[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5040 Introduced in House (IH)]
<DOC>
115th CONGRESS
2d Session
H. R. 5040
To authorize the President to control the export, reexport, and
transfer of commodities, software, and technology to protect the
national security, and to promote the foreign policy, of the United
States, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 15, 2018
Mr. Royce of California (for himself and Mr. Engel) introduced the
following bill; which was referred to the Committee on Foreign Affairs,
and in addition to the Committee on Oversight and Government Reform,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To authorize the President to control the export, reexport, and
transfer of commodities, software, and technology to protect the
national security, and to promote the foreign policy, of the United
States, 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
Reform Act of 2018''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--AUTHORITY AND ADMINISTRATION OF CONTROLS
Sec. 101. Short title.
Sec. 102. Statement of policy.
Sec. 103. Authority of the President.
Sec. 104. Additional authorities.
Sec. 105. Administration of export controls.
Sec. 106. Control lists.
Sec. 107. Licensing.
Sec. 108. Compliance assistance.
Sec. 109. Requirements to identify and control emerging critical
technologies in export control regulations.
Sec. 110. Penalties.
Sec. 111. Enforcement.
Sec. 112. Administrative procedure.
Sec. 113. Annual report to Congress.
Sec. 114. Repeal.
Sec. 115. Effect on other Acts.
Sec. 116. Transition provisions.
TITLE II--ANTI-BOYCOTT ACT OF 2018
Sec. 201. Short title.
Sec. 202. Statement of policy.
Sec. 203. Foreign boycotts.
Sec. 204. Enforcement.
TITLE III--SANCTIONS REGARDING MISSILE PROLIFERATION AND CHEMICAL AND
BIOLOGICAL WEAPONS PROLIFERATION
Sec. 301. Missile proliferation control violations.
Sec. 302. Chemical and biological weapons proliferation sanctions.
SEC. 2. DEFINITIONS.
In this Act:
(1) Controlled.--The term ``controlled'', with respect to
an item, means the export, reexport, or transfer of the item is
controlled under title I.
(2) Dual-use.--The term ``dual-use'', with respect to an
item, means the item has civilian applications and military,
terrorism, or weapons of mass destruction-related applications.
(3) Export.--The term ``export'', with respect to an item
subject to controls under title I, includes--
(A) the shipment or transmission of the item out of
the United States, including the sending or taking of
the item out of the United States, in any manner; and
(B) the release or transfer of technology or source
code relating to the item to a foreign person in the
United States.
(4) Export administration regulations.--The term ``Export
Administration Regulations'' means--
(A) the Export Administration Regulations as
promulgated, 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; or
(B) regulations that are promulgated, maintained,
and amended under the authority of title I on or after
the date of the enactment of this Act.
(5) Foreign person.--The term ``foreign person'' means a
person that is not a United States person.
(6) Item.--The term ``item'' means a commodity, software,
or technology.
(7) Person.--
(A) In general.--The term ``person'' means--
(i) a natural person;
(ii) a corporation, business association,
partnership, society, trust, financial
institution, insurer, underwriter, guarantor,
and any other business organization, any other
nongovernmental entity, organization, or group,
and any governmental entity operating as a
business enterprise; and
(iii) any successor to any entity described
in clause (ii).
(B) Application to governmental entities.--The term
``person'' does not include a government or
governmental entity that is not operating as a business
enterprise.
(8) Reexport.--The term ``reexport'', with respect to an
item subject to controls under title I, includes--
(A) the shipment or transmission of the item from a
foreign country to another foreign country, including
the sending or taking of the item from the foreign
country to the other foreign country, in any manner;
and
(B) the release or transfer of technology or source
code relating to the item to a foreign person outside
the United States.
(9) Technology.--The term ``technology''--
(A) includes--
(i) information necessary for the
development, production, use, operation,
installation, maintenance, repair, overhaul or
refurbishing of an item; and
(ii) information at whatever stage of its
creation, such as foundational information and
know-how, as further defined by regulations;
and
(B) does not include published information,
including prerecorded records, printed books,
pamphlets, miscellaneous publications, or other
information, that--
(i) arises during, or results from,
fundamental research and is intended to be
published;
(ii) is released by instruction in a
catalog course or associated teaching
laboratory of an academic institution;
(iii) appears in patents or open
(published) patent publications available from
or at any patent office, unless covered by an
invention secrecy order;
(iv) is non-proprietary system
descriptions;
(v) is telemetry data; or
(vi) is any other category or type of
information, as determined by the President for
purposes of national security or foreign policy
concerns.
(10) Transfer.--The term ``transfer'', with respect to an
item subject to controls under title I, means a change in the
end-use or end user of the item within the same foreign
country.
(11) United states.--The term ``United States'' means the
several States, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana Islands,
American Samoa, Guam, the United States Virgin Islands, and any
other territory or possession of the United States.
(12) United states person.--The term ``United States
person'' means--
(A) any individual who is a citizen or national of
the United States or who is an individual described in
subparagraph (B) of section 274B(a)(3) of the
Immigration and Nationality Act (8 U.S.C. 1324b(a)(3));
and
(B) a corporation or other legal entity which is
organized under the laws of the United States, any
State or territory thereof, or the District of
Columbia, if natural persons described in subparagraph
(A) own, directly or indirectly, more than 50 percent
of the outstanding capital stock or other beneficial
interest in such legal entity.
(13) Weapons of mass destruction.--The term ``weapons of
mass destruction'' means nuclear, radiological, chemical, and
biological weapons and delivery systems for such weapons.
TITLE I--AUTHORITY AND ADMINISTRATION OF CONTROLS
SEC. 101. SHORT TITLE.
This title may be cited as the ``Export Controls Act of 2018''.
SEC. 102. STATEMENT OF POLICY.
The following is the policy of the United States:
(1) The national security and foreign policy of the United
States require that the export, reexport, and transfer of
items, and specific activities of United States persons,
wherever located, be controlled for the following purposes:
(A) To control the access to items for use in--
(i) the proliferation of weapons of mass
destruction or of conventional weapons;
(ii) the acquisition of destabilizing
numbers or types of conventional weapons;
(iii) acts of terrorism;
(iv) military programs that could pose a
threat to the security of the United States or
its allies; or
(v) activities undertaken specifically to
cause significant interference with or
disruption of critical infrastructure.
(B) To preserve the qualitative military
superiority of the United States.
(C) To strengthen the United States industrial
base.
(D) To carry out the foreign policy of the United
States, including the protection of human rights and
the promotion of democracy.
(E) To carry out obligations and commitments under
international agreements and arrangements, including
multilateral export control regimes.
(F) To facilitate military interoperability between
the United States and its North Atlantic Treaty
Organization (NATO) and other close allies.
(G) To ensure national security controls are
tailored to focus on those core technologies and other
items that are capable of being used to pose a serious
national security threat to the United States.
(2) The national security of the United States requires
that the United States maintain its leadership in the science,
technology, engineering, and manufacturing sectors. Such
leadership requires that United States persons are competitive
in global markets. The impact of the implementation of this
title on such leadership and competitiveness must be evaluated
on an ongoing basis and applied in imposing controls under
sections 103 and 104 to avoid negatively affecting such
leadership.
(3) The national security and foreign policy of the United
States require that the United States participate in
multilateral organizations and agreements regarding export
controls on items that are consistent with the policy of the
United States, and take all the necessary steps to secure the
adoption and consistent enforcement, by the governments of such
countries, of export controls on items that are consistent with
such policy.
(4) Export controls should be fully coordinated with the
multilateral export control regimes. Export controls that are
multilateral are most effective, and should be tailored to
focus on those core technologies and other items that are
capable of being used to pose a serious national security
threat to the United States and its allies.
(5) Export controls applied unilaterally to items widely
available from foreign sources generally are less effective in
preventing end-users from acquiring those items.
(6) The effective administration of export controls
requires a clear understanding both inside and outside the
United States Government of which technologies and other items
are controlled and an efficient process should be created to
update the controls, such as by removing and adding
technologies and other items.
(7) The export control system must ensure that it is
transparent, predictable, and timely, has the flexibility to be
adapted to address new threats in the future, and allows
seamless access to and sharing of export control information
among all relevant United States national security and foreign
policy agencies.
(8) Implementation and enforcement of United States export
controls require robust capabilities in monitoring,
intelligence, and investigation, appropriate penalties for
violations, and the ability to swiftly interdict unapproved
transfers.
(9) Export controls should be balanced with United States
counterterrorism, information security, and cyber-security
policies to ensure the ability to export, reexport, and
transfer technology and other items in support of
counterterrorism, critical infrastructure, and other homeland
security priorities, while effectively preventing malicious
cyber terrorists from obtaining items that threaten the United
States and its interests, including the protection of and
safety of United States citizens abroad.
(10) Export controls complement and are a critical element
of the national security policies underlying the laws and
regulations governing foreign direct investment in the United
States, including controlling the transfer of critical
technologies to certain foreign persons. Thus, the President,
in close coordination with the Department of Commerce, the
Department of Defense, the Department of State, the Department
of Energy, and other agencies responsible for export controls,
should have a regular and robust process to identify the
emerging and other types of critical technologies of concern,
as defined in United States foreign direct investment laws, and
regulate their release to foreign persons as warranted
regardless of the nature of the underlying transaction. Such
identification efforts should draw upon the resources and
expertise of all relevant parts of the United States
Government, industry, and academia. These efforts should be in
addition to traditional efforts to modernize and update the
lists of controlled items under the multilateral export control
regimes.
(11) The authority under this title may be exercised only
in furtherance of all of the objectives set forth in paragraphs
(1) through (10).
SEC. 103. AUTHORITY OF THE PRESIDENT.
(a) Authority.--In order to carry out the policy set forth in
paragraphs (1) through (10) of section 102, the President shall
control--
(1) the export, reexport, and transfer of items, whether by
United States persons, wherever located, or by foreign persons,
wherever located; and
(2) the activities of United States persons, wherever
located, relating to specific--
(A) nuclear explosive devices;
(B) missiles;
(C) chemical or biological weapons;
(D) whole plants for chemical weapons precursors;
(E) foreign maritime nuclear projects; and
(F) foreign intelligence services.
(b) Requirements.--In exercising authority under this title, the
President shall impose controls to achieve the following objectives:
(1) To regulate the export, reexport, and transfer of items
described in subsection (a)(1) of United States persons,
wherever located, or foreign persons, wherever located.
(2) To regulate the activities described in subsection
(a)(2) of United States persons, wherever located.
(3) To secure the cooperation of other governments and
multilateral organizations to impose control systems that are
consistent, to the extent possible, with the controls imposed
under subsection (a).
(4) To maintain the leadership of the United States in
science, engineering, technology research and development, and
manufacturing.
(5) To enhance the viability of commercial firms, academic
institutions, and research establishments, and maintain the
skilled workforce of such firms, institutions, and
establishments, that are necessary to preserving the leadership
of the United States described in paragraph (4).
(6) To strengthen the United States industrial base, both
with respect to current and future defense requirements.
(7) To enforce the controls through means such as
regulations, requirements for compliance, lists of controlled
items, lists of foreign persons who threaten the national
security or foreign policy of the United States, and guidance
in a form that facilitates compliance by United States persons
and foreign persons, in particular academic institutions,
scientific and research establishments, and small- and medium-
sized businesses.
SEC. 104. ADDITIONAL AUTHORITIES.
(a) In General.--In carrying out this title, the President shall--
(1) establish and maintain lists published by the Secretary
of Commerce of items that are controlled under this title;
(2) establish and maintain lists published by the Secretary
of Commerce of foreign persons and end-uses that are determined
to be a threat to the national security and foreign policy of
the United States pursuant to the policy set forth in section
102(1)(A) and to whom exports, reexports, and transfers of
items are controlled;
(3) prohibit unauthorized exports, reexports, and transfers
of controlled items;
(4) restrict exports, reexports, and transfers of any
controlled items to any foreign person or end-use listed under
paragraph (2);
(5) require licenses or other authorizations, as
appropriate, for exports, reexports, and transfers of
controlled items, including imposing conditions or restrictions
on United States persons and foreign persons with respect to
such licenses or other authorizations;
(6) establish a process by which the Secretary of Commerce
or a license applicant requests an assessment that a foreign
item is comparable in quality to an item controlled under this
title, and is available in sufficient quantities to render the
United States export control of that item or the denial of a
license ineffective;
(7) require measures for compliance with the export
controls established under this title;
(8) require and obtain such information from United States
persons and foreign persons as is necessary to carry out this
title;
(9) require, as appropriate, advance notice before an item
is exported, reexported, or transferred, as an alternative to
requiring a license;
(10) require, to the extent feasible, identification of
items subject to controls under this title in order to
facilitate the enforcement of such controls;
(11) inspect, search, detain, seize, or impose temporary
denial orders with respect to items, in any form, that are
subject to controls under this title, or conveyances on which
it is believed that there are items that have been, are being,
or are about to be exported, reexported, or transferred in
violation of this title;
(12) monitor shipments, or other means of transfer;
(13) keep the public fully apprised of changes in policy,
regulations, and procedures established under this title;
(14) appoint technical advisory committees in accordance
with the Federal Advisory Committee Act;
(15) create, as warranted, exceptions to licensing
requirements in order to further the objectives of this title;
and
(16) undertake any other action as is necessary to carry
out this title and is not otherwise prohibited by law.
(b) Relationship to IEEPA.--The authority under this title may not
be used to regulate or prohibit under this title the export, reexport,
or transfer of any item that may not be regulated or prohibited under
section 203(b) of the International Emergency Economic Powers Act (50
U.S.C. 1702(b)).
(c) Countries Supporting International Terrorism.--
(1) License requirement.--
(A) In general.--A license shall be required for
the export, reexport, or transfer of items to a country
if the Secretary of State has made the following
determinations:
(i) The government of such country has
repeatedly provided support for acts of
international terrorism.
(ii) The export, reexport, or transfer of
such items could make a significant
contribution to the military potential of such
country, including its military logistics
capability, or could enhance the ability of
such country to support acts of international
terrorism.
(B) Determination under other provisions of law.--A
determination of the Secretary of State under section
620A of the Foreign Assistance Act of 1961 (22 U.S.C.
2371), section 40 of the Arms Export Control Act (22
U.S.C. 2780), or any other provision of law that the
government of a country described in subparagraph (A)
has repeatedly provided support for acts of
international terrorism shall be deemed to be a
determination with respect to such government for
purposes of clause (i) of subparagraph (A).
(2) Notification to congress.--The Secretary of State and
the Secretary of Commerce shall notify the Committee on Foreign
Affairs of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs and the Committee on
Foreign Relations of the Senate at least 30 days before issuing
any license required by paragraph (1).
(3) Publication in federal register.--Each determination of
the Secretary of State under paragraph (1)(A) shall be
published in the Federal Register, except that the Secretary of
State may exclude confidential information and trade secrets
contained in such determination.
(4) Rescission of determination.--A determination of the
Secretary of State under paragraph (1)(A) may not be rescinded
unless the President submits to the Speaker of the House of
Representatives, the chairman of the Committee on Foreign
Affairs, and the chairman of the Committee on Banking, Housing,
and Urban Affairs and the chairman of the Committee on Foreign
Relations of the Senate--
(A) before the proposed rescission would take
effect, a report certifying that--
(i) there has been a fundamental change in
the leadership and policies of the government
of the country concerned;
(ii) that government is not supporting acts
of international terrorism; and
(iii) that government has provided
assurances that it will not support acts of
international terrorism in the future; or
(B) at least 90 days before the proposed rescission
would take effect, a report justifying the rescission
and certifying that--
(i) the government concerned has not
provided any support for acts international
terrorism during the preceding 24-month period;
and
(ii) the government concerned has provided
assurances that it will not support acts of
international terrorism in the future.
(5) Disapproval of rescission.--No rescission under
paragraph (4)(B) of a determination under paragraph (1)(A) with
respect to the government of a country may be made if Congress,
within 90 days after receipt of a report under paragraph
(4)(B), enacts a joint resolution described in subsection
(f)(2) of section 40 of the Arms Export Control Act with
respect to a rescission under subsection (f)(1) of such section
with respect to the government of such country.
(6) Notification and briefing.--Not later than--
(A) ten days after initiating a review of the
activities of the government of the country concerned
within the 24-month period referred to in paragraph
(4)(B)(i), the Secretary of State shall notify the
Committee on Foreign Affairs of the House of
Representatives and the Committee on Foreign Relations
of the Senate of such initiation; and
(B) 20 days after the notification described in
paragraph (1), the Secretary of State shall brief the
congressional committees described in paragraph (1) on
the status of such review.
(7) Contents of notification of license.--The Secretary of
State shall include in the notification required by paragraph
(2)--
(A) a detailed description of the items to be
offered, including a brief description of the
capabilities of any item for which a license to export,
reexport, or transfer the items is sought;
(B) the reasons why the foreign country, person, or
entity to which the export, reexport, or transfer is
proposed to be made has requested the items under the
export, reexport, or transfer, and a description of the
manner in which such country, person, or entity intends
to use such items;
(C) the reasons why the proposed export, reexport,
or transfer is in the national interest of the United
States;
(D) an analysis of the impact of the proposed
export, reexport, or transfer on the military
capabilities of the foreign country, person, or entity
to which such transfer would be made;
(E) an analysis of the manner in which the proposed
export, reexport, or transfer would affect the relative
military strengths of countries in the region to which
the items that are the subject of such export,
reexport, or transfer would be delivered and whether
other countries in the region have comparable kinds and
amounts of items; and
(F) an analysis of the impact of the proposed
export, reexport, or transfer on the relations of the
United States with the countries in the region to which
the items that are the subject of such export,
reexport, or transfer would be delivered.
(d) Enhanced Proliferation Controls.--
(1) In general.--In furtherance of section 103(a) of this
title, the President shall, except to the extent authorized by
a statute or regulation administered by a Federal department or
agency other than the Department of Commerce, require a United
States person, wherever located, to apply for and receive a
license from the Department of Commerce for the export,
reexport, or transfer of items described in paragraph (2) or
for the performance of services relating to such items.
(2) Items described.--The items described in this paragraph
are--
(A) nuclear explosive devices;
(B) missiles;
(C) chemical or biological weapons;
(D) whole plants for chemical weapons precursors;
and
(E) foreign maritime nuclear projects that would
pose a risk to the national security or foreign policy
of the United States.
(e) Additional Prohibitions.--The Secretary of Commerce may inform
United States persons, either individually by specific notice or
through amendment to any regulation or order issued under this title,
that a license from the Bureau of Industry and Security of the
Department of Commerce is required to engage in any activity if the
activity involves the types of movement, service, or support described
in subsection (d). The absence of any such notification does not excuse
the United States person from compliance with the license requirements
of subsection (d), or any regulation or order issued under this title.
(f) License Review Standards.--The Secretary of Commerce shall deny
an application to engage in any activity that involves the types of
movement, service, or support described in subsection (d) if the
activity would make a material contribution to any of the items
described in subsection (d)(2).
SEC. 105. ADMINISTRATION OF EXPORT CONTROLS.
(a) In General.--The President shall delegate to the Secretary of
Commerce, the Secretary of Defense, the Secretary of State and, as
appropriate, the Director of National Intelligence and the heads of
other appropriate Federal departments and agencies, the authority to
carry out the purposes set forth in subsection (b).
(b) Purposes.--
(1) In general.--The purpose of the delegations of
authority pursuant to subsection (a) are--
(A) to advise the President with respect to--
(i) identifying specific threats to the
national security and foreign policy that the
authority of this title may be used to address;
and
(ii) exercising the authority under this
title to implement policies, regulations,
procedures, and actions that are necessary to
effectively counteract those threats;
(B) to review and approve--
(i) criteria for including items on, and
removing such an item from, a list of
controlled items established under this title;
(ii) an interagency procedure for compiling
and amending any list described in clause (i);
(iii) criteria for including a person on a
list of persons to whom exports, reexports, and
transfers of items are prohibited or restricted
under this title;
(iv) standards for compliance by persons
subject to controls under this title; and
(v) policies and procedures for the end-use
monitoring of exports, reexports, and transfers
of items controlled under this title;
(C) to obtain independent evaluations, including
from Inspectors General of the relevant departments or
agencies, on a periodic basis on the effectiveness of
the implementation of this title in carrying out the
policy set forth in section 102; and
(D) to benefit from the inherent equities,
experience, and capabilities of the Federal officials
described in subsection (a), including--
(i) the views of the Department of Defense
with respect to the national security
implications of a particular control or
decision;
(ii) the views of the Department of State
with respect to the foreign policy implications
of a particular control or decision;
(iii) the views of the Department of Energy
with respect to the implications for nuclear
proliferation of a particular control or
decision; and
(iv) the views of the Department of
Commerce with respect to the administration of
an efficient, coherent, reliable, enforceable,
and predictable export control system, and the
resolution of competing views or policy
objectives described in section 102.
(2) Authority to seek information.--The Federal officials
described in subsection (a) may, in carrying out the purposes
set forth in paragraph (1), seek information and advice from
experts who are not officers or employees of the Federal
Government.
(3) Transmittal and implementation of evaluations.--The
results of the independent evaluations conducted pursuant to
paragraph (1)(D) shall be transmitted to the President and the
Congress, in classified form if necessary. Subject to the
delegation of authority by the President, the Federal officials
described in subsection (a) shall determine, direct, and ensure
that improvements recommended in the evaluations are
implemented.
SEC. 106. CONTROL LISTS.
The President shall, pursuant to the delegation of authority in
section 105, ensure that--
(1) a process is established for regular interagency review
of each list established under section 104(a)(1), that pursuant
to such review the Secretary of Commerce regularly updates such
lists to ensure that new items (including emerging critical
technologies) are appropriately controlled, and that the level
of control of items on the lists are adjusted as conditions
change;
(2) information and expertise is obtained from officers and
employees from relevant Federal departments, agencies, and
offices and persons outside the Federal Government who have
technical expertise, with respect to the characteristics of the
items considered for each list established under section
104(a)(1) and the effect of controlling the items on addressing
the policy set forth in section 102;
(3) each list established under section 104(a)(1)
appropriately identifies each entry that has been included by
virtue of the participation of the United States in a
multilateral regime, organization, or group the purpose of
which is consistent with and supports the policy of the United
States under this title relating to the control of exports,
reexports, and transfers of items; and
(4) each list established under section 104(a)(1) is
published by the Secretary of Commerce in a form that
facilitates compliance with it and related requirements,
particularly by small- and medium-sized businesses, and
academic institutions.
SEC. 107. LICENSING.
(a) In General.--The President shall, pursuant to the delegation of
authority in section 105, establish a procedure for the Department of
Commerce to license or otherwise authorize the export, reexport, and
transfer of items controlled under this title in order to carry out the
policy set forth in section 102 and the requirements set forth in
section 103(b). The procedure shall ensure that--
(1) license applications, other requests for authorization,
and related dispute resolution procedures are considered and
decisions made with the participation of appropriate
departments, agencies, and offices that have delegated
functions under this title; and
(2) licensing decisions are made in an expeditious manner,
with transparency to applicants on the status of license and
other authorization processing and the reason for denying any
license or request for authorization.
(b) Sense of Congress.--It is the sense of Congress that the
President should make best efforts to ensure that an accurate,
consistent, and timely evaluation and processing of licenses or other
requests for authorization to export, reexport, or transfer items
controlled under this title is accomplished within 30 days from the
date of such license request.
(c) Fees.--No fee may be charged in connection with the submission,
processing, or consideration of any application for a license or other
authorization or other request made in connection with any regulation
in effect under the authority of this title.
SEC. 108. COMPLIANCE ASSISTANCE.
(a) System for Seeking Assistance.--The President may establish a
system to provide United States persons with assistance in complying
with this title, which may include a mechanism for providing
information, in classified form as appropriate, who are potential
customers, suppliers, or business partners with respect to items
controlled under this title, in order to further ensure the prevention
of the export, reexport, or transfer of items that may pose a threat to
the national security or foreign policy of the United States.
(b) Security Clearances.--In order to carry out subsection (a), the
President may issue appropriate security clearances to persons
described in that subsection who are responsible for complying with
this title.
(c) Assistance for Certain Businesses.--
(1) In general.--Not later than 120 days after the date of
the enactment of this Act, the President shall develop and
submit to Congress a plan to assist small- and medium-sized
United States in export licensing and other processes under
this title.
(2) Contents.--The plan shall include, among other things,
arrangements for the Department of Commerce to provide
counseling to businesses described in paragraph (1) on filing
applications and identifying items controlled under this title,
as well as proposals for seminars and conferences to educate
such businesses on export controls, licensing procedures, and
related obligations.
SEC. 109. REQUIREMENTS TO IDENTIFY AND CONTROL EMERGING CRITICAL
TECHNOLOGIES IN EXPORT CONTROL REGULATIONS.
(a) In General.--The President shall, pursuant to the delegation of
authority in section 105, establish and, in coordination with the
Department of Commerce, the Department of Defense, the Department of
State, the Department of Energy, and other departments determined to be
necessary, lead a regular, ongoing interagency process to identify
emerging critical technologies that are not identified in any list of
items controlled for export under United States law or regulations, but
that nonetheless could be essential for maintaining or increasing the
technological advantage of the United States over countries that pose a
significant threat to the national security of the United States with
respect to national defense, intelligence, or other areas of national
security, or gaining such an advantage over such countries in areas
where such an advantage may not currently exist.
(b) Requirements.--The interagency process required under
subsection (a) shall--
(1) draw upon the expertise, resources, and equities of all
relevant United States Government agencies, industries, and
academic institutions to identify and describe such emerging
critical technologies;
(2) require the relevant export control authority to
publish proposed regulations for public comment that would
control heretofore unlisted emerging critical technologies
identified pursuant to subsection (a) and control the release
of each such technology to destinations, end uses, or end users
as determined by the President;
(3) require the Secretary of Commerce, the Secretary of
State, and the Secretary of Defense to propose to the relevant
multilateral export control regimes in the following year that
such emerging critical technologies be added to the list of
technologies controlled by such regimes;
(4) determine whether national security concerns warrant
continued unilateral export controls over technologies
identified pursuant to subsection (a) if the relevant
multilateral export control regime does not agree to list such
technologies on its control list within three years; and
(5) require the agencies responsible for administering the
export controls identified in subsection (a) to remove or
revise, as appropriate, existing controls determined to warrant
removal or revision as a result of insight or information
obtained during efforts undertaken to comply with the
requirements of this section.
SEC. 110. PENALTIES.
(a) Unlawful Acts.--
(1) In general.--It shall be unlawful for a person to
violate, attempt to violate, conspire to violate, or cause a
violation of this title or of any regulation, order, license,
or other authorization issued under this title, including any
of the unlawful acts described in paragraph (2).
(2) Specific unlawful acts.--The unlawful acts described in
this paragraph are the following:
(A) No person may engage in any conduct prohibited
by or contrary to, or refrain from engaging in any
conduct required by this title, the Export
Administration Regulations, or any order, license or
authorization issued thereunder.
(B) No person may cause or aid, abet, counsel,
command, induce, procure, or approve the doing of any
act prohibited, or the omission of any act required by
this title, the Export Administration Regulations, or
any order, license or authorization issued thereunder.
(C) No person may solicit or attempt a violation of
this Act, the Export Administration Regulations, or any
order, license or authorization issued thereunder.
(D) No person may conspire or act in concert with
one or more other persons in any manner or for any
purpose to bring about or to do any act that
constitutes a violation of this title, the Export
Administration Regulations, or any order, license or
authorization issued thereunder.
(E) No person may order, buy, remove, conceal,
store, use, sell, loan, dispose of, transfer,
transport, finance, forward, or otherwise service, in
whole or in part, any item exported or to be exported
from the United States, or that is otherwise subject to
the Export Administration Regulations, with knowledge
that a violation of this title, the Export
Administration Regulations, or any order, license or
authorization issued thereunder, has occurred, is about
to occur, or is intended to occur in connection with
the item unless valid authorization is obtained
therefor.
(F) No person may make any false or misleading
representation, statement, or certification, or falsify
or conceal any material fact, either directly to the
Department of Commerce, or an official of any other
United States agency, or indirectly through any other
person--
(i) in the course of an investigation or
other action subject to the Export
Administration Regulations;
(ii) in connection with the preparation,
submission, issuance, use, or maintenance of
any export control document or any report filed
or required to be filed pursuant to the Export
Administration Regulations; or
(iii) for the purpose of or in connection
with effecting any export, reexport, or
transfer of an item subject to the Export
Administration Regulations or a service or
other activity of a United States person
described in section 104.
(G) No person may engage in any transaction or take
any other action with intent to evade the provisions of
this title, the Export Administration Regulations, or
any order, license, or authorization issued thereunder.
(H) No person may fail or refuse to comply with any
reporting or recordkeeping requirements of the Export
Administration Regulations or of any order, license, or
authorization issued thereunder.
(I) Except as specifically authorized in the Export
Administration Regulations or in writing by the
Department of Commerce, no person may alter any
license, authorization, export control document, or
order issued under the Export Administration
Regulations.
(J) No person may take any action that is
prohibited by a denial order issued by the Department
of Commerce to prevent imminent violations of this
title, the Export Administration Regulations, or any
order, license or authorization issued thereunder.
(3) Additional requirements.--For purposes of subparagraph
(G), any representation, statement, or certification made by
any person shall be deemed to be continuing in effect. Each
person who has made a representation, statement, or
certification to the Department of Commerce relating to any
order, license, or other authorization issued under this title
shall notify the Department of Commerce, in writing, of any
change of any material fact or intention from that previously
represented, stated, or certified, immediately upon receipt of
any information that would lead a reasonably prudent person to
know that a change of material fact or intention had occurred
or may occur in the future.
(b) Criminal Penalty.--
(1) Knowing violations.--Except as provided in paragraph
(2), a person who knowingly violates or conspires or attempts
to violate subsection (a) shall be fined not more than 5 times
the amount or value of the exports, reexports, or transfers
involved, or $500,000, whichever is greater, and, in the case
of an individual, imprisoned not more than 5 years, or both.
(2) Willful violations.--A person who willfully violates or
conspires to or attempts to violate any provision of subsection
(a) shall be fined not more than 5 times the amount or value of
the exports, reexports, or transfers involved, or $1,000,000,
whichever is greater, and, in the case of an individual, shall
be fined not more than $250,000, or imprisoned not more than 10
years, or both.
(c) Civil Penalties.--
(1) Authority.--The President may impose the following
civil penalties on a person for each violation by that person
of this title or any regulation, order, or license issued under
this title, for each violation:
(A) A fine of not more than $250,000 or an amount
that is twice the value of the transaction that is the
basis of the violation with respect to which the
penalty is imposed, whichever is greater.
(B) Revocation of a license issued under this title
to the person.
(C) A prohibition on the person's ability to
export, reexport, or transfer any items, whether or not
subject to controls under this title.
(2) Procedures.--Any civil penalty under this subsection
may be imposed only after notice and opportunity for an agency
hearing on the record in accordance with sections 554 through
557 of title 5, United States Code.
(3) Standards for levels of civil penalty.--The President
may by regulation provide standards for establishing levels of
civil penalty under this subsection based upon factors such as
the seriousness of the violation, the culpability of the
violator, and such mitigating factors as the violator's record
of cooperation with the Government in disclosing the violation.
(d) Criminal Forfeiture of Property Interest and Proceeds.--
(1) Forfeiture.--Any person who is convicted under
subsection (b) of a violation of a control imposed under
section 103 (or any regulation, order, or license issued with
respect to such control) shall, in addition to any other
penalty, forfeit to the United States--
(A) any of that person's interest in, security of,
claim against, or property or contractual rights of any
kind in the tangible items that were the subject of the
violation;
(B) any of that person's interest in, security of,
claim against, or property or contractual rights of any
kind in tangible property that was used in the
violation; and
(C) any of that person's property constituting, or
derived from, any proceeds obtained directly or
indirectly as a result of the violation.
(2) Procedures.--The procedures in any forfeiture under
this subsection, and the duties and authority of the courts of
the United States and the Attorney General with respect to any
forfeiture action under this subsection or with respect to any
property that may be subject to forfeiture under this
subsection, shall be governed by the provisions of section 1963
of title 18, United States Code.
(e) Prior Convictions.--
(1) License bar.--
(A) In general.--The President may--
(i) deny the eligibility of any person
convicted of a criminal violation described in
subparagraph (B) to export, reexport, or
transfer outside the United States any item,
whether or not subject to controls under this
title, for a period of up to 10 years beginning
on the date of the conviction; and
(ii) revoke any license or other
authorization to export, reexport, or transfer
items that was issued under this title and in
which such person has an interest at the time
of the conviction.
(B) Violations.--The violations referred to in
subparagraph (A) are any criminal violations of, or
criminal attempt or conspiracy to violate--
(i) this title (or any regulation, license,
or order issued under this title);
(ii) any regulation, license, or order
issued under the International Emergency
Economic Powers Act;
(iii) section 793, 794, or 798 of title 18,
United States Code;
(iv) section 4(b) of the Internal Security
Act of 1950 (50 U.S.C. 783(b)); or
(v) section 38 of the Arms Export Control
Act (22 U.S.C. 2778).
(2) Application to other parties.--The President may
exercise the authority under paragraph (1) with respect to any
person related, through affiliation, ownership, control, or
position of responsibility, to any person convicted of any
violation of law set forth in paragraph (1), upon a showing of
such relationship with the convicted party, and subject to the
procedures set forth in subsection (c)(2).
(f) Other Authorities.--Nothing in subsection (c), (d), or (e)
limits--
(1) the availability of other administrative or judicial
remedies with respect to violations of this title, or any
regulation, order, license or other authorization issued under
this title;
(2) the authority to compromise and settle administrative
proceedings brought with respect to violations of this title,
or any regulation, order, license, or other authorization
issued under this title; or
(3) the authority to compromise, remit or mitigate seizures
and forfeitures pursuant to section 1(b) of title VI of the Act
of June 15, 1917 (22 U.S.C. 401(b)).
SEC. 111. ENFORCEMENT.
(a) Authorities.--In order to enforce this title, the President
may--
(1) issue regulations, orders, and guidelines;
(2) require, inspect, and obtain books, records, and any
other information from any person subject to the provisions of
this title;
(3) administer oaths or affirmations and by subpoena
require any person to appear and testify or to appear and
produce books, records, and other writings, or both;
(4) conduct investigations (including undercover) in the
United States and in other countries, including intercepting
any wire, oral, and electronic communications, conducting
electronic surveillance, using pen registers and trap and trace
devices, and carrying out acquisitions, to the extent
authorized under chapters 119, 121, and 206 of title 18, United
States Code, and other applicable laws of the United States;
(5) inspect, search, detain, seize, or issue temporary
denial orders with respect to items, in any form, that are
subject to controls under this title, or conveyances on which
it is believed that there are items that have been, are being,
or are about to be exported, reexported, or transferred in
violation of this title, or any regulations, order, license, or
other authorization issued thereunder;
(6) conduct prelicense inspections and post-shipment
verifications; and
(7) execute warrants and make arrests.
(b) Enforcement of Subpoenas.--In the case of contumacy by, or
refusal to obey a subpoena issued to, any person under subsection
(a)(3), a district court of the United States, after notice to such
person and a 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, regardless of format, that
are the subject of the subpoena. Any failure to obey such order of the
court may be punished by such court as a contempt thereof.
(c) Best Practice Guidelines.--
(1) In general.--The President, in consultation with the
Secretary of Commerce and other Federal officials described in
section 105(a), should publish and update ``best practices''
guidelines to assist persons in developing and implementing, on
a voluntary basis, effective export control programs in
compliance with the regulations issued under this title.
(2) Export compliance program.--The implementation by a
person of an effective export compliance program and a high
quality overall export compliance effort by a person should
ordinarily be given weight as mitigating factors in a civil
penalty action against the person under this title.
(d) Reference to Enforcement.--For purposes of this section, a
reference to the enforcement of, or a violation of, this title includes
a reference to the enforcement or a violation of any regulation, order,
license or other authorization issued pursuant to this title.
(e) 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.
(f) Confidentiality of Information.--
(1) Exemptions from disclosure.--
(A) In general.--Information obtained under this
title may be withheld from disclosure only to the
extent permitted by statute, except that information
described in subparagraph (B) shall be withheld from
public disclosure and shall not be subject to
disclosure under section 552(b)(3) of title 5, United
States Code, unless the release of such information is
determined by the President to be in the national
interest.
(B) Information described.--Information described
in this subparagraph is information submitted or
obtained in connection with an application for a
license or other authorization to export, reexport, or
transfer items, engage in other activities, a
recordkeeping or reporting requirement, enforcement
activity, or other operations under this title,
including--
(i) the license application, license, or
other authorization itself;
(ii) classification or advisory opinion
requests, and the response thereto;
(iii) license determinations, and
information pertaining thereto;
(iv) information or evidence obtained in
the course of any investigation; and
(v) information obtained or furnished in
connection with any international agreement,
treaty, or other obligation.
(2) 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 any provision of the Export
Administration Act of 1979 (as in effect on the
day before the date of the enactment of this
Act and as continued in effect pursuant to the
International Emergency Economic Powers Act),
under the Export Administration Regulations, or
under this title, including any report or
license application required under any such
provision, 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 made
available under clause (i), 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.--Information described in
clause (i) of subparagraph (B) shall be subject
to the limitations contained in section 716 of
title 31, United States Code.
(ii) Prohibition on further disclosure.--An
officer or employee of the Government
Accountability Office may not 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.
(3) Information sharing.--
(A) In general.--Any Federal official described in
section 105(a) who obtains information that is relevant
to the enforcement of this title, including information
pertaining to any investigation, shall furnish such
information to each appropriate department, agency, or
office 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 President shall
ensure that the heads of departments, agencies, and
offices with enforcement authorities under this title,
consistent with protection of law enforcement and its
sources and methods--
(i) exchange any licensing and enforcement
information with one another that is necessary
to facilitate enforcement efforts under this
section; and
(ii) consult on a regular basis with one
another and with the head of other departments,
agencies, and offices that obtain information
subject to this paragraph, in order to
facilitate the exchange of such information.
(D) Information sharing with federal agencies.--
Licensing or enforcement information obtained under
this title may be shared with heads of departments,
agencies, and offices that do not have enforcement
authorities under this title on a case-by-case basis at
the discretion of the President. Such information may
be shared only when the President makes a determination
that the sharing of this information is in the national
interest.
(g) Reporting Requirements.--In the administration of this section,
reporting requirements shall be designed so as to reduce the cost of
reporting, recordkeeping, and documentation to the extent consistent
with effective enforcement and compilation of useful trade statistics.
Reporting, recordkeeping, and documentation requirements shall be
periodically reviewed and revised in the light of developments in the
field of information technology.
(h) Civil Forfeiture.--
(1) In general.--Any tangible items seized under subsection
(a) by designated officers or employees shall be subject to
forfeiture to the United States in accordance with applicable
law, except that property seized shall be returned if the
property owner is not found guilty of a civil or criminal
violation under section 109.
(2) Procedures.--Any seizure or forfeiture under this
subsection shall be carried out in accordance with the
procedures set forth in section 981 of title 18, United States
Code.
SEC. 112. ADMINISTRATIVE PROCEDURE.
(a) In General.--The functions exercised under this title shall be
subject to sections 551, 553 through 559, and 701 through 706 of title
5, United States Code.
(b) Amendments to Regulations.--The President shall notify in
advance the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Foreign Affairs of the House of
Representatives of any proposed amendments to the Export Administration
Regulations with an explanation of the intent and rationale of such
amendments.
SEC. 113. ANNUAL REPORT TO CONGRESS.
(a) In General.--The President shall submit to Congress, by
December 31 of each year, a report on the implementation of this title
during the preceding fiscal year. The report shall include an analysis
of--
(1) the effect of controls imposed under this title on
exports, reexports, and transfers of items in addressing
threats to the national security or foreign policy of the
United States, including a description of licensing processing
times;
(2) the impact of such controls on the scientific and
technological leadership of the United States;
(3) the consistency with such controls of export controls
imposed by other countries;
(4) efforts to provide exporters with compliance
assistance, including specific actions to assist small- and
medium-sized businesses;
(5) a summary of regulatory changes from the prior fiscal
year;
(6) a summary of export enforcement actions, including of
actions taken to implement end-use monitoring of dual-use,
military, and other items subject to the Export Administration
Regulations;
(7) a summary of approved license applications to
proscribed persons; and
(8) efforts undertaken within the previous year to comply
with the requirements of section 109, including any ``critical
technologies'' identified under such section and how or whether
such critical technologies were controlled for export.
(b) Form.--The report required under subsection (a) shall be
submitted in unclassified form, but may contain a classified annex.
SEC. 114. REPEAL.
(a) In General.--The Export Administration Act of 1979 (50 U.S.C.
App. 2401 et seq.) (as continued in effect pursuant to the
International Emergency Economic Powers Act) is repealed.
(b) Implementation.--The President shall implement the amendment
made by subsection (a) by exercising the authorities of the President
under the International Emergency Economic Powers Act (50 U.S.C. 1701
et seq.).
SEC. 115. EFFECT ON OTHER ACTS.
(a) In General.--Except as otherwise provided in this title,
nothing contained in this title shall be construed to modify, repeal,
supersede, or otherwise affect the provisions of any other laws
authorizing control over exports, reexports, or transfers of any item,
or activities of United States persons subject to the Export
Administration Regulations.
(b) Coordination of Controls.--
(1) In general.--The authority granted to the President
under this title shall be exercised in such manner so as to
achieve effective coordination with all export control and
sanctions authorities exercised by Federal departments and
agencies delegated with authority under this title,
particularly the Department of State, the Department of the
Treasury, and the Department of Energy.
(2) Sense of congress.--It is the sense of Congress that in
order to achieve effective coordination described in paragraph
(1), such Federal departments and agencies--
(A) should continuously work to create enforceable
regulations with respect to the export, reexport, and
transfer by United States and foreign persons of
commodities, software, technology, and services to
various end uses and end users for foreign policy and
national security reasons;
(B) should regularly work to reduce complexity in
the system, including complexity caused merely by the
existence of structural, definitional, and other non-
policy based differences between and among different
export control and sanctions systems; and
(C) should coordinate controls on items exported,
reexported, or transferred in connection with a foreign
military sale under chapter 2 of the Arms Export
Control Act or a commercial sale under section 38 of
the Arms Export Control Act to reduce as much
unnecessary administrative burden as possible that is a
result of differences between the exercise of those two
authorities.
(c) Nonproliferation Controls.--Nothing in this title shall be
construed to supersede the procedures published by the President
pursuant to section 309(c) of the Nuclear Non-Proliferation Act of
1978.
SEC. 116. TRANSITION PROVISIONS.
(a) In General.--All delegations, rules, regulations, orders,
determinations, licenses, or other forms of administrative action that
have been made, issued, conducted, or allowed to become effective under
the Export Administration Act of 1979 (as in effect on the day before
the date of the enactment of this Act and as continued in effect
pursuant to the International Emergency Economic Powers Act), or the
Export Administration Regulations, and are in effect as of the date of
the enactment of this Act, shall continue in effect according to their
terms until modified, superseded, set aside, or revoked under the
authority of this title.
(b) Administrative and Judicial Proceedings.--This title shall not
affect any administrative or judicial proceedings commenced, or any
applications for licenses made, under the Export Administration Act of
1979 (as in effect on the day before the date of the enactment of this
Act and as continued in effect pursuant to the International Emergency
Economic Powers Act), or the Export Administration Regulations.
(c) Certain Determinations and References.--
(1) State sponsors of terrorism.--Any determination that
was made under section 6(j) of the Export Administration Act of
1979 (as in effect on the day before the date of the enactment
of this Act and as continued in effect pursuant to the
International Emergency Economic Powers Act) shall continue in
effect as if the determination had been made under section
104(c) of this Act.
(2) Reference.--Any reference in any other provision of law
to a country the government of which the Secretary of State has
determined, for purposes of section 6(j) of the Export
Administration Act of 1979 (as in effect on the day before the
date of the enactment of this Act and as continued in effect
pursuant to the International Emergency Economic Powers Act),
is a government that has repeatedly provided support for acts
of international terrorism shall be deemed to refer to a
country the government of which the Secretary of State has
determined, for purposes of section 104(c) of this Act, is a
government that has repeatedly provided support for acts of
international terrorism.
TITLE II--ANTI-BOYCOTT ACT OF 2018
SEC. 201. SHORT TITLE.
This Act may be cited as the ``Anti-Boycott Act of 2018''.
SEC. 202. STATEMENT OF POLICY.
Congress declares it is the policy of the United States--
(1) to oppose restrictive trade practices or boycotts
fostered or imposed by any foreign country, or requests to
impose restrictive trade practices or boycotts by any foreign
country, against other countries friendly to the United States
or against any United States person;
(2) to encourage and, in specified cases, require United
States persons engaged in the export of goods or technology or
other information to refuse to take actions, including
furnishing information or entering into or implementing
agreements, which have the effect of furthering or supporting
the restrictive trade practices or boycotts fostered or imposed
by any foreign country, or requests to impose restrictive trade
practices or boycotts by any foreign country against a country
friendly to the United States or against any United States
person; and
(3) to foster international cooperation and the development
of international rules and institutions to assure reasonable
access to world supplies.
SEC. 203. FOREIGN BOYCOTTS.
(a) Prohibitions and Exceptions.--
(1) Prohibitions.--For the purpose of implementing the
policies set forth in section 202, the President shall issue
regulations prohibiting any United States person, with respect
to that person's activities in the interstate or foreign
commerce of the United States, from taking or knowingly
agreeing to take any of the following actions with intent to
comply with, further, or support any boycott fostered or
imposed by any foreign country, or request to impose any
boycott by any foreign country, against a country which is
friendly to the United States and which is not itself the
object of any form of boycott pursuant to United States law or
regulation:
(A) Refusing, or requiring any other person to
refuse, to do business with or in the boycotted
country, with any business concern organized under the
laws of the boycotted country, with any national or
resident of the boycotted country, or with any other
person, pursuant to an agreement with, a requirement
of, or a request from or on behalf of the boycotting
country. The mere absence of a business relationship
with or in the boycotted country with any business
concern organized under the laws of the boycotted
country, with any national or resident of the boycotted
country, or with any other person, does not indicate
the existence of the intent required to establish a
violation of regulations issued to carry out this
subparagraph.
(B) Refusing, or requiring any other person to
refuse, to employ or otherwise discriminating against
any United States person on the basis of race,
religion, sex, or national origin of that person or of
any owner, officer, director, or employee of such
person.
(C) Furnishing information with respect to the
race, religion, sex, or national origin of any United
States person or of any owner, officer, director, or
employee of such person.
(D) Furnishing information, or requesting the
furnishing of information, about whether any person
has, has had, or proposes to have any business
relationship (including a relationship by way of sale,
purchase, legal or commercial representation, shipping
or other transport, insurance, investment, or supply)
with or in the boycotted country, with any business
concern organized under the laws of the boycotted
country, with any national or resident of the boycotted
country, or with any other person which is known or
believed to be restricted from having any business
relationship with or in the boycotting country. Nothing
in this subparagraph shall prohibit the furnishing of
normal business information in a commercial context as
defined by the Secretary.
(E) Furnishing information about whether any person
is a member of, has made contributions to, or is
otherwise associated with or involved in the activities
of any charitable or fraternal organization which
supports the boycotted country.
(F) Paying, honoring, confirming, or otherwise
implementing a letter of credit which contains any
condition or requirement compliance with which is
prohibited by regulations issued pursuant to this
paragraph, and no United States person shall, as a
result of the application of this paragraph, be
obligated to pay or otherwise honor or implement such
letter of credit.
(2) Exceptions.--Regulations issued pursuant to paragraph
(1) shall provide exceptions for--
(A) complying or agreeing to comply with
requirements--
(i) prohibiting the import of goods or
services from the boycotted country or goods
produced or services provided by any business
concern organized under the laws of the
boycotted country or by nationals or residents
of the boycotted country; or
(ii) prohibiting the shipment of goods to
the boycotting country on a carrier of the
boycotted country, or by a route other than
that prescribed by the boycotting country or
the recipient of the shipment;
(B) complying or agreeing to comply with import and
shipping document requirements with respect to the
country of origin, the name of the carrier and route of
shipment, the name of the supplier of the shipment or
the name of the provider of other services, except that
no information knowingly furnished or conveyed in
response to such requirements may be stated in
negative, blacklisting, or similar exclusionary terms,
other than with respect to carriers or route of
shipment as may be permitted by such regulations in
order to comply with precautionary requirements
protecting against war risks and confiscation;
(C) complying or agreeing to comply in the normal
course of business with the unilateral and specific
selection by a boycotting country, or national or
resident thereof, of carriers, insurers, suppliers of
services to be performed within the boycotting country
or specific goods which, in the normal course of
business, are identifiable by source when imported into
the boycotting country;
(D) complying or agreeing to comply with export
requirements of the boycotting country relating to
shipments or transshipments of exports to the boycotted
country, to any business concern of or organized under
the laws of the boycotted country, or to any national
or resident of the boycotted country;
(E) compliance by an individual or agreement by an
individual to comply with the immigration or passport
requirements of any country with respect to such
individual or any member of such individual's family or
with requests for information regarding requirements of
employment of such individual within the boycotting
country; and
(F) compliance by a United States person resident
in a foreign country or agreement by such person to
comply with the laws of that country with respect to
his activities exclusively therein, and such
regulations may contain exceptions for such resident
complying with the laws or regulations of that foreign
country governing imports into such country of
trademarked, trade named, or similarly specifically
identifiable products, or components of products for
his own use, including the performance of contractual
services within that country, as may be defined by such
regulations.
(3) Special rules.--Regulations issued pursuant to
paragraphs (2)(C) and (2)(F) shall not provide exceptions from
paragraphs (1)(B) and (1)(C).
(4) Rule of construction.--Nothing in this subsection may
be construed to supersede or limit the operation of the
antitrust or civil rights laws of the United States.
(5) Application.--This section shall apply to any
transaction or activity undertaken, by or through a United
States person or any other person, with intent to evade the
provisions of this section as implemented by the regulations
issued pursuant to this subsection, and such regulations shall
expressly provide that the exceptions set forth in paragraph
(2) shall not permit activities or agreements (expressed or
implied by a course of conduct, including a pattern of
responses) otherwise prohibited, which are not within the
intent of such exceptions.
(b) Foreign Policy Controls.--
(1) In general.--In addition to the regulations issued
pursuant to subsection (a), regulations issued under title I of
this Act to carry out the policies set forth in section
102(1)(D) shall implement the policies set forth in this
section.
(2) Requirements.--Such regulations shall require that any
United States person receiving a request for the furnishing of
information, the entering into or implementing of agreements,
or the taking of any other action referred to in subsection (a)
shall report that fact to the Secretary, together with such
other information concerning such request as the Secretary may
require for such action as the Secretary considers appropriate
for carrying out the policies of that section. Such person
shall also report to the Secretary whether such person intends
to comply and whether such person has complied with such
request. Any report filed pursuant to this paragraph shall be
made available promptly for public inspection and copying,
except that information regarding the quantity, description,
and value of any goods or technology to which such report
relates may be kept confidential if the Secretary determines
that disclosure thereof would place the United States person
involved at a competitive disadvantage. The Secretary shall
periodically transmit summaries of the information contained in
such reports to the Secretary of State for such action as the
Secretary of State, in consultation with the Secretary,
considers appropriate for carrying out the policies set forth
in section 202.
(c) Preemption.--The provisions of this section and the regulations
issued pursuant thereto shall preempt any law, rule, or regulation of
any of the several States or the District of Columbia, or any of the
territories or possessions of the United States, or of any governmental
subdivision thereof, which law, rule, or regulation pertains to
participation in, compliance with, implementation of, or the furnishing
of information regarding restrictive trade practices or boycotts
fostered or imposed by foreign countries, or requests to impose
restrictive trade practices or boycotts by any foreign country, against
other countries friendly to the United States.
SEC. 204. ENFORCEMENT.
(a) Civil Penalties.--The President may impose the following civil
penalties on a person who violates section 203 or any regulation issued
under this title:
(1) A fine of not more than $250,000 or an amount that is
twice the amount of the transaction that is the basis of the
violation with respect to which the penalty is imposed.
(2) Revocation of a license issued under title I to the
person.
(3) A prohibition on the person's ability to export,
reexport, or transfer any items, whether or not subject to
controls under this title.
(b) Procedures.--Any civil penalty under this section may be
imposed only after notice and opportunity for an agency hearing on the
record in accordance with sections 554 through 557 of title 5, United
States Code, and shall be subject to judicial review in accordance with
chapter 7 of such title.
(c) Standards for Levels of Civil Penalty.--The President may by
regulation provide standards for establishing levels of civil penalty
under this section based upon factors such as the seriousness of the
violation, the culpability of the violator, and the violator's record
of cooperation with the Government in disclosing the violation.
TITLE III--SANCTIONS REGARDING MISSILE PROLIFERATION AND CHEMICAL AND
BIOLOGICAL WEAPONS PROLIFERATION
SEC. 301. MISSILE PROLIFERATION CONTROL VIOLATIONS.
(a) Violations by United States Persons.--
(1) Sanctions.--
(A) Sanctionable activity.--The President shall
impose the applicable sanctions described in
subparagraph (B) if the President determines that a
United States person knowingly--
(i) exports, reexports, or transfers of any
item on the MTCR Annex, in violation of the
provisions of section 38 (22 U.S.C. 2778) or
chapter 7 of the Arms Export Control Act, title
I of this Act, or any regulations or orders
issued under any such provisions; or
(ii) conspires to or attempts to engage in
such export, reexport, or transfer.
(B) Sanctions.--The sanctions that apply to a
United States person under subparagraph (A) are the
following:
(i) If the item on the MTCR Annex involved
in the export, reexport, or transfer is missile
equipment or technology within category II of
the MTCR Annex, then the President shall deny
to such United States person, for a period of 2
years, licenses for the transfer of missile
equipment or technology controlled under title
I.
(ii) If the item on the MTCR Annex involved
in the export, reexport, or transfer is missile
equipment or technology within category I of
the MTCR Annex, then the President shall deny
to such United States person, for a period of
not less than 2 years, all licenses for items
the transfer of which is controlled under title
I.
(2) Discretionary sanctions.--In the case of any
determination referred to in paragraph (1), the President may
pursue any other appropriate penalties under section 109 of
this Act.
(3) Waiver.--The President may waive the imposition of
sanctions under paragraph (1) on a person with respect to a
product or service if the President certifies to the Congress
that--
(A) the product or service is essential to the
national security of the United States; and
(B) such person is a sole source supplier of the
product or service, the product or service is not
available from any alternative reliable supplier, and
the need for the product or service cannot be met in a
timely manner by improved manufacturing processes or
technological developments.
(b) Transfers of Missile Equipment or Technology by Foreign
Persons.--
(1) Sanctions.--
(A) Sanctionable activity.--Subject to paragraphs
(3) through (7), the President shall impose the
applicable sanctions under subparagraph (B) on a
foreign person if the President--
(i) determines that a foreign person
knowingly--
(I) exports, reexports, or
transfers any MTCR equipment or
technology that contributes to the
design, development, or production of
missiles in a country that is not an
MTCR adherent and would be, if it were
United States-origin equipment or
technology, subject to the jurisdiction
of the United States under title I;
(II) conspires to or attempts to
engage in such export, reexport, or
transfer; or
(III) facilitates such export,
reexport, or transfer by any other
person; or
(ii) has made a determination with respect
to the foreign person under section 73(a) of
the Arms Export Control Act.
(B) Sanctions.--The sanctions that apply to a
foreign person under subparagraph (A) are the
following:
(i) If the item involved in the export,
reexport, or transfer is within category II of
the MTCR Annex, then the President shall deny,
for a period of 2 years, licenses for the
transfer to such foreign person of missile
equipment or technology the transfer of which
is controlled under title I.
(ii) If the item involved in the export,
reexport, or transfer is within category I of
the MTCR Annex, then the President shall deny,
for a period of not less than 2 years, licenses
for the transfer to such foreign person of
items the transfer of which is controlled under
title I.
(2) Inapplicability with respect to MTCR adherents.--
Paragraph (1) does not apply with respect to--
(A) any export, reexport, or transfer that is
authorized by the laws of an MTCR adherent, if such
authorization is not obtained by misrepresentation or
fraud; or
(B) any export, reexport, or transfer of an item to
an end user in a country that is an MTCR adherent.
(3) Effect of enforcement actions by MTCR adherents.--
Sanctions set forth in paragraph (1) may not be imposed under
this subsection on a person with respect to acts described in
such paragraph or, if such sanctions are in effect against a
person on account of such acts, such sanctions shall be
terminated, if an MTCR adherent is taking judicial or other
enforcement action against that person with respect to such
acts, or that person has been found by the government of an
MTCR adherent to be innocent of wrongdoing with respect to such
acts.
(4) Waiver and report to congress.--
(A) Waiver authority.--The President may waive the
application of paragraph (1) to a foreign person if the
President determines that such waiver is essential to
the national security of the United States.
(B) Notification and report to congress.--In the
event that the President decides to apply the waiver
described in subparagraph (A), the President shall so
notify the appropriate congressional committees not
less than 20 working days before issuing the waiver.
Such notification shall include a report fully
articulating the rationale and circumstances which led
the President to apply the waiver.
(5) Additional waiver.--The President may waive the
imposition of sanctions under paragraph (1) on a person with
respect to a product or service if the President certifies to
the appropriate congressional committees that--
(A) the product or service is essential to the
national security of the United States; and
(B) such person is a sole source supplier of the
product or service, the product or service is not
available from any alternative reliable supplier, and
the need for the product or service cannot be met in a
timely manner by improved manufacturing processes or
technological developments.
(6) Exceptions.--The President shall not apply the sanction
under this subsection prohibiting the importation of the
products of a foreign person--
(A) in the case of procurement of defense articles
or defense services--
(i) under existing contracts or
subcontracts, including the exercise of options
for production quantities to satisfy
requirements essential to the national security
of the United States;
(ii) if the President determines that the
person to which the sanctions would be applied
is a sole source supplier of the defense
articles or defense services, that the defense
articles or defense services are essential to
the national security of the United States, and
that alternative sources are not readily or
reasonably available; or
(iii) if the President determines that such
articles or services are essential to the
national security of the United States under
defense coproduction agreements or NATO
Programs of Cooperation;
(B) to products or services provided under
contracts entered into before the date on which the
President publishes his intention to impose the
sanctions; or
(C) to--
(i) spare parts;
(ii) component parts, but not finished
products, essential to United States products
or production;
(iii) routine services and maintenance of
products, to the extent that alternative
sources are not readily or reasonably
available; or
(iv) information and technology essential
to United States products or production.
(c) Definitions.--In this section:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Affairs of the House
of Representatives; and
(B) the Committee on Foreign Relations and the
Committee on Banking, Housing, and Urban Affairs of the
Senate.
(2) Defense articles; defense services.--The terms
``defense articles'' and ``defense services'' mean those items
on the United States Munitions List as defined in section 47(7)
of the Arms Export Control Act (22 U.S.C. 2794 note).
(3) Missile.--The term ``missile'' means a category I
system as defined in the MTCR Annex.
(4) Missile technology control regime; mtcr.--The term
``Missile Technology Control Regime'' or ``MTCR'' means the
policy statement, between the United States, the United
Kingdom, the Federal Republic of Germany, France, Italy,
Canada, and Japan, announced on April 16, 1987, to restrict
sensitive missile-relevant transfers based on the MTCR Annex,
and any amendments thereto.
(5) MTCR adherent.--The term ``MTCR adherent'' means a
country that participates in the MTCR or that, pursuant to an
international understanding to which the United States is a
party, controls MTCR equipment or technology in accordance with
the criteria and standards set forth in the MTCR.
(6) MTCR annex.--The term ``MTCR Annex'' means the
Guidelines and Equipment and Technology Annex of the MTCR, and
any amendments thereto.
(7) Missile equipment or technology; mtcr equipment or
technology.--The terms ``missile equipment or technology'' and
``MTCR equipment or technology'' mean those items listed in
category I or category II of the MTCR Annex.
SEC. 302. CHEMICAL AND BIOLOGICAL WEAPONS PROLIFERATION SANCTIONS.
(a) Imposition of Sanctions.--
(1) Determination by the president.--Except as provided in
subsection (b)(2), the President shall impose the sanction
described in subsection (c) if the President determines that a
foreign person has knowingly and materially contributed--
(A) through the export from the United States of
any item that is subject to the jurisdiction of the
United States under this title; or
(B) through the export from any other country of
any item that would be, if they were United States
goods or technology, subject to the jurisdiction of the
United States under this title,
to the efforts by any foreign country, project, or entity
described in paragraph (2) to use, develop, produce, stockpile,
or otherwise acquire chemical or biological weapons.
(2) Countries, projects, or entities receiving
assistance.--Paragraph (1) applies in the case of--
(A) any foreign country that the President
determines has, at any time after January 1, 1980--
(i) used chemical or biological weapons in
violation of international law;
(ii) used lethal chemical or biological
weapons against its own nationals; or
(iii) made substantial preparations to
engage in the activities described in clause
(i) or (ii);
(B) any foreign country whose government is
determined for purposes of section 104(c) of this Act
to be a government that has repeatedly provided support
for acts of international terrorism; or
(C) any other foreign country, project, or entity
designated by the President for purposes of this
section.
(3) Persons against which sanctions are to be imposed.--A
sanction shall be imposed pursuant to paragraph (1) on--
(A) the foreign person with respect to which the
President makes the determination described in that
paragraph;
(B) any successor entity to that foreign person;
and
(C) any foreign person that is a parent,
subsidiary, or affiliate of that foreign person if that
parent, subsidiary, or affiliate knowingly assisted in
the activities which were the basis of that
determination.
(b) Consultations With and Actions by Foreign Government of
Jurisdiction.--
(1) Consultations.--If the President makes the
determinations described in subsection (a)(1) with respect to a
foreign person, the Congress urges the President to initiate
consultations immediately with the government with primary
jurisdiction over that foreign person with respect to the
imposition of a sanction pursuant to this section.
(2) Actions by government of jurisdiction.--In order to
pursue such consultations with that government, the President
may delay imposition of a sanction pursuant to this section for
a period of up to 90 days. Following such consultations, the
President shall impose the sanction unless the President
determines and certifies to the appropriate congressional
committees that the Government has taken specific and effective
actions, including appropriate penalties, to terminate the
involvement of the foreign person in the activities described
in subsection (a)(1). The President may delay imposition of the
sanction for an additional period of up to 90 days if the
President determines and certifies to the Congress that the
government is in the process of taking the actions described in
the preceding sentence.
(3) Report to congress.--The President shall report to the
appropriate congressional committees, not later than 90 days
after making a determination under subsection (a)(1), on the
status of consultations with the appropriate government under
this subsection, and the basis for any determination under
paragraph (2) of this subsection that such government has taken
specific corrective actions.
(c) Sanction.--
(1) Description of sanction.--The sanction to be imposed
pursuant to subsection (a)(1) is, except as provided that the
United States Government shall not procure, or enter into any
contract for the procurement of, any goods or services from any
person described in subsection (a)(3).
(2) Exceptions.--The President shall not be required to
apply or maintain a sanction under this section--
(A) in the case of procurement of defense articles
or defense services--
(i) under existing contracts or
subcontracts, including the exercise of options
for production quantities to satisfy United
States operational military requirements;
(ii) if the President determines that the
person or other entity to which the sanctions
would otherwise be applied is a sole source
supplier of the defense articles or defense
services, that the defense articles or defense
services are essential, and that alternative
sources are not readily or reasonably
available; or
(iii) if the President determines that such
articles or services are essential to the
national security under defense coproduction
agreements;
(B) to products or services provided under
contracts entered into before the date on which the
President publishes his intention to impose sanctions;
(C) to--
(i) spare parts;
(ii) component parts, but not finished
products, essential to United States products
or production; or
(iii) routine servicing and maintenance of
products, to the extent that alternative
sources are not readily or reasonably
available;
(D) to information and technology essential to
United States products or production; or
(E) to medical or other humanitarian items.
(d) Termination of Sanctions.--A sanction imposed pursuant to this
section shall apply for a period of at least 12 months following the
imposition of one sanction and shall cease to apply thereafter only if
the President determines and certifies to the appropriate congressional
committees that reliable information indicates that the foreign person
with respect to which the determination was made under subsection
(a)(1) has ceased to aid or abet any foreign government, project, or
entity in its efforts to acquire chemical or biological weapons
capability as described in that subsection.
(e) Waiver.--
(1) Criterion for waiver.--The President may waive the
application of any sanction imposed on any person pursuant to
this section, after the end of the 12-month period beginning on
the date on which that sanction was imposed on that person, if
the President determines and certifies to the appropriate
congressional committees that such waiver is important to the
national security interests of the United States.
(2) Notification of and report to congress.--If the
President decides to exercise the waiver authority provided in
paragraph (1), the President shall so notify the appropriate
congressional committees not less than 20 days before the
waiver takes effect. Such notification shall include a report
fully articulating the rationale and circumstances which led
the President to exercise the waiver authority.
(f) Definitions.--In this section:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means--
(A) the Committee on Foreign Affairs of the House
of Representatives; and
(B) the Committee on Foreign Relations and the
Committee on Banking, Housing, and Urban Affairs of the
Senate.
(2) Defense articles; defense services.--The terms
``defense articles'' and ``defense services'' mean those items
on the United States Munitions List or are otherwise controlled
under the Arms Export Control Act.
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