[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3515 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 3515
To make improvements in the electronic filing of export data, to
strengthen enforcement authorities with respect to the Export
Administration Regulations, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 31, 2009
Mr. Sherman (for himself, Mr. Manzullo, and Mr. Smith of Washington)
introduced the following bill; which was referred to the Committee on
Foreign Affairs
_______________________________________________________________________
A BILL
To make improvements in the electronic filing of export data, to
strengthen enforcement authorities with respect to the Export
Administration Regulations, 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. Conferences; registration for filers; notifications; fees.
Sec. 103. Definitions.
Sec. 104. Conforming amendments.
Sec. 105. Authorization of appropriations.
TITLE II--EXPORT ENFORCEMENT ENHANCEMENT
Sec. 201. Short title.
Subtitle A--Enforcement of Export Administration Regulations
Sec. 211. Declaration of policy.
Sec. 212. Enforcement.
Sec. 213. Authorization of appropriations.
Sec. 214. Definitions.
Subtitle B--Prevention of Transfer of Sensitive Items to Countries of
Concern
Sec. 221. Identification of locations of concern with respect to
transshipment, reexportation, or diversion
of certain items to Iran.
Sec. 222. Destinations of Possible Diversion Concern and Destinations
of Diversion Concern.
Sec. 223. Report on expanding diversion concern system to countries
other than Iran.
Sec. 224. Annual report on transfers of militarily sensitive technology
to countries and entities of concern.
Sec. 225. Definitions.
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. CONFERENCES; REGISTRATION FOR FILERS; NOTIFICATIONS; FEES.
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 agents to file information in the
Automated Export System on behalf of the United States
principal party in interest or the foreign principal party in
interest. 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) Requirements.--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--
``(i) holds a valid Automated Export System
registration under paragraph (2);
``(ii) is responsible for the supervision
and control of filing Shipper's Export
Declaration information in the Automated Export
System; and
``(iii) 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).
``(B) Additional registration requirements.--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. Notification of relevant export requirements
``(a) In General.--The Secretary, with the concurrence of the heads
of the relevant departments and agencies, shall 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, compliance alerts, and other warnings, as
appropriate, that the transaction may not satisfy export
requirements, 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. 103. 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) 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.
``(3) Shipper's export declaration.--The term `Shipper's
Export Declaration' means the export information filed under
this chapter.''.
SEC. 104. CONFORMING AMENDMENTS.
(a) Regulations, Orders, etc.--Section 306 of title 13, United
States Code, as redesignated by section 102(1) of this Act, is amended
by striking the last sentence and inserting ``The Secretary shall make
rules, regulations, and orders, and amendments thereto, with the
concurrence of the Secretary of Homeland Security.''.
(b) Cross References.--Section 309 of title 13, United States Code,
as redesignated by section 102(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''.
(c) 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. Notification of reelvant export requirements.
``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. 105. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as may be
necessary to carry out the amendments made by this title.
TITLE II--EXPORT ENFORCEMENT ENHANCEMENT
SEC. 201. SHORT TITLE.
This title may be cited as the ``Export Enforcement Act of 2009''.
Subtitle A--Enforcement of Export Administration Regulations
SEC. 211. 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. 212. ENFORCEMENT.
(a) General Authority.--
(1) In general.--To the extent necessary or appropriate for
the enforcement of the Export Administration Regulations, or
for the imposition of any penalty, forfeiture, or liability
arising under the Export Administration Regulations--
(A) the head of any department or agency exercising
any function under the Export Administration
Regulations 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 Commerce (and officers and
employees of the Office of Export Enforcement of the
Department of Commerce specifically designated by the
Secretary of Commerce), and the head of any department
or agency with responsibility for enforcing the Export
Administration Regulations (and officers and employees
of such department or agency specifically designated by
the head of such department or agency), may conduct
investigations outside of the United States;
(C) the head of any department or agency with the
responsibility for enforcing the Export Administration
Regulations (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) Enforcement.--
(A) In general.--Subject to subparagraph (B)--
(i) the Secretary of Commerce shall have
the responsibility for the enforcement of the
restrictive trade practices and boycott
provisions of the Export Administration
Regulations;
(ii) to the extent necessary or appropriate
for the enforcement of the Export
Administration Regulations, or for the
imposition of any penalty, forfeiture, or
liability arising under the Export
Administration Regulations, the Secretary of
Commerce may search, detain (after search), and
seize goods or technology--
(I) at places within the United
States other than 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; 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 authorized under clause (ii) may be
conducted by officers or employees of the
Department of Commerce designated by the
Secretary of Commerce, with the concurrence of
the Secretary of Homeland Security; and
(iv) enforcement activities under this
section that are conducted outside the United
States, except for prelicense 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 of Commerce 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 section:
(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.
(3) Attorney general guidelines.--The authority conferred
by paragraph (2) shall be exercised consistent with guidelines
approved by the Attorney General.
(4) Best practices guidelines.--
(A) In general.--The Secretary of Commerce, in
consultation with the technical advisory committees
established pursuant to section 5(h) of the Export
Administration Act of 1979, 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
the Export Administration Regulations.
(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 the Export
Administration Regulations.
(5) Reference to enforcement.--For purposes of this
section, a reference to the enforcement of, or a violation of,
the Export Administration Regulations includes a reference to
the enforcement or a violation of any order or license issued
pursuant to the Export Administration Regulations.
(b) Immunity.--A person shall not be excused from complying with
any requirements under this section because of the person's privilege
against self-incrimination, but the immunity provisions of section 6002
of title 18, United States Code, shall apply with respect to any
individual who specifically claims such privilege.
(c) Confidentiality of Information.--
(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)
of the Export Administration Act of 1979, information
obtained under the Export Administration Act of 1979,
or any predecessor statute, on or before June 30, 1980,
that 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 of Commerce 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) of the
Export Administration Act of 1979, information obtained
under the Export Administration Act of 1979 after June
30, 1980, or under the Export Administration
Regulations may be withheld from disclosure only to the
extent permitted by statute, except that information
obtained for the purpose of consideration of, or
concerning, license applications under the Export
Administration Act of 1979 or the Export Administration
Regulations shall be withheld from public disclosure
unless the release of such information is determined by
the Secretary of Commerce to be in the national
interest.
(2) Withholding of information from federal agencies
barred.--Nothing in this section or the Export Administration
Regulations shall be construed as authorizing the withholding
of information from other Federal agencies for purposes of the
enforcement of the Export Administration Regulations, any
regulation, rule, order, or license issued under the
International Emergency Economic Powers Act, or any other
provision of law.
(3) Information to the congress and gao.--
(A) In general.--Nothing in this section shall be
construed as authorizing the withholding of information
from the Congress or from the Government Accountability
Office.
(B) Availability to the congress.--
(i) In general.--Any information obtained
at any time under the Export Administration Act
of 1979, under previous Acts regarding the
control of exports, or under the Export
Administration Regulations, including any
report or license application required under
any such Act or the Export Administration
Regulations, shall be made available to a
committee or subcommittee of Congress of
appropriate jurisdiction, upon the request of
the chairman or ranking minority member of such
committee or subcommittee.
(ii) Prohibition on further disclosure.--No
such committee or subcommittee, or member
thereof, may disclose any information obtained
under the Export Administration Act of 1979,
under previous Acts regarding the control of
exports, or under the Export Administration
Regulations, that is submitted on a
confidential basis unless the full committee
determines that the withholding of that
information is contrary to the national
interest.
(C) Availability to gao.--
(i) In general.--Notwithstanding paragraph
(1), information described in clause (i) of
subparagraph (B) shall, consistent with the
protection of intelligence,
counterintelligence, and law enforcement
sources, methods, and activities, as determined
by the agency that originally obtained the
information, and consistent with section 716 of
title 31, United States Code, be made available
only by that agency, upon request, to the
Comptroller General of the United States or to
any officer or employee of the Government
Accountability Office authorized by the
Comptroller General to have access to such
information.
(ii) Prohibition on further disclosure.--No
officer or employee of the Government
Accountability Office may disclose, except to
the Congress in accordance with this paragraph,
any such information that is submitted on a
confidential basis or from which any individual
can be identified.
(4) Information sharing.--
(A) In general.--Any department or agency that
obtains information that is relevant to the enforcement
of the Export Administration Regulations, including
information pertaining to any investigation, shall
furnish such information to each department or agency
with enforcement responsibilities under this section to
the extent consistent with the protection of
intelligence, counterintelligence, and law enforcement
sources, methods, and activities.
(B) Exceptions.--The provisions of this paragraph
shall not apply to information subject to the
restrictions set forth in section 9 of title 13, United
States Code, and return information, as defined in
subsection (b) of section 6103 of the Internal Revenue
Code of 1986 (26 U.S.C. 6103(b)), may be disclosed only
as authorized by that section.
(C) Exchange of information.--The Secretary of
Commerce and the Secretary of Homeland Security, upon
request, shall exchange any licensing and enforcement
information with each other that is necessary to
facilitate enforcement efforts under this section.
(D) Interagency consultations.--The Secretary of
Commerce, the Attorney General, and the Secretary of
Homeland Security shall consult on a continuing basis
with one another and with the head of other departments
and agencies that obtain information subject to this
paragraph, in order to facilitate the exchange of such
information.
(d) Reporting Requirements.--In the administration of this section
and the Export Administration Regulations, reporting requirements shall
be so designed as to reduce the cost of reporting, recordkeeping, and
export documentation required under this section and the Export
Administration Regulations to the extent feasible consistent with
effective enforcement and compilation of useful trade statistics.
Reporting, recordkeeping, and export documentation requirements shall
be periodically reviewed and revised in the light of developments in
the field of information technology.
(e) Simplification of Regulations.--The Secretary of Commerce, in
consultation with appropriate departments and agencies of the United
States and with appropriate technical advisory committees established
pursuant to section 5(h) of the Export Administration Act of 1979,
shall review the Export Administration Regulations, including the
commodity control list, in order to determine how compliance with the
provisions of the Export Administration Regulations can be facilitated
by simplifying the Export Administration Regulations, by simplifying or
clarifying the commodity control list, or by any other means.
(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 set
forth in 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 the Export
Administration Regulations--
(A) funds made available for export enforcement
under this section 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 section 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 section 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
of Commerce 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 of Commerce shall report the circumstances to the
Comptroller General of the United States as much in advance of
such disposition as the Secretary of Commerce 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 of Commerce 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 of Commerce shall submit to the Congress
a report on the results of the audit.
(B) Report.--The Secretary of Commerce shall submit
to the appropriate congressional committees, in the
Secretary's annual report to the Congress on the
administration of export controls and the Export
Administration Regulations, the following additional
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.
(5) Definitions.--In this subsection:
(A) 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.
(B) 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--
(I) in which the gross receipts
(excluding interest earned) exceed
$25,000, or expenditures (other than
expenditures for salaries of employees)
exceed $75,000; and
(II) which is exempt from section
3302 or 9102 of title 31, United States
Code.
(ii) Exception.--Subclauses (I) and (II) of
clause (i) shall not apply with respect to the
report to the Congress required by paragraph
(4)(B).
(h) Authorization for Bureau of Industry and Security.--The
Secretary of Commerce 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. 213. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as may be
necessary to carry out this subtitle for each fiscal year.
SEC. 214. DEFINITIONS.
In this subtitle:
(1) Appropriate congressional committees.--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.
(2) Export administration regulations.--The term ``Export
Administration Regulations'' means the Export Administration
Regulations as maintained and amended under the authority of
the International Emergency Economic Powers Act and codified,
as of the date of the enactment of this Act, in subchapter C of
chapter VII of title 15, Code of Federal Regulations.
Subtitle B--Prevention of Transfer of Sensitive Items to Countries of
Concern
SEC. 221. IDENTIFICATION OF LOCATIONS OF CONCERN WITH RESPECT TO
TRANSSHIPMENT, REEXPORTATION, OR DIVERSION OF CERTAIN
ITEMS TO IRAN.
Not later than 180 days after the date of the enactment of this
Act, and annually thereafter, the President shall submit to the
appropriate congressional committees a report that identifies all
countries that the President determines are of concern with respect to
transshipment, reexportation, or diversion of items subject to the
provisions of the Export Administration Regulations to an entity owned
or controlled by the Government of Iran.
SEC. 222. DESTINATIONS OF POSSIBLE DIVERSION CONCERN AND DESTINATIONS
OF DIVERSION CONCERN.
(a) Destinations of Possible Diversion Concern.--
(1) Designation.--The Secretary of Commerce shall designate
a country as a Destination of Possible Diversion Concern if the
Secretary, in consultation with the Secretary of State and the
Secretary of the Treasury, determines that such designation is
appropriate to carry out activities to strengthen the export
control systems of that country based on criteria that
include--
(A) the volume of items that originated in the
United States that are transported through the country
to end-users whose identities cannot be verified;
(B) the inadequacy of the export and reexport
controls of the country;
(C) the unwillingness or demonstrated inability of
the government of the country to control diversion
activities; and
(D) the unwillingness or inability of the
government of the country to cooperate with the United
States in interdiction efforts.
(2) Strengthening export control systems of destinations of
possible diversion concern.--If the Secretary of Commerce
designates a country as a Destination of Possible Diversion
Concern under paragraph (1), the United States shall initiate
government-to-government activities described in paragraph (3)
to strengthen the export control systems of the country.
(3) Government-to-government activities described.--The
government-to-government activities described in this paragraph
include--
(A) cooperation by agencies and departments of the
United States with counterpart agencies and departments
in a country designated as a Destination of Possible
Diversion Concern under paragraph (1) to--
(i) develop or strengthen export control
systems in the country;
(ii) strengthen cooperation and facilitate
enforcement of export control systems in the
country; and
(iii) promote information and data
exchanges among agencies of the country and
with the United States; and
(B) efforts by the Office of International Programs
of the Department of Commerce to strengthen the export
control systems of the country to--
(i) facilitate legitimate trade in high-
technology goods; and
(ii) prevent terrorists and state sponsors
of terrorism, including Iran, from obtaining
nuclear, biological, and chemical weapons,
defense technologies, components for improvised
explosive devices, and other defense items.
(b) Destinations of Diversion Concern.--
(1) Designation.--The Secretary of Commerce shall designate
a country as a Destination of Diversion Concern if the
Secretary, in consultation with the Secretary of State and the
Secretary of the Treasury, determines--
(A) that the government of the country is directly
involved in transshipment, reexportation, or diversion
of items that originated in the United States to end-
users whose identities cannot be verified or to
entities owned or controlled by the Government of Iran;
or
(B) in the case of a country that has been
designated as a Destination of Possible Diversion
Concern under subsection (a)(1), that the country has,
upon the expiration of the 12-month period beginning on
the date of such designation--
(i) failed to cooperate with the
government-to-government activities initiated
by the United States under subsection (a)(2);
or
(ii) based on the criteria described in
subsection (a)(1), failed to adequately
strengthen the export control systems of the
country.
(2) Licensing controls with respect to destinations of
diversion concern.--
(A) Report on suspect items.--
(i) In general.--Not later than 45 days
after the date of the enactment of this Act,
the Secretary of Commerce, in consultation with
appropriate representatives of the United
States intelligence community, the Secretary of
State, and the Secretary of the Treasury, shall
submit to the appropriate congressional
committees a report containing a list of items
that, if the items were transshipped,
reexported, or diverted to Iran, could
contribute to--
(I) Iran obtaining nuclear,
biological, or chemical weapons,
defense technologies, components for
improvised explosive devices, or other
defense items; or
(II) support by Iran for acts of
international terrorism.
(ii) Considerations for list.--In
developing the list required under clause (i),
the Secretary of Commerce shall consider--
(I) the items subject to licensing
requirements under section 742.8 of
title 15, Code of Federal Regulations
(or any corresponding similar
regulation or ruling) and other
existing licensing requirements; and
(II) the items added to the list of
items for which a license is required
for exportation to North Korea by the
final rule of the Bureau of Export
Administration of the Department of
Commerce issued on June 19, 2000 (65
Fed. Reg. 38148; relating to export
restrictions on North Korea).
(B) Licensing requirement.--Not later than 180 days
after the date of the enactment of this Act, the
Secretary of Commerce shall require a license to export
an item on the list required under subparagraph (A)(i)
to a country designated as a Destination of Diversion
Concern.
(3) Waiver.--The President may waive the imposition of the
licensing requirement under paragraph (2)(B) with respect to a
country designated as a Destination of Diversion Concern if the
President--
(A) determines that such a waiver is in the
national interest of the United States; and
(B) submits to the appropriate congressional
committees a report describing the reasons for the
determination.
(c) Termination of Designation.--The designation of a country as a
Destination of Possible Diversion Concern or a Destination of Diversion
Concern shall terminate on the date on which the Secretary of Commerce
determines, based on the criteria described in subparagraphs (A)
through (D) of subsection (a)(1), and certifies to the appropriate
congressional committees and the President that the country has
adequately strengthened the export control systems of the country to
prevent transshipment, reexportation, and diversion of items through
the country to end-users whose identities cannot be verified or to
entities owned or controlled by the Government of Iran.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section.
SEC. 223. REPORT ON EXPANDING DIVERSION CONCERN SYSTEM TO COUNTRIES
OTHER THAN IRAN.
Not later than 180 days after the date of the enactment of this
Act, the President shall submit to the appropriate congressional
committees a report that--
(1) identifies any country that the President determines
may be transshipping, reexporting, or diverting items subject
to the provisions of the Export Administration Regulations to
another country if such other country--
(A) is seeking to obtain nuclear, biological, or
chemical weapons, defense technologies, components for
improvised explosive devices, or other defense items;
or
(B) provides support for acts of international
terrorism; and
(2) assesses the feasability and advisability of expanding
the system established under section 222 for designating
countries as Destinations of Possible Diversion Concern and
Destinations of Diversion Concern to include countries
identified under paragraph (1).
SEC. 224. 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 2010, 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 President 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 President 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 appropriate representatives of
the United States intelligence community, 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 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.--In this section, the term ``countries and entities
of concern'' means--
(1) any country that is a state sponsor of 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. 225. DEFINITIONS.
In this subtitle:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Banking, Housing, and Urban
Affairs, the Committee on Foreign Relations, and the
Select Committee on Intelligence of the Senate; and
(B) the Committee on Financial Services, the
Committee on Foreign Affairs, and the Permanent Select
Committee on Intelligence of the House of
Representatives.
(2) End-user.--The term ``end-user'' means an end-user as
that term is used in the Export Administration Regulations.
(3) Entity owned or controlled by the government of iran.--
The term ``entity owned or controlled by the Government of
Iran'' includes--
(A) any corporation, partnership, association, or
other entity in which the Government of Iran owns a
majority or controlling interest; and
(B) any entity that is otherwise controlled by the
Government of Iran.
(4) Export administration regulations.--The term ``Export
Administration Regulations'' means the Export Administration
Regulations as maintained and amended under the authority of
the International Emergency Economic Powers Act and codified,
as of the date of the enactment of this Act, in subchapter C of
chapter VII of title 15, Code of Federal Regulations.
(5) Government.--The term ``government'' includes any
agency or instrumentality of a government.
(6) Iran.--The term ``Iran'' includes any agency or
instrumentality of Iran.
(7) State sponsor of terrorism.--The term ``state sponsor
of terrorism'' means any country the government of which the
Secretary of State has determined has repeatedly provided
support for acts of international terrorism pursuant to--
(A) section 6(j)(1)(A) of the Export Administration
Act of 1979 (50 U.S.C. App. 2405(j)(1)(A)) (or any
successor thereto);
(B) section 40(d) of the Arms Export Control Act
(22 U.S.C. 2780(d)); or
(C) section 620A(a) of the Foreign Assistance Act
of 1961 (22 U.S.C. 2371(a)).
(8) Transshipment, reexportation, or diversion.--The term
``transshipment, reexportation, or diversion'' means the
exportation, directly or indirectly, of items that originated
in the United States to an end-user whose identity cannot be
verified or to an entity owned or controlled by the Government
of Iran in violation of the laws or regulations of the United
States by any means, including by--
(A) shipping such items through one or more foreign
countries; or
(B) using false information regarding the country
of origin of such items.
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