                                            ``(aa) in which the gross 
                                        receipts (excluding interest 
                                        earned) exceed $25,000, or 
                                        expenditures (other than 
                                        expenditures for salaries of 
                                        employees) exceed $75,000; and
                                            ``(bb) which is exempt from 
                                        section 3302 or 9102 of title 
                                        31, United States Code.
                                    ``(II) Exception.--Items (aa) and 
                                (bb) of subclause (I) shall not apply 
                                with respect to the report to the 
                                Congress required by subparagraph 
                                (2)(B).
    ``(h) Authorization for Bureau of Industry and Security.--The 
Secretary may authorize, without fiscal year limitation, the 
expenditure of funds transferred to, paid to, received by, or made 
available to the Bureau of Industry and Security of the Department of 
Commerce as a reimbursement in accordance with section 9703 of title 
31, United States Code (as added by Public Law 102-393).''.

SEC. 204. AUTHORIZATION OF APPROPRIATIONS.

    Section 18 of the Export Administration Act of 1979 (50 U.S.C. App. 
2417) is amended to read as follows:

                   ``authorization of appropriations

    ``Sec. 18.  There are authorized to be appropriated to the 
Department of Commerce to carry out section 12 of this Act such sums as 
may be necessary for each fiscal year.''.

SEC. 205. TERMINATION DATE.

    Section 20 of the Export Administration Act of 1979 (50 U.S.C. App. 
2419) is amended by inserting before the period at the end the 
following: ``, except that section 12 shall not terminate''.

SEC. 206. DESIGNATION OF DESTINATIONS OF DIVERSION CONCERN.

    (a) Efforts With UAE.--The Congress recognizes efforts taken by the 
United Arab Emirates, in coordination with the Secretary of Commerce, 
in response to international concerns over the diversion of dual-use 
items to prohibited destinations, parties, or uses, and urges the 
Secretary of Commerce to continue to work with the Government of the 
United Arab Emirates to ensure that such efforts are successful in 
stopping such diversion of dual-use items.
    (b) Country of Diversion Concern.--Not later than 60 days after the 
date of the enactment of this Act, the Secretary of Commerce shall 
amend the Export Administration Regulations by--
            (1) creating a designation of a country as a ``country of 
        diversion concern'' based on criteria that include, but are not 
        limited to--
                    (A) volume of dual-use items transshipped through 
                the country;
                    (B) volume and proportion of trade by the country 
                with countries of concern for proliferation or 
                terrorism;
                    (C) inadequate export or reexport controls in the 
                country;
                    (D) demonstrated inability to control diversion 
                activities in the country; and
                    (E) unwillingness or inability of the government of 
                the country to cooperate with the United States in 
                efforts to stop illegal transfers of dual-use items; 
                and
            (2) requiring the imposition of additional restrictions on 
        exports of dual-use items to a country of diversion concern, 
        including, but not limited to, some or all of the following:
                    (A) Implementing more stringent review policies.
                    (B) Imposing additional license restrictions.
                    (C) Requiring more frequent and more thorough end-
                user and end-use checks.
    (c) Report.--Not later than 90 days after the date of the enactment 
of this Act, the Secretary of Commerce shall submit to the appropriate 
congressional committees a report describing in detail past, current, 
and future efforts undertaken or planned by the Governments of the 
United Arab Emirates, Malaysia, and the United States to ensure that 
dual-use items are not diverted to countries, entities, or uses of 
concern for proliferation or terrorism from the territory or 
jurisdiction of Malaysia or the United Arab Emirates.
    (d) Restrictions.--Unless the Secretary of Commerce makes the 
certification described in subsection (e) with respect to a country 
listed in that subsection, the Secretary shall by regulation impose the 
following measures with respect to that country:
            (1) The Secretary shall designate the country as a country 
        of diversion concern under subsection (b).
            (2) The Secretary shall impose additional restrictions on 
        exports of dual-use items to the country, including 
        restrictions on nuclear dual-use items.
    (e) Certification.--The certification under this subsection is a 
certification by the Secretary of Commerce to the appropriate 
congressional committees, not later than 180 days after the date of the 
enactment of this Act, and not later than the end of each of the next 5 
1-year periods, with respect to each of the countries of the United 
Arab Emirates and Malaysia that the Government of such country--
            (1) has adopted and is vigorously implementing effective 
        national laws and regulations controlling the export and 
        transshipment of dual-use items; and
            (2) is taking all reasonable steps to ensure that dual-use 
        items within its territory and jurisdiction are not diverted to 
        countries, entities, or uses of concern for proliferation or 
        terrorism.
    (f) Subsequent Certifications.--If the Secretary is unable to make 
a certification with respect to a country under subsection (e), the 
Secretary may at any time thereafter make such a certification with 
respect to that country.
    (g) Authorization of Appropriations.--
            (1) In general.--There are authorized to appropriated for 
        each fiscal year such sums as may be necessary to carry out 
        this section.
            (2) Funds for additional personnel.--There are authorized 
        to be appropriated for each fiscal year $10,000,000 for 
        additional personnel in the Department of Commerce to conduct 
        end-use checks and export control compliance in the United Arab 
        Emirates and Malaysia.

SEC. 207. VALIDATED END-USER PROGRAM REVIEW.

    (a) Audit.--The Comptroller General shall conduct, and report to 
the appropriate congressional committees the results of, an audit of 
the Validated End-User program operated by the Department of Commerce. 
In doing so, the Comptroller General shall examine whether the national 
security of the United States is sufficiently protected by Validated 
End-User program procedures as they are designed and carried out, 
including those related to selecting, reviewing, and approving 
candidates for Validated End-User status, monitoring compliance by 
Validated End-Users with export control laws and regulations of the 
United States, and monitoring individual exports under the Validated 
End-User program.
    (b) Restriction on Designation of Additional Validated End-Users.--
The Secretary of Commerce may not designate additional Validated End-
Users until the end of the 6-month period beginning on the date on 
which the report on the audit required under subsection (a) is 
submitted to the appropriate congressional committees.
    (c) Consultation Prior to Designation.--The Secretary of Commerce 
shall consult with the appropriate congressional committees at least 30 
days before designating any Validated End-User.

SEC. 208. ANNUAL REPORT ON TRANSFERS OF MILITARILY SENSITIVE TECHNOLOGY 
              TO COUNTRIES AND ENTITIES OF CONCERN.

    (a) Annual Report.--Not later than March 30 of each year beginning 
in 2009, the President shall transmit to the Congress a report on 
transfers to countries and entities of concern during the preceding 
calendar year of the most significant categories of United States 
technologies and technical information with potential military 
applications.
    (b) Contents of Report.--The report required by subsection (a) 
shall include, at a minimum, the following:
            (1) An assessment by the Director of National Intelligence 
        of efforts by countries and entities of concern to acquire 
        technologies and technical information referred to in 
        subsection (a) during the preceding calendar year.
            (2) An assessment by the Secretary of Defense, in 
        consultation with the Joint Chiefs of Staff and the Director of 
        National Intelligence, of the cumulative impact of licenses 
        granted by the United States for exports of technologies and 
        technical information referred to in subsection (a) to 
        countries and entities of concern during the preceding 5-
        calendar year period on--
                    (A) the military capabilities of such countries and 
                entities; and
                    (B) countermeasures that may be necessary to 
                overcome the use of such technologies and technical 
                information.
            (3) An audit by the Inspectors General of the Departments 
        of Defense, State, Commerce, Homeland Security, Energy, and the 
        Treasury, in consultation with the Director of National 
        Intelligence and the Director of the Federal Bureau of 
        Investigation, of the policies and procedures of the United 
        States Government with respect to the export of technologies 
        and technical information referred to in subsection (a) to 
        countries and entities of concern.
    (c) Additional Requirement for First Report.--The first annual 
report required by subsection (a) shall include an assessment by the 
Inspectors General of the Departments of Defense, State, Commerce, 
Homeland Security, Energy, and the Treasury and the Inspector General 
of the Central Intelligence Agency of the adequacy of current export 
controls and counterintelligence measures to protect against the 
acquisition by countries and entities of concern of United States 
technology and technical information referred to in subsection (a).
    (d) Support of Other Agencies.--Upon the request of any of the 
officials responsible for preparing an assessment or audit required by 
subsection (b) or (c), the heads of other departments and agencies 
shall make available to those officials all information necessary to 
carry to prepare such assessment or audit.
    (e) Classified and Unclassified Reports.--Each report required by 
this section shall be submitted in classified form and unclassified 
form.
    (f) Definition.--As used in this section, the term ``countries and 
entities of concern'' means--
            (1) any country the government of which the Secretary of 
        State has determined, for purposes of section 6(j) of the 
        Export Administration Act of 1979 or other applicable law, to 
        have repeatedly provided support for acts of international 
        terrorism;
            (2) any country that--
                    (A) has detonated a nuclear explosive device (as 
                defined in section 830(4) of the Nuclear Proliferation 
                Prevention Act of 1994 (22 U.S.C. 6305(4))); and
                    (B) is not a member of the North Atlantic Treaty 
                Organization; and
            (3) any entity that--
                    (A) is engaged in international terrorism or 
                activities in preparation thereof; or
                    (B) is directed or controlled by the government of 
                a country described in paragraph (1) or (2).

SEC. 209. DEFINITION.

    In this title, the term ``appropriate congressional committees'' 
means the Committee on Foreign Affairs of the House of Representatives 
and the Committee on Foreign Relations of the Senate.
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