II 110th CONGRESS 1st Session S. 2000 IN THE SENATE OF THE UNITED STATES August 3, 2007 Mr. Dodd (by request) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend and extend the Export Administration Act of 1979 and for other purposes.

1.

Short title

This Act may be cited as the Export Enforcement Act of 2007.

2.

National security controls

Section 5(f)(6) of the Export Administration Act of 1979 (50 U.S.C. App. 2404(f)(6)) is amended by striking Under Secretary of Commerce for Export Administration and inserting Under Secretary of Commerce for Industry and Security.

3.

Violations

Section 11 of the Export Administration Act of 1979 (50 U.S.C. App. 2410) is amended— (1)by striking subsections (a) and (b) and inserting the following: (a)

Criminal penalties

(1)

Violations by an individual

Any individual who willfully violates, conspires to violate, or attempts to violate any provision of this Act or any regulation, license, or order issued under this Act shall be fined up to $1,000,000, imprisoned for not more than 10 years, or both, for each such violation. (2)

Violations by a person other than an individual

Any person, other than an individual, who willfully violates, conspires to violate, or attempts to violate any provision of this Act or any regulation, license, or order issued under this Act shall be fined for each such violation an amount equal to the greater of— (A)up to 10 times the value of the exports involved; or (B)$5,000,000. (b)

Forfeiture of property interest and proceeds

(1)

Criminal forfeiture

Any person who is convicted of a violation under paragraph (1) or (2) of subsection (a) shall, in addition to any penalty, forfeit to the United States such person’s— (A)security or other interest in, claim against, or property or contractual rights of any kind in, the real or personal property that was the subject of the violation; (B)interest in any property, real or personal, constituting or traceable to gross profits or other proceeds obtained from such violation; and (C)interest in any property, real or personal, used or intended to be used to commit or to promote the commission of such violation. (2)

Civil forfeiture

Any property subject to forfeiture pursuant to paragraph (1) may be forfeited to the United States in a civil case in accordance with the procedures set forth in section 981 of title 18, United States Code. ; (2)in subsection (c), by striking paragraph (1) and inserting the following: (1)

Civil penalty

The Secretary may impose a civil penalty of up to $500,000 for each violation of a provision of this Act or any regulation, license, or order issued under this Act. A civil penalty under this paragraph may be in addition to, or in lieu of, any other liability or penalty which may be imposed for such a violation. ; (3)by striking subsections (g) and (h) and inserting the following: (g)

Violations defined by regulation

Nothing in this section shall limit the authority of the Secretary to define by regulation violations under this Act. (h)

Effect of other convictions

(1)

Denial of export privileges

Any person convicted of a violation described in paragraph (2) may, at the discretion of the Secretary, be denied export privileges under this Act for a period not to exceed 25 years from the date of the conviction. The Secretary may also revoke any export license under this Act in which such person had an interest at the time of the conviction. (2)

Violations

The violations referred to in paragraph (1) are a violation of— (A)a provision of this Act; (B)a provision of the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.); (C)section 793, 794, or 798 of title 18, United States Code; (D)section 4(b) of the Internal Security Act of 1950 (50 U.S.C. 783(b)); (E)section 38 of the Arms Export Control Act (22 U.S.C. 2778); (F)section 16 of the Trading with the Enemy Act (50 U.S.C. App. 16); (G)any regulation, license, or order issued under any provision of law listed in subparagraph (A), (B), (C), (D), (E), or (F); (H)section 371 or 1001 of title 18, United States Code, if in connection with the export or attempted export of items subject to this Act or any regulation, license, or order issued under the International Emergency Economic Powers Act, the Arms Export Control Act, or the Trading with the Enemy Act; (I)section 175 of title 18, United States Code; (J)a provision of the Atomic Energy Act of 1954 (42 U.S.C. 201 et seq.); (K)section 831 of title 18, United States Code; (L)sections 2332a, 2332b, 2332d, 2332g, and 2332h of title 18, United States Code; (M)section 1956 of title 18, United States Code, if in conjunction with any export or attempted export in violation of this Act, or any regulation, rule, order, or license issued under the International Emergency Economic Powers Act, the Arms Export Control Act, or the Trading with the Enemy Act; (N)sections 2339A, 2339B, and 2339C of title 18, United States Code; (O)section 554 of title 18, United States Code, (relating to smuggling goods from the United States) as added by section 331(a) of Public Law 109–177; or (P)section 554 of title 18, United States Code, (relating to border tunnels and passages) as added by section 551 of Public Law 109–295. (3)

Related persons

The Secretary may exercise the authority under paragraph (1) with respect to any person related through affiliation, ownership, control, or position of responsibility to a person convicted of any violation of a law set forth in paragraph (2), upon a finding that such relationship exists with the convicted person. The Secretary shall make such finding only after providing notice and opportunity for a hearing. ; and (4)by adding at the end the following new subsection: (j)

Statute of limitations

(1)

In general

Except as provided in paragraph (2), a proceeding in which a civil penalty or other administrative sanction is sought under subsection (c) may not be commenced more than 5 years after the date on which the violation was committed. (2)

Exception

(A)

Tolling

In any case in which a criminal indictment or information in connection with actions constituting a violation under subsection (a) is returned or filed within the time limit prescribed by law for the institution of such indictment or information (as the case may be), the limitation under paragraph (1) for commencing a proceeding to impose a civil penalty or other administrative sanction under this section shall, upon the return of the criminal indictment or the filing of the criminal information, be tolled against any person named as a defendant. (B)

Duration

The tolling of the limitation with respect to a person under subparagraph (A) shall be for a period of 6 months beginning on the date of whichever of the following events occurs last: (i)The date the person is convicted pursuant to the criminal indictment or criminal information. (ii)The date the indictment or the information against the person is dismissed. (iii)The date the criminal action against the person is otherwise concluded. .

4.

Enforcement

Section 12 of the Export Administration Act of 1979 (50 U.S.C. App. 2411) is amended— (1)in subsection (a), by striking paragraphs (1), (2), (3), and (4) and inserting the following: (1)

In general

To the extent necessary or appropriate for the enforcement of this Act or for 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 the United States Immigration and Customs Enforcement specifically designated by the Secretary 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 the officers or employees of such department or agency) 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)the officers or employees of such department or agency 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 of Commerce (and officers or employees of the Department of Commerce designated by the Secretary) may conduct, outside the United States, pre-license investigations 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), the U.S. Immigration and Customs Enforcement and the 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 the U.S. Immigration and Customs Enforcement and the U.S. Customs and Border Protection are authorized by law to conduct such activities. (B)

Searches and seizures

An officer of the U.S. Immigration and Customs Enforcement or the U.S. Customs and Border Protection may conduct the following activities in carrying out enforcement authority under this Act: (i)Stop, search, and examine a vehicle, vessel, aircraft, person, package, or container. (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. (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 any other provision of law. (D)

Detention of goods

The U.S. Immigration and Customs Enforcement and the U.S. Customs and Border Protection may not detain for more than 45 days any shipment of goods or technology that may be exported without a license issued by the Department of Commerce. In any case in which the goods are detained as the result of a disagreement between the Secretary, and the head of any other department or agency with export licensing authority under any other provision of law, regarding issuance of an export license for the goods or technology, the disagreement shall be resolved within that 45-day period. At the end of that 45-day period, the U.S. Immigration and Customs Enforcement and the 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 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 any other provision of this Act, the Secretary is authorized to search, detain (after search), and seize goods or technology— (I)at places within the United States other than the ports specified in paragraph (2)(A); and (II)at 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 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 investigations and post-shipment verifications, shall be conducted 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 enforcement authority under 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 authority conferred by paragraph (3) shall be exercised consistent with guidelines approved by the Attorney General. ; (2)in subsection (a), as amended by paragraph (1), by striking paragraphs (6), (7), and (8) and 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 representative exporters, shippers, trade facilitators, freight forwarders, and reexporters, shall continue to publish and update best practices guidelines to help 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 effort is one of the factors that ordinarily should be given weight as a mitigating factor in a civil penalty action 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)in subsection (c)— (A)by striking the heading and inserting the following: Confidentiality of information.— (B)by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; (C)by striking paragraph (1) and inserting the following: (1)

Exemptions from disclosure

(A)

Information obtained on or before June 30, 1980

Except as otherwise provided by the third sentence of section 8(b)(2) and by section 11(c)(2)(C), information obtained under this Act, or any predecessor statute, on or before June 30, 1980, which is deemed confidential, including Shipper's Export Declarations, or with respect to which a request for confidential treatment is made by the person furnishing such information, shall not be subject to disclosure under section 552 of title 5, United States Code, and such information shall not be published or disclosed, unless the Secretary determines that withholding such information is contrary to the national interest. (B)

Information obtained after June 30, 1980

Except as otherwise provided by the third sentence of section 8(b)(2) and by section 11(c)(2)(C), information obtained under this Act after June 30, 1980, or under the Export Administration Regulations as maintained and amended under the authority of the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), may be withheld from disclosure only to the extent permitted by statute, except that information submitted or obtained in connection with an application for an export license, other export authorization (or recordkeeping or reporting requirement), enforcement activity, or other operations under this Act, or under the Export Administration Regulations as maintained and amended under the authority of the International Emergency Economic Powers Act, including— (i)the export license or other export authorization itself; (ii)classification requests described in section 10(l), and commodity jurisdiction requests; (iii)information or evidence obtained in the course of any investigation by an employee or officer of the Department of Commerce or any other department or agency of the United States; (iv)information obtained or furnished under section 5 or 6 in connection with any international agreement, treaty, or other obligation; and (v)information obtained in any investigation of an alleged violation of section 8, except for information required to be disclosed by section 8(b)(2); shall be withheld from public disclosure and shall not be subject to disclosure under section 552 of title 5, United States Code, unless the release of such information is determined by the Secretary to be in the national interest.(2)

Withholding of information from Federal agencies barred

Nothing in this Act shall be construed as authorizing the withholding of information from other Federal agencies for the enforcement of this Act, any regulation, rule, order, or license issued under the International Emergency Economic Powers Act, or any other provision of law. ; (D)in paragraph (3), as redesignated— (i)by striking under this Act or previous Acts each place it appears and inserting under this Act, previous Acts, or under 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.); (ii)by striking the General Accounting Office each place it appears and inserting the Government Accountability Office; and (iii)by moving the text 2 ems to the right; and (E)in paragraph (4), as redesignated— (i)by striking (4) Any and inserting the following: (4) Information sharing.—Any; (ii)by moving the text 2 ems to the right; and (iii)by striking Commissioner of Customs each place it appears and inserting Secretary of Homeland Security; and (4)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 made in accordance with the procedures of section 981 of title 18, United States Code. (g)

Undercover investigation operations

(1)

Use of funds

In the case of 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 a violation 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 (or the Secretary's designee) certifies, in writing, that the action authorized by subparagraph (A), (B), (C), or (D) 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. (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). .

5.

Administrative procedure and judicial review

Section 13(a) of the Export Administration Act of 1979 (50 U.S.C. App. 2412(a)) is amended in the first sentence by inserting , or under 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.), after under this Act.

6.

Administrative and regulatory authority

Section 15(a) of the Export Administration Act of 1979 (50 U.S.C. App. 2414(a)) is amended in the first sentence— (1)by striking Under Secretary of Commerce for Export Administration and inserting Under Secretary of Commerce for Industry and Security; and (2)by striking such other statutes and all that follows through the end period and inserting other statutes that the Secretary has delegated to the Under Secretary of Commerce for Industry and Security or any predecessor (including the Under Secretary of Commerce for Export Administration and the Assistant Secretary of Commerce for Trade Administration) as of the date of the enactment of the Export Enforcement Act of 2007, or may delegate to the Under Secretary of Commerce for Industry and Security from time to time..

7.

Authorization of appropriations

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

18.

Authorization of appropriations

There are authorized to be appropriated to the Department of Commerce to carry out this Act— (1)$78,776,000 for fiscal year 2008; and (2)such sums as may be necessary for each of the fiscal years 2009, 2010, 2011, and 2012.

.

8.

Termination date

Section 20 of the Export Administration Act of 1979 (50 U.S.C. App. 2419) is amended to read as follows:

20.

Termination date

The authority granted by this Act shall terminate at the end of the 5-year period beginning on the date of the enactment of the Export Enforcement Act of 2007, except that the authority granted by sections 11 and 12 of this Act shall not terminate.

.

9.

Technical and conforming amendments

(a)

Wiretapping

Section 2516(1) of title 18, United States Code, is amended— (1)by amending subsection (m) to read as follows: (m)any violation of the Export Administration Act of 1979 or of the International Emergency Economic Powers Act; ; and (2)in subsection (p), by inserting (8 U.S.C. 1324, 1327, or 1328) after Immigration and Nationality Act. (b)

Pay of Under Secretary

Section 5314 of title 5, United States Code, is amended by striking Under Secretary of Commerce for Export Administration and inserting Under Secretary of Commerce for Industry and Security. (c)

Amendments to title 31, United States Code

(1)Section 9703(a) of title 31, United States Code (as added by Public Law 102–393), is amended in the matter preceding paragraph (1), by striking or the United States Coast Guard and inserting, , the United States Coast Guard, or the Bureau of Industry and Security of the Department of Commerce. (2)Section 9703(o)(1) of title 31, United States Code (as added by Public Law 102–393) is amended by adding at the end the following: For purposes of this section, the Bureau of Industry and Security of the Department of Commerce shall be considered to be a Department of the Treasury law enforcement organization.. (d)

Civil forfeiture proceedings

Section 983(i)(2) of title 18, United States Code, is amended— (1)by striking or at the end of subparagraph (D); (2)by striking the period at the end of subparagraph (E) and inserting ; or; and (3)by adding at the end the following new subparagraph: (F)the Export Administration Act of 1979. . (e)

Clerical amendment

Section 11A(k) of the Export Administration Act of 1979 (50 U.S.C. App. 2410A(k)) is amended— (1)by redesignating paragraph (3) as paragraph (2); and (2)in paragraph (2), as redesignated, by striking paragraph (2) and inserting paragraph (1). (f)

Arms Export Control Act

The Arms Export Control Act (22 U.S.C. 2771 et seq.) is amended— (1)in section 38(e) (22 U.S.C. 2778(e)), by striking subsections (c), (d), (e), and (g) and inserting (b), (c), (d), and (e); and (2)in section 40(k) (22 U.S.C. 2780(k)), by striking 11(c), 11(e) , 11(g) and inserting 11(b), 11(c), 11(e). (g)

Tariff Act of 1930

Section 596 of the Tariff Act of 1930 (19 U.S.C. 1595A) is amended by adding at the end the following new subsection: (e)Every person involved in a violation of subsection (d) shall be liable for a penalty up to the value of the articles exported or attempted to be exported, or $2,500, whichever is greater. .