[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2122 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 2122

To renew the Export Administration Act of 1979, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 3, 2011

 Ms. Ros-Lehtinen (for herself, Mr. Royce, Mr. Burton of Indiana, and 
 Mr. Chabot) introduced the following bill; which was referred to the 
                      Committee on Foreign Affairs

_______________________________________________________________________

                                 A BILL


 
To renew the Export Administration Act of 1979, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Export Administration Renewal Act of 
2011''.

               TITLE I--EXPORT ADMINISTRATION ACT OF 1979

SEC. 101. VIOLATIONS.

    (a) Criminal Penalties.--Section 11 of the Export Administration 
Act of 1979 (50 U.S.C. App. 2410) is amended 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, attempts to violate, 
        or aids or abets in the commission of a violation of any 
        provision of this Act or any regulation, license, or order 
        issued under this Act shall be fined not more than $1,000,000, 
        imprisoned for not more than 20 years, or both, for each 
        violation.
            ``(2) Violations by a person other than an individual.--Any 
        person, other than an individual, who willfully violates, 
        conspires to violate, attempts to violate, or aids or abets in 
        the commission of a violation of any provision of this Act or 
        any regulation, license, or order issued under this Act shall 
        be fined not more than 10 times the value of the exports 
        involved or $5,000,000, whichever amount is greater, for each 
        violation.
    ``(b) Regulatory Authority Not Affected.--Nothing in subsection (a) 
limits the authority of the Secretary to define by regulations 
violations under this Act.''.
    (b) Civil Penalties.--Section 11(c)(1) of the Export Administration 
Act of 1979 (50 U.S.C. 2410(c)(1)) is amended to read as follows: ``(1) 
The Secretary may impose a civil penalty for each violation of this 
Act, or any regulation, license, or order issued under this Act, in an 
amount not to exceed the greater of $250,000, or an amount that is 
twice the value of the transaction that is the basis of the violation. 
A civil penalty under this paragraph may be in addition to, or in lieu 
of, any other liability or penalty that may be imposed for such a 
violation.''
    (c) Forfeiture.--Section 11(g) of the Export Administration Act of 
1979 (50 U.S.C. App. 2410) is amended to read as follows:
    ``(g) 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 other 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 the violation; and
                    ``(C) interest in any property, real or personal, 
                used or intended to be used to commit or to promote the 
                commission of the violation.
            ``(2) Civil forfeiture.--Any person convicted of a 
        violation under subsection (a), or subject to a civil penalty 
        as set forth in subsection (c), shall forfeit to the United 
        States such person's interest in--
                    ``(A) any 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) any property, real or personal, constituting 
                or traceable to gross profits or other proceeds 
                obtained because of the act or acts constituting the 
                violation; and
                    ``(C) any property, real or personal, used or 
                intended to be used to commit or to promote the 
                commission of the violation.
            ``(3) Procedures.--Forfeiture under this subsection shall 
        be carried out in accordance with the procedures set forth in 
        chapter 46 of title 18, United States Code.''.
    (d) Temporary Denial Orders.--Section 11 of the Export 
Administration Act of 1979 (50 U.S.C. App. 2410) is amended--
            (1) by redesignating subsection (i) as subsection (j);
            (2) by inserting after subsection (h) the following:
    ``(i) Imposition of Temporary Denial Orders.--
            ``(1) Authority of the secretary.--In any case in which it 
        is necessary, in the public interest, to prevent an imminent 
        violation of this Act or any regulation, order, or license 
        issued under this Act, the Secretary may, without a hearing, 
        issue an order temporarily denying United States export 
        privileges (in this subsection referred to as a `temporary 
        denial order') to a person. A temporary denial order may be 
        effective no longer than 180 days unless renewed in writing by 
        the Secretary for additional 180-day periods in order to 
        prevent such an imminent violation, except that a temporary 
        denial order may be renewed only after notice and an 
        opportunity for a hearing is provided. The Secretary shall 
        publish notice of the issuance of a temporary denial order in 
        the Federal Register and may provide notice of the issuance of 
        the order to the person that is the subject of the order by 
        such additional means as the Secretary considers appropriate.
            ``(2) Procedures.--A temporary denial order shall define 
        the imminent violation and state why the temporary denial order 
        was granted without a hearing. The person or persons subject to 
        the issuance or renewal of a temporary denial order may file an 
        appeal of the issuance or renewal of the temporary denial order 
        with an administrative law judge who shall, within 10 working 
        days after the appeal is filed, recommend that the temporary 
        denial order be affirmed, modified, or vacated. Parties may 
        submit briefs and other material to the judge. The 
        recommendation of the administrative law judge shall be 
        submitted to the Secretary who shall either accept, reject, or 
        modify the recommendation by written order within 5 working 
        days after receiving the recommendation. The written order of 
        the Secretary under the preceding sentence shall be final and 
        is not subject to judicial review, except as provided in 
        paragraph (3). The temporary denial order shall be affirmed 
        only if it is reasonable to believe that the order is required 
        in the public interest to prevent an imminent violation of this 
        Act or any regulation, order, or license issued under this Act. 
        All materials submitted to the administrative law judge and the 
        Secretary shall constitute the administrative record for 
        purposes of review by the courts.
            ``(3) Appeals.--An order of the Secretary affirming, in 
        whole or in part, the issuance of a temporary denial order may, 
        within 15 days after the order is issued, be appealed by a 
        person subject to the order to the United States Court of 
        Appeals for the District of Columbia Circuit, which shall have 
        jurisdiction of the appeal. The court may review only those 
        issues necessary to determine whether the standard for issuing 
        the temporary denial order has been met. The court shall vacate 
        the Secretary's order if the court finds that the Secretary's 
        order is arbitrary, capricious, an abuse of discretion, or 
        otherwise not in accordance with law.''; and
            (3) in subsection (j), as redesignated, by striking ``or 
        (h)'' and inserting ``(h), or (i)''.
    (e) Conforming Amendments.--Section 13 of the Export Administration 
Act of 1979 (50 U.S.C. App. 2412) is amended--
            (1) by striking subsection (d); and
            (2) by redesignating subsection (e) as subsection (d).
    (f) Effective Date.--The amendments made by this section apply with 
respect to acts constituting violations under section 11 of the Export 
Administration Act of 1979 that occur on or after the date of the 
enactment of this Act.

SEC. 102. ENFORCEMENT.

    (a) Findings.--The Congress finds the following:
            (1) On July 1, 2010, the Comprehensive Iran Sanctions, 
        Accountability, and Divestment Act of 2010 (Public Law 111-195) 
        was signed into law by the President of the United States.
            (2) Section 305 of that Act provides the Department of 
        Commerce with the authority to enforce the provisions of that 
        Act as well as the Export Administration Act of 1979.
            (3) Statutory authority to conduct investigations overseas, 
        as well as undercover authority, is necessary for the Office of 
        Export Enforcement of the Department of Commerce to combat 
        increasingly complex international proliferation activities 
        involving Iran and other hostile state and non-state actors.
    (b) Enforcement Authority.--Section 12 of the Export Administration 
Act of 1979 (50 U.S.C. App. 2411) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), in the first sentence, by 
                striking ``within the United States, and'' and 
                inserting ``within the United States, the Secretary of 
                Commerce (and officers and employees of the Department 
                of Commerce specifically designated by the Secretary of 
                Commerce) may conduct investigations outside of the 
                United States and, in addition,'';
                    (B) by striking paragraph (6) and redesignating 
                paragraphs (7) and (8) as paragraphs (6) and (7), 
                respectively; and
                    (C) in paragraph (7) (as redesignated) by inserting 
                before the period the following: ``, and the 
                enforcement or a 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.)''; and
            (2) by adding at the end the following new subsections:
    ``(f) Forfeiture.--
            ``(1) In general.--Any tangible items lawfully seized under 
        subsection (a) by designated officers or employees shall be 
        subject to forfeiture to the United States.
            ``(2) Procedures.--Any seizure or forfeiture under this 
        subsection shall be carried out in accordance with the 
        procedures set forth in chapter 46 of title 18, United States 
        Code.
    ``(g) Undercover Investigation Operations.--
            ``(1) Use of funds.--With respect to any undercover 
        investigative operation conducted by the Office of Export 
        Enforcement of the Department of Commerce that is necessary for 
        the detection and prosecution of violations under 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, and sections 3901(a), 3903, 4501 through 
                4506, 4706, 6301(a), and 6306 of title 41, United 
                States Code;
                    ``(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), or 
                (C) for which the funds would be used is necessary for 
                the conduct of the undercover operation.
            ``(2) Disposition of business entities.--If a corporation 
        or business entity established or acquired as part of an 
        undercover operation has a net value of more than $250,000 and 
        is to be liquidated, sold, or otherwise disposed of, the 
        Secretary shall report the circumstances to the Comptroller 
        General of the United States as much in advance of such 
        disposition as the Secretary determines is practicable. The 
        proceeds of the liquidation, sale, or other disposition, after 
        obligations incurred by the corporation or business entity are 
        met, shall be deposited in the Treasury of the United States as 
        miscellaneous receipts. Any property or equipment purchased 
        pursuant to paragraph (1)(A) may be retained for subsequent use 
        in undercover operations under this subsection. When such 
        property or equipment is no longer needed, it shall be 
        considered as surplus and disposed of as surplus government 
        property.
            ``(3) Deposit of proceeds.--As soon as the proceeds from an 
        undercover investigative operation of the Office of Export 
        Enforcement of the Department of Commerce with respect to which 
        an action is authorized and carried out under this subsection 
        are no longer needed for the conduct of such operation, the 
        proceeds or the balance of the proceeds remaining at the time 
        shall be deposited into the Treasury of the United States as 
        miscellaneous receipts.
            ``(4) Audit and report.--
                    ``(A) Audit.--The Secretary shall conduct a 
                detailed financial audit of each closed undercover 
                operation of the Office of Export Enforcement of the 
                Department of Commerce. Not later than 180 days after 
                an undercover operation is closed, the Secretary shall 
                submit to the Congress a report on the results of that 
                audit.
                    ``(B) Report.--The Secretary shall submit annually 
                to the Congress a report, which may be included in the 
                annual report under section 14(a), including the 
                following information:
                            ``(i) The number of undercover 
                        investigative operations pending as of the end 
                        of the period for which the report is 
                        submitted.
                            ``(ii) The number of undercover 
                        investigative operations commenced in the 1-
                        year period preceding the period for which the 
                        report is submitted.
                            ``(iii) The number of undercover 
                        investigative operations closed in the 1-year 
                        period preceding the period for which such 
                        report is submitted and, with respect to each 
                        such closed undercover operation, the results 
                        obtained and any civil claims made with respect 
                        to such operation.
                    ``(C) Definitions.--In this paragraph:
                            ``(i) Closed.--The term `closed', with 
                        respect to an undercover investigative 
                        operation, refers to the earliest point in time 
                        at which all criminal proceedings (other than 
                        appeals) pursuant to the investigative 
                        operation are concluded, or covert activities 
                        pursuant to such operation are concluded, 
                        whichever occurs later.
                            ``(ii) Undercover investigative operation 
                        and undercover operation.--
                                    ``(I) In general.--Subject to 
                                subclause (II), 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 in which the gross receipts 
                                (excluding interest earned) exceed 
                                $25,000, or expenditures (other than 
                                expenditures for salaries of employees) 
                                exceed $75,000.
                                    ``(II) Exception.--The report to 
                                Congress required by subparagraph (B) 
                                shall be made with respect to 
                                undercover investigative operations 
                                conducted by the Office of Export 
                                Enforcement of the Department of 
                                Commerce without regard to the gross 
                                receipts and expenditures limitations 
                                under subclause (I).
    ``(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).''.
    (c) Effective Date.--
            (1) In general.--Subject to paragraphs (2) and (3), the 
        amendments made by subsection (a) shall take effect on the date 
        of the enactment of this Act.
            (2) Forfeiture.--Section 12(f) of the Export Administration 
        Act of 1979, as added by subsection (a)(2) of this section, 
        shall apply to items seized on or after the date of the 
        enactment of this Act.
            (3) Undercover operations.--Section 12(g) of the Export 
        Administration Act of 1979, as added by subsection (a)(2) of 
        this section, shall apply with respect to undercover 
        investigative operations commenced on or after the date of the 
        enactment of this Act.

SEC. 103. ADMINISTRATIVE AND REGULATORY AUTHORITY.

    Section 15 of the Export Administration Act of 1979 (50 U.S.C. App. 
2414) is amended--
            (1) in subsection (a), in the first sentence--
                    (A) by striking ``Under Secretary of Commerce for 
                Export Administration'' and inserting ``Under Secretary 
                of Commerce for Industry and Security''; and
                    (B) by striking ``such other statutes'' and all 
                that follows through the end of the sentence and in 
                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 Administration Renewal Act of 2011, or may 
                delegate to the Under Secretary of Commerce for 
                Industry and Security on or after that date.'';
            (2) in subsection (b)--
                    (A) by striking ``the President and the Secretary'' 
                and inserting--
            ``(1) In general.--The President and the Secretary''; and
                    (B) by adding at the end the following:
            ``(2) Advance notice to congress.--Any significant 
        regulations issued pursuant to this Act shall be provided to 
        the Committee on Foreign Affairs of the House of 
        Representatives and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate not less than 30 days in advance of 
        the publication of the regulations in the Federal Register, 
        unless exigent circumstances require the Secretary to shorten 
        that 30-day period.''; and
            (3) in subsection (c)--
                    (A) by inserting after the first sentence the 
                following: ``The Secretary shall submit the report 
                under the preceding sentence not less than 30 days in 
                advance of the publication of the proposed amendments 
                in the Federal Register, unless exigent circumstances 
                require the Secretary to shorten that 30-day period.''; 
                and
                    (B) in the succeeding sentence, by striking 
                ``evaluate the cost and burden to United States 
                exporters'' and inserting ``include the text of the 
                proposed amendments, as well as evaluate the economic 
                and national security impact on the United States''.

SEC. 104. AUTHORIZATION OF APPROPRIATIONS.

    Section 18(b) of the Export Administration Act of 1979 (50 U.S.C. 
App. 2417(b)) is amended--
            (1) by striking paragraphs (1) and (2) and inserting the 
        following:
            ``(1) $100,141,000 for fiscal year 2012; $101,643,115 for 
        fiscal year 2013; $103,167,647 for fiscal year 2014; and 
        $104,926,000 for fiscal year 2015; and''; and
            (2) by redesignating paragraph (3) as paragraph (2).

SEC. 105. TERMINATION DATE.

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

                           ``termination date

    ``Sec. 20. The authority granted by this Act terminates on 
September 30, 2015, except that the authority granted by sections 11 
and 12 shall not terminate.''.

SEC. 106. FOREIGN POLICY CONTROLS.

    (a) Terrorist States.--Section 6(j)(4) of the Export Administration 
Act of 1979 (50 U.S.C. App. 2405(j)(4)) is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``the Speaker'' and inserting ``the chairman of the Committee 
        on Foreign Affairs''; and
            (2) in subparagraph (B)--
                    (A) in clause (i), by striking ``6-month period; 
                and'' and inserting ``36-month period;'';
                    (B) in clause (ii), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding after clause (ii) the following:
                    ``(iii) that government is not a `country of 
                proliferation concern' as defined in section 1055(g)(2) 
                of the National Defense Authorization Act for Fiscal 
                Year 2010 (50 U.S.C. 2371(g)(2)); and
                    ``(iv) that government has provided assurances that 
                it will not knowingly facilitate, directly or 
                indirectly, the proliferation of nuclear materials, 
                items, or technology in the future.''.
    (b) Conforming Amendments.--
            (1) Foreign assistance act of 1961.--Section 620A(c) of the 
        Foreign Assistance Act of 1961 (22 U.S.C. 2371(c)) is amended--
                    (A) in the matter preceding paragraph (1), by 
                striking ``the Speaker'' and inserting ``the chairman 
                of the Committee on Foreign Affairs''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by striking ``6-
                        month period; and'' and inserting ``36-month 
                        period;'';
                            (ii) in subparagraph (B), by striking the 
                        period at the end and inserting a semicolon; 
                        and
                            (iii) by adding after subparagraph (B) the 
                        following:
                    ``(C) that government is not a `country of 
                proliferation concern' as defined in section 1055(g)(2) 
                of the National Defense Authorization Act for Fiscal 
                Year 2010 (50 U.S.C. 2371(g)(2)); and
                    ``(D) that government has provided assurances that 
                it will not knowingly facilitate, directly or 
                indirectly, the proliferation of nuclear materials, 
                items, or technology in the future.''.
            (2) Arms export control act.--Section 40(f)(1) of the Arms 
        Export Control Act (22 U.S.C. 2780(f)(1)) is amended--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``the Speaker'' and inserting ``the chairman 
                of the Committee on Foreign Affairs''; and
                    (B) in subparagraph (B)--
                            (i) in clause (i), by striking ``6-month 
                        period; and'' and inserting ``36-month 
                        period;'';
                            (ii) in clause (ii), by striking the period 
                        at the end and inserting a semicolon; and
                            (iii) by adding after clause (ii) the 
                        following:
                    ``(iii) that government is not a `country of 
                proliferation concern' as defined in section 1055(g)(2) 
                of the National Defense Authorization Act for Fiscal 
                Year 2010 (50 U.S.C. 2371(g)(2)); and
                    ``(iv) that government has provided assurances that 
                it will not knowingly facilitate, directly or 
                indirectly, the proliferation of nuclear materials, 
                items, or technology in the future.''.

SEC. 107. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Renaming of Under Secretary.--
            (1) In general.--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''.
            (2) Conforming amendment.--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''.
    (b) 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: ``In addition, 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.''.
    (c) 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.''.
    (d) Clerical Amendment.--Paragraph (3) of section 11A(k) of the 
Export Administration Act of 1979 (50 U.S.C. App. 2410A(k)(3)) is 
amended--
            (1) by redesignating that paragraph as paragraph (2); and
            (2) by striking ``paragraph (2)'' and inserting ``paragraph 
        (1)''.
    (e) Annual Report.--Section 14(a)(15) of the Export Administration 
Act of 1979 (50 U.S.C. App. 2413(a)(15)) is amended by striking ``the 
export licensing process and'' and inserting export licensing, an 
assessment of the impact of licensing exemptions on licensing 
caseloads, numbers of licensing officers, and the budget of the Bureau 
of Industry and Security, and efforts.

SEC. 108. REPORTS BY COMPTROLLER GENERAL ON EXPORT CONTROL 
              VULNERABILITIES.

    (a) In General.--Not later than the date that is 1 year, 2 years, 
and 3 years after the date of the enactment of this Act, the 
Comptroller General of the United States shall submit to the 
appropriate congressional committees a report assessing any progress 
made in resolving export control issues identified by the Government 
Accountability Office in--
            (1) its report (GAO-09-767T) entitled ``Export Controls: 
        Fundamental Reexamination of System Is Needed to Help Protect 
        Critical Technologies'', dated June 4, 2009; and
            (2) its report (GAO-11-278) entitled ``High-Risk Series: An 
        Update'', dated February 16, 2011.
    (b) Appropriate Congressional Committees.--For purposes of 
subsection (a), the term ``appropriate congressional committees'' 
means--
            (1) the Committee on Foreign Affairs and the Committee on 
        Armed Services of the House of Representatives; and
            (2) the Committee on Banking, Housing, and Urban Affairs, 
        the Committee on Armed Services, and the Committee on Foreign 
        Relations of the Senate.

SEC. 109. EFFECTIVE DATE.

    Subject to sections 101(f) and 102(b), this title and the 
amendments made by this title shall take effect on the date of the 
enactment of this Act.

           TITLE II--CONTROL OF GENERIC PARTS AND COMPONENTS

SEC. 201. TREATMENT OF GENERIC COMPONENTS OR PARTS.

    Section 38(a)(1) of the Arms Export Control Act (22 U.S.C. 
2778(a)(1)) is amended by adding at the end the following: ``Nothing in 
this section shall be construed to require the President to include as 
a defense article any component, accessory, attachment, or part 
associated with any end-item included on the United States Munitions 
List, if such component, attachment, or part does not have specialized 
or unique military or intelligence capability or significance such that 
control under the Arms Export Control Act is warranted.''.

SEC. 202. INTERAGENCY PROCESS FOR SUBSEQUENT CONTROL OF ITEMS REMOVED 
              FROM U.S. MUNITIONS LIST.

    (a) Level of Export Controls on Items Removed From United States 
Munitions List.--If an item is removed from the United States Munitions 
List under section 38(f) of the Arms Export Control Act (22 U.S.C. 
2778(f)), the item may not be made subject to export controls that are 
less restrictive than the export controls that are imposed on the item 
at the time it is removed from the Munitions List, unless the 
President--
            (1) determines that such less restrictive controls are 
        appropriate and in the national security and economic interests 
        of the United States; and
            (2) complies with the 30-day notification requirement set 
        forth in section 15(b)(2) of the Export Administration Act of 
        1979 with respect to the proposed controls, together with a 
        description of, and justification for, the less restrictive 
        controls.
    (b) Consensus of Department Heads.--The President shall ensure, 
through interagency procedures or regulation, that when an item that is 
removed from the United States Munitions List under section 38(f) of 
the Arms Export Control Act is subject to controls under the Export 
Administration Act of 1979, the Secretaries of State, Defense, and 
Commerce concur on all subsequent modifications to the export controls 
on the item.

SEC. 203. EXPORTS TO CERTAIN COUNTRIES.

    (a) Exports to China.--
            (1) Presumption of denial.--There shall be a presumption of 
        denial of any application for a license or other approval to 
        export to the People's Republic of China any item that is 
        removed from the United States Munitions List under section 38 
        of the Arms Export Control Act and is listed on the ``Very 
        Sensitive List'' or ``Sensitive List''' of the Wassenaar 
        Arrangement on Export Controls for Conventional Arms and Dual-
        Use Goods and Technologies.
            (2) Waiver.--The President may waive the application of 
        paragraph (1) on a case-by-case basis if the President--
                    (A) determines that the waiver is in the national 
                security and economic interest of the United States; 
                and
                    (B) at least 15 days before the waiver is to take 
                effect, the President submits to the Committee on 
                Foreign Affairs of the House of Representatives and the 
                Committees on Banking, Finance, and Urban Affairs and 
                on Foreign Relations of the Senate a report describing 
                the reasons for the waiver.
    (b) Exports to Certain Countries.--An application for a license or 
other approval to export any item that is removed from the United 
States Munitions List under section 38 of the Arms Export Control Act 
for export to any country or end-user that is subject to section 126.1 
of title 22, Code of Federal Regulations (and any successor 
regulations), or to a multilateral arms embargo under the United 
Nations Security Council shall be denied.

SEC. 204. EFFECTIVE DATE.

    (a) Section 201.--Section 201 shall take effect on the date of the 
enactment of this Act.
    (b) Section 202.--Section 202 shall apply with respect to any item 
removed from the United States Munitions List on or after the date of 
the enactment of this Act.
    (c) Section 203.--Section 203 shall apply to any application for a 
license or other approval to export that is made on or after the date 
of the enactment of this Act.
                                 <all>