[Senate Treaty Document 110-7]
[From the U.S. Government Publishing Office]



110th Congress 
 1st Session                     SENATE                     Treaty Doc.
                                                                  110-7
_______________________________________________________________________

                                    

 
                 TREATY WITH UNITED KINGDOM CONCERNING

                       DEFENSE TRADE COOPERATION

                               __________

                                MESSAGE

                                  from

                     THEPRESIDENTOFTHEUNITEDSTATES

                              transmitting

 TREATY BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE 
GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND 
CONCERNING DEFENSE TRADE COOPERATION, DONE AT WASHINGTON AND LONDON ON 
                          JUNE 21 AND 26, 2007




September 20, 2007.--Treaty was read the first time, and together with 
the accompanying papers, referred to the Committee on Foreign Relations 
          and ordered to be printed for the use of the Senate

                         LETTER OF TRANSMITTAL

                              ----------                              

                               The White House, September 20, 2007.
To the Senate of the United States:
    I transmit herewith for Senate advice and consent to 
ratification the Treaty Between the Government of the United 
States of America and the Government of the United Kingdom of 
Great Britain and Northern Ireland Concerning Defense Trade 
Cooperation, done at Washington and London on June 21 and 26, 
2007. I transmit, for the information of the Senate, the report 
of the Department of State concerning this Treaty.
    My Administration is prepared to provide to the Senate for 
its information other relevant documents, including proposed 
implementing arrangements to be concluded pursuant to the 
Treaty, relevant correspondence with the Government of the 
United Kingdom about the Treaty, and proposed amendments to the 
International Traffic in Arms Regulations.
    This Treaty will allow for greater cooperation between the 
United States and the United Kingdom, enhancing the operational 
capabilities and interoperability of the armed forces of both 
countries. I recommend that the Senate give early and favorable 
consideration to this Treaty.

                                                    George W. Bush.
    The White House, September 20, 2007.
                          LETTER OF SUBMITTAL

                              ----------                              

                                       Department of State,
                                     Washington, September 4, 2007.
The President,
The White House.
    The President: I have the honor to submit to you, with a 
view to its transmittal to the Senate for advice and consent to 
ratification, the Treaty between the Government of the United 
States of America and the Government of the United Kingdom of 
Great Britain and Northern Ireland Concerning Defense Trade 
Cooperation, done at Washington and London June 21 and 26, 
2007, accompanied by an overview of the Treaty. This self-
executing Treaty is intended to create an exemption to 
provisions of the Arms Export Control Act regarding 
authorizations and notifications associated with certain 
exports and transfers, as defined in the Treaty. The Treaty 
envisages the conclusion of implementing arrangements, which 
may be entered into as Executive Agreements. I recommend that 
this Treaty be transmitted to the Senate for its advice and 
consent to ratification.
    Respectfully submitted.
                                                  Condoleezza Rice.
    Enclosures: As stated.

 Treaty Between the Government of the United States of America and the 
Government of the United Kingdom of Great Britain and Northern Ireland 
                  Concerning Defense Trade Cooperation


                                OVERVIEW

    For several years, the United States and the United Kingdom 
have sought to negotiate a legally binding agreement that would 
provide a mutually agreeable exemption for exports to the 
United Kingdom of defense articles controlled pursuant to the 
Arms Export Control Act (22 U.S.C. 2751 et seq.) (AECA) from 
some requirements, such as the licensing requirements, of 
Section 38 of the AECA and its implementing regulations, the 
International Traffic in Arms Regulations (22 C.F.R. 120-130) 
(ITAR).
    Section 1 of the AECA recognizes that ``[t]he need for 
international defense cooperation among the United States and 
those friendly countries to which it is allied by mutual 
defense treaties is especially important . . .'' and asserts 
that ``it remains the policy of the United States to facilitate 
the common defense by entering into international arrangements 
with friendly countries which further the objective of applying 
agreed resources of each country to programs and projects of 
cooperative exchange of data, research, development, 
production, procurement, and logistics support to achieve 
specific national defense requirements and objectives of mutual 
concern'' (22 U.S.C. 2751). Section 38(a)(1) of the AECA 
authorizes the President ``to control the import and the export 
of defense articles and defense services,'' to ``designate 
those items which shall be considered as defense articles and 
defense services,'' and to ``promulgate regulations for the 
import and export of such articles and services'' (22 U.S.C. 
2778(a)(1)). The AECA further provides that the President may 
regulate the import and export of defense articles and services 
pursuant to licenses (22 U.S.C. 2778(b)).
    In the proposed Treaty between the Government of the United 
States of America and the Government of the United Kingdom of 
Great Britain and Northern Ireland Concerning Defense Trade 
Cooperation, done at Washington and London June 21 and 26, 2007 
(the Treaty), the Government of the United Kingdom would be 
bound to a regime that would provide appropriate protections 
for U.S. defense articles and defense services exported under 
the Treaty through the application of the United Kingdom 
Official Secrets Act rather than through revisions to its 
export control regime. For this reason, the Treaty will not be 
entered into pursuant to the authority contained in section 
38(j) of the AECA (22 U.S.C. 27780)).
    The Treaty establishes a comprehensive framework for the 
export of certain defense articles and defense services from 
the United States to certain facilities and entities of the 
United Kingdom. Where the Treaty applies, such export may occur 
without a license or other written authorization from the 
Department of State's Directorate of Defense Trade Controls, 
which is the office responsible for developing and implementing 
the ITAR. Once exported, these Defense Articles may be 
transferred within what is referred to as an ``Approved 
Community'' without case-by-case review and approval by the 
Directorate of Defense Trade Controls. Transfers out of such 
Approved Community would, however, be subject to Directorate of 
Defense Trade Controls authorization requirements, and any 
unauthorized transfers would constitute violations of the AECA.
    As noted in the Treaty's Preamble, this Treaty is self-
executing in the United States. The purposes for which exports 
may occur pursuant to this Treaty and the defense articles that 
may not be exported pursuant to the Treaty will be identified 
in separate Implementing Arrangements, as well as in 
regulations intended to clarify this matter. The list of 
facilities and entities in the United Kingdom that may receive 
defense articles and defense services through exports pursuant 
to this Treaty will be identified through processes established 
in separate Implementing Arrangements.
    This Treaty establishes an exemption from the operation of 
the licensing and notification requirements contained in the 
AECA and the ITAR. As stated below, compliance with the 
procedures established in accordance with this Treaty shall 
constitute an exception to these requirements. Conduct outside 
of the procedures established in accordance with this Treaty 
must comply with the normal requirements. Although the Treaty 
is self-executing, it will be necessary to promulgate a number 
of regulatory changes to the ITAR to effectuate the licensing 
exemption. Once the Implementing Arrangements have entered into 
force, they will be made available to the public, and changes 
to the ITAR will be published in the Federal Register.

Definitions

    Article 1 of the Treaty provides definitions for many of 
the terms used in the Treaty. When the capitalized form of any 
defined term, or its variants, is used in the Treaty, the 
intent is to employ the definition provided in Article 1. When 
a lower case form of any defined term, or its variants, is used 
in the Treaty, the intent is to refer to the ordinary meaning 
of the term. This procedure is also being followed for purposes 
of the discussion in this ``Overview.''
    The Treaty defines ``Defense Articles'' as those articles, 
services, and related technical data, including software, in 
tangible or intangible form, listed on the United States 
Munitions List (``USML'') of the ITAR, as amended. As origin 
(i.e., where the product is manufactured) is not an element of 
this definition, the term ``Defense Articles'' may extend to 
items of United Kingdom origin, or to items with United Kingdom 
content, that are listed or described on the USML, even if such 
items are not of United States origin or are without United 
States content.
    Several of the definitions (i.e., those for Her Majesty's 
Government Personnel, Her Majesty's Government Facilities, 
Implementing Arrangements, United Kingdom Community, and United 
States Community) incorporate by reference the substantive 
provision of the Treaty that gives meaning to each term. Such 
definitions are intended to provide clarity in that the term 
appears in the substantive text prior to the relevant provision 
that provides its meaning.
    Four definitions apply to the movement of Defense Articles. 
An ``Export'' involves the movement of Defense Articles from 
the United States Community to the United Kingdom Community. 
Once a Defense Article has been Exported pursuant to the 
Treaty, covered movements of such Defense Articles include 
``Transfers,'' ``Re-transfers,'' and ``Re-exports.'' A 
``Transfer'' involves the movement of previously ``Exported'' 
Defense Articles (1) within the United Kingdom Community, (2) 
from the United Kingdom Community to the United States 
Community, or (3) from the United States Community back to the 
United Kingdom Community. A ``Re-transfer'' involves the 
movement of previously Exported Defense Articles by a member of 
the United Kingdom Community from a location in the Approved 
Community to a location that is outside of the Approved 
Community but in the Territory of the United Kingdom. A ``Re-
export'' involves the movement of Defense Articles by a member 
of the United Kingdom Community from a location in the Approved 
Community to a location outside the Territory of the United 
Kingdom.

Purpose of the treaty

    Article 2 contains a simple recital of the Treaty's 
purpose: to provide a comprehensive framework for Exports and 
Transfers of Defense Articles without a license or other 
written authorization, to the extent that such Exports and 
Transfers support certain types of activities. This Article 
stands for the proposition that it is in the mutual security 
and defense interests of the United States and the United 
Kingdom to improve the interoperability of their armed forces 
by facilitating the movement of Defense Articles in support of 
certain mutually agreed activities, while maintaining and 
ensuring proper safeguards against unauthorized release of the 
defense technology involved.

Scope of the treaty

    Article 3 identifies the activities in support of which 
Defense Articles may be Exported or Transferred without a 
license or other written authorization. The Treaty applies to 
the movement of Defense Articles that are required for agreed 
combined military or counter-terrorism operations; cooperative 
security and defense research, development, production, and 
support programs; security and defense projects where the 
Government of the United Kingdom is the end-user; and for 
United States Government end-use. Either Government may exclude 
certain Defense Articles from the application of the Treaty.
    The Treaty does not apply to the provision of Defense 
Articles pursuant to the Foreign Military Sales program. The 
process for providing Defense Articles pursuant to that program 
will remain unchanged. Once such Defense Articles are provided, 
however, they may be transferred within the Approved Community 
pursuant to the Treaty.
    An exporter may request a license or other authorization 
from the Directorate of Defense Trade Controls in which case 
the terms of such license or authorization will apply instead 
of the procedures that will be established to implement the 
Treaty .

Approved community

    Articles 4 and 5 identify the persons and entities that may 
Export or Transfer Defense Articles without a license or other 
written authorization. Specifically, Article 4 identifies the 
persons, entities, and facilities of the United Kingdom that 
may send or receive such Defense Articles; and Article 5 
identifies the persons, entities, and facilities of the United 
States that may send or receive such Defense Articles.
    The entities and facilities of the United Kingdom that may 
send or receive Defense Articles pursuant to this Treaty are 
(1) those facilities of the Government of the United Kingdom 
that are accredited pursuant to the General Security Agreement 
between the Government of the United States of America and the 
Government of the United Kingdom of Great Britain and Northern 
Ireland of April 14, 1961, and its implementing arrangements 
that are relevant to the scope of the Treaty; and (2) 
nongovernmental United Kingdom entities and facilities that 
meet agreed eligibility requirements, are accredited pursuant 
to a process agreed to by both Parties in an Implementing 
Arrangement, and that are agreed to by both Parties for 
inclusion on a List. Once on the List, a nongovernmental United 
Kingdom entity or facility will be removed from the List if 
either the United States or the United Kingdom considers such 
removal to be in its national interests.
    Personnel of the Government of the United Kingdom who meet 
agreed criteria, which at a minimum will require appropriate 
United Kingdom security accreditation and a need-to-know, may 
be provided access to Defense Articles Exported or Transferred 
pursuant to the Treaty. Employees of the agreed nongovernmental 
entities and facilities who meet agreed criteria, which at a 
minimum will require appropriate United Kingdom security 
accreditation and a need-to-know, may be provided access to 
Defense Articles Exported or Transferred pursuant to the 
Treaty.
    The departments and agencies of the United States 
Government may send and receive Defense Articles pursuant to 
this Treaty. In addition, nongovernmental United States 
entities that are registered with the State Department's 
Directorate of Defense Trade Controls and that are eligible to 
export defense articles and defense services in accordance with 
United States law and regulation, including the AECA and the 
ITAR, may send or receive Defense Articles pursuant to this 
Treaty.
    United States Government personnel with appropriate 
security clearance and a need-to-know may be provided access to 
Defense Articles exported or transferred pursuant to this 
Treaty. Employees of the nongovernmental United States entities 
referred to above who have appropriate security clearance and a 
need-to-know may be provided access to Defense Articles 
Exported or Transferred pursuant to this Treaty.
    The facilities, entities, and personnel described in 
Article 4 comprise the United Kingdom Community. The 
facilities, entities, and personnel described in Article 5 
comprise the United States Community. The United Kingdom and 
United States Communities comprise the Approved Community.

Exports of defense articles from the United States

    Article 6(1) of the Treaty provides that departments and 
agencies of the United States Government and eligible 
nongovernmental United States entities may Export Defense 
Articles within the scope of this Treaty to a member of the 
United Kingdom Community without licenses or other 
authorization. Article 6(2) requires that the United States 
Government establish procedures to ensure proper identification 
of Defense Articles Exported pursuant to the Treaty. Article 
6(3) requires that the Government of the United Kingdom 
appropriately identify these Defense Articles once they enter 
the United Kingdom Community.
    The Directorate of Defense Trade Controls would promulgate 
regulations to effectuate Article 6. In particular, it would be 
necessary to provide procedures to ensure potential exporters 
know whether a proposed recipient is a member of the United 
Kingdom Community, and whether the proposed project falls 
within the scope of Article 3.

Transfers of defense articles

    Article 7 provides that the Transfer of previously Exported 
Defense Articles to members of the United Kingdom Community, as 
identified in Article 4, or the United States Community, as 
identified in Article 5, will not require authorization by the 
United States Government. Pursuant to Article 9, however, if a 
member of the United Kingdom community were to retransfer 
previously Exported Defense Articles outside of the Approved 
Community, authorization of the Government of the United 
Kingdom would be required. (Such retransfers would include 
``Retransfers'' and ``Re-exports'' as defined in the Treaty.) 
Prior to granting authorization for Re-transfers and Re-
exports, the Government of the United Kingdom will require the 
exporter to provide supporting documentation that includes 
United States Government approval. Any Re-transfer or Re-export 
without the authorization of the Government of the United 
Kingdom and United States Government approval will be a 
violation of, at a minimum, the Arms Export Control Act and the 
United Kingdom Official Secrets Act, and will be punishable as 
such.
    Exports of Defense Articles from a member of the United 
States Community to an entity, facility, or person outside of 
the United Kingdom Community would continue to require a 
license or other written authorization by the Directorate of 
Defense Trade Controls of the Department of State.

Exports and transfers from the United Kingdom

    Article 8 obligates the Government of the United Kingdom to 
ensure that Defense Articles exported from the United Kingdom 
Community to the United States Community do not require 
additional export licenses or other authorizations. 
Specifically, Article 8(1) recognizes that the Government of 
the United Kingdom may satisfy this obligation through its 
blanket or open authorizations.

Proprietary rights and intellectual property

    Article 10(1) provides that nothing in the Treaty shall 
affect any rights to, or interests in, intellectual property or 
other proprietary information of the Parties or of any person 
or entity within the Approved Community. Article 10(2) provides 
that nothing in this Treaty shall affect any provisions for the 
protection of intellectual property and other proprietary 
information that may be agreed between the persons or entities 
Exporting or Transferring Defense Articles pursuant to the 
Treaty. Accordingly, such persons or entities may agree between 
themselves on procedures to provide protections to intellectual 
property or other proprietary information, additional to the 
protections afforded to classified information.

Protection of defense articles exported from the United States

    Article 11 provides that Defense Articles Exported or 
Transferred pursuant to the Treaty will be marked, identified, 
transmitted, stored, and handled in accordance with the General 
Security Agreement between the Government of the United Kingdom 
of Great Britain and Northern Ireland and the Government of the 
United States of America of April 14, 1961, as amended, and 
implementing arrangements thereto. At a minimum, the Defense 
Articles will be treated as United Kingdom ``restricted'' 
information. Such treatment will result in the application of 
the United Kingdom Official Secrets Act with respect to Defense 
Articles exported pursuant to the Treaty. If the Defense 
Articles are classified at a higher level, they will be so 
marked and identified, and treated according to the 
requirements for that classification level in the 
aforementioned General Security Agreement.

Recordkeeping and notification

    Article 12 requires both Parties to require that entities 
within their respective Community Exporting, Transferring, or 
receiving Defense Articles pursuant to the Treaty maintain 
detailed records of such movements. Either Party may request 
that the other Party obtain, and provide it with copies of, 
such records. Article 12 further allows for either Party to 
establish procedures, which may include advance notification of 
certain Exports, to accomplish appropriate notification to its 
legislative bodies.

Enforcement

    Article 13 provides that if persons or entities Exporting 
or Transferring Defense Articles pursuant to the Treaty comply 
with the procedures established pursuant to this Treaty, 
including its Implementing Arrangements, and any regulations 
promulgated to implement the Treaty's effect on existing law, 
they shall be exempt from the generally applicable licensing 
requirements established pursuant to the Arms Export Control 
Act with respect to exports and transfers of Defense Articles. 
If, however, persons or entities Exporting or Transferring 
Defense Articles engage in conduct that is outside the scope of 
the Treaty, including certain of its Implementing Arrangements, 
and any regulations promulgated to implement the Treaty's 
effect on existing law, that conduct remains subject to the 
applicable licensing requirements and implementing regulations 
of the AECA.
    Because the Treaty is self-executing, this exemption will 
be created through ratification of the Treaty; no additional 
legislation will be required to implement the exemption in 
United States law. Those Implementing Arrangements constituting 
terms of the exemption are authorized by this self-executing 
Treaty. They will not be submitted for Senate advice and 
consent to ratification and also require no further legislative 
action to become a fully effective part of the exemption.
    Both governments will investigate potential violations of 
the procedures established pursuant to the Treaty. Where 
appropriate, both governments will cooperate in the conduct of 
such investigations as well as in prosecutions and 
administrative actions resulting from such investigations.
    As with exports that are regulated pursuant to Sec. 38 of 
the Arms Export Control Act, as amended, it is important to 
ensure that Defense Articles exported or transferred pursuant 
to the Treaty are properly handled and controlled. In this 
regard, the governments will review the procedures utilized 
with respect to postshipment verification and end-use or end-
user monitoring for current exports to ensure that they are 
appropriate for exports or transfers pursuant to this Treaty. 
Such procedures will be modified as required.

Implementing arrangements

    Article 14(1) of the Treaty provides that the Parties shall 
conclude, on an expedited basis, Implementing Arrangements for 
this Treaty, which may be amended or supplemented by the 
Parties from time to time. For example, the Implementing 
Arrangements will establish eligibility requirements for 
persons to be considered part of the United Kingdom Community.
    Article 14(2) further provides that the Parties will 
include in such Implementing Arrangements a process by which 
entities in the Approved Community may transition from the 
requirements of U.S. government defense export licenses or 
other authorizations issued under the ITAR to the regime 
established under the Treaty.
    The Administration does not intend to submit any of the 
Implementing Arrangements to the Senate for advice and consent, 
but is prepared to provide these Implementing Arrangements to 
the Senate for its information.

Implementing agencies

    Article 15 of the Treaty requires that each Party designate 
an authorized agency to implement its obligations under the 
Treaty. The authorized agency for the Government of the United 
States is the Department of State. The authorized agency for 
the Government of the United Kingdom is the Ministry of 
Defence. Either Party may change the designation of its 
authorized agency by providing written notice to the other 
Party.

Relationship to other international agreements

    Article 16 provides that the Treaty does not affect the 
rights and obligations of either Party under other 
international agreements to which it is a Party.

Consultations

    Article 17 of the Treaty requires that the Parties consult 
at least annually on cooperative aspects of their export 
control relationship and to review the operation of the Treaty. 
It further clarifies that the consultations are intended to 
provide a mechanism to review and address all relevant export 
control issues. Such issues therefore are not limited to issues 
specifically arising under the Treaty.

Dispute resolution

    Article 18 provides that any disputes between the Parties 
arising out of, or in connection with, the Treaty shall be 
resolved through consultations between the Parties and shall 
not be referred to any court, tribunal, or third party.

Amendments

    Article 19 provides that the Treaty may be amended upon 
written agreement of the Parties.

Entry into force

    In accordance with Article 20, the Treaty shall enter into 
force upon an exchange of notes confirming that each Party has 
completed the necessary domestic requirements to bring the 
Treaty into force. The United States will not provide such 
notice until the Senate provides its advice and consent to 
ratification of the Treaty and the President ratifies the 
Treaty.

Duration and withdrawal

    Article 21(1) provides that the Treaty shall be of 
unlimited duration. Article 21(2) further provides that either 
Party may withdraw from the Treaty if it decides that 
extraordinary events related to the subject matter of the 
Treaty have jeopardized its national interests. Should a Party 
decide to withdraw from the Treaty, it shall notify the other 
Party of its intent to withdraw and shall include a statement 
of the extraordinary events that it regards as having 
jeopardized its national interests. The Parties shall commence 
consultations within thirty days of the provision of such 
notification, with a view to allowing the continuation of the 
Treaty. If the notifying Party does not agree to the 
continuation of the Treaty, the withdrawal of the notifying 
Party will take effect six months after the provision of such 
notification.
    Article 21(3) provides that should either Party withdraw 
from the Treaty, the procedures for the protection of Defense 
Articles that were exported pursuant to the Treaty shall 
continue in effect until appropriate export licenses or other 
authorizations are in place.


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