II Calendar No. 586 111th CONGRESS 2d Session S. 3581 [Report No. 111–302] IN THE SENATE OF THE UNITED STATES July 14, 2010 Mr. Lugar (for himself, Mr. McCain, Mr. Kyl, and Mr. Webb) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations September 23, 2010 Reported by Mr. Kerry, with an amendment and an amendment to the title Strike out all after the enacting clause and insert the part printed in italic A BILL To implement certain defense trade treaties.

1.

Short title

This Act may be cited as the Defense Trade Treaty Implementation Act of 2010.

2.

Exemption from requirements for bilateral agreements

Section 38(j)(1) of the Arms Export Control Act (22 U.S.C. 2778(j)(1)) is amended— (1)in the subparagraph heading for subparagraph (B), by inserting for Canada after Exception; and (2)by adding at the end the following new subparagraph: (C)

Exception for defense trade cooperation treaties

The requirement to conclude a bilateral agreement in accordance with subparagraph (A) shall not apply with respect to an exemption from the licensing requirements of this Act for the export of defense items to give effect to any of the following defense trade cooperation treaties, provided that the treaty has entered into force pursuant to Article II, Section 2, clause 2 of the Constitution of the United States: (i)The Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Defense Trade Cooperation, done at Washington and London June 21 and 26, 2007 (and any implementing arrangement thereto). (ii)The Treaty Between the Government of the United States of America and the Government of Australia Concerning Defense Trade Cooperation, done at Sydney September 23, 2007 (and any implementing arrangement thereto). .

3.

Enforcement

(a)

Criminal violations

Section 38(c) of such Act is amended by striking this section or section 39, or any rule or regulation issued under either section and inserting this section, section 39, a treaty referred to in subsection (j)(1)(C), or any rule or regulation issued under this section or section 39, including any rule or regulation issued under this section to implement or enforce a treaty referred to in subsection (j)(1)(C) or an implementing arrangement pursuant to such treaty. (b)

Enforcement powers of President

Section 38(e) of such Act is amended by striking defense services, and inserting defense services, including defense articles and defense services exported or imported pursuant to a treaty referred to in subsection (j)(1)(C),. (c)

Notification regarding exemptions from licensing requirements

Section 38(f) of such Act is amended by adding at the end the following new paragraph: (4)Paragraph (2) shall not apply with respect to an exemption under subsection (j)(1)(A) to give effect to a treaty referred to in subsection (j)(1)(C) (and any implementing arrangements to such treaty), provided that the President promulgates regulations to implement and enforce such treaty under this section and section 39. .

4.

Congressional notification

(a)

Eligibility for defense articles or defense articles

Section 3(d)(3)(A) of such Act (22 U.S.C. 2753(d)(3)(A)) is amended by inserting after approved under section 38 of this Act the following: or has been exempted from the licensing requirements of this Act pursuant to section 38(j) of this Act. (b)

Presidential certifications

(1)

Export licenses

Section 36(c) of such Act (22 U.S.C. 2776(c)) is amended by adding at the end the following new paragraph: (6)An export pursuant to a treaty referred to in section 38(j)(1)(C) of this Act to which the provisions of paragraph (1) would apply absent an exemption granted under section 38(j)(1) of this Act shall not take place until 15 days after the President has submitted a certification with respect to such export in a similar manner, and containing comparable information, as required under paragraph (1). . (2)

Commercial technical assistance or manufacturing licensing agreements

Section 36(d) of such Act (22 U.S.C. 2776(d)) is amended by adding at the end the following new paragraph: (6)An export pursuant to a treaty referred to in section 38(j)(1)(C) of this Act to which the provisions of paragraph (1) would apply absent an exemption granted under section 38(j)(1) of this Act shall not take place until 15 days after the President has submitted a certification with respect to such export in a similar manner, and containing comparable information, as required under paragraph (1). .

5.

Implementing regulations

The President is authorized to issue regulations pursuant to the Arms Export Control Act (22 U.S.C. 2751 et seq.) to implement and enforce the Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Defense Trade Cooperation, done at Washington and London June 21 and 26, 2007 (and any implementing arrangement thereto), and the Treaty Between the Government of the United States of America and the Government of Australia Concerning Defense Trade Cooperation, done at Sydney September 23, 2007 (and any implementing arrangement thereto), consistent with other applicable provisions of the Arms Export Control Act, as amended by this Act, and with the terms of any resolution of advice and consent adopted by the Senate with respect to either treaty.

6.

Rule of construction

Nothing in this Act, or in the Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Defense Trade Cooperation, done at Washington and London on June 21 and 26, 2007 (and any implementing arrangement thereto), or in the Treaty Between the Government of the United States of America and the Government of Australia Concerning Defense Trade Cooperation, done at Sydney, September 23, 2007 (and any implementing arrangement thereto), or in any regulation issued to implement either treaty, shall be construed to modify or supersede any provision of law or regulation other than the Arms Export Control Act (22 U.S.C. 2751 et seq.), as amended by this Act, and regulations issued pursuant to such Act.

1.

Short title

This Act may be cited as the Defense Trade Cooperation Treaties Implementation Act of 2010.

2.

Exemptions from requirements

(a)

Retransfer requirements

Section 3(b) of the Arms Export Control Act (22 U.S.C. 2753(b)) is amended by inserting a treaty referred to in section 38(j)(1)(C)(i) of this Act permits such transfer without prior consent of the President, or if after if. (b)

Bilateral agreement requirements

Section 38(j)(1) of such Act (22 U.S.C. 2778(j)(1)) is amended— (1)in the subparagraph heading for subparagraph (B), by inserting for canada after Exception; and (2)by adding at the end the following new subparagraph: (C)

Exception for defense trade cooperation treaties

(i)

In general

The requirement to conclude a bilateral agreement in accordance with subparagraph (A) shall not apply with respect to an exemption from the licensing requirements of this Act for the export of defense items to give effect to any of the following defense trade cooperation treaties, provided that the treaty has entered into force pursuant to article II, section 2, clause 2 of the Constitution of the United States: (I)The Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Defense Trade Cooperation, done at Washington and London on June 21 and 26, 2007 (and any implementing arrangement thereto). (II)The Treaty Between the Government of the United States of America and the Government of Australia Concerning Defense Trade Cooperation, done at Sydney September 5, 2007 (and any implementing arrangement thereto). (ii)

Limitation of scope

The United States shall exempt from the scope of a treaty referred to in clause (i)— (I)complete rocket systems (including ballistic missile systems, space launch vehicles, and sounding rockets) or complete unmanned aerial vehicle systems (including cruise missile systems, target drones, and reconnaissance drones) capable of delivering at least a 500 kilogram payload to a range of 300 kilometers, and associated production facilities, software, or technology for these systems, as defined in the Missile Technology Control Regime Annex Category I, Item 1; (II)individual rocket stages, re-entry vehicles and equipment, solid or liquid propellant motors or engines, guidance sets, thrust vector control systems, and associated production facilities, software, and technology, as defined in the Missile Technology Control Regime Annex Category I, Item 2; (III)defense articles and defense services listed in the Missile Technology Control Regime Annex Category II that are for use in rocket systems, as that term is used in such Annex, including associated production facilities, software, or technology; (IV)toxicological agents, biological agents, and associated equipment, as listed in the United States Munitions List (part 121.1 of chapter I of title 22, Code of Federal Regulations), Category XIV, subcategories (a), (b), (f)(1), (i), (j) as it pertains to (f)(1), (l) as it pertains to (f)(1), and (m) as it pertains to all of the subcategories cited in this paragraph; (V)defense articles and defense services specific to the design and testing of nuclear weapons which are controlled under United States Munitions List Category XVI(a) and (b), along with associated defense articles in Category XVI(d) and technology in Category XVI(e); (VI)with regard to the treaty cited in clause (i)(I), defense articles and defense services that the United States controls under the United States Munitions List that are not controlled by the United Kingdom, as defined in the United Kingdom Military List or Annex 4 to the United Kingdom Dual Use List, or any successor lists thereto; and (VII)with regard to the treaty cited in clause (i)(II), defense articles for which Australian laws, regulations, or other commitments would prevent Australia from enforcing the control measures specified in such treaty. .

3.

Enforcement

(a)

Criminal violations

Section 38(c) of such Act (22 U.S.C. 2778(c)) is amended by striking this section or section 39, or any rule or regulation issued under either section and inserting this section, section 39, a treaty referred to in subsection (j)(1)(C)(i), or any rule or regulation issued under this section or section 39, including any rule or regulation issued to implement or enforce a treaty referred to in subsection (j)(1)(C)(i) or an implementing arrangement pursuant to such treaty. (b)

Enforcement powers of President

Section 38(e) of such Act (22 U.S.C. 2278(e)) is amended by striking defense services, and inserting defense services, including defense articles and defense services exported or imported pursuant to a treaty referred to in subsection (j)(1)(C)(i),. (c)

Notification regarding exemptions from licensing requirements

Section 38(f) of such Act (22 U.S.C. 2778(f)) is amended by adding at the end the following new paragraph: (4)Paragraph (2) shall not apply with respect to an exemption under subsection (j)(1) to give effect to a treaty referred to in subsection (j)(1)(C)(i) (and any implementing arrangements to such treaty), provided that the President promulgates regulations to implement and enforce such treaty under this section and section 39. . (d)

Incentive payments

Section 39A(a) of such Act (22 U.S.C. 2779a(a)) is amended by inserting or exported pursuant to a treaty referred to in section 38(j)(1)(C)(i) of this Act after under this Act.

4.

Congressional notification

(a)

Retransfers and reexports

Section 3(d)(3)(A) of such Act (22 U.S.C. 2753(d)(3)(A)) is amended by inserting or has been exempted from the licensing requirements of this Act pursuant to a treaty referred to in section 38(j)(1)(C)(i) of this Act where such treaty does not authorize the transfer without prior United States Government approval after approved under section 38 of this Act. (b)

Discrimination

Section 5(c) of such Act (22 U.S.C. 2755(c)) is amended by inserting or any import or export under a treaty referred to in section 38(j)(1)(C)(i) of this Act after under this Act. (c)

Annual estimate of sales

Section 25(a) of such Act (22 U.S.C. 2765(a)) is amended— (1)in paragraph (1), by inserting , as well as exports pursuant to a treaty referred to in section 38(j)(1)(C)(i) of this Act, after commercial exports under this Act; and (2)in paragraph (2), by inserting , as well as exports pursuant to a treaty referred to in section 38(j)(1)(C)(i) of this Act, after commercial exports. (d)

Presidential certifications

(1)

Exports

Section 36(c) of such Act (22 U.S.C. 2776(c)) is amended by adding at the end the following new paragraph: (6)The President shall notify the Speaker of the House of Representatives and the Chairman of the Committee on Foreign Relations of the Senate at least 15 days prior to an export pursuant to a treaty referred to in section 38(j)(1)(C)(i) of this Act to which the provisions of paragraph (1) of this subsection would apply absent an exemption granted under section 38(j)(1) of this Act, for which purpose such notification shall contain information comparable to that specified in paragraph (1) of this subsection. . (2)

Commercial technical assistance or manufacturing licensing agreements

Section 36(d) of such Act (22 U.S.C. 2776(d)) is amended by adding at the end the following new paragraph: (6)The President shall notify the Speaker of the House of Representatives and the Chairman of the Committee on Foreign Relations of the Senate at least 15 days prior to an export pursuant to a treaty referred to in section 38(j)(1)(C)(i) of this Act to which the provisions of paragraph (1) of this subsection would apply absent an exemption granted under section 38(j)(1) of this Act, for which purpose such notification shall contain information comparable to that specified in paragraph (1) of this subsection. . (e)

Fees and political contributions

Section 39(a) of such Act (22 U.S.C. 2779(a)) is amended— (1)in paragraph (1), by striking ; or and inserting a semicolon; (2)in paragraph (2), by inserting or after the semicolon; and (3)by adding at the end the following new paragraph: (3)exports of defense articles or defense services pursuant to a treaty referenced in section 38(j)(1)(C)(i) of this Act; .

5.

Limitation on implementing arrangements

(a)

In general

No amendment to an implementing arrangement concluded pursuant to a treaty referred to in section 38(j)(1)(C)(i) of the Arms Export Control Act, as added by this Act, shall enter into effect for the United States unless the Congress adopts, and there is enacted, legislation approving the entry into effect of that amendment for the United States. (b)

Covered amendments

(1)

In general

The requirements specified in subsection (a) shall apply to any amendment other than an amendment that addresses an administrative or technical matter. The requirements in subsection (a) shall not apply to any amendment that solely addresses an administrative or technical matter. (2)

U.S.-UK Implementing Arrangement

In the case of the Implementing Arrangement Pursuant to the Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Defense Trade Cooperation, signed at Washington February 14, 2008, amendments to which the requirements specified in subsection (a) apply shall include— (A)any amendment to section 2, paragraphs (1), (2), or (3) that modifies the criteria governing operations, programs, and projects to which the treaty applies; (B)any amendment to section 3, paragraphs (1) or (2) that modifies the criteria governing end-use requirements and the requirements for approved community members responding to United States Government solicitations; (C)any amendment to section 4, paragraph (4) that modifies the criteria for including items on the list of defense articles exempt from the treaty; (D)any amendment to section 4, paragraph (7) that modifies licensing and other applicable requirements relating to items added to the list of defense articles exempt from the scope of the treaty; (E)any amendment to section 7, paragraph (4) that modifies the criteria for eligibility in the approved community under the treaty for nongovernmental United Kingdom entities and facilities; (F)any amendment to section 7, paragraph (9) that modifies the conditions for suspending or removing a United Kingdom entity from the approved community under the treaty; (G)any amendment to section 7, paragraphs (11) or (12) that modifies the conditions under which individuals may be granted access to defense articles exported under the treaty; (H)any amendment to section 9, paragraphs (1), (3), (7), (8), (9), (12), or (13) that modifies the circumstances under which United States Government approval is required for the re-transfer or re-export of a defense article, or to exceptions to such requirement; and (I)any amendment to section 11, paragraph (4)(b) that modifies conditions of entry to the United Kingdom community under the treaty. (3)

U.S.-Australia implementing arrangement

In the case of the Implementing Arrangement Pursuant to the Treaty Between the Government of the United States of America and the Government of the Australia Concerning Defense Trade Cooperation, signed at Washington March 14, 2008, amendments to which the requirements specified in subsection (a) apply shall include— (A)any amendment to section 2, paragraphs (1), (2), or (3) that modifies the criteria governing operations, programs, and projects to which the treaty applies; (B)any amendment to section 3, paragraphs (1) or (2) that modifies the criteria governing end-use requirements and the requirements for approved community members responding to United States Government solicitations; (C)any amendment to section 4, paragraph (4) that modifies criteria for including items on the list of defense articles exempt from the scope of the treaty; (D)any amendment to section 4, paragraph (7) that modifies licensing and other applicable requirements relating to items added to the list of defense articles exempt from the scope of the treaty; (E)any amendment to section 6, paragraph (4) that modifies the criteria for eligibility in the approved community under the treaty for nongovernmental Australian entities and facilities; (F)any amendment to section 6, paragraph (9) that modifies the conditions for suspending or removing an Australian entity from the Australia community under the treaty; (G)any amendment to section 6, paragraphs (11), (12), (13), or (14) that modifies the conditions under which individuals may be granted access to defense articles exported under the treaty; (H)any amendment to section 9, paragraphs (1), (2), (4), (7), or (8) that modifies the circumstances under which United States Government approval is required for the re-transfer or re-export of a defense article, or to exceptions to such requirement; and (I)any amendment to section 11, paragraph (6) that modifies conditions of entry to the Australian community under the treaty. (c)

Congressional notification for other amendments to implementing arrangements

(1)

In general

Except as noted under paragraph (2), not later than 15 days before any amendment to an implementing arrangement to which subsection (a) does not apply shall take effect, the President shall provide to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives a report containing— (A)the text of the amendment; and (B)an analysis of the amendment’s effect, including an analysis regarding why subsection (a) does not apply. (2)

Exceptional circumstances

If the President determines that it is important to maintaining the viability and effectiveness of a treaty referred to in section 38(j)(1)(C)(i) of the Arms Export Control Act, as added by this Act, to immediately bring into effect an amendment to an implementing arrangement to which subsection (a) does not apply, then no later than 5 days after such amendment shall come into effect, the President shall provide to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives a certification to that effect and the reasons for making the determination, as well as the report required under paragraph (1).

6.

Implementing regulations

The President is authorized to issue regulations pursuant to the Arms Export Control Act (22 U.S.C. 2751 et seq.) to implement and enforce the Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Defense Trade Cooperation, done at Washington and London on June 21 and 26, 2007 (and any implementing arrangement thereto) and the Treaty Between the Government of the United States of America and the Government of Australia Concerning Defense Trade Cooperation, done at Sydney, September 5, 2007 (and any implementing arrangement thereto), consistent with other applicable provisions of the Arms Export Control Act, as amended by this Act, and with the terms of any resolution of advice and consent adopted by the Senate with respect to either treaty.

7.

Rule of construction

Nothing in this Act, the Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Defense Trade Cooperation, done at Washington and London on June 21 and 26, 2007 (and any implementing arrangement thereto), the Treaty Between the Government of the United States of America and the Government of Australia Concerning Defense Trade Cooperation, done at Sydney, September 5, 2007 (and any implementing arrangement thereto), or in any regulation issued to implement either treaty, shall be construed to modify or supersede any provision of law or regulation other than the Arms Export Control Act (22 U.S.C. 2751 et seq.), as amended by this Act, and the International Traffic in Arms Regulations (subchapter M of chapter I of title 22, Code of Federal Regulations).

Amend the title so as to read: To implement certain defense trade cooperation treaties.. September 23, 2010 Reported with an amendment and an amendment to the title